Pub. 4 2014-2015 Issue 6

20 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE TRISH REILLEY ASCENSUS The Department of Treasury issued final regulations in December 2014 governing the new retirement savings bond created for the my RA program. Coordination of my RAsSMWith Other IRAs —What Financial Organizations Need to Know I n a January 2014 State of the Union address, President Barack Obama outlined his plan to help workers save for retirement—specif- ically geared for those who do not partici- pate in an employer-sponsored retirement plan. In late 2014, the Department of the Treasury rose to the challenge and created the “my Retirement Account” (myRASM) program, which generally is a payroll-de- duction Roth IRA savings program invested in a new government-backed saving bond. While no private sector organization can of- fer myRAs—other than Comerica Bank, the appointed custodian—financial organizations should not be quick to ignore myRAs because there are areas where myRAs and private sector IRAs overlap. The my RA program is now live at the Treasury’s my RA website and individuals only can sign up online. Although not re- quired, employers are encouraged to offer this programas a way to help their employees begin saving for retirement. As individuals begin signing up for these accounts, financial organizations may find themselves fielding questions and seeing overlap with private sector IRAs, particularly concerning aggre- gated IRA contribution limits and portability. The my RA My RAs are Roth IRAs with certain product-specific limitations as defined by the Treasury and Comerica to fit the admin- istrative parameters of the program. Because my RAs are Roth IRAs, they must follow the Roth IRA rules under Internal Revenue Code Section (IRC Sec.) 408A. They are available to single tax return filers withmodified adjusted gross income in 2015 of less than $131,000 and married joint tax return filers with in- come less than $193,000, and the Roth IRA income phase-out ranges apply. Individuals may contribute to Traditional and Roth IRAs up to $5,500 for 2015, plus $1,000 in catch-up contributions if age 50 or older. (These limits are subject to annual cost-of-living adjust- ments.) There are no minimum contribution requirements for my RAs. Distributions can be taken from my RAs at any time. Roth IRA qualified distributions are distributed tax-and penalty-free. A qual- ified distribution occurs when the individual has had a Roth IRA for five years and one of the four qualifying reasons (attainment of age 59½, death, disability, or first-time home purchase) has been met. The assets in a my RA can be transferred to another Roth IRAs at any time. While my RA owners may distribute the assets at any time, a myRA must be terminated (i.e., distributed or transferred to another Roth IRA) the earlier of when the balance reaches $15,000 or 30 years after it is opened.