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A plan cannot be written to allow for only Roth deferrals. 1.401(k)-1: "The term designated Roth contribution means an elective contribution under a qualified cash or deferred arrangement that, to the extent permitted under the plan, is designated irrevocably by the employee at the time of the cash or deferred election as a designated Roth contribution that is being made in lieu of all or a portion of the pre-tax elective contributions the employee is otherwise eligible to make under the plan;..." IRS website FAQ: "Can a plan offer only designated Roth contributions? No, in order to provide for designated Roth contributions, a plan must also offer traditional, pre-tax elective contributions." https://www.irs.gov/retirement-plans/retirement-plans-faqs-on-designated-roth-accounts#13 I would be surprised if any resource like EOB fails to mention this requirement.

I'm just here waiting for Larry's tone when he just tells you to get a payroll provider who will accommodate both! ?

Unfortunately, our main contact, the HR person is also the payroll person. I really want to tell her that it isn't possible and she needs to figure it out or get a new payroll system but that's difficult to convey nicely.

I love how payroll incompetence or software limitations become retirement plan problems. I would recommend getting a new person to run the payroll or getting a new payroll company.

Agreed. The only time you are allowed to remove forfeitures from a DC plan and give back to employer, if my memory serves me correctly, is 415 suspense/forfeitures upon plan termination - not something that happens every day.

There are a lot of areas in field where that is true and the answer really is because the law says otherwise. The risk simply isn't worth the upside to try and argue the results are the same. The fix seems so easy as others have pointed out.

Yes.

We discourage loans by having NO LOANS in the plan. I'd say over 95% of our plans do not allow loans. Want to borrow money: go to the bank! My employers don't want to be in the banking business with their employees.