Conversion to Roth IRA

[Cynchbeast]

We have a participant in a Defined contribution plan (still employed, plan allows for in-service distributions and he is eligible) who wants to convert part of his account into a Roth IRA (plan also allows for Roth). We are not sure at this time if we are looking at Profit Sharing money, salary deferrals, or other ER money (match, Safe Harbor, QNEC).

Could someone please enlighten me on the mechanics of converting pre-tax contributions to Roth IRA while leaving the money in the plan? Is it as simple as just issuing a 1099-R for the amount involved and reclassifying the account balance as Roth?

[K2retire]

You can take an in-service distribution from the plan and roll it to a Roth IRA. If the plan allows it, you can do a conversion to Roth money type within the plan. You cannot have a Roth IRA within a plan.

[masteff]

You may need an amendment to permit an in-plan rollover. Here's an IRS notice on in-plan rollovers. http://www.irs.gov/pub/irs-drop/n-10-84.pdf

[Cynchbeast]

Thank you both for very useful information. I checked the IRS notice, and it pretty much answers any questions we have.