BENEFITS DIGEST

Comments on the proposed Trump Account investment rules are due October 20. The proposal's requirement that eligible funds invest at least 90 percent in U.S. equities remains contested. It also excludes ESG index funds even though they aren't sector funds. Speaking at a webinar covered by NAPA, Mindset's Chantel Sheaks said the 0.1 percent fee cap includes all charges to the account holder, whatever they're called. Actively managed funds generally wouldn't qualify.

A comment deadline is approaching on the investment side of the accounts we covered all week. October 20 is the date for [the August proposed regulations](https://www.federalregister.gov/documents/2026/08/21/2026-17123/guidance-on-eligible-investments-for-trump-accounts) defining what a Trump Account may hold. The proposed rules are strict. Mutual funds or ETFs only, tracking the S&P 500 or another broad U.S. equity index (no sector, ESG-focused, or actively managed funds, and no leverage), with annual fees capped at 0.1 percent of assets. Under the proposal, trustees would offer only eligible funds, name a default, monitor eligibility annually, and unwind any fund that falls out of compliance within 30 days. The investment menu would stay deliberately narrow, and employers considering contributions should understand those limits before describing the benefit to employees.

The first alert to give equal time to the second proposed rule: what Trump accounts may actually hold during the growth period. Investments must be index tracking mutual funds or ETFs with no leverage and annual fees capped at 0.1 percent of net asset value—actively managed funds, fund of funds structures, and ESG index funds are all ineligible—and trustees must re-verify eligibility every twelve months and dispose of noncompliant holdings within thirty days. On the employer side, two cautions easy to miss: a written employee certification is not enough by itself to verify an account, and contributions escape income tax but remain wages for FICA and FUTA. A safe harbor covers employers that match the $1,000 pilot contribution identically for all non-excluded employees.

Two sets of proposed regulations address how employer-sponsored Trump Account contribution programs will operate and how account assets may be invested before a beneficiary turns 18. Seyfarth walks through the requirements, including a separate written plan document, a $2,500 per-employee cap on tax-favored Section 128 contributions, cafeteria plan elections for employee pre-tax contributions to dependents' accounts, and nondiscrimination testing that tracks the dependent care FSA rules. Contributions default to an S&P 500 index ETF with ESG index funds off the table, and open questions remain, from tracking eligible dependents to coordinating contributions across a controlled group.

Proposed regulations under section 530A would confine Trump Account investments during the growth period to unleveraged index funds that track broad U.S. equity benchmarks and charge annual fees of 0.1% or less, excluding actively managed, sector, and ESG-labeled funds. Employers contributing to the accounts bear no fiduciary duty for investment selection but should confirm contributions flow to compliant accounts. Comments are due October 20.

The IRS issued a proposal outlining the acceptable investments for Trump Accounts. The proposal covers fees, foreign investments, ESG funds, and other investment management issues.

EBSA sent its replacement for the 2022 Biden-era ESG rule to OIRA on June 30, 2026; agenda target release July 2026. Expected to restrict fiduciary consideration of climate/social factors under the

The US Treasury also posted a rule list that provides SECURE 2.0 guidance including required minimum distributions.