Individual Retirement Accounts

IRAs are retirement savings plans that offer income tax advantages to members. Federal credit unions are permitted to act as trustees and custodians of IRAs under NCUA regulation part 724, Trustees and Custodians of Certain Tax-Advantaged Savings Plans.

The NCUA insures IRAs separately from other types of share accounts, up to $250,000. However, a regular retirement IRA and Roth IRA are combined and insured in the aggregate up to $250,000. A Keogh account is insured separately from an IRA or Roth IRA up to $250,000. For more information, see NCUA regulation § 745.9-2, Retirement and other employee benefit plan accounts.

The IRS governs IRAs and provides extensive information about them. For more information, see IRS regulation § 1.408-2, Individual retirement accounts.

Due Diligence

NCUA regulation part 707, Truth in Savings, requires credit unions to provide a member with the following upon IRA account opening:

• An IRA disclosure statement outlining the rates, fees, balance requirements, termination requirements, etc.

• An IRA agreement and plan document outlining the contract between the credit union and the member and the provisions of the IRA (for example, allowable investments, contribution limits, and deductions)

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