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10 Essential Things NiSource Employees Should Know About the Trump Savings Account
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'For NiSource employees, understanding how new savings rules fit within a broader long-term financial plan can help families make more informed decisions, and Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group, believes that evaluating these opportunities alongside your overall retirement and family goals is an important part of comprehensive financial planning.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.
'For NiSource employees, new savings opportunities are most effective when they are evaluated as part of a well-rounded long-term financial strategy, and Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group, encourages families to understand the rules and consider how these accounts align with their broader financial goals.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.
In this article we will discuss:
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How Trump Savings Accounts work and who can contribute.
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The rules for contributions, investments, withdrawals, and taxation.
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How NiSource employees can evaluate whether a Trump Savings Account fits into their family's long-term financial and retirement planning strategy.
On August 21 at 12 p.m. Eastern time, Denise will host a webinar titled 'Trump Accounts: What Every Advisor Needs to Know.' For NiSource employees planning for their family's future, understanding how this new savings account works can help you determine whether it belongs in your long-term financial strategy.
The Trump Savings Account is a savings account for children under the age of eighteen that was established by the One Big Beautiful Bill Act, which was signed into law on July 4, 2025.
The Trump account follows special guidelines up to the child's 18th birthday, but it takes many of its rules from the traditional IRA. The Trump account is then handled like any other traditional IRA. Before then, parents and guardians should be aware of its limitations, restrictions, and contribution deadlines. NiSource employees should understand these rules before opening or funding an account.
A parent or guardian, another person such as a friend or relative, an employer, the IRS in some situations, and an approved charity can all contribute to a Trump account. There are specific guidelines on the annual contribution cap and the timing of contributions, even though funding may come from a variety of sources.
Ten Important Things Regarding Trump Savings Accounts
1) Who Is the Trump Account's Owner?
The child owns the Trump account and is referred to as the beneficiary, much like in a 529 plan or an education savings account. The beneficiary is the legal owner, and all Trump account rules apply to that child.
2) What Types of Accounts Can Receive Contributions?
Only accounts that follow the tax code's traditional IRA structure are eligible to receive contributions to a Trump account. Employer contributions are not subject to the same operating procedures or notices as contributions to SEP or SIMPLE IRAs. Funds in a Trump account grow tax-deferred, while earnings generally become taxable when withdrawn.
3) How Much and Who Can Fund a Trump Account?
Parents, guardians, and other individuals may contribute up to $5,000 annually to a Trump account. Employers may contribute up to $2,500 for an employee or the employee's dependent under the age of 18, with the employer contribution counting toward the $5,000 annual limit. NiSource employees may want to determine how employer contributions fit within the overall annual cap.
The One Big Beautiful Bill Act also established a one-time federal government deposit of $1,000 for children born between January 1, 2025, and December 31, 2028. The child must have a Social Security number. This $1,000 deposit does not count toward the $5,000 annual contribution limit.
In addition, certain qualifying groups of children may receive contributions from charities and government programs that also do not count toward the $5,000 limit.
4) What Are the Contribution Deadlines?
Contributions to Trump accounts must be be made by December 31 of the contribution year.
Once the child turns 18, the account becomes a traditional IRA and follows the standard IRA contribution deadline, allowing contributions until the applicable tax filing deadline.
5) How Do You Invest in a Trump Account?
Investment options for Trump accounts are limited. Funds may only be invested in exchange-traded funds (ETFs) or mutual funds that track a qualified index, such as the S&P 500. Leverage is prohibited, and annual fees are capped at 0.1% of the account balance.
6) When Are Distributions Allowed?
With a few exceptions, distributions cannot be made before the child reaches age 18.
Exceptions include:
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- A transfer between Trump accounts for the same beneficiary.
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- A rollover to an ABLE account during the year the child turns 17.
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- The return of excess contributions.
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- Distribution following the beneficiary's death.
After age 18, standard IRA distribution rules apply, including potential early withdrawal penalties for distributions before age 59½ unless an exception applies.
7) How Are Distributions Taxed?
The tax treatment depends on the source of the contributions.
Non-taxable contributions made by parents, guardians, friends, or relatives create basis, which generally is not taxed when withdrawn.
Employer contributions, charitable contributions, and the federal $1,000 contribution do not create basis and generally are taxable upon withdrawal.
Investment earnings are also taxable when withdrawn.
Unless an exception applies, taxable withdrawals made before age 59½ may also be subject to a 10% early distribution penalty.
For example, if 40% of the account represents basis and 60% represents taxable funds, then each distribution generally will be treated as 40% non-taxable and 60% taxable. The IRS does not allow withdrawals to come only from basis first.
Only contributions made by the beneficiary, parents, guardians, friends, or relatives establish basis. Other contributions and all earnings generally are taxable upon distribution.
