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Emergency Savings Accounts Linked to Retirement Plans

This act allows employers to offer special emergency savings accounts linked to employee retirement plans. This makes it easier for citizens to save for unexpected expenses, benefiting from certain tax treatments and automatic enrollment, aiming to enhance financial security without impacting retirement savings.
Key points
Employers can offer pension-linked emergency savings accounts to employees.
Contributions can come from employees (treated like Roth contributions) or employers (taxable as employee income).
Accounts have no minimum balance, allow withdrawals at least monthly, and are invested in principal-preserving assets.
The maximum account balance is $2,500 (subject to inflation adjustment), with excess contributions potentially directed to the main retirement plan.
Employees can be automatically enrolled but can adjust contribution rates or opt out at any time.
Upon termination of employment, funds can be transferred to a Roth account within the retirement plan or to a Roth IRA.
The act requires using emergency savings funds before taking hardship distributions or loans from the main retirement plan.
It introduces simplified reporting and disclosure requirements for these accounts to reduce administrative burden.
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Expired
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Additional Information
Print number: 117_S_4310
Sponsor: Sen. Booker, Cory A. [D-NJ]
Process start date: 2022-05-25
Lustra uses Artificial Intelligence. Verify details in source documents.
Summarized by: gemini-2.5-flash
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Emergency Savings Act of 2022

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 117_S_4310.

Which chamber initiated this legislation?

This legislation was initiated in the Senate.

When did the legislative process begin?

The process officially started on 2022-05-25.

What are the main provisions?

Key points include:

  • Employers can offer pension-linked emergency savings accounts to employees.
  • Contributions can come from employees (treated like Roth contributions) or employers (taxable as employee income).
  • Accounts have no minimum balance, allow withdrawals at least monthly, and are invested in principal-preserving assets.
  • The maximum account balance is $2,500 (subject to inflation adjustment), with excess contributions potentially directed to the main retirement plan.
  • Employees can be automatically enrolled but can adjust contribution rates or opt out at any time.
  • Upon termination of employment, funds can be transferred to a Roth account within the retirement plan or to a Roth IRA.
  • The act requires using emergency savings funds before taking hardship distributions or loans from the main retirement plan.
  • It introduces simplified reporting and disclosure requirements for these accounts to reduce administrative burden.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Sen. Booker, Cory A. [D-NJ].

What is the latest detailed status?

The latest detailed status is: Introduced in Senate

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2026-01-02.

CATEGORIES

Labor Economy Taxes