T. ROWE PRICE LAUNCHES PENSION-LINKED EMERGENCY SAVINGS ACCOUNTS

Rhea-AI Summary

T. Rowe Price has launched industry-first pension-linked emergency savings accounts (ESAs) for retirement plan participants, enabled by the SECURE 2.0 Act of 2022. The new feature allows non-highly compensated employees to save up to $2,500 for emergencies within their 401(k), 403(b), or 457(b) plans.

Key findings show that 64% of T. Rowe Price's 401(k) participants cannot cover six months of expenses. Industry projections indicate 70% of advisors expect increased adoption of in-plan solutions within 3-5 years.

The ESAs complement T. Rowe Price's existing emergency savings solutions, including an out-of-plan savings app and emergency expense withdrawals up to $1,000 penalty-free from retirement plans. Once participants reach the ESA limit, additional contributions automatically convert to non-ESA Roth retirement contributions.

The in-plan emergency savings accounts, believed to be an industry first, allows retirement savers the ability to directly contribute to emergency savings

BALTIMORE, April 22, 2025 /PRNewswire/ -- T. Rowe Price, a global investment management firm and a leader in retirement, today announced the launch of its in-plan emergency savings accounts (ESAs) for retirement plan participants, believed to be an industry first. The solution is made possible by the passage of the SECURE 2.0 Act of 2022 which includes a provision for pension-linked emergency savings accounts that allows non-highly compensated employees to save up to $2,500 toward emergency expenses within their 401(k), 403(b) or governmental 457(b), if permitted by the plan. Once they have reached the $2,500 limit, any additional contributions are automatically converted to non-ESA Roth contributions toward their retirement account.

"As a leader in retirement, T. Rowe Price is proud to lead the charge in the industry with its in-plan emergency savings accounts," said Francisco Negrón, head of Retirement Plan Services at T. Rowe Price. "For many, emergency expenses can be a barrier to saving for retirement. ESAs expand our retirement plan offering and can give retirement savers more confidence about handling the unexpected while staying on the path toward a secure retirement."

T. Rowe Price recently found that 64% of its 401(k) participants, who responded to a financial wellness questionnaire hosted by the firm, are unable to cover six months' worth of expenses. Meanwhile, Emergency savings solutions, one of the themes from the firm's Retirement Market Outlook for 2025, are expected to gain traction in the industry, with 70% of advisors and consultants anticipating a rise in in‑plan solutions and 52% expecting an increase in out‑of‑plan solutions within three to five years.

"Every retirement product T. Rowe Price brings to market is grounded in thoughtful research and a deep understanding of the evolving needs of retirement savers," said Dennis Elliott, head of Retirement Plan Services products and platforms at T. Rowe Price. "It is this commitment to insight-driven innovation that keeps us ahead of the curve and focused on providing solutions that can drive better retirement outcomes for our clients."

ESAs are the latest addition to T. Rowe Price Retirement Plan Services' suite of emergency savings solutions, including an out-of-plan savings app that allows employees the ability to save three to six months of expenses toward emergency savings. The firm also supports emergency expense withdrawals, which allow employees to withdraw up to $1,000, penalty-free, from their retirement plan for emergency expenses. T. Rowe Price plan sponsor clients are able to adopt one or any combination of the optional solutions, giving them the flexibility to offer what will help best support the diverse needs of their employees.

"Our mission at T. Rowe Price is simple: to meet the diverse needs of retirement savers by empowering them with choice and flexible solutions," said Michael Davis, head of Global Retirement Strategy for T. Rowe Price. "We hope this removes a point of stress in saving for retirement so that individuals can focus on the exciting possibilities of their retirement years."

ABOUT T. ROWE PRICE

Founded in 1937, T. Rowe Price (NASDAQ – GS: TROW) helps individuals and institutions around the world achieve their long-term investment goals. As a large global asset management company known for investment excellence, retirement leadership, and independent proprietary research, the firm is built on a culture of integrity that puts client interests first. Clients rely on the award-winning firm for its retirement expertise and active management of equity, fixed income, alternatives, and multi-asset investment capabilities. T. Rowe Price serves millions of clients globally and manages US $1.57 trillion in assets under management as of March 31, 2025. About two-thirds of the assets under management are retirement-related. News and other updates can be found on Facebook, Instagram, LinkedIn, X, YouTube, and troweprice.com/newsroom.

View original content to download multimedia:https://www.prnewswire.com/news-releases/t-rowe-price-launches-pension-linked-emergency-savings-accounts-302434617.html

SOURCE T. Rowe Price Associates, Inc.

FAQ

What is the maximum amount allowed in T. Rowe Price's new emergency savings accounts (ESAs)?

The maximum amount allowed in T. Rowe Price's ESAs is $2,500. Once this limit is reached, additional contributions automatically convert to non-ESA Roth retirement contributions.

How does SECURE 2.0 Act enable T. Rowe Price's emergency savings accounts?

The SECURE 2.0 Act of 2022 includes provisions for pension-linked emergency savings accounts, allowing non-highly compensated employees to save for emergencies within their 401(k), 403(b), or governmental 457(b) plans.

What percentage of T. Rowe Price 401(k) participants lack adequate emergency savings?

64% of T. Rowe Price's 401(k) participants who responded to their financial wellness questionnaire cannot cover six months' worth of expenses.

What other emergency savings solutions does T. Rowe Price offer besides ESAs?

T. Rowe Price offers an out-of-plan savings app for 3-6 months of emergency expenses and allows emergency withdrawals up to $1,000 penalty-free from retirement plans.

What happens when T. Rowe Price ESA participants exceed the $2,500 limit?

When participants exceed the $2,500 ESA limit, any additional contributions are automatically converted to non-ESA Roth contributions in their retirement account.