ATRA Roth Transfer

[Gruegen]

Is anyone aware how many TPA's/recordkeepers are prepared to administer/recordkeep the new in-plan Roth transfer provision under IRC 402A©(4)(E) as permitted by the American Taxpayer Relief Act of 2012?

Given the fact that the IRS has not yet issued guidance on the new transfer provision, it may be prudent for plan sponsors to wait until such guidance is issued. However, some participants are anxious to convert amounts to Roth in 2013 to avoid higher tax rates in future years.

[ETA Consulting LLC]

I've wondered that myself. This will likely encompass the addition of many different "Designated Roth" sources on the recordkeeping system. Some of these sources will be eligible for distribution (i.e. when you convert an amount from an account that was previously distributable, but failed to meet the distribution restrictions under Section 401(k)(2) of the Code), then you'd have the Roth Source for those amounts that failed to meet any allowable distribution under the plan.

So, I would imagine a 401(k) plan with a Roth, Matching, Profit Sharing, and Rollover source moving to 401(k), Roth Deferral, Designated Roth PS, Designated Roth Match, Designated Roth Rollover, Profit Sharing, Match, Rollover.

This will be done to ensure any distribution restrictions/availabilty applicable to any source would continue to apply to those funds after the designation to Roth is made.

Good Luck!

[Belgarath]

Very informally, I had asked Sungard a couple of weeks ago as to when they anticipated that their amendment might be ready, and they indicated ballpark end of October. Whether the Government shutdown may delay this I can't say.

P.S. FWIW, we have not had even ONE inquiry or indication of interest from clients wanting this amendment yet. Of course, that just means they will be waiting until December 31, or next April 14th, as per usual...