Voluntary after tax to Roth IRA

[Jim Chad]

I just received a call from an Investment adviser that suggested using Voluntary after tax contributions.... distributed in service to an IRA... then convert the IRA to Roth.

I have not worked with voluntary after tax contributions in years.

Please confirm my memory regarding voluntary after tax contributions:

1. Are they subject to 415? I think yes

2. Are they subject to 402(g)? I think no

3. This plan has an enhanced Safe Harbor Match? Am I still free of the ACP test?

4. If the owner is the only one to do this, do I have any coverage or discrimination problems or tests to run? How about benefits, rights or features?

5. Any other amendments needed other than allowing voluntary after tax and in service withdrawals?

6. Other?

[ETA Consulting LLC]

I just received a call from an Investment adviser that suggested using Voluntary after tax contributions.... distributed in service to an IRA... then convert the IRA to Roth.

I have not worked with voluntary after tax contributions in years.

Please confirm my memory regarding voluntary after tax contributions:

1. Are they subject to 415? I think yes

2. Are they subject to 402(g)? I think no

3. This plan has an enhanced Safe Harbor Match? Am I still free of the ACP test?

4. If the owner is the only one to do this, do I have any coverage or discrimination problems or tests to run? How about benefits, rights or features?

5. Any other amendments needed other than allowing voluntary after tax and in service withdrawals?

6. Other?

1. Correct

2. Correct

3. You would need to test the After-tax under ACP (as the safe harbor doesn't provide a free-ride for After-tax)

4. No, but you'd likely fail ACP.

5. Not really, assuming you're using a prototype that already contains the language. You'd need to track another source of funds (operationally).

Good Luck!