Retroactive Amendment

[Inquiring Mind]

I had a supervisor instruct one of our employees to prepare a plan amendment effective in 2024 to add a Roth Rollover source. Apparently a client's employee rolled money into their 401k plan back in 2024, but it was Roth. The plan didn't allow for Roth Rollovers. From my years if knowledge and recent research, I don't see how this would be allowed. The correction would be to remove the funds from the plan. Please provide some help and guidance. Thanks.

[FORMER ESQ.]

Under EPCRS, a plan sponsor may retroactively amend its plan document to allow for Roth source rollovers so as to "match" the plan's actual operation with the document. However, the retroactive amendment cannot otherwise be discriminatory under 1.401(a)(4). It's the 1.401(a)(4) issue that I would examine if the employee in question is an HCE.