Industry Groups Back Trump Accounts, Seek Further Guidance

Major financial industry and employer groups are pressing federal regulators for clearer rules and operational guidance on 530A accounts, commonly known as Trump Accounts. The initiative scheduled to start in July is designed to give children tax-advantaged retirement savings accounts, as the Department of the Treasury and Internal Revenue Service prepare formal regulations.

In formal comment letters submitted over the past week in response to IRS Notice 2025-68, which outlined initial guidance and solicited feedback on the accounts, organizations representing investment managers, large employers and retirement service providers said they broadly support the program’s goal of encouraging long-term saving. But they warned that unresolved questions—related to issues ranging from employer participation and account administration to investment rules and rollovers—could complicate implementation unless regulators provide detailed guidance before the accounts become fully operational.

The accounts may be opened for children younger than age 18 and will be treated as traditional individual retirement accounts under Section 408 of the Internal Revenue Code, but with special “growth period” rules lasting until the year the child turns 18. They function as starter retirement accounts and can be funded by parents, employers, the federal government and other sources. They will generally grow tax-advantaged until the child reaches adulthood, after which the account transitions to rules similar to a traditional IRA.

Sorting Out Details

In its detailed letter, the Investment Company Institute stated that the accounts could help “foster a culture of investing among young people” and praised the Treasury for issuing early guidance. But the organization recommended changes to ensure the program operates smoothly and competitively. Among its proposals:

• Safeguards to prevent the Treasury-selected default account provider from gaining an unfair market advantage;
• Flexibility for custodians to manage contributions and correct excess deposits;
• Broader definitions of permissible investments; and
• Clear rules to ensure government and other contributions reach the correct account after rollovers.

The ICI also emphasized the need for a competitive marketplace of account providers and streamlined rollover processes to allow families to move accounts to private financial institutions, if they choose.

Large employers, represented by the ERISA Industry Committee, also welcomed the accounts but wrote that they needed clearer guidance before committing to contribute on behalf of workers’ children. The committee’s key concerns included whether employer contributions would trigger Employee Retirement Income Security Act coverage, how nondiscrimination rules would apply, and what documentation and reporting requirements employers must meet.

The group also urged Treasury to establish a centralized “common remitter” to handle employer contributions, arguing that without one, employers could face the burden of coordinating payments with multiple account providers.

Independence Day Deadline Looms

The ERIC stated that regulatory certainty is especially important because the accounts are expected to become operational by July 4, warning that employers may hesitate to participate if final rules arrive too late.

The SPARK [Society of Professional Asset Managers and Recordkeepers] Institute, whose members administer retirement plans for millions of workers, wrote that Trump Accounts should be integrated into the broader U.S. retirement system, rather than treated as a stand-alone program. The group described the accounts as “starter IRAs” that can eventually link to employer plans or other retirement vehicles.

To ensure that connection works, the SPARK Institute urged regulators to clarify how accounts can be rolled over to private providers, to confirm that providers may charge administrative fees and to issue guidance on employer contributions and payroll-based programs.