In-Plan Roth Conversions: Planning and Administrative Considerations  

Oleh:

Melcher, Peter J.

Jenis: Article from Bulletin/Magazine
Dalam koleksi: Journal of Accountancy vol. 211 no. 5 (May 2011), page 48-52.
Topik: Small Business; Internal Revenue Code -- Section 401(Jc); Individual Retirement Accounts--IRA; Retirement Planning; Internal Revenue Code -- Section 403(b); Internal Revenue Code -- Section 457(b); Federal Legislation

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ85.30 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Before enactment of the Small Business Jobs Act of 2010 (SBJA), amounts held in section 401(k), 403(b) and 457(b) plans could be converted to a Roth-type retirement plan only by taking a distribution and rolling it into a Roth IRA. This put plan sponsors in a difficult position, because in-service distributions can be made only to the extent permitted under the plan document. If distribution options were expanded to increase the amounts that could be rolled over, participants might use distributions for purposes other than Roth conversions. To solve this problem, the SBJA, signed into law in September 2010, included a provision (IRC section 402A(c)(4)) allowing in-plan conversions of amounts held in 401(k), 403(b) and 457(b) plans to Roth accounts and permitting plans to be amended to create a new distribution option solely for in-plan Roth conversions. Effective Sep 28, 2010, section 401(k) and 403(b) plans may permit qualifying participants to convert their accounts to Roth accounts in the same plan.

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