Note: This is a summary of a select section of Public Act 16-29. Click here to view Public Act 16-29 in its entirety.
Roth IRA Program
The bill requires the program to establish and maintain a Roth IRA for each program participant either by the program itself or by a third-party entity in the business of establishing and maintaining IRAs. The assets must be held in trust or custodial accounts meeting the federal requirements for IRAs (Internal Revenue Code of 1986, § 408 (a) or (c), as amended from time to time).
The bill specifies that interest, investment earnings, and investment losses are allocated to each participant’s IRA. A participant’s benefit under the program is equal to the balance in such participant’s IRA as of any applicable measurement date.
The bill requires the authority to establish processes to prevent a participant’s contributions to the IRA program from exceeding the annual maximum deduction amount set in federal tax law (26 USC 219(b)(1)). Click here to view more Public Act 16-29 summaries.