RESOLVING THE LEDGER
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More than 6.5 million families have signed up for Trump Accounts since the savings initiative for American children officially launched on July 4, according to the Treasury Department.
A much smaller number of employers have elected to contribute to these savings accounts on behalf of employees with children enrolled in them. Bank of America , Chipotle , Dell, and Uber are among the 55+ companies that have said they’ll make Trump Account contributions for their employees, according to an independent tracker affiliated with the education site Saving for College.
Under a provision that was included in the One Big Beautiful Bill Act enacted last year, employers can contribute up to $2,500 annually, tax-free, to Trump Accounts. These savings accounts are available to any US citizen under the age of 18, and take the form of individual retirement accounts once they reach that age.
But many employers are waiting for further guidance from the Treasury on how exactly these contributions will work before rolling out employee benefits tied to Trump Accounts, sources told us.
One important question has already been addressed by the Department of Labor, which in June said that employer contributions to Trump Accounts won’t be subject to the Employee Retirement Income Security Act of 1974 (ERISA). That means that employers offering them won’t be subject to fiduciary responsibility requirements as they are for retirement plans, for example.
While this guidance was helpful, Dorian Smith, a leader with Mercer’s law and policy practice, said, “I don’t believe it’s going to move the needle at all” for employers who are undivided about contributing to Trump Accounts. As of April, two-thirds of employers surveyed by the consulting firm said they didn’t plan to implement employer or employee contributions for Trump Accounts, while 4% said they did plan to do so.
Employers are still waiting on “operational guidance that tells them exactly how to implement employer contributions to Trump accounts,” Smith said, starting with the question, “where do we send the money to?”
Bank of New York Mellon (BNY) is the designated trustee for contributions made through the pilot program seeding accounts for children born between Jan. 1, 2025 and Dec. 31, 2028 with $1,000. But once that money is deposited into a BNY account, an individual can roll it over to a different trustee, Smith explained. It’s unlikely, he said, that employers will want to deal with various financial institutions when making contributions, so the hope is that guidance will offer some mechanism for streamlining that process.
The same question remains for employers that don’t intend to make contributions to Trump accounts themselves, but want to allow workers to deduct a pre-tax contribution from their income (known as a “cafeteria plan”). “Where do we send that money to? I’ve withheld it from the employee’s pay, but now I need to forward it somewhere,” he said.
Companies are also waiting on additional guidance about non-discrimination rules that will apply to Trump Accounts, Smith said. Such tests seek to ensure that highly compensated employees don’t disproportionately benefit from plans such as 401(k)s.
In a speech in Georgia on July 22, President Donald Trump called these accounts the “most consequential” provision of the One Big Beautiful Bill Act. But whether they prove consequential to the average employee benefits package depends on a number of factors, including whether lawmakers elect to extend the pilot program, and to what extent HR leaders can make room for contributions in their budgets.
“Everyone’s going to have a different list of priorities,” Matt Taylor, CEO of Guardian HR, an HR consulting and employment law firm, told us. He ticked off a number of common line items on benefits budgets, including healthcare, retirement account contributions, and other types of dependent care support, like flexible spending accounts .
“Where does the Trump Account land on that? We don’t know that yet.”
This story was originally featured on Fortune.com
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