Trump Accounts: What Employers Need to Know

Trump Accounts: What Employers Need to Know
March 4, 2026 5 mins

Trump Accounts: What Employers Need to Know

Trump Accounts: Key Employer Insights for 530A Plans

What employers need to know about 530A (“Trump”) accounts: how they work, employer opportunities and open questions

Key Takeaways
  1. Trump (Section 530A) accounts are intended to establish a new early childhood savings option with distinct rules and funding opportunities.
  2. Employers have multiple ways to support these accounts, from direct contributions to education and communication strategies.
  3. Key administrative and compliance questions remain, with IRS guidance expected in Spring 2026 to clarify employer implementation for 2027.

What are Trump/Section 530A Accounts?

Section 530A accounts, commonly known as Trump accounts, are early childhood savings vehicles intended to give children a head start for a secure financial future. Starting on July 4, 2026, contributions to these accounts can be made by individuals, employers, government entities and charities, but families must set up a child’s account first.

An early childhood savings account can positively impact a child’s financial future. The following table illustrates the potential financial impact under two funding scenarios. As demonstrated below, Trump accounts have the potential to ease some of the major financial challenges young adults face, such as affording housing or post-secondary education. Funding these accounts may also materially change retirement saving patterns later in life since contributing $5,000 annually over the first 18 years of a child's life is equivalent to saving double that amount annually over a 40+ year working career.

  Single Contribution
$1,000 at Birth		 Annual from Birth to Age 18
$5,0000/year
                        Pre-tax results in today's dollars1 for relatability
Age 18 $2,000                     $120,000
Age 25 $3,000                     $165,000
Age 67 $18,000                     $980,000

How Do These Accounts Work?

Section 530A accounts are generally subject to the rules for Individual Retirement Accounts (IRAs), except during their growth period which begins at account initiation and ends the year before the child turns age 18. During the growth period, withdrawals from the account are generally prohibited and eligible investments are limited to mutual funds and ETFs that track indices of primarily U.S. companies. After the growth period, IRA rules will take effect, including the 10% additional tax on early distributions.

There are many opportunities to fund these savings vehicles as parents, grandparents, extended family and friends can contribute to a child’s account. Contributions are limited to $5,000 per child in 2026, of which an employer can contribute up to $2,500 through direct funding and/or the employee’s pre-tax salary reductions under a cafeteria plan. Contributions funded by a governmental entity or a charity are not subject to the annual dollar limit. A compelling component of the initial roll-out is the federal government’s pilot program which provides a one-time $1,000 contribution available to every child born between January 1, 2025 and December 31, 2028. Several philanthropists have also pledged contributions to millions of children, taking advantage of the framework established to enable such contributions.

Employer Opportunities

Employers can help fund Section 530A accounts through direct contributions, by facilitating employee pre-tax salary reductions through a cafeteria plan, or both. As of the published date of this paper, more than 50 employers have already announced support, with most planning to match the $1,000 pilot program contribution for the children of their employees.

Even if an employer isn’t ready to add 530A accounts to their total rewards program, they can play a meaningful role by serving as a trusted source of information for employees. Employers can explain how the accounts work and provide their employees with education on how the accounts can support their children’s financial future. Employer communications through various channels can influence whether and how employees choose to use Trump accounts.

Open Questions

Notice 2025-68, issued on December 2, 2025, provides initial guidance regarding Trump accounts. Right now, there are number of outstanding questions regarding the implementation and administration of employer-supported programs, particularly around how to coordinate with 530A account vendors and how to conduct nondiscrimination testing. Aon is providing input to the IRS and Treasury regarding these important questions. The IRS proposed regulations, anticipated in Spring 2026, should help answer these questions so employers can start integrating Trump accounts into their total rewards strategy for 2027.

How Aon Can Help

Aon’s Human Capital team has the broad expertise necessary to support the development, implementation and monitoring of an employer’s Trump account strategy as additional guidance is released and finalized. To learn more about how we help, please write to [email protected].

 
Phase 1
Staying on top of regulatory guidance Design with illustrative costs and nondiscrimination testing Communication to employees
 Phase 2
Plan document drafting Employee elections Payroll coordination and distribution
 
Ongoing
Project management Compliance support Monitoring usage and effectiveness

1 Assumptions: No indexing of $5,000 contribution limit (although that is allowed); Age-graded returns 6.90% down to 6.10% at age 67; Inflation 2.25%; Age-graded salary increases 6.00% down to 2.25% at age 67. $10,000/year assumes 10% of salary contribution from age 25 to 67 for a participant earning $100,000 at age 25 in 2051

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

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