Roths in K Plans

[Jed Macy]

In 2003, participants in qualified defined contribution plans may make their IRA contributions to a qualified plan as a Deemed IRA if allowed by the plan. These IRA contributions can be traditional and/or Roth up to the new $3,000 limit.

In 2006, participants in 401(k) plans can make Roth Contributions up to $15,000 if allowed by the plan.

In 2002, participants can roll their traditional IRA to an employer sponsored qualified plan that allows it.

My questions is: does EGTRRA allow a participant to roll his Roth IRA into a qualified plan? If so, as of when?

[MGB]

EGTRRA Section 642 "Rollovers of IRAs into Workplace Retirement Plans," only amends Section 408 of the Code. That is traditional IRAs. There is nothing changing the distribution rules in 408A, Roth IRAs. So, I'd say that Roths may not be rolled into an employer's plan's Roth account.

However, rolling from an individual Roth to a deemed Roth IRA within an employer's plan should be OK. The deemed Roth IRA is treated for all purposes as an individual Roth IRA. I don't see any reason why this could not occur. (I don't know much about Roth IRAs; I assume they may be transferred from one to another similar to traditional IRAs.)

[Jed Macy]

Dear MGB,

The first paragraph in your response appears to be correct. However, your second paragraph merely contradicts your first paragraph as the issue that I raised was specifically whether an existing Roth IRA can be transferred into a QP. Note that the 2003 "Deemed IRA" (whether traditional or Roth) is the contribution of new money.

As your first paragraph states, I see no statutory authority for an existing Roth IRA to be transferred into a QP -- ever; not in 2002 when traditional IRAs can be transferred in, nor in 2003 when a Deemed Roth IRA contribution will be allowed, nor in 2006 when Roth Deferral Contributions will be allowed.

Does anyone interpret this differently?