On June 17, 2026, the U.S. Department of Labor (DOL) issued important guidance clarifying the Employee Retirement Income Security Act (ERISA) status of Trump Accounts, also known as Section 530A accounts. In Technical Release 2026-02, the DOL confirmed that most Trump Accounts are not subject to Title I of ERISA, providing welcome clarity for employers considering contributions to these accounts.
This guidance removes a significant compliance concern for employers by confirming that employer and employee pre-tax contributions made through an employer contribution program to a Trump Account established for the benefit of an employee’s dependent child generally will not create an ERISA-covered employee benefit plan. The DOL also clarified that, in the less common circumstance where contributions are made to a Trump Account benefiting an employee directly, ERISA coverage may still be avoided if the arrangement satisfies certain conditions designed to limit employer involvement and preserve employer neutrality.
Background on Trump Accounts
Trump Accounts were established under the One Big Beautiful Bill Act signed into law on July 4, 2025. The accounts are a new type of traditional individual retirement account (IRA) under Code Section 530A, designed to help eligible children build savings through long-term investment accounts established before age 18.
For qualifying children who are U.S. citizens born between January 1, 2025, and December 31, 2028, the U.S. Treasury will provide a one-time $1,000 pilot program contribution. Beginning July 4, 2026, employers, family members, and other organizations may contribute to these accounts during the “growth period” (generally the period prior to January 1 of the year in which the beneficiary reaches age 18).
During this growth period, employers may contribute up to $2,500 annually per employee through an employer contribution program. These employer contributions generally are excluded from the employee’s taxable income and count toward the account beneficiary’s annual aggregate contribution limit of $5,000. The annual contribution limit adjusts for inflation after 2027.
A beneficiary may also establish a subsequent Trump Account, known as a rollover Trump Account, through a trustee-to-trustee transfer of the entire balance from an existing Trump Account. Because the transfer must include the account’s full balance, only one funded Trump Account may exist for a beneficiary at any given time.
New Guidance Clarifies ERISA Treatment of Trump Accounts
The DOL concluded that Trump Accounts established for an employee’s dependent child generally do not meet ERISA’s definition of an employee pension benefit plan because the accounts are intended to benefit the child and not to provide retirement income or deferred compensation to the employee. As a result, employer contributions and employee pre-tax contributions made to a dependent child’s Trump Account through an employer contribution program generally will not cause the arrangement to become subject to ERISA.
Although most Trump Accounts are not subject to ERISA, certain requirements that apply to a Code Section 129 dependent care assistance program (regarding nondiscrimination as to contributions, benefits, eligibility, and average benefits provided, employee notifications, and statements of benefits provided) will apply to a Trump Account contribution program.
Importantly, the DOL’s Technical Release addresses only the ERISA status of Trump Accounts. Employers are still awaiting additional guidance on the tax, administrative, reporting, payroll, and operational requirements associated with establishing and maintaining Trump Account contribution programs. The IRS and Treasury Department are expected to issue further guidance in the near future.
Limited Exception for Accounts Benefiting Employees
The DOL also addressed a less common scenario involving employees who are themselves eligible Trump Account beneficiaries (for example, employees age 16 or 17). In those situations, employer involvement could raise ERISA concerns because the account is benefiting the employee rather than the employee’s dependent.
To address this issue, the DOL outlined two separate IRA safe harbors under which these arrangements may remain outside the scope of ERISA.
- Employer Contributions During the Growth Period
The first safe harbor applies to employer contributions made through an employer contribution program during the account’s growth period. Under this framework, the arrangement generally will not be treated as an ERISA-covered benefit provided participation is completely voluntary and the employer does not:
- Impose conditions on how account funds are used beyond those permitted by law;
- Make or influence investment decisions with respect to funds contributed to a Trump Account;
- Represent the account as an employee pension benefit plan or an employee welfare benefit plan established or maintained by the employer; or
- Receive any payment or compensation in connection with the account.
Requiring contribution conditions to satisfy applicable Internal Revenue Code requirements does not, by itself, affect the above conclusion, provided that the employee or trustee does not place additional restrictions on an employee’s ability to roll over funds to another Trump Account beyond those restrictions imposed by the code.
