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A New Plan Design Feature for Qualified Plans: The Roth “In-Plan” Rollover

Journal of Pension Benefits
Spring 2011

Effective on or after September 28, 2010, Section 2112 of the “Small Business Jobs and Credit Act of 2010” (H.R. 5297) (the “Act”) added a new design option for 401(k) and 403(b) plans effective September 29, 2010, and for governmental 457(b) plans effective January 1, 2011. That option is the ability to permit a conversion of certain non-Roth amounts to a designated Roth account within the same plan. A summary of the prior law is set forth in the attached article, along with a summary of the new provision and the IRS guidance issued in Notice 2010-84 to facilitate implementing this provision. Lastly, the article reviews the key implementation steps when adding the new Roth rollover feature.

Reprinted from Journal of Pension Benefits, Volume 18, Number 3, Spring 2011, pages 62–65, Copyright © 2011 CCH Incorporated, with permission from Aspen Publishers, a Wolters Kluwer business, New York, NY.  For more information on this or any other Aspen publication, please call 1-800-638-8437 or visit www.aspenpublishers.com.