Memo #
24578

Draft Letter to Treasury/IRS on IN-Plan Roth Conversions; Comments Requested by October 12
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ACTION REQUESTED

[24578]

October 5, 2010

TO: PENSION COMMITTEE No. 24-10
PENSION OPERATIONS ADVISORY COMMITTEE No. 23-10 RE: DRAFT LETTER TO TREASURY/IRS ON IN-PLAN ROTH CONVERSIONS; COMMENTS REQUESTED BY OCTOBER 12

 

Attached for your review is draft letter requesting guidance from Department of Treasury and IRS on section 2112 of the Small Business Jobs Act of 2010, which allows a distribution from a 401(k), 403(b), or governmental 457(b) plan from an account that is not a designated Roth account to be rolled over into a designated Roth account under the plan (referred to as an “in-plan Roth conversion”). [1] 

The letter requests guidance on the following items:

  • Withholding
  • Reporting on Form 1099-R
  • Steps to complete conversion
  • Guidance on amendment requirements
  • Application of five-year period
  • Loans
  • Sources for in-plan Roth conversion
  • Conversion of after-tax amounts
  • Recharacterization
  • Employer securities and individuals born before 1936
  • Spousal consent
  • Conditioning distribution on conversion
  • Restricting conversions to current employees

Because of the need for immediate guidance, we ask that you provide any comments to the undersigned (mhadley@ici.org or 202-326-5810) by Tuesday, October 12.

Michael L. Hadley
Associate Counsel

Attachment (in .pdf format)

endnotes

 [1] See Memorandum to Pension Members No. 39-10 and Federal Legislation Members No. 7-10 [24557], dated September 24, 2010.