[Federal Register Volume 80, Number 155 (Wednesday, August 12, 2015)]
[Notices]
[Pages 48417-48419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19798]



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DEPARTMENT OF THE TREASURY

Fiscal Service

[Docket No. FISCAL-2015-0001]


Request for Public Comment on the Process for Transferring 
myRA[supreg] Account Balances to Private Sector Roth IRAs

AGENCY: Bureau of the Fiscal Service, Fiscal Service, Treasury.

ACTION: Notice and Request for Information.

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SUMMARY: The United States Department of the Treasury's Bureau of the 
Fiscal Service (Fiscal Service) has developed a new Treasury electronic 
retirement savings bond to give working individuals (particularly those 
not currently saving) a new opportunity to begin saving for 
retirement.\1\ The bond, targeted to new savers who lack access to an 
employer-sponsored retirement plan, is available as an investment for 
eligible individuals who choose to save in Roth IRAs maintained by 
Treasury's financial agent. A Roth IRA invested in the new bond is 
called a myRA[supreg] (short for my Retirement Account). Account 
holders can transfer their myRA account balance into a private sector 
Roth IRA of their choosing at any time.\2\
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    \1\ More information on myRA is available at www.myRA.gov.
    \2\ Some private sector IRAs have minimum initial investment 
requirements.
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    Individuals can continue to participate in myRA until they reach 
the ``Transfer Threshold,'' which is the point when their account 
balance reaches $15,000 or they have participated in myRA for 30 years, 
whichever occurs first. myRA is designed to encourage new savers to 
develop a regular habit of saving so that they will be ready to 
graduate from this starter account and continue saving in the private 
sector for the long term. The retirement savings bond will be redeemed 
when the myRA account holder graduates from the starter account, the 
myRA account will be closed, and the account balance may be transferred 
(or rolled over) tax-free to a private sector Roth IRA.\3\
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    \3\ Under current tax law, Roth IRAs may be transferred or 
rolled over tax-free only to other Roth IRAs, not to traditional 
IRAs or to employer-sponsored plans.
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    Treasury requests information and public comment on possible 
options for (1) communicating effectively with account holders about 
considerations and options for transferring their myRA account balances 
to private sector Roth IRAs, and (2) transferring the myRA account 
balances of account holders who do not provide transfer instructions to 
Treasury's financial agent by the time they reach the Transfer 
Threshold.

DATES: Submit comments on or before Friday, October 23, 2015.

ADDRESSES: See SUPPLEMENTARY INFORMATION section for further 
instructions on submitting comments. You may submit comments using one 
of the following methods:
     Electronic Submission: Submit electronic comments through 
the Federal eRulemaking Portal at www.regulations.gov. Follow the 
instructions on the Web site for submitting comments.
     Mail: Send comments to the Department of the Treasury, 
Bureau of the Fiscal Service, Attn: Kimberly S. Reese, 200 Third Street 
Room 402, Parkersburg, WV 26106.

FOR FURTHER INFORMATION CONTACT: Kimberly Reese, at (304) 480-7929 or 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    myRAs are designed to encourage more Americans to begin saving. 
They provide individuals--particularly those lacking access to 
employer-sponsored retirement plans--a simple, safe, and affordable way 
to save by investing in a newly-developed U.S. retirement savings bond.

II. myRA Features

    The newly-developed retirement savings bond is the only investment 
that can be held by a myRA account. No fees are charged to individuals 
for opening and maintaining the myRA account or for investing in the 
retirement savings bond. Currently, account holders can fund their myRA 
accounts via their employers' direct deposit processes. Later in 2015, 
the program also will allow individuals to fund their myRA accounts 
directly via electronic (ACH) transfers from other accounts, such as 
their bank or credit union accounts. Account holders are able to manage 
their accounts either online or by calling a customer service center 
operated by Treasury's designated financial agent.
    To be simple and convenient for new savers, the bond has been 
designed as an add-on security. This means that, instead of having a 
fixed denomination, such as $100 or $1,000, the amount of the bond 
grows with contributions plus interest. Therefore, an individual may 
make initial and subsequent contributions in any amount (subject to the 
Roth IRA contribution limits), on a regular basis or from time to time, 
and need not acquire multiple bonds because all contributions are added 
to the principal amount of the bond. Because the bond is the only 
investment that may be held in a myRA, the total account balance of the 
myRA is equal to the principal amount of the bond plus the interest 
accrued in the account (minus any withdrawals by the account holder).
    The amount in the myRA account cannot go down in value (except as a 
result of withdrawals, transfers, or rollovers by the account holder), 
and is backed by the full faith and credit of the United States. The 
bond will continue to earn interest until the account holder redeems 
it, or until the bond reaches the Transfer Threshold of $15,000 or 30 
years, whichever is earlier. Interest is earned at the same variable 
rate as securities issued to the Government Securities Investment Fund 
(G Fund) in the Thrift Savings Plan for federal employees. The G Fund 
interest rate is calculated pursuant to 5 U.S.C. 8438(e)(2), and the 
retirement savings bond interest rate compounds daily at \1/360\ of the 
annual percentage rate.
    Account holders can choose to transfer their myRA account balance 
into a private sector Roth IRA of their choosing at any time. After an 
individual's myRA account balance reaches the Transfer Threshold, the 
retirement savings bond will stop earning interest. Subsequently, the 
bond will be redeemed, and the myRA account will be closed. Treasury 
wishes to encourage individuals to proactively transfer their myRA 
account balances to a private sector Roth IRA at or prior to the 
Transfer Threshold, and to make this process of graduating to the 
private sector understandable and easy for account holders.
    Treasury recognizes that some account holders may not actively 
select a destination for their myRA account balances. For those myRA 
account holders, Treasury would like to develop appropriate procedures 
by which its financial agent will transfer the account holder's myRA 
account balance to a Roth IRA at a private sector IRA provider 
determined under a Treasury-approved process. Entities eligible to be 
designated for this purpose could potentially include any U.S. 
depository institution or other U.S. entity that is qualified to offer 
and does offer Roth IRAs.

