Anyone Know What Platforms can handle In Plan Roth Conversions Properly?

[Dennis Povloski]

Not sure where the right place to post this question is, so I figured I would start here.

Have a client that's looking for a new investment platform for their 401k plan. One of the trustees made it very clear that they want the platform to be able to handle an in plan Roth conversion. I'm finding that some platforms can handle this under the old rules where there had to be a distributable event, but are not quite capable of handling the new rules, where there's no distributable event required.

Anyone have any experience an investment platform that is set up to do this right?

The issue is that they have to be able to set up money type that is Roth that still maintains the same distribution restriction as the pre-conversion money type. So for example, if converting traditional 401k money to Roth 401k money, they still need to maintain the age 59 1/2 restriction. Under old rules, all the money was distributable anyway, so it could just be put in a Roth Rollover money type.

[K2retire]

I understand that Great-West can handle this. I think Principal might also have that ability, but I'm not certain of that.

[Kevin C]

Another issue is that the in-plan conversions need to be tracked separately by year of conversion for at least five years. (Notice 2010-84 Q&A 12) Depending on the number of sources and number of investment options, you may run into the limitation on the maximum number of accounts the valuation system can handle. I don't know if any of the daily software vendors have reprogrammed to increase the number of available accounts.