8) What Happens at Age 18?
The Trump account begins following all standard IRA rules during the year the child turns 18. From that point forward, the account owner must have eligible compensation to make new contributions.
Standard IRA rules regarding rollovers, transfers, basis aggregation, the one-rollover-per-year limitation, and future required minimum distribution rules also apply.
9) How Are Trump Accounts Reported?
The financial institution maintaining the Trump account must provide annual reports to both the account owner and the IRS. These reports include contributions, account balances, basis, rollovers, distributions, and the source of non-family contributions exceeding $25.
These reporting requirements continue until the child turns 17. After that, reporting follows standard IRA procedures.
10) When Can Contributions Begin?
By law, contributions cannot begin until one year after the One Big Beautiful Bill Act became law. As a result, July 4, 2026, is the earliest date contributions may be made.
Financial institutions will need systems designed to administer Trump accounts, including the ability to track basis accurately.
Remember to Be Aware of Penalties
It is important to remember that excess contributions, early withdrawals, and missed contribution deadlines may result in penalties.
If annual contributions exceed the allowable limit, the IRS may assess a 6% annual excise tax until the excess is corrected. Generally, the excess contribution and any associated earnings must be withdrawn.
With limited exceptions, withdrawals before age 18 are prohibited. After age 18, withdrawals made before age 59½ may be subject to the standard 10% early distribution penalty unless an exception applies.
For beneficiaries under age 18, contributions must be made by December 31 of the contribution year. Once the beneficiary turns 18, the contribution deadline changes to the IRA tax filing deadline. Missing the applicable deadline could result in the loss of that year's contribution opportunity.
Should You Consider a Trump Account for Your Child?
For children under age 18, the Trump account provides a tax-deferred savings opportunity. Once the child reaches age 18, the account functions much like a traditional IRA, although unique rules apply before then.
Families should carefully evaluate whether a Trump account, a 529 plan, a Roth IRA (if eligible), or another savings vehicle best aligns with their long-term objectives. For NiSource employees balancing retirement planning with family savings objectives, reviewing all available options can provide additional perspective when developing a comprehensive financial strategy.
If you have questions about how a Trump account may fit into your broader retirement and financial planning strategy, The Retirement Group can assist. Our team works with individuals and families to review retirement planning opportunities and coordinate long-term savings strategies. Call The Retirement Group at (800) 900-5867 to learn more.
Sources:
1. Internal Revenue Service. 'One Big Beautiful Bill Provisions.' Internal Revenue Service , U.S. Department of the Treasury, updated June 2026, https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions . Accessed 30 June 2026.
2. Internal Revenue Service. 'Treasury, IRS Issue Proposed Regulations on How to Open Initial Trump Accounts under the One Big Beautiful Bill.' Internal Revenue Service , U.S. Department of the Treasury, 6 Mar. 2026, https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-how-to-open-initial-trump-accounts-under-the-one-big-beautiful-bill . Accessed 30 June 2026.
3. KPMG Washington National Tax. 'Proposed Regulations: Guidance Regarding 'Trump Accounts' and Contribution Pilot Program.' KPMG , 6 Mar. 2026, https://kpmg.com/us/en/taxnewsflash/news/2026/03/tnf-proposed-regulations-guidance-regarding-trump-accounts-and-contribution-pilot-program.html . Accessed 30 June 2026.
4. Segal. 'Initial Guidance on Trump Accounts.' Segal , 7 Jan. 2026, https://www.segalco.com/consulting-insights/initial-guidance-on-trump-accounts/ . Accessed 30 June 2026.
5. 'There's a 'Trump Account' Hack That Can Unlock Decades of Wealth-Building for Your Kid.' MarketWatch , June 2026, https://www.marketwatch.com/story/theres-a-trump-account-hack-that-can-unlock-decades-of-wealth-building-for-your-kid-b84188b6 . Accessed 30 June 2026.
As an employee of National Grid, what are the key eligibility criteria for participating in the Pension Plan specifically for Niagara Mohawk Power Corporation employees? How might these criteria impact your personal retirement planning and the benefits you expect to receive upon retirement from National Grid?
Eligibility Criteria for Niagara Mohawk Pension Plan: Employees of Niagara Mohawk Power Corporation who are represented by Local Union 97 of the IBEW and work at least 20 hours per week or accumulate 1,000 hours in a Pension Plan year are eligible. Participation begins automatically on the first day of employment. These criteria directly impact retirement planning by determining when employees begin accruing pension benefits and how much they will receive at retirement(National_Grid_2023_Niag…).
Within the framework of the National Grid Pension Plan, how does the cash balance formula work in calculating retirement benefits, and what implications does this have for employees of Niagara Mohawk Power Corporation when considering their long-term financial outlook?
