Groom principal and employers and sponsors practice co-chair David Levine joined Law360 for their article, “New Catch-Up Law Forces Decision For Plans Lacking Roth,” where he discussed a newly arisen issue for many government, non-profit, and school employers about whether or not to add Roth options to their retirement plans.
When discussing possible negatives for plan sponsors, Law360 reported “David Levine with the Groom Law Group told Law360 there are some unique challenges to adding Roth features for sponsors of Section 403(b) and 457(b) plans. While in many cases it shouldn’t be that hard, certain cases will require some care.”
Levine went on, “In the 403(b) and 457 space, there could be situations where Roth is not built into the system as easily as 401(k), and it may not have as broad an adoption.” He added, “Especially for governmental entities, their payroll systems are often proprietary, especially the larger ones. And it may be harder to track Roth contributions there, which could require some coding upgrades that could take some time.”
Law360 reiterated further, “Some plan sponsors may simply decide not to add Roth because they don’t want to deal with the complexity, Levine said. Worker use of catch-up contributions could also contribute to that choice, he said. If few workers use catch-ups, it may not be worth the effort, he said.”
To read the article, click here.
