HarleyBabe Posted June 6, 2021 Report Share Posted June 6, 2021 Need some guidance please. Had a client consult with an attorney who you know informed them of retirement plan options. I'm sure they were all knowledgeable. Yes I'm being sarcastic. At any rate, they have approached me with adding a Roth IRA as a plan option so they can offer more to long term employees. They have Roth in their B plan. It's not a Safe Harbor B plan just as an FYI. I know everything I can do with the B plan but I suspect they don't want everyone to benefit. It's also an ERISA B plan. Apparently they can put together an Employer sponsored Roth IRA and just contribute for who they choose, of course the contribution they make is taxable to the participant. But how does this coordinate with the ERISA B plan? Are there combined testing requirements since both Employer sponsored. Can they do this free and clear??? I've never in 30 years had a client do something like this so insight on whys and such or other options, pros and cons of this, would be great? Thank you. Link to comment Share on other sites More sharing options...
Mike Preston Posted June 6, 2021 Report Share Posted June 6, 2021 What is a B plan? Link to comment Share on other sites More sharing options...
QDROphile Posted June 6, 2021 Report Share Posted June 6, 2021 Do you really mean "adding a Roth IRA as a plan option" or do you mean increasing the compensation of select employees and depositing the increment (or some portion of it) into an individual Roth IRA of each select employee? Link to comment Share on other sites More sharing options...
HarleyBabe Posted June 7, 2021 Author Report Share Posted June 7, 2021 B plan = 403 B QDROphile I believe that’s what they mean increasing comp and contributing to a Roth IRA Is there coordination needed with the 403b compliance wise? Just haven’t seen this done before Link to comment Share on other sites More sharing options...
HarleyBabe Posted June 7, 2021 Author Report Share Posted June 7, 2021 Isn’t offering Roth IRA as a plan option the same as depositing money in a Roth IRA for certain employees? This is why I’m confused. Link to comment Share on other sites More sharing options...
QDROphile Posted June 7, 2021 Report Share Posted June 7, 2021 Before I go on a socio-political economic tear, does the emplyee have the option to receive the "contribution" in cash rther than deposit to IRA? Luke Bailey 1 Link to comment Share on other sites More sharing options...
QDROphile Posted June 7, 2021 Report Share Posted June 7, 2021 Does this put you at ease relating to your part in it? https://www.irs.gov/retirement-plans/ira-based-plans It dos not help much with the practical design, execution, maintenance, and disclosure issues. It is also only the IRS position. Other ERISA issues are implicated depending on the details. Link to comment Share on other sites More sharing options...
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