1.2.3 Individual Retirement Accounts (IRA)

This topic provides the functional enhancements of IRAs Retail Accounts and Retail Deposits

US Geography Feature Enhancements

• IRA Transfers and Rollovers:
  • Enhancements have been made to support rollover of contributions only to plans that are enabled for rollover in the IRA Plan configuration.
  • Contribution and distribution codes can be flagged as valid for rollover transactions, ensuring only approved codes are available during rollover processing.
  • IRA transfers enable customers to move funds between accounts within the same IRA plan. No contribution and distribution codes are applicable, also state and federal with holdings as this is not considered as distribution.
  • IRA rollover supports movement of funds between accounts under different IRA plans, either for the same customer or different customers. Rollover transactions capture distribution and contribution codes as applicable; enhancements allow specific codes to be marked for rollover use. Federal and state penalty taxes may be waived, and standard CD penalties may also be waived for IRA CD accounts.
• Required Minimum Distribution (RMD): OBA-Retail is enhanced to support comprehensively Required Minimum Distributions (RMD) from Individual Retirement Accounts.
  • System supports manual and automated distributions. Automated RMD calculations are done by system once the IRA owner reaches the RMD age as specified in configurable global parameters.
  • Auto-distribution setup enables the system to distribute RMD amounts automatically across multiple accounts per plan, following configurable distribution orders (e.g., by lowest interest rate, lowest balance, oldest account, or user-defined sequence)
  • Enhancements for inherited IRAs allow tailored distribution options based on beneficiary type. The system uses IRS tables and the selected distribution method to determine the correct life expectancy factor for inherited IRA RMDs.
  • Customer-Plan and Account enquiry services now display RMD details like distributed amount, outstanding amount, last distribution date, and amount for the fiscal year.
  • Payment methods for RMDs include internal transfer, GL, check, or external account transfer. Frequency and start date are configurable.
• Coverdell Education Savings Accounts (ESA): System is enhanced with new UIs and restful APIs to include end-to-end support like static plan setup, global/plan parameters, ESA Savings and ESA CD product enablement, transaction processing (contributions/distributions), internal transfers, rollovers, enquiries, notifications, and federal/state penalty tax processing
• Static value Plan Type ROT is renamed to RTH.
• In Plan configuration UI, ‘Age Cut-off for Contribution (in years)’ field is renamed to Catch Up Contribution Age (in years)’.
• Multiple Contribution codes and Distribution codes can be sent as part of IRA Contribution and Distribution requests.
• IRA Account Enquiry: A new Restful API is introduced to query IRA account details based on Customer Number, Plan Type and Account Number. Response of this query gives details on Contributions, Distributions, Balances for Current and Previous tax years and RMD information.