Roth Safe Harbor Plan

[RLTGroup]

I have a client insisting he should be able to do a Roth Safe Harbor and make Safe Harbor POST-TAX contributions. I have explained that his plan is set up as a Roth 401(k) Plan and it has a Safe Harbor feature. He is taking advantage of the Roth Deferrals. I have explained that the government does not allow the employer to do Post Tax contributions. He now wants to see something in writing stating that employers cannot do post tax contributions. Any assistance or direction to the verbiage is greatly appreciated.

Thanks

[Lou S.]

Tell him to go read IRC sections 401 - 416 inclusive. If he finds something that allows an employer to make post tax ROTH contributions (not just employee ROTH deferals) to the plan tell him you'll do his plan administration for free for the next 5 years.

[BG5150]

Tell him to go read IRC sections 401 - 416 inclusive. If he finds something that allows an employer to make post tax ROTH contributions (not just employee ROTH deferals) to the plan tell him you'll do his plan administration for free for the next 5 years.

(And let me know where he finds it, so I can start serving a new market...)

[RLTGroup]

@ Lou - Thanks a lot... I read your comment to the broker and she laughed and will pass it along. Take care.

@BK5150 - I even skimmed through it... Tough read... So, sorry you are stuck with the same market as the rest of us. LOL... Enjoy the day.

[John Feldt ERPA CPC QPA]

Then, if he really does want the SH to become Roth, have the plan adopt the Roth Transfer option that was enacted by Congress and passed by the President earlier this year. Then it becomes Roth in nature and gets taxed like an individual Roth rollover. The contribution of the SH cannot go in as Roth, but I think this might get him closer to the place he thinks he wants to be.

Does that help?

[K2retire]

Then, if he really does want the SH to become Roth, have the plan adopt the Roth Transfer option that was enacted by Congress and passed by the President earlier this year. Then it becomes Roth in nature and gets taxed like an individual Roth rollover. The contribution of the SH cannot go in as Roth, but I think this might get him closer to the place he thinks he wants to be.

Does that help?

The client may have read about this and be confusing the terminology when asking the question.

[RLTGroup]

Thank you all for your thoughts and input... I was able to convince the client that what he thought he wanted is not possible and he is now happy with making Roth Deferrals.

Enjoy the day.