SSA commissioner calls Trump Accounts a complement to Social Security

Frank Bisignano, commissioner of the Social Security Administration and chief executive officer of the Internal Revenue Service, described the Trump Accounts program as a permanent complement to Social Security. Speaking to Yahoo Finance Fed Correspondent Jennifer Schonberger, Bisignano stated that the initiative is codified in law and intended to provide young Americans with an early start on retirement savings.

The program is currently in a growth phase, with Bisignano noting that over 25 million accounts had funding by the end of the week. He characterized the effort as one of the greatest startups ever, aiming for a total of 70 million accounts. Bisignano reported that more than 70 major companies have signed up to contribute, and he expects small businesses to begin participating as well. He suggested that individuals might shift holiday gifting habits, placing money into Trump Accounts instead of purchasing gift cards.

Recent rule changes have expanded how assets can be contributed to the program. The administration moved to auto-enrollment and allowed wealthy individuals and charities to donate individual stocks to children. Addressing concerns that donors might use these contributions to secure tax write-offs or dump assets in a way that impacts share prices, Bisignano said no stock donation will be made without the sign-off of the Treasury Secretary. He argued that the stocks involved would be high quality and part of the S&P 500, noting that investors who own an S&P 500 index fund already hold a portion of those companies.

Bisignano framed the program as an IRA for youth, explaining that accounts convert to traditional IRAs when recipients turn 18. He said the program gives every young person exposure to markets, a head start that most would not have received otherwise. While discussing the relationship between the new accounts and existing retirement benefits, Bisignano referenced comments made by Secretary Russell Vought earlier in the week. Vought stated that there would be no cuts to Social Security and that Trump Accounts would serve as a complement to the existing system. Bisignano affirmed his view that the program is designed to last beyond the current administration, ensuring future generations also receive seed money for their retirement.