Is a default rollover divided into Roth and non-Roth subaccounts?

[Peter Gulia]

Assume a participant severs from employment with a nonforfeitable account less than $7,000 (and more than $1,000) and the plan provides an involuntary distribution.

Despite that small size, the account includes both Roth and non-Roth subaccounts. (For example, elective deferrals were Roth and matching contributions were non-Roth.)

Assume the participant, after the proper notices, does not specify her preference for the distribution, invoking the plan’s default rollover.

Does a plan's administrator with its service provider pay separately the Roth and non-Roth amounts?

Or does a plan’s administrator and its service provider pay one sum, and instruct the default IRA provide on the distinct Roth and non-Roth amounts?

Does a default IRA provider separately account for the Roth and non-Roth amounts?

Does a default IRA provider put this in two IRAs? Or in one IRA with subaccounts?

[Peter Gulia]

For the particular matter I’m now working on, I found my answer:

An Ascensus recordkeeper agreement with an add-on for using Ascensus as the default-IRA provider says two IRAs—Roth and traditional.

But is that way universal?

[Bruce1]

Peter I've never seen an IRA where they've had both pre-tax and Roth dollars in them. Even when doing rollovers it always comes in two checks.. Hope that helps. 

[Paul I]

The plan administrator and its service providers will make separate payments of the Roth and non-Roth accounts.  In addition to the fact that IRA providers will not take on the responsibility of splitting a distribution into Roth and non-Roth accounts, the plan has to report the distribution to the participant on a 1099R, and there is not enough room on one 1099R for all of distribution codes needed to report the distribution correctly if it was made in a single payment.

In short, no IRA provider would accept a check with co-mingled amounts, and the plan would have no way to properly report the distribution to the participant.