S. 3333: Emergency Savings Enhancement Act of 2025

The Emergency Savings Enhancement Act of 2025 aims to update certain features of pension-linked emergency savings accounts. Here’s a breakdown of the key changes proposed in the bill:

1. Modifications to Eligibility Requirements

The bill seeks to amend the definition of an “eligible participant” in individual account plans under the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986. The new definition would include individuals who meet any age, service, and additional eligibility requirements specified by their respective plans, regardless of whether they are already participants in those plans.

2. Changes to Contribution Limits

Currently, there is a contribution limit of $2,500 for pension-linked emergency savings accounts. The bill proposes to increase this limit to $5,000. This change aims to encourage individuals to save more in these specially designated accounts for emergencies.

3. Removal of Certain Provisions

The amendments also involve the removal of certain existing provisions under the applicable regulations, streamlining requirements around emergency savings accounts. This includes making conforming amendments to eliminate outdated clauses regarding participant definitions and contribution conditions.

4. Effective Date

The changes proposed in this bill would take effect for taxable years beginning after December 31, 2026. This means that the revised eligibility and contribution rules would not be applicable until the start of the 2027 tax year.

Relevant Companies

• PRU (Prudential Financial) - May be impacted as a provider of retirement and savings products through their retirement accounts.
• AKAM (Akamai Technologies) - As a tech company that may be involved in financial services, they could be indirectly impacted by changes in how retirement savings products are offered.