IRS Seeks Input for In-Plan Roth Rollovers Guidance


February 5, 2013 – The IRS is seeking input from retirement industry practitioners as the agency drafts guidance on provisions of the American Taxpayer Relief Act (ATRA) enacted in early 2013. Speaking this week at a national benefits conference, IRS officials indicated that the Service would welcome ideas and suggestions as they draft guidance on in-plan Roth rollovers in employer-sponsored retirement plans.

ATRA liberalized rules for plan participants to convert pre-tax employer plan assets to Roth status in 401(k), 403(b) and governmental 457(b) plans, removing a requirement that such assets be distributable in order to be eligible for conversion, effective January 1, 2013.

A Treasury Department benefits tax counsel in the Office of Tax Policy named vesting, forfeiture, and tax treatment issues as problematic in the drafting of the promised guidance.  Administrative challenges, protected benefit status, and possible conversion ordering rules were also identified as issues for which input is sought.

The IRS did not indicate when it expects to release guidance; it is anticipated that it will be issued later in 2013.

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