Deemed Roth IRA Contribution Limits and Nondiscrimination

[Guest johnpetrancosta]

I've been researching Deemed Roth IRAs under employer retirement plans and need to verify two conclusions I've reached, one of which just doesn't smell right.

1. The internet tax research network we use states ... However, the deemed IRA accounts are not subject to the ERISA reporting and disclosure, participation, vesting, funding and enforcement requirements applicable to the eligible retirement plan.

This would seem to imply that an employer can create deemed Roth IRAs for only a select group of individuals - i.e. only the HCEs or owners or officers. This does not pass my smell test. Does anyone have any insights on this?

2. Regular Roth IRAs have an AGI phase out. The research I've read seems somewhat vague regarding Deemed Roth IRAs. It states ... For 2005, the dollar limitation will generally be $4,000, plus an additional $500 for participants over 50. The maximum contribution cannot exceed the employee's includible compensation for the year. - It never specifically references and AGI phase out, however it previously states that the deemed Roth IRA must meet the requirements of 408A (which is where the AGI phase out is found) and also states Deemed Roth IRAs are subject the same contribution limits as regular Roth IRAs.

Any thoughts on whether the phase-outs apply to Deemed Roth IRAs?