Only allow Roth catch ups for everyone (not SECURE related, but kind of)

Assume a 401k plan currently allows pretax, Roth and catch up deferrals.

In theory, can a 401k plan allow pre tax deferrals, Roth deferrals, and only Roth catch up deferrals for all employees regardless of pay and SECURE 2.0? (Ignore document restraints for this question and ignore that catch ups were accidently deleted)

My answer is 'no' based on the following:

414v allows for catch ups, that section defines “deferrals” under 402g(3), which defines deferrals under section 401k, which says a plan cannot only allow Roth deferrals (1.401(k)-1(f)(1)(i)). Since a catch up is a deferral, I am not sure how a plan could only allow catch ups as Roth.

Thoughts? 

Thank you

Unless the IRS issues further guidance I would agree with you.

Ditto

I would think it was allowed, the Relius document would have a provision for it, and the Cycle 3 Non-standardized doc does not.

15 hours ago, BG5150 said:

I would think it was allowed, the Relius document would have a provision for it, and the Cycle 3 Non-standardized doc does not.

With all due respect to Relius/FIS, we've found them not necessarily to be the end all/be all authority on what can be, or must be, in a plan document (we are a major modifier of the Relius document).

In any event, our position is, if the plan doesn't allow pre-tax for a "source: then it can't allow Roth for that source, per the discussion above.

Some practitioners think that this is a legally valid approach - to require that catch-up contributions be made on a Roth basis.  Hopefully, the IRS will soon clearly state its official position.  

To rely on a remedial-amendment period, one must administer the plan according to the provisions that are not yet written.

For some provisions, that might be a challenge if a plan sponsor anticipates using and relying on an IRS-preapproved document, and the writing of that document is not wholly in the plan sponsor’s control.