III. Sample Approaches for Transfer Process

    This section describes potential approaches for the transfer of 
myRA account balances to other Roth IRAs. Under each of these 
approaches there is no added cost to the U.S. government relating to 
the transfer of myRA account

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balances to other Roth IRA providers to accept transferred myRA account 
balances. Furthermore, Treasury's designated financial agent will be 
responsible for all communication and contact with account holders 
during this process as well as administrative and record keeping 
services associated with this process.
    Under any of the approaches outlined below, the financial agent 
would notify a myRA account holder at certain times before the account 
is expected to reach the Transfer Threshold. Before or when the account 
reaches the Transfer Threshold, the account holder could instruct the 
financial agent to transfer his or her myRA account balance to a new or 
existing Roth IRA at a provider of the account holder's choosing (or 
could request a distribution). For account holders who do not provide 
instructions following the initial notice, the financial agent would 
follow up with an additional notice or notices requesting transfer or 
distribution instructions and providing information about private 
sector Roth IRA transfer options.
    An account holder who does not provide transfer instructions after 
reaching the Transfer Threshold would ultimately receive a notice 
stating that the account balance will be transferred to a specified 
private sector Roth IRA.\4\ Accordingly, the financial agent, pursuant 
to a process established by Treasury, would open a Roth IRA on behalf 
of the account holder at a provider designated to accept a transfer and 
would transfer the account holder's myRA account balance to the 
accepting Roth IRA provider. Both the accepting Roth IRA provider and 
the financial agent would notify the account holder of the transfer 
when it occurs.
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    \4\ A transfer to the private sector would have no tax 
consequences for account holders and would allow them to continue to 
grow their retirement savings beyond myRA (unlike a distribution of 
the funds upon reaching the Transfer Threshold, which ordinarily 
would be a taxable event, depending on account holders' 
circumstances).
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    As described below, Treasury is considering alternative possible 
approaches for the process of automatically transferring the myRA 
account balances of account holders who do not provide the financial 
agent with instructions.

A. Rotating Approach: Allocation of Transfers Among a Number of Roth 
IRA Providers Determined Under a Treasury-Approved Process

    One approach Treasury is considering is to approve a number of 
specified Roth IRA providers that are willing to open and maintain Roth 
IRAs for myRA account holders who fail to give instructions after their 
myRA accounts reach the Transfer Threshold. Under this approach, the 
list of these Roth IRA providers would be sent to myRA account holders 
pursuant to one or more of the notices described above. For account 
holders who do not provide transfer instructions, the financial agent 
would transfer their myRA account balances to providers on the list on 
a rotating basis. For example, if there were seven providers on the 
list, the first account holder's account balance might be transferred 
to Provider A, the second account holder's account balance might be 
transferred to Provider B, and so forth until account balances have 
been transferred to all seven providers. At that point, the process 
would start over with the account balance for the eighth account holder 
being transferred to Provider A, and so forth. Account holders would be 
notified of the Roth IRA provider on the list to which their myRA 
account balance would be transferred.

B. Single-Provider Approach: Allocation of Transfers to a Single Roth 
IRA Provider Determined Under a Treasury-Approved Process

    Another approach Treasury is considering is to approve a single 
Roth IRA provider (instead of multiple providers) that is willing to 
open and maintain Roth IRAs for myRA account holders who fail to give 
instructions after their myRA accounts reach the Transfer Threshold.

C. Other Approaches

    Comments are invited on possible alternatives to, or variations on, 
the potential approaches outlined above that should be considered.

IV. Request for Comments

    The public is invited to comment on any aspect of these possible 
approaches, including the specific issues listed below and suggestions 
or other information for the design of this process. In particular, 
suggestions are requested on how to provide appropriate consumer 
protections without imposing undue or unnecessary requirements, 
conditions, costs, or complexity.

A. General Input

     Which potential approach outlined above--multiple possible 
default destinations or a single default destination--would result in 
both the best end user and the best service provider experience?
     What are the inherent risks and benefits of the potential 
approaches outlined above from an end user as well as a service 
provider perspective?

