Compliance News | July 6, 2026
The DOL has issued guidance specifying that a Trump Account is generally not a pension plan for purposes of ERISA even where an employer allows employee contributions. While this guidance was expected, its issuance is a major step that should encourage employers to establish programs that allow employees to contribute to Trump Accounts that parents establish for their children.
Trump Accounts were established under the Internal Revenue Code (IRC) by the One Big Beautiful Bill Act of 2025 (OBBBA), effective July 4, 2026. OBBBA did not amend ERISA when creating Trump Accounts.
Generally, parents (and others) may establish Trump Accounts for children under age 18 (technically, before January 1 of the year the child attains age 18). The period until age 18 is known as the “growth” period and is subject to special rules, including rules on allowable investments. Once the growth period ends, the Trump Account becomes generally subject to the rules for individual retirement accounts (IRAs).
The IRC allows employers to permit pre-tax contributions and after-tax payroll deductions to their child’s Trump Account in situations where the child is the dependent. Employers could, in the future, allow employees (e.g., those age 16 or 17), to make contributions to their already existing Trump Account.
For more information on Trump Accounts, including citations to Treasury Department regulations, see our January 7, 2026 insight “Initial Guidance on Trump Accounts.”
If the DOL considered Trump Accounts to be pension plans under ERISA, the ERISA rules would also apply to Trump Accounts. In DOL Technical Release 2026-02, the DOL concluded that Trump Accounts, during the growth period, were not pension plans under ERISA because employer contributions would be made, in most cases, to dependents of employees and not to the employees themselves. In the few cases where a 16-year-old or 17-year-old might be an employee and thus the contribution would be to an employee’s own Trump Account, the DOL determined that the Trump Account would still not be a pension plan if it satisfied the existing minimal employer involvement exception for IRAs.
After the growth period, Trump Accounts become IRAs of the child and generally fall under the IRA exceptions to ERISA.
Individuals may establish Trump Accounts starting July 4, 2026. Individuals who have children eligible for the government’s $1,000 contribution for children born on or after January 1, 2025 and before January 1, 2029 under the Trump Account “pilot project” are likely to establish a Trump Account as soon as possible.
Offering employees the option to make pre-tax contributions to Trump Accounts is likely to be attractive to some employers. Many of the rules that govern employer plan design, including the nondiscrimination rules under the IRC that will apply to Trump Accounts, remain undefined. The general belief is that the nondiscrimination rules, when issued, will apply rules like those that currently apply to dependent care assistance programs and cafeteria plans, The Treasury has not yet issued applicable Trump Account rules although they have indicated they are a top priority.
Most employers are likely to wait to allow employees to make pre-tax contributions to Trump Accounts until the 2027 calendar year, when there will be more guidance, and the change will coordinate with any other changes to the benefit package for 2027. However, employers may need to make decisions now to be ready for 2027 even in the absence of complete guidance.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.