A Labor spokesperson informed ThinkAdvisor Wednesday that EBSA’s steering “is complementary with the IRS Discover, however addresses a broader scope of subjects” associated to PLESAs.
EBSA’s FAQ offers “broader steering on quite a lot of questions and issues that had been raised by stakeholders, together with representatives of employers serious about adopting” PLESAs, the spokesperson mentioned.
Gomez mentioned that the ”plans can provide these accounts to employees as an extra possibility that gives them entry to wanted funds when emergency conditions come up,” corresponding to emergency dental care, a damaged fridge or automotive repairs, which might “power employees to faucet into their retirement financial savings plans by way of loans and hardship withdrawals.”
Labor’s FAQ solutions 20 questions on subjects from eligibility and participation to contribution, distribution and withdrawal guidelines.
As Labor explains, “employers could robotically enroll their staff into PLESAs, make worker contributions to the PLESAs by way of payroll deductions and make matching employer contributions to the linked retirement plans.”
Collaborating staff “can simply withdraw funds saved of their PLESA with out the penalties of drawing from retirement financial savings. Employers could set a restrict of as much as $2,500 for contributions,” Labor mentioned.
The PLESA characteristic is out there for plan years starting after Dec. 31, 2023.