B. Notification and Education Questions

     What are the key topics, messages, and information 
Treasury should provide to account holders about their options, and 
about saving for retirement more generally, when they are considering 
the transfer of their account balances? When and in what form should 
these communications and related retirement savings education occur? 
How can Treasury make the best use of myRA as an opportunity to promote 
financial capability and literacy and financial education?
     How far in advance, how often, and in what form (e.g., 
email, mailed notification, telephone calls, text messages) should the 
financial agent notify myRA account holders of the approaching Transfer 
Threshold, and how and in what form should account holders be notified 
that their account balances have been automatically transferred?
     As part of the notification process under either scenario 
described above, should the financial agent include a list of available 
Roth IRA providers to help account holders choose their own Roth IRA 
providers, in addition to a list of the providers selected to receive 
automatic transfers of myRA account balances?
    [cir] If so, what eligibility criteria should Treasury consider in 
selecting providers to be on that potentially broader list of Roth IRA 
providers? How should the eligibility criteria be similar to or 
different from the eligibility criteria for a provider to accept 
automatically-transferred accounts?
    [cir] What information about each provider and its IRAs, 
investments, and services (and the associated fees and expenses) should 
be provided? Should the information about different providers be made 
readily comparable and, if so, how? Should a Treasury-provided internet 
portal be made available (or be linked to) for this purpose?
     To what extent could or should Treasury partner with 
outside organizations or use other means of communication besides 
direct contact from the financial agent to promote awareness of the 
Transfer Threshold and transfer options? Specific examples are 
requested, together with explanations as to why they would be 
effective.

C. Automatic Transfer Process Questions

     As part of the process for opening a myRA account, the 
designated financial agent obtains a customer's

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consent to automatically transfer the myRA account balance and related 
account and personal information to another Roth IRA provider if the 
myRA account reaches the Transfer Threshold without transfer or 
distribution instructions from the account holder. Will Roth IRA 
providers be comfortable opening accounts on this basis?
     What eligibility criteria should Treasury consider in 
selecting providers to receive automatic transfers?
     Should Treasury impose any specific guidelines or 
conditions on providers? If so, what types of guidelines or conditions 
should there be? How long should they remain in effect or should they 
be indefinite?
     Is there a particular number of Roth IRA providers that 
should be selected among those that are willing to accept automatic 
transfers of myRA account balances?
     How would the number of providers on the list affect the 
willingness of potential providers to participate as recipients of 
automatic transfers?
     What factors are likely to make a Roth IRA provider 
willing (or unwilling) to be selected to receive automatically 
transferred myRA account balances?
     Are there potential requirements that would discourage 
Roth IRA providers from choosing to be on the list of institutions that 
accept automatically transferred myRA account balances?
     Are there potential circumstances that would cause 
providers to wish to decline receipt of an automatically transferred 
myRA account?
     If there are multiple providers receiving automatically 
transferred myRA account balances, how should accounts be transferred 
to providers?

D. Automatic Transfer Provider Fee Structure Questions

     Should Treasury establish guidelines for the types and/or 
amounts of fees or other charges that providers that accept automatic 
transfers may charge the account holder? If so, how? What types and 
levels of fees or other charges should be permitted? How should they be 
disclosed?
     How would any such guidelines affect the willingness of 
such providers to participate?
     Should any such guidelines require that all such providers 
charge the same fees, or should varying fees be permitted?

E. Automatic Transfer Investment Offering Questions

     What types of investment options should providers that 
accept automatic transfers be permitted or required to offer, and what 
policies, fees, or determining factors should be considered?
     Should these or other providers be required to provide a 
default investment option for automatically transferred accounts, and, 
if so, what should that default investment option be (for example, a 
target date fund)?
     Should the default investment be different depending upon 
the characteristics (e.g., age or account balance size) of a particular 
account holder?
     Should providers be required to offer alternative 
investment options in addition to a default option? If so, should there 
be specific criteria for the types of alternative investment options, 
for example having at least one ``safe'' (principal-protected) 
alternative investment option?

F. Other Questions

     Are there key or unique features of myRA that Treasury 
should consider when selecting providers or that could present a 
challenge in the context of transfers to the private sector?
     What other operational, legal, or regulatory issues should 
Treasury be aware of or take into consideration in developing a myRA 
account balances transfer process?

V. Comments Instructions

    Comments should refer to docket number FISCAL-2015-0001, and should 
also include (1) the supporting rationale; and (2) alternative 
approaches, if any, that should be considered, including specific 
examples and options. All comments received will become part of this 
docket, and in general, will be published on www.regulations.gov 
without change, including any business or personal information 
provided. You should only submit information that you wish to make 
publicly available. Comments received will also be available for public 
inspection and copying at the Treasury Department Library, Main 
Treasury Building, 1500 Pennsylvania Avenue NW., Washington, DC 20220. 
To visit the library, call (202) 622-0990 for an appointment.

    Authority:  31 CFR part 347.

    Dated: August 6, 2015.
David A. Lebryk,
Fiscal Assistant Secretary.
[FR Doc. 2015-19798 Filed 8-11-15; 8:45 am]
 BILLING CODE 4810-AS-P