An employer may automatically enroll employees in the new retirement plan-linked Emergency Savings Account program, but the employees must be given the chance to opt out of the program, the Department of Labor said last week.

"Automatic enrollment is not the same as mandatory participation," the department said, in a set of Frequently Asked Questions on the new program. "Employees must be given written notification before they are automatically enrolled into a PLESA program, and they have the right under federal law to opt out and withdraw their money at no charge."

The program began this month; it was created under a provision of SECURE 2.0. The emergency savings accounts are treated as designated Roth accounts. Contributions are not tax deductible, but withdrawals generally are considered tax free. Participants may withdraw funds held in PLESAs at least once a month, as needed.

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