Key Takeaways
- • Only 1.1% of 753 surveyed U.S. plan sponsors have adopted Pension-Linked Emergency Savings Accounts (PLESAs) for the 2025 plan year, according to the Plan Sponsor Council of America's 69th annual survey.
- • Sponsors considering a PLESA fell to 9.9% from 14% a year earlier, signaling continued decline in interest in the SECURE 2.0 provision.
- • Participant loans surged to 22.2% of participants in 2025, nearly double the 12.4% recorded in 2024.
- • Hardship withdrawals averaged 3.4% of participants among the 91% of sponsors allowing them, up from 2.7% in 2024, 2.1% in 2023 and 1.5% in 2022.
- • PSCA executive director Will Hansen attributed the trend to affordability pressures, stating the 401(k) "becomes the emergency fund."
Summary
Adoption of Pension-Linked Emergency Savings Accounts (PLESAs) remains minimal among U.S. 401(k) plan sponsors, even as participants increasingly tap their retirement accounts for short-term needs, according to the Plan Sponsor Council of America (PSCA). In its 69th annual survey of profit sharing and 401(k) plans, covering 753 sponsors and their 2025 plan-year experiences, PSCA found that only 1.1% have adopted PLESAs. The share of sponsors considering adding one dropped to 9.9% from 14% in the prior survey.
PLESAs were created by SECURE 2.0, enacted in December 2022, and took effect in 2024. They allow employers to automatically enroll workers in emergency accounts alongside retirement accounts, with withdrawals free of penalties and taxes and with the same employer match applying to both. Industry participants have cited uncertainty as a barrier. Holly Tardif, senior director, retirement, and defined contribution strategist at Willis Towers Watson, told Pensions & Investments in July 2024 that "the lack of clarity around how the PLESA would work in practice has slowed record-keeper solutions and plan sponsor interest." Lawmakers have discussed simplifying the rules and broadening eligibility, but the survey notes no substantive legislative movement yet.
The decline in PLESA interest contrasts with rising reliance on plan borrowing and withdrawals. The share of participants with loans rose to 22.2% in 2025 from 12.4% in 2024. Among the 91% of sponsors permitting hardship withdrawals, average participation reached 3.4% in 2025, up from 2.7% in 2024, 2.1% in 2023 and 1.5% in 2022. Hansen said in a November 10 news release that "affordability is driving this data," adding that workers are "taking smaller loans and hardship withdrawals just to keep up."
Other SECURE 2.0 provisions show stronger uptake. PSCA reported that 96.9% of sponsors offer Roth employee contributions, up from 95.6%, and 87.1% have adopted the catch-up contribution provision for participants aged 60-63, up from 73%. Additionally, 42.2% have added or plan to add Roth treatment of employer contributions, more than double the 19.7% reported last year.
PLESAs were created by SECURE 2.0, enacted in December 2022, and took effect in 2024. They allow employers to automatically enroll workers in emergency accounts alongside retirement accounts, with withdrawals free of penalties and taxes and with the same employer match applying to both. Industry participants have cited uncertainty as a barrier. Holly Tardif, senior director, retirement, and defined contribution strategist at Willis Towers Watson, told Pensions & Investments in July 2024 that "the lack of clarity around how the PLESA would work in practice has slowed record-keeper solutions and plan sponsor interest." Lawmakers have discussed simplifying the rules and broadening eligibility, but the survey notes no substantive legislative movement yet.
The decline in PLESA interest contrasts with rising reliance on plan borrowing and withdrawals. The share of participants with loans rose to 22.2% in 2025 from 12.4% in 2024. Among the 91% of sponsors permitting hardship withdrawals, average participation reached 3.4% in 2025, up from 2.7% in 2024, 2.1% in 2023 and 1.5% in 2022. Hansen said in a November 10 news release that "affordability is driving this data," adding that workers are "taking smaller loans and hardship withdrawals just to keep up."
Other SECURE 2.0 provisions show stronger uptake. PSCA reported that 96.9% of sponsors offer Roth employee contributions, up from 95.6%, and 87.1% have adopted the catch-up contribution provision for participants aged 60-63, up from 73%. Additionally, 42.2% have added or plan to add Roth treatment of employer contributions, more than double the 19.7% reported last year.
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