Cash Balance Formula: The National Grid Pension Plan for Niagara Mohawk employees uses a cash balance formula that provides monthly pay-based credits (starting at 4% and increasing with years of service) and interest credits. These accumulate in a hypothetical account, growing until retirement, allowing employees to track their retirement benefits much like a savings account. This formula impacts financial outlook by providing predictable growth tied to service and pay(National_Grid_2023_Niag…).
For employees at National Grid, what are the specific rights and options available during the pension benefit application process? How do these rights protect the interests of individual employees and ensure they receive fair treatment under the Niagara Mohawk Pension Plan?
Pension Benefit Application Process: National Grid employees must apply for their pension benefits by submitting the required forms at least 90 days before retirement. Spousal consent is required if opting for any form of payment other than the default. This ensures employees understand and select the best payment option for their circumstances, protecting their interests under the Niagara Mohawk Pension Plan(National_Grid_2023_Niag…).
Given the different types of credits that contribute to the pension benefit for employees of National Grid, how are Pay-based Credits and interest credits calculated? What strategies might Niagara Mohawk Power Corporation employees employ to maximize these credits before retirement?
Pay-based and Interest Credits Calculation: Pay-based credits are determined by years of service, starting at 4% of pay and increasing to 8% after 20 years. Interest credits are based on an annual interest rate tied to the Treasury securities and corporate bond rates. Employees can maximize these credits by continuing to work and contributing to their pension balance(National_Grid_2023_Niag…).
How do pension benefits work for Transition Group Employees specifically within National Grid's framework, and what unique provisions apply to them under the Pension Plan as compared to regular employees of Niagara Mohawk Power Corporation?
Pension Benefits for Transition Group Employees: Transition Group Employees under the National Grid Pension Plan have benefits calculated using both the former final average pay formula and the cash balance formula, with the greater benefit being paid out. This differs from regular employees who only receive benefits calculated under the cash balance formula(National_Grid_2023_Niag…)(National_Grid_2023_Niag…).
What are the repercussions for National Grid employees in terms of benefit loss or limitation if they have not met the Vesting requirements under the Niagara Mohawk Pension Plan? How can understanding these repercussions influence an employee's decision-making regarding their career and retirement?
Impact of Vesting Requirements: Employees must complete three years of service to become vested in the Niagara Mohawk Pension Plan. If they leave before vesting, they lose all accrued pension benefits. Understanding vesting requirements is crucial for career and retirement planning, as it ensures employees retain their pension benefits if they meet the criteria(National_Grid_2023_Niag…).
As a current employee at National Grid, what does the termination of the Pension Plan imply for accrued benefits under the Niagara Mohawk Pension Plan? Specifically, how do federal protections through ERISA and the Pension Benefit Guaranty Corporation come into play for employees seeking assurance regarding their retirement funds?
Termination of Pension Plan and Federal Protections: If the Niagara Mohawk Pension Plan is terminated, accrued benefits are protected by ERISA and insured by the Pension Benefit Guaranty Corporation (PBGC). Employees can feel assured that their benefits will be secured up to the PBGC's limits in case of plan termination(National_Grid_2023_Niag…).
How does the National Grid Pension Plan accommodate the unique situations of employees during times of disability or military service, and what steps should Niagara Mohawk Power Corporation employees take to ensure their benefits continue during these periods?
Disability and Military Service: Niagara Mohawk employees receive service credits during periods of disability or military leave, ensuring continuous pension accrual. Employees should ensure their disability or military status is properly documented with the company to avoid interruptions in their pension benefits(National_Grid_2023_Niag…).
When considering the various forms of pension payments available to retirees from National Grid, what are the potential advantages and disadvantages of choosing an annuity versus a lump-sum payment for employees from Niagara Mohawk Power Corporation?
Annuity vs. Lump-Sum Payment: Retirees at National Grid have the option to choose between an annuity, providing a steady income for life, or a lump-sum payment. The annuity provides financial stability, while a lump sum offers flexibility. The choice depends on individual financial needs and retirement goals(National_Grid_2023_Niag…).
For those looking to gain further clarity on the nuances of the Niagara Mohawk Pension Plan, what are the most effective ways for employees to contact National Grid for assistance? How can engaging with the Pension Service Center enhance an employee's understanding of their benefits and rights?
Contacting National Grid for Pension Assistance: Employees seeking more information about their Niagara Mohawk Pension Plan can contact the National Grid Pension Service Center or use the online pension modeler. Engaging with the Pension Service Center provides personalized guidance, helping employees understand their benefits and make informed decisions(National_Grid_2023_Niag…).
For more information you can reach the plan administrator for NiSource at , ; or by calling them at .
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