The U.S. Department of Labor (the “DOL”) recently issued Technical Release 2026-02, providing guidance on whether certain Trump accounts established under Section 530A of the Internal Revenue Code and the One, Big, Beautiful Bill Act (“Trump Accounts”) and employer contribution programs to such accounts constitute employee pension benefit plans subject to Title I of ERISA.  In general, the DOL concluded that Trump Accounts and related employer contribution programs are not subject to Title I of ERISA.

Background

Trump Accounts are a new type of individual retirement account (“IRA”) for eligible individuals under age 18.  Unlike traditional IRAs, which generally require compensation income for contributions, Trump Accounts may receive contributions from several sources, including employers, employees as account beneficiaries, and employees contributing as family members.  Notably, beginning January 1 of the calendar year in which the account beneficiary attains age 18, the Trump Account converts to a traditional IRA.  As of July 4, 2026, contributions may now be made to Trump Accounts.

Key Takeaways

• Accounts for employees’ dependents generally are not ERISA plans.  In order to be an ERISA pension plan, the plan must provide retirement benefits to employees themselves.  Accordingly, an account that benefits only an employee’s dependent generally would not be an ERISA plan.
• Accounts for employees with employer contributions may rely on the HSA safe harbor.  Recognizing that ERISA coverage could potentially apply to accounts that benefit employees (such as employees who are age 16 or 17), the DOL likened Trump Accounts to health savings accounts, where an employer may contribute while maintaining limited involvement.  Because Trump Accounts may receive funding from a variety of sources, the DOL reasoned that employer contributions should not be a significant factor in analyzing the status of Trump Accounts under ERISA.  Accordingly, ERISA coverage will generally not apply if employee participation is completely voluntary and the employer does not restrict use of account funds beyond applicable federal tax rules, make or influence investment decisions, represent that the arrangement is an ERISA plan, or receive compensation in connection with the account.
• Accounts for employees with employee-only contributions may rely on the IRA safe harbor.  For accounts funded solely with employee contributions, the DOL confirmed that the IRA safe harbor regulation would apply and provided examples of permissible employer involvement that would not jeopardize safe harbor status.

Employers considering facilitating contributions to Trump Accounts should carefully structure the arrangement consistent with DOL and applicable Internal Revenue Code requirements, including the Code Section 128 Trump Account contribution program requirements and related non-discrimination, notice, and reporting obligations.

The Nelson Mullins Employee Benefits Group is ready to assist with questions or to discuss your options. Please contact one of our Employee Benefits attorneys or the Nelson Mullins attorney with whom you work.