Arlene Rudin, Chief Executive Officer
Central Credit Union
107-14 71st Road
Forest Hills, NY 11375-4719
Re: Simplified employee pension accounts
Your letter dated October 9, 1997
Dear Ms. Rudin:
You asked how a simplified employee pension (SEP) account is insured by the National Credit Union Share Insurance Fund (NCUSIF). A SEP is defined in I.R.C. §408(k) as "an individual retirement account" (IRA) meeting certain statutory requirements. As a type of IRA, a SEP is insured like an IRA under §745.9-2 of NCUA's regulations. 12 C.F.R. §745.9-2.
In your example, a member has $100,000 in an IRA with your credit union and $100,000 in a SEP account at another institution. The member would like to move the SEP account to your credit union. This would leave $100,000 uninsured. SEPs and IRAs at one institution are combined for purposes of NCUSIF account insurance and would be insured up to $100,000 in the aggregate for both accounts.
Sheila A. Albin
Associate General Counsel
cc: Region I