December 16, 1997
Arlene Rudin, Chief Executive Officer
Central Credit Union
107-14 71st Road
Forest Hills, NY 11375-4719
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. �8(k) as "an individual retirement
account" (IRA) meeting certain statutory requirements. As
a type of IRA, a SEP is insured like an IRA under �5.9-2
of NCUA's regulations. 12 C.F.R. �5.9-2.
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.
Sincerely,
Sheila A. Albin
Associate General Counsel
GC/MSC:sg
SSIC 7000
97-1056
cc: Region I