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4000 - Advisory Opinions

New Rules Applicable to Accounts Held by Insured Institutions in a Fiduciary Capacity Do Not Apply to IRAs


July 23, 1993

Joseph A. DiNuzzo, Senior Attorney

In response to your letter of June 15, 1993, and in furtherance of our telephone conversation earlier today, please note that, beginning December 19, 1993, an individual's Individual Retirement Accounts will no longer be insured separately from his or her interests in other specified retirement-type accounts maintained at the same insured depository institution. This aggregation, however, is not related to the change in the deposit insurance rules (also effective starting December 19, 1993) on the coverage of deposits held by an insured institution in a fiduciary capacity.

In essence, your question is two-fold: (1) whether an IRA will continue to be separately insured from other "regular" accounts held by the same customer at the institution; and (2) do the requirements applicable to accounts held by the institution in a fiduciary capacity have to be satisfied for separate IRA coverage to be provided?

The answer to the first question is yes. Under section 330.12 of the FDIC's regulations (to become effective December 19, 1993) each participant's interests in IRAs, self-directed Keogh Plan accounts, eligible "457 Plan" accounts and self-directed defined contribution plan accounts will be added together and insured up to $100,000 (per insured institution where such accounts are maintained). This coverage is in addition to coverage available to the same depositor who also may have other types of deposits at the same institution. For example, if in addition to IRA and self-directed Keogh Plan deposits at an insured bank, a depositor has a single-ownership deposit and is a co-owner of a joint deposit at the same bank, the deposit insurance on the IRA and the Keogh accounts would be separate from the coverage available on the single-ownership account and the insurance available on the joint account.

The answer to the second question is no. The rule changes applicable to situations where an insured institution is acting as a fiduciary do not apply to IRAs. Thus, the requirements that apply in such situations do not apply to the coverage afforded to IRAs under section 330.12 of the FDIC's regulations.

I have enclosed a camera-ready copy of the revised FDIC insurance pamphlet, "Your Insured Deposit." Questions and answers 33 and 34 address insurance coverage for retirement accounts. We anticipate that the pamphlets will be available for distribution to insured institutions by this Fall.

Feel free to call me at (202) 898-7349 with any additional questions or comments.

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