Regulatory News

In-Plan Roth Rollovers: 2010 Guidance and Reporting Instructions

In-Plan Roth Rollovers - New Guidance and 2010 Forms 1099-R and 8606 Reporting Instructions
From IRS "Retirement News for Employers" Fall 2010 Edition

On November 26, 2010, the IRS issued Notice 2010-84 containing guidance for 401(k) and 403(b) plans about in-plan Roth rollovers - a feature that permits plan participants to roll over eligible rollover distributions (ERDs) made after September 27, 2010, from a non-Roth account into a designated Roth account in the same plan. A non-Roth account means any plan account that does not hold designated Roth contributions.

New Legislation Allows In-Plan Roth Conversions

On September 27, 2010, the Small Business Jobs and Credit Act of 2010 was signed into law by President Obama which allows a 401(k) and 403(b) plan participant to convert their balances to a Roth account. The in-plan Roth conversion provision is effective immediately. In addition, effective January 1, 2011, this provision will also be available to 457(b) plans.

The new legislation applies to plans offering an in-service distribution option and a Roth account.

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