Treasury/IRS Trump Accounts Proposed Rule

Summary

SIFMA provided comments to the Internal Revenue Service (IRS) and believe that tax-advantaged savings programs, such as Trump accounts, are essential tools to help savers build wealth. Helping Americans build long-term savings, including for retirement, is among the most important roles of the U.S. capital markets. Trump accounts can jumpstart the financial future for American children through the power of compound interest and provide key opportunities to promote saving and investment in capital markets starting in childhood to build financial foundations for a lifetime. As Treasury works to implement Trump accounts, SIFMA supports practical, workable solutions for operationalizing these accounts and welcome working with Treasury and other stakeholders toward achieving this goal.

Excerpt

I. Executive Summary

Our suggestions reply to specific questions regarding potential changes to non-bank trustee requirements and aim to clarify account elections and responsible party authority and streamline transfers and promote portability. They include:

• Modify non-bank trustee net worth and fiduciary experience requirements as suggested by Treasury.
• Clarify account elections and responsible party authority.
• Streamline transfers and promote portability.

II. Support modifications to non-bank trustee requirements to reflect modern custodial models.

The proposed rule specifically requests comments on:

• whether the adequacy of net worth requirement in § 1.408–2(e)(5)(ii) should be changed to treat certain debt as equity (for example, for broker-dealers, debt meeting the conditions specified in the rule may be treated as capital pursuant to the Securities and Exchange Commission rule in 17 CFR 240.15c3–1),
• whether the special rule for a governmental unit seeking to be a nonbank trustee in § 1.408–2(e)(8) should be expanded to include other types of IRAs (including Trump accounts) beyond a deemed IRA that is part of the governmental unit’s own qualified employer plan, and
• whether the fiduciary experience requirement in § 1.408–2(e)(2)(iii) should take into account the fiduciary experience of subcontractors of the applicant.