In-plan Roth conversion & 5500

[Monica Barnard]

Employee had rollover into 401K Plan in 2010, and did in-plan Roth conversion on entire amount. Since Plan issued 1099R so that participant paid taxes, is the amount reported on Form 5500?

[John Feldt ERPA CPC QPA]

You mean, show a distribution, and also show a rollover into the plan?

I think that would be alright.

[Tom Poje]

my initial reaction would have been that's how its done but Publication 560 "What New" says its not a distribution.

now what it means by 'most purposes' is your guess.

In-plan Roth rollovers. Section 402A©(4) of

the Internal Revenue Code provides for a distribution

from an individual’s 401(k) plan, other

than a designated Roth account, that is rolled

over to the individual’s designated Roth account

in the same plan. An in-plan Roth rollover is not

treated as a distribution for most purposes. Section

402A©(4) was added by the Small Business

Jobs Act of 2010 and applies to

distributions made after September 27, 2010.

For additional guidance on in-plan Roth rollovers,

see Notice 2010-84, 2010-51 I.R.B. 872,

available at www.irs.gov/irb/2010-51_IRB/ar11.

html.

[John Feldt ERPA CPC QPA]

Yes, that is the question. Auditors generally like to reconcile the Form 1099-R's to the Form 5500 distributions.

[Tom Poje]

I found the following from an ASPPA webcast. its a Wegesin-ism and that's just about as close to anything you can bet the farm on.

IN-PLAN ROTH CONVERSIONS

How are these reported on Form 5500?

No reporting necessary inasmuch as no cash

transferred in or out of the plan

Is merely a re-characterization of existing

funds for recordkeeping purposes

Even though a taxable event has occurred

I guess you would put the taxes under

other expenses???

or as a loss?