Roth 401(k) question

[Guest ArkansasChris]

My firm is considering adding the Roth 401(k) feature for our clients while doing restatements. We handle both the admin work and the investments too. Investments are in individual stocks/bonds and we work under pooled accounting, allocating gains and losses across all participants in one master account. I'm trying to figure out if we can use this same method for Roth deferrals. The treasury regs refer to "separate accounting of contributions, gains, and losses".

To me, this sounds like we could continue to use pooled accounting. However, I've also found an IRS publication which states "A separate account must be estabilshed for each participant making designated Roth contributions". This makes it sound like pooled accounting would not be acceptable.

Anyone dealt with this issue and/or have any input? Thanks in advance.

Chris

[WDIK]

http://benefitslink.com/boards/index.php?showtopic=41440

[Appleby]

I think you can use the pooled accounting system, as long as you maintain separate accounting.

However, the Roth assets may need to be maintained in a separate account from the traditional assets- see thread references by WDIK.