Article by Nancy S. Gerrie, William E. Hansen and Elizabeth A. Savard
Employers should ensure their trustees and third-party administrators comply with the final Roth 401(k) distribution, rollover and taxation rules.
The Internal Revenue Service (IRS) recently released final regulations for designated Roth Accounts under section 402A of the Internal Revenue Code (the Code). The final regulations follow the proposed regulations released on January 26, 2006, with a few exceptions described below. This latest release of guidance regarding Roth 401(k) contributions did not reduce the amount of administrative obligations that can be placed upon plan administrators. If your 401(k) plan has already implemented Roth contribution provisions, you should discuss with your trustee and third-party administrator whether the proper distribution, rollover and taxation rules are in compliance with the applicable regulations.
