Emergency Savings Enhancement Act of 2025

This bill expands eligibility and increases the maximum contribution limit for pension-linked emergency savings accounts (PLESAs).

As background, PLESAs are savings accounts that are established and maintained in connection with a defined contribution retirement plan, such as a 401(k). Contributions to such accounts are subject to federal income tax, and withdrawals are allowed for any reason.

The bill expands eligibility for PLESAs by eliminating the exclusion of highly compensated employees. Thus, under the bill, individuals who meet the age, service, and other eligibility requirements of the plan, regardless of compensation, are eligible to participate in such a plan.

The bill also increases the maximum limit on the portion of a PLESA balance attributable to participant contributions to $5,000 (from $2,600 in 2026). This limit continues to be adjusted for inflation.

The bill also extends and provides additional funding for a Department of Labor program that awards grants to states to promote employee ownership and participation in businesses.