What Trump Account Auto-Enrollment Means for Employers

The Treasury Department announced that Trump Accounts will soon automatically enroll millions of children — an announcement that might make the accounts a more routine part of the benefits landscape.

In temporary regulations released Sept. 29, the Treasury said it plans to automatically establish Trump Accounts for eligible children who do not already have one, beginning on or about Oct. 1. The agency estimates the move could result in accounts being created for as many as 60 million children.  

On its surface, the announcement doesn’t directly impact employers, said Jim Earle, partner at Troutman Pepper Locke, in Charlotte, N.C.

“The IRS temporary and proposed regs do not directly impact employers,” he said. “They do not change the recent proposed regs on IRC section 128 employer contribution programs for Trump Accounts or impact how and when employers or employees can make contributions to Trump Accounts.” 

However, the new automatic enrollment in Trump Accounts will indirectly employers simply because millions of more Trump Accounts will soon exist. And a growing number of employees might expect their employers to play a role.

“This announcement has the potential to normalize childhood savings accounts” because it dramatically expands the program’s reach, said Melissa Elbert, wealth solutions partner at consulting firm Aon, in Chicago. 

“Over time, that could make Trump Accounts a more routine part of the benefits landscape, much the way automatic enrollment helped make saving in a retirement plan the default for many employees,” she said.

There are important distinctions in the automatic enrollment change, Elbert said. First, auto accounts that the Treasury establishes do not automatically receive the $1,000 federal pilot contribution — a parent or guardian must elect to receive it. Second, the auto accounts can only receive certain government, tribal, and charitable contributions. To enable individual or employer contributions, a parent or guardian needs to claim the account and transfer it into a fully activated Trump Account that can accept those contributions. The regulations establish a process for parents or guardians to verify their identity and authority to act on behalf of the child before claiming and activating the ongoing Trump Account, Elbert explained. 

For employers, the key takeaway is that “automatic enrollment may significantly expand access, but it does not eliminate the need for employee engagement,” she said. 

“Employers can expect more employees to have children with Trump Accounts and more questions about how the organization plans to support them through education, employee savings, or employer contributions,” Elbert said. “But making the jump from an automatically established account to one that can accept employer contributions shouldn’t be underestimated. Employers should be ready to educate employees on how to navigate that process.” 

Specialty Credential: Total Rewards

Employer Contribution Guidance Remains 

Trump Accounts were created as part of President Donald Trump’s One Big Beautiful Bill and are intended to encourage early wealth building. They provide a $1,000 pilot contribution from the U.S. Treasury into a tax-advantaged account for eligible children born in the U.S. between 2025 and 2028. Once an account is established, parents, guardians, grandparents, and others can contribute up to $5,000 per year in after-tax dollars until the year before the beneficiary turns 18. The annual contribution limit adjusts for inflation after 2027. 

Employers may make a tax-free contribution of up to $2,500 per year to the Trump Account of an employee or their dependents. The contribution would count toward the $5,000 annual contribution cap.  

Related Article: Employers Get Guidance on Trump Account Contributions

A growing number of organizations — a list that now includes Bank of America, Charles Schwab, Sofi, JPMorgan Chase, and Visa — said they will contribute to employees’ accounts as a new perk. Roughly 50 companies have committed to making contributions, according to the Treasury.  

Time to Make Decisions

Elbert recommended that employers be “very intentional” about thinking through the role they want to play regarding Trump Accounts — from education to facilitating employee savings to providing direct employer contributions.  

Company leaders, including HR pros, should consider how they want the accounts to fit into their overall benefits and total rewards strategy and how they compare to other investments competing for the same benefit dollars. 

Importantly, she said, employers should prepare for more employees hoping, or expecting, their employer to play a role in Trump Accounts. 

“With the increase in awareness and adoption, employers may get more pressure from their workforce to take an active role in funding them or providing the ability for employees to contribute pre-tax through their cafeteria plans,” Elbert said.

The biggest mistake, she said, would be ignoring these developments.  

“Even employers that choose not to contribute should be prepared to answer employees’ questions and for childhood savings accounts to become a routine part of the benefits ecosystem.”