IRS Provides New Guidance On In-Plan Roth Rollovers

On December 11, 2013, the IRS issued IRS Notice 2013-74 which provides guidance on in-plan Roth rollovers. An in-plan Roth rollover is a rollover within a Section 401(k), Section 403(b) or governmental Section 457(b) plan to a designated Roth account in the same plan. Notice 2013-74 expands the types of contributions that may be rolled over by an in-plan Roth rollover and supplements previous guidance on this topic.

Designated Roth contributions, governed by Section 402A of the Internal Revenue Code (the "Code"), are elective deferrals to a retirement plan, otherwise excludable from gross income, that a participant elects to include in gross income. An individual's designated Roth contributions, along with associated earnings, must be maintained in a separate account under the plan. Pursuant to an in-plan Roth rollover, a distribution from an individual's account in a retirement plan, other than a designated Roth account, may be rolled over to the