- Employee After-Tax Contributions Outside an Employer Contribution Program
While employers may not make a Code Section 128 employer contribution to a Trump Account after the growth period, the DOL confirmed that employers may permit employees to contribute to their own Trump Accounts through after-tax payroll deductions, outside of an employer contribution program, both during and after the growth period. These arrangements are generally analyzed under a framework similar to existing payroll deduction IRA safe harbors.
Importantly, an employee’s ability to make after-tax contributions through this type of payroll deduction arrangement is not lost solely because the safe harbor conditions for employer and employee pre-tax contributions were not satisfied during the account’s growth period. In addition, employers may find that certain employee contributions must be made on an after-tax basis to satisfy the nondiscrimination requirements applicable to employer contribution programs.
Employer Neutrality Remains Critical
For both of the above arrangements, the DOL emphasized that employer neutrality is essential. Employers may provide information and facilitate participation, but they must avoid actions that could be viewed as endorsing a particular account provider or product.
Examples of permissible activities include:
- Providing general program information about Trump Accounts, including posting to an employer’s intranet site;
- Distributing educational materials on long-term savings and Trump Accounts; and
- Providing links to the official government Trump Account website.
Notably, the neutrality standard for Trump Accounts is more restrictive than the guidance applicable to Health Savings Accounts (HSAs). While HSA guidance generally permits employers to designate a single HSA trustee or custodian and limit which providers may market products in the workplace, the DOL emphasized that employers facilitating Trump Accounts must remain neutral. Although employers may narrow the field of available providers, they should avoid recommending, endorsing, or appearing to favor any particular provider or investment option.
Employer Action Steps
Employers interested in establishing a Trump Account contribution program should consider the following steps:
- Determine the program design. Consider whether the program will be limited to employees’ dependent children. Doing so will generally allow the arrangement to remain outside ERISA coverage under the DOL’s guidance. Employers should also determine whether contributions will consist of employer contributions, employee pre-tax contributions through a Section 125 cafeteria plan, or a combination of both.
- Adopt a written plan document for the Trump Account contribution program. Although generally not subject to ERISA, Code Section 128 requires employers to maintain a written plan document. The written plan document must describe eligibility, administration, and reporting.
- Coordinate with payroll, recordkeeping, and account providers. Establish processes for employer contributions and any employee contribution elections permitted under the program. Payroll systems should be configured to track Code Section 128 contributions separately from wages, monitor applicable contribution limits, and ensure that contributions are appropriately identified to the account trustee as Code Section 128 employer contributions. Employer contributions must be reported to the trustee and on Form W-2 (Code TA). Employers should confirm that vendors can support the program’s administrative and compliance requirements.
- Avoid actions that could increase ERISA or fiduciary risk. Maintain employer neutrality by avoiding endorsements of specific investment products, account providers, or account performance. Employers should not control investment decisions, restrict account use beyond statutory requirements, represent the arrangement as an employer-sponsored benefit, or accept compensation related to the accounts. Educational communications should remain factual and objective.
- Prepare for nondiscrimination compliance. Trump Account contribution programs are subject to requirements similar to those applicable to Code Section 129 dependent care assistance programs, including nondiscrimination requirements relating to contributions, benefits, and eligibility. Employers should be prepared to monitor compliance and conduct any testing that may be required by future IRS guidance.
- Monitor future IRS and Treasury guidance. The DOL guidance addresses only the ERISA status of Trump Accounts. Additional guidance regarding administration, taxation, reporting, and operational requirements is still anticipated. Employers may wish to continue monitoring developments before implementing a program.
Looking Ahead
The DOL’s confirmation that most Trump Accounts are not subject to ERISA provides welcome clarity and removes a significant compliance hurdle for employers interested in offering this new benefit. While additional guidance from the IRS and Treasury Department is expected, employers now have greater certainty that contributions made for employees’ dependent children generally can be offered without creating an ERISA-covered plan. In limited circumstances where the contribution benefits employees under the age of 18, ERISA status may still be avoided, provided employers adhere to the applicable safe harbor rules.
Employers considering a Trump Account contribution program should work with their payroll providers, financial institutions, and legal advisors to ensure the arrangement is structured in accordance with the DOL’s guidance and any future regulatory developments.
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