Washington, D.C. — U.S. Representatives Eugene Vindman (D-Va-07) and Glenn “G.T.” Thompson (R-Pa.-15) and U.S. Senators Todd Young (R-Ind.) and Cory Booker (D-N.J.) introduced the Emergency Savings Enhancement Act, a bipartisan bill to strengthen Americans’ financial security by making emergency savings more accessible.
“Too many Americans are one flat tire, one medical bill, or one missed paycheck away from financial crisis,” said Vindman. “The Emergency Savings Enhancement Act builds on proven bipartisan reforms to give working families a safer, more effective tool to handle emergencies without sacrificing their long-term retirement security. By expanding these savings options, we can help Virginians weather life’s storms while protecting their futures.”
“Far too many Americans don’t have emergency savings when they need it, and this bill gives workers a straightforward way to build emergency savings directly within their retirement plans,” said Glenn “G.T.” Thompson. “I am proud to work with Rep. Vindman, Senator Young, and Senator Booker to make these commonsense updates to help families prepare for unexpected challenges without creating new burdens on taxpayers.”
The legislation is led in the U.S. Senate by Senators Todd Young (R-Ind.) and Cory Booker (D-N.J.)
“As a father of four, I understand the impact that unexpected expenses can have on a family budget. Our bill will provide workers and families with additional options to build savings for unexpected expenses, without tapping into retirement savings. If passed, our bill will support Indiana families and build financial security for working Hoosiers,” said Young.
“For millions of working families, an unexpected expense can quickly push them into financial turmoil—even more so as families face rising costs of rent, groceries, and other essentials,” said Booker. “In 2022, Senator Young and I passed legislation to create emergency savings accounts to help families weather these storms while also saving for their retirement. Today, we are introducing a proposal building on that progress, enhancing emergency savings accounts to help strengthen workers’ financial stability and support their path to a secure retirement.”
The Emergency Savings Enhancement Act builds on the bipartisan SECURE Acts of 2019 and 2022, which first established Pension-Linked Emergency Savings Accounts (PLESAs). These accounts include a “sidecar” feature that lets workers automatically set aside savings for emergencies alongside their retirement contributions. Funds in the emergency account can be withdrawn at any time, tax- and penalty-free, to cover unexpected expenses.
By modernizing PLESAs, this legislation makes it easier for Americans to build emergency savings without jeopardizing their long-term retirement goals. Broader adoption of PLESAs will help workers and their families grow their savings while simultaneously reducing the federal deficit, as scored by the Congressional Budget Office.
Specifically, the Emergency Savings Enhancement Act would modernize and improve PLESAs by:
- Raising the contribution limit to pay for real-world emergencies. The current $2,500 PLESA cap falls short of covering real emergency costs, such as a substantial medical bill or major car repair. Raising the contribution limit to $5000 better reflects today’s financial realities and helps families avoid high-interest debt, costly early retirement withdrawals, and reliance on public assistance.
- Cutting red tape for business owners. By eliminating the PLESA exclusion for highly compensated employees, this bill creates a fair standard for all workers and encourages broader business adoption by reducing administrative complexity.
This Emergency Savings Enhancement Act is endorsed by the National Taxpayers Union, Progressive Policy Institute, U.S. Chamber of Commerce, Alight, Vestwell, Prosperity Now, SaverLife, WISER, Financial Finesse, Sunny Day Fund, Aspen Institute, Commonwealth, T. Rowe Price, Voya, UnidosUS, Third Way, and Bipartisan Policy Center Action.
“Too many working Americans are one emergency expense away from financial hardship,” said Michele Stockwell, President, Bipartisan Policy Center Action. “This commonsense bill, led by Sens. Todd Young (R-IN) and Cory Booker (D-NJ) and Reps. Eugene Vindman (D-VA) and Glenn “GT” Thompson (R-PA), tackles that problem by making it easier for employers to help their workers automatically save for an emergency, alongside their retirement accounts. By passing the Emergency Savings Enhancement Act of 2025, Congress can build on the progress of the bipartisan SECURE 2.0 Act and strengthen middle class financial security.”
BACKGROUND
Across the country, millions of American families remain on precarious financial footing. According to the Federal Reserve, 37% of adults cannot cover a $400 expense, and nearly half lack the savings to weather a $2,000 emergency. Credit card debt is at record highs, delinquencies are rising, and one in four non-retired adults has no retirement savings at all. Vindman introduced the Emergency Savings Enhancement Act to provide Americans with an alternative to costly hardship withdrawals and predatory high-interest loans that sabotage long-term financial security.
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