Things Every Employer Should Know About Pension-Linked Employee Savings Accounts (PLESAs)
Mardy Gould • March 21, 2024
In the wake of recent developments, we are pleased to provide insights into Pension-Linked Employee Savings Accounts (PLESAs) under the Secure 2.0 Act. PLESAs are short-term savings accounts that are established and maintained within a defined contribution plan. The legislative intent of a PLESA is to allow low- and middle-income employees to use payroll deductions to accumulate funds that they can use in the event of an emergency. Here are the top 5 things employers should know:
- What is a PLESA? A PLESA is a retirement savings vehicle where non-highly compensated employees can make Roth contributions to their employer sponsored retirement account of up to $2,500. PLESAs may only be offered in defined contribution plans including 401(k), 403(b) and governmental 457(b) plans.
- No Hardship is Required to Receive a Distribution From the PLESA. Employees may withdraw the amount in the PLESA at any time, without certifying a hardship or other financial emergency. Employees must be permitted to make withdrawals without any fees at least once per month.
- 10% Early Distribution Penalty Does Not Apply. Normally, amounts distributed prior to age 59½ are subject to a 10% early withdrawal penalty. The 10% penalty does not apply to distributions from a PLESA.
- Automatic Enrollment is Permitted. Employers may automatically enroll employees into a PLESA, provided employees are given notice of automatic enrollment and the ability to opt out. The automatic enrollment percentage must be 3% or less of compensation.
- Employer Matching Contributions on PLESAs. If an employer makes matching contributions to the retirement plan, the employer must provide matching contributions on amounts contributed to the PLESA at the same rate as the matching contribution is made on other employee elective contributions. Matching contributions are made to the matching contribution account in the plan and not to the PLESA.
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1
While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health.
Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization?
Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness.
Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
