SIA Submits Comments to the IRS on Proposed Regulations on Deemed IRAs

The Securities Industry Association (SIA)* provides comments to the Internal Revenue Service (IRS) on proposed regulations on Deemed IRAs. Regulations permit commingling of Deemed IRA assets with the host plan trust assets and that signing a separate IRA agreement issued by a sponsoring IRA trustee is not required. If the “host” plan is disqualified, it would inevitably also disqualify the Deemed IRA. SIA believes that the disqualification of the host qualified planby a deemed IRA that was not maintained properly would serve as a deterrent to potential sponsors. With both the Deemed IRA and its host qualified plan being administered together certain administrative concerns will undoubtedly arise. SIA recommends that the requirement that the trustee of a Deemed IRA program be an IRS approved nonbank Trustee under regulation section 1.408-2(e) be revised and that the designated trustee of the employer-sponsored plan be permitted to likewise serve as the trustee of the Deemed IRA portion of the plan being sponsored.

*SIFMA is the product of a merger between the Securities Industry Association (SIA) and The Bond Market Association (TBMA) in 2006.