Take Action Today: Proposed Changes to the Laws Governing Individual Retirement Accounts that Could Affect You.

Your financial security is our priority and the relationship you have with Quest Trust Company is very important to us. That’s why we want to make you aware that the United States House of Representatives has proposed changes to the laws governing individual retirement accounts (IRAs) as part of its $3.5 trillion reconciliation package. These changes, if enacted into law, would have a direct negative impact on you and your ability to save for a secure retirement through an individual retirement account, like the one you have today at Quest Trust Company.

How would the proposed legislation affect you?

The proposed legislation would prohibit IRAs from holding privately-placed equity and debt securities and other investments that require IRA owners to meet minimum financial, educational or licensing requirements. For example, the legislation would prohibit IRAs from holding unregistered investments that are offered to accredited investors, like equity or debt investments in small businesses or investments in private funds. You may very well hold investments in your IRA today that would be prohibited by the proposed legislation.

The bill would also prohibit IRA owners from investing in (1) non-publicly traded entities in which the IRA owner and related entities (including the IRA itself) own more than a 10% interest or (2) any entity in which the IRA owner is an officer or director, regardless of ownership percentage. By way of example, single-member limited liability companies or any investment in an entity in which an individual is a director or officer could no longer be held in an IRA. IRAs holding any of the above investments would lose all of the tax advantages previously available to the IRA.

If the proposed legislation is enacted, you will no longer be able to purchase any of the above investment types in your IRA. Further, you will be required to dispose of any such investments that you currently hold in your IRA by no later than December 31, 2023, which could result in significant and previously unforeseen financial and tax consequences, including taxes and penalties associated with any assets that could not be sold or liquidated and must be distributed in-kind from the IRA.

What can you do? Time is of the essence – Take Action Today.

Make your voice heard. Contact your elected officials in the United States House of Representatives and Senate, and tell them:

• You oppose limitations on IRA investment choice (Sections 138312 and 138314 of the House reconciliation bill). These under-the-radar provisions have never been publicly vetted and will have unintended and adverse impacts on you and countless other Americans who wish to save for a secure retirement through Main Street investments.
• You are also concerned that the legislation negatively impacts the ability of small businesses that employ everyday Americans to obtain the funding necessary to operate and grow their business and create jobs. The proposed legislation eliminates the ability of suitable investors to participate in private capital-raising transactions through their IRAs, a source of funding on which many of these small businesses rely.
• You believe the legislation will ultimately increase the wealth gap (which is in direct opposition to the stated goals of the legislation) because it would limit the ability of many Americans, whose investable funds are almost exclusively in their retirement accounts, to invest in these private investments.
• On a personal level, the legislation:
• negatively impacts your ability to save for a secure retirement by limiting your choice and ability to diversify your retirement savings outside of the stock market.
• will likely cause you significant negative financial consequences by forcing you to sell or liquidate existing IRA investments at a depressed price by a publicized date certain, and may also cause significant negative tax consequences (including early distribution penalties) by forcing you to distribute in-kind from your IRA any investments that you are unable to sell or liquidate.

We’re advocating for you.

We want you to know that we are working closely with our third-party advisors in Washington D.C., along with other major industry participants with the goal of having these provisions removed from the reconciliation package. Know that, as always – we will continue to be a strong advocate for investor choice. We also want you to feel secure in knowing that our company is well-positioned to continue to succeed, no matter the outcome of the proposed legislation.

Not sure how to contact your U.S. Congressional Representative?
Go to: https://www.house.gov/representatives/find-your-representative

Not sure how to contact your U.S. Senators?
Go to: https://www.senate.gov/senators/senators-contact.htm