first Roth Distribution

[Jim Chad]

I have just been informed that a terminated Participant with a Roth wants a distribution. Is there anything special required in the forms or notice?

[J Simmons]

I don't know off the top, Jim, if required, but I generally recommend informing such a participant in writing of (a) the first year of Roth per plan records, for the 5-year wait period, (b) what the 'basis' of Roth contributions is so that the employee will know how much is due to investment earnings and thus taxable if less than 5 years and not rolled over, © the employee's option to specify that a partial distribution of vested benefits will be first out of Roth rather than non-Roth benefits, and (d) if the employee has both Roth and non-Roth benefits and wants to roll over all benefits to one IRA or to another QRP, the recipient custodian or trustee must agree to separately track the two different types of benefits before the rollover may be made.