U.S. Treasury Terminates myRA Program

On July 28, 2017, the U.S. Treasury announced its decision to terminate its sponsorship of the myRA program.

In January of 2014, President Obama issued a presidential memorandum directing the Treasury to establish

The U.S. Treasury did not want to call the new investment account a Roth IRA so it was called a myRA. There are probably many reasons this special program is being terminated.

One of them is - the program was expensive as the U.S. government has spent $70 million to manage the program since 2014. Even so, public participation was small. The myRA program initially was to be a payroll deduction IRA program. Participation was so low the program was changed to allow individuals to contribute directly into myRA accounts.

New enrollments to the myRA program are no longer permitted. Although no formal deadline has been established, myRA account holders are being encourage to transfer or rollover their myRA balance to another Roth IRA as soon as possible.

It may be you will have clients interested in establishing a Roth IRA with you and then their Roth IRA funds may be transferred.

As with many subjects, the government likes to issue FAQs as a way to communicate with the public. The FAQs are set forth.

A second unstated reason for ending the myRA program is that the Trump administration wanted to discontinue the Obama administration's expansion of the federal government's role in the pension and IRA industry. Although the single payer system is normally thought of as a medical health insurance issue, some “progressives” would like to see if a single system for IRA and pension fund administration would also work.

Individuals with myRA accounts should be working to move their funds to another Roth IRA as soon as possible. Obviously, transferring the funds would be best. The IRS has given no indication that the once per 365 day rollover rule does not apply to this government created situation.