Trump Accounts Not Subject to ERISA: Industry Wants Certainty
The Internal Revenue Service and Department of Treasury is getting plenty of advice from industry organizations regarding how the agency can successfully launch Trump Accounts—and particularly about the need for certainty that the new accounts themselves are not subject to ERISA jurisdiction.
On Friday alone, the Investment Company Institute (ICI), the ERISA Industry Committee (ERIC) and the National Association of Insurance and Financial Advisors (NAIFA) all submitted comments and recommendations to Treasury and the IRS on the guidance and request for information related to section 530A establishing Trump accounts.
The provision, which was included in the One Big Beautiful Bill Act, establishes new tax-advantaged investment accounts for U.S. children under the age of 18. The Treasury Department and the IRS intend to issue proposed regulations reflecting and adding to the guidance already issued back in December.
ICI promotes competition, choice
ICI submitted a detailed list of recommendations support the effective implementation of Trump Accounts as the youngest Americans receive $1,000 from the government to launch their investment journey at birth.
“The recommendations we submitted today are focused on ensuring Trump Accounts are implemented efficiently and in a way that promotes competition and investor choice.”
ICI President and CEO Eric Pan
“ICI was one of the earliest supporters of Trump Accounts because we believe that introducing investing at birth can put young Americans on a path toward long-term financial security. The recommendations we submitted today are focused on ensuring Trump Accounts are implemented efficiently and in a way that promotes competition and investor choice, both of which are essential to making this program work for families over the long term,” said ICI President and CEO Eric Pan.
ICI has emphasized to Treasury that a competitive marketplace for account trustees and custodians is essential. Treasury should mitigate competitive advantages associated with one firm being selected as the initial account provider, including through white-labeling and avoiding potential impediments to rollovers so families can move accounts easily to their preferred financial institutions.
ICI also recommended that Treasury broadly interpret the eligible investment requirements for the benefit of investors. For example, allowing fund-of-funds structures offers Americans a route towards convenient diversification and professional asset allocation.
Additionally, ICI asked the administration to clarify that Trump Accounts and employer contribution programs are not subject to ERISA and to offer guidance on the application of the $2,500 annual limit on employer contributions.
Click here to read the full ICI letter.
ERIC calls for needed clarification
Drawing on the unique experiences its member companies have providing tools individuals use to plan for financial security, ERIC’s comment letter outlined several areas to be addressed in proposed regulations. Some suggestions include clarifying that employer contributions do not create an ERISA-covered plan, guidance on how employers may efficiently remit funds, and specificity about documentation requirements and other technical issues.
“Large employers are at the forefront of helping millions of American workers achieve financial security and wellness, including planning so that their children can have a head start toward reaching their dreams. Trump accounts represent an exciting new tool that many Americans will consider to help make those dreams a reality,” said Andy Banducci, ERIC’s Senior Vice President for Retirement and Compensation Policy. “Once regulations are proposed, ERIC looks forward to offering informed comments and working with the IRS, Treasury, and other agencies to ensure these new accounts are simple to operate and practical to adopt.”
ERIC’s full comment letter is available here.
NAIFA wants advisors involved
While NAIFA offered specific recommendations on investment flexibility and ERISA clarification in its formal comments, the organization made clear that the long-term success of Trump Accounts will ultimately depend on one critical factor: meaningful inclusion of financial advisors in the program’s implementation and ongoing administration.
“Trump Accounts represent a meaningful opportunity to promote early savings and financial security from birth,” said NAIFA President Christopher L. Gandy, LACP. “But accounts alone do not build wealth; relationships, education, and disciplined guidance do. NAIFA members stand ready to help families use these accounts responsibly and strategically to secure brighter financial futures for their children.”
“Restricting access to broader investment options limits customization and prevents advisors from tailoring strategies to the specific needs of the individual.”
NAIFA President Christopher L. Gandy
In its comments, NAIFA recommended that the Treasury Department work with Congress to amend current investment restrictions that limit Trump Accounts primarily to index funds and ETFs. While these investments can be appropriate in many circumstances, NAIFA cautioned that overly restrictive investment menus could limit customization and long-term performance.
“Restricting access to broader investment options limits customization and prevents advisors from tailoring strategies to the specific needs of the individual,” Gandy said. “Financial experts are positioned to responsibly advise their clients on the multitude of investment options available to them and then use that knowledge to maximum value and returns over time.”
NAIFA also called for clear confirmation that Trump Accounts themselves are not subject to ERISA jurisdiction. Because employers may contribute to these accounts but cannot establish or maintain them, NAIFA emphasized that the accounts should not be treated as employer-sponsored benefit plans. Subjecting the accounts to ERISA requirements could create administrative conflicts, litigation risk, and barriers that discourage employer participation—undermining the program’s effectiveness and limiting family access.
Bessent: Trump Accounts a legacy-defining policy
In remarks on Jan. 28, Treasury Secretary Scott Bessent referred to Trump Accounts as “The Defining Policy of America’s 250th Anniversary.”
“Trump Accounts are among the most significant policy innovations of modern times. They mark a singular moment in economic history by expanding the benefits of private ownership and compound growth to all Americans,” Bessent said while addressing the House of Representatives.
Trump Accounts are government-established, tax-advantaged investment accounts for children under 18, designed to build long-term wealth through stock market growth. Established under the 2025 One Big Beautiful Bill Act, they feature a $1,000 Treasury-funded investment for U.S. citizen newborns (2025–2028), with potential for added family and employer contributions.
SEE ALSO:
• Treasury, IRS Release Guidance on ‘Trump Accounts’
• Trump Accounts Website Goes Live as Ray Dalio Pledges Contribution
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.