In-Plan Roth Conversion and age 59 1/2

Let's say a plan allows for In-Plan Roth conversion. A participant has only Pre-Tax Deferrals in his account, but he's not yet 59 1/2. I have 2 questions:

1) Since Deferrals always have a 59 1/2 age restriction for In-Service Distribution, would he be able to convert his account to Roth?

2) If so, what if he decides to withhold a certain amount, let's say 10% on that distribution? Would that be permitted? Seems like it shouldn't be as the amount going to the Roth Conversion would be less than the original amount (the other 10% being the taxes paid).

Thanks,

Withholding is not possible on in-plan conversions.

As for your question about whether it can be done, the document should have that answer.

You can only have an in-plan Roth conversion if the amount was eligible for distribution. Here it wasn't, so no go. Of course, the individual can make Roth deferrals for new money.

14 hours ago, Luke Bailey said:

You can only have an in-plan Roth conversion if the amount was eligible for distribution. Here it wasn't, so no go. Of course, the individual can make Roth deferrals for new money.

Depends on the document. Some permit in-plan Roth conversion of amounts that wouldn't have been distributable otherwise.

Good quick answer guide at https://www.irs.gov/retirement-plans/designated-roth-accounts-in-plan-rollovers-to-designated-roth-accounts.

3 hours ago, duckthing said:

Depends on the document. Some permit in-plan Roth conversion of amounts that wouldn't have been distributable otherwise.

Good quick answer guide at https://www.irs.gov/retirement-plans/designated-roth-accounts-in-plan-rollovers-to-designated-roth-accounts.

duckthing, I stand corrected. ATRA 2012 changed the rules to allow amounts that are not otherwise distributable, including elective deferrals of a participant who had not attained age 59-1/2, to be rolled over in-plan. Explained in Notice 2013-74. Thanks.

There is a distinction between an "In Plan Rollover/Roth conversion", where a distributable event must apply, and an "In Plan Roth Conversion" where there does not need to be any distributable event.  Record-keepers call the those that are amounts eligible for distribution  an "in Plan Roth Rollover", and the amounts not eligible for distribution  an "In Plan Roth Conversion", where money types are retained. Be careful to limit them to 100% vested amounts.