Roth 401(k) effective date

[Belgarath]

Just wanted to confirm something:

If you have a plan year beginning in 2005, say, 10-1-2005, can it be amended to allow Roth deferrals starting 1-1-2006? I initially thought it could, but the excerpt from the proposed regs below says otherwise, and couldn't start until the plan year beginning 10-1-06. Wanted to make sure I'm not missing anything. Thanks!

Effective Date

Section 402A is effective for taxable

years beginning after December 31,

2005. These regulations are proposed to

apply to plan years beginning on or after

January 1, 2006.

[JanetM]

I agree with you, the 10/01/06 is the date you can add roth.

[Guest BobK]

The EGTRRA law itself states that the Roth is effective for taxable years starting on January 1, 2006, it does not mention plan years. So youe initial understanding is correct.

In addition, the recently released guidance on amending plans (Notice 2005-95) states under the section titled Designated Roth Contributions:

..."For example, for a plan where the plan year ends March 31st, designated Roth contributions can be implemented as early as January 1, 2006 but in such cases, the plan sponsor must amend the plan by March 31, 2006".

Hope this helps.

[Belgarath]

That's where I saw it! Thanks Bob - it was driving me crazy - knew I had seen it, but couldn't remember where.