FOR IMMEDIATE RELEASE
ICBA Applauds Quick Implementation of Higher Deposit Insurance Coverage for Retirement Accounts
Washington, D.C. (March 14, 2006)—The Independent Community Bankers of America (ICBA) applauds the FDIC for quickly implementing new rules to increase deposit insurance coverage for certain retirement accounts from $100,000 to $250,000 as authorized by the recently enacted Federal Deposit Insurance Reform Act of 2005. The FDIC issued an interim final rule that takes effect on April 1.
“ICBA and community bankers are very, very pleased to see the FDIC move so quickly to implement the higher coverage rules for retirement accounts, a key ICBA goal for a number of years,” said Terry J. Jorde, ICBA chairman, and president and CEO of CountryBank USA in Cando, N.D. “Higher insurance coverage for retirement accounts is one of the many ways community banks can help their customers have a safer and more stable retirement.”
Under the FDIC's new rules, up to $250,000 in deposit insurance will be provided for the money a consumer has in a certain retirement accounts at an individual bank. These include traditional individual retirement accounts (IRAs), as well as Roth IRA. Self-directed Keogh accounts, "457 Plan" accounts for state government employees, and employer-sponsored "defined contribution plan" accounts that are self-directed, which are primarily 401(k) accounts, also fall under the new rules. In general, self-directed accounts are those in which a consumer (not the employer) identifies where his or her retirement money is deposited.
In addition, the IRAs and other retirement accounts that will be protected under the new rules to $250,000 are insured separately from a depositor’s other accounts at the same institution that will continue to be insured up to at least $100,000.
For more information on the new rules, visit www.fdic.gov.