Account set up for mega back door Roth

We have an owner-only 401k/PS plan.  He has the after-tax employee contributions and will be converting to Roth for 2022.  Is it recommended that he keep the converted $$$ in an plan account, or after the conversion move the $$$ to a Roth-IRA outside of the plan (plan allows for withdrawal of after-tax at any time)?  

Thank you

Does it allow for the withdrawal of Roth at any time? Likely not. Once he converts, it's Roth and not after-tax.

If the plan allows for distributions of after-tax, he can effectuate the conversion by a distribution directly to a Roth IRA.  Two ways to do it - in plan, and distribution (but only if distributable per the plan provisions - which applies to any pre-tax money to be converted as well).

We have that in the plan document, distributions from after-tax at any time.  So if they want this to go outside of the plan, it would seem like a conversion to a Roth IRA would be allowable.  Conversion takes place, its out of the plan which is what he wants.

Distribution of VAT at any time is not the same as a Roth distribution, check your plan provisions carefully. We typically have person make the VAT, keep it temporarily invested in non-interest bearing cash, then take a withdrawal of their after-tax account and roll to a Roth IRA. If there is some income on the VAT then it must also be distributed and can be rolled to regular IRA, taken in taxable cash, or rolled to Roth IRA (and taxable).

Side note: if the individual owns existing pretax IRA's, the conversion outside the plan may not work out as planned due to the aggregation rules. 

56 minutes ago, WCC said:

Side note: if the individual owns existing pretax IRA's, the conversion outside the plan may not work out as planned due to the aggregation rules. 

Thanks. I remember that being an issue (don't remember details), but I don't work on IRAs.

I don't think rolling after-tax withdrawals directly to a Roth IRA is a conversion any more than rolling Roth 401(k) out to a Roth IRA.