PhilyK

Hello - you are confused. Hopefully this helps: Roth vs Pre-tax is a participant election for your deferrals out of your paycheck which impacts your taxes. You chose your preference and file your taxes accordingly. As a completely separate conversation, employer money that goes into a 401(k) must be pre-tax. Why? 401(k)s are "qualified" plans. Qualified for what? Favorable tax treatment in exchange for treating employees "equally" according to the rules. How can you treat employees equally if you're mixing and matching employER roth contributions for some and pretax for others? When everyone has completely different unique tax situations? ? You can't do it. Roth contributions would mean "paying someone's taxes" for them which even if possible to calculate, would be grossly unfair due to the higher tax bracket of HCEs. They would receive greater than their "fair share" from a tax savings standpoint vs a rank-in-file employee in a lower tax tier. Sounds like discrimination to me, ERISA's least favorite thing! What is the answer IRS? Let's just ban roth and require pre-tax for employer contributions. Problem solved.,

If the "powers that be" wish to mandate a LTPTer be eligible with 501 hours of annual service in 3 consecutive years, would they not want to mandate the same 401(k) benefit be accessible to a LTFTer who gets denied the very same plan with the very same 3 years of tenure, just due to their job description as a driver, for example?

Ha. Yes, one way to look at it is you skip a year if transitioning from SIMPLE to K. If the 401(k) is the first ever plan, they give you the Year 0 $ for a welcome bonus.