Organization and Operation of Federal Credit Unions; Trustees and Custodians of Pension Plans

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On February 20, 1998, NCUA issued a letter to federally insured credit unions regarding share insurance coverage on member accounts established as Education IRAs, Roth IRAs, Savings Incentive Match Plan for Employees and Medical Savings Accounts. Although these accounts can be established in federal credit unions, the letter noted that federal credit unions cannot act as trustees or custodians for these types of accounts. The basis for that statement was the current wording of NCUA regulations, which references specific provisions of the Internal Revenue Code. This interim rule corrects that part by including additional specific references to Internal Revenue Code provisions for certain of these accounts. It also makes a conforming amendment to the rule regarding retirement benefits for federal credit union employees.