IRS Guidance on In-Plan Roth Transfers Could Arrive by Year-End, Speaker Says

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By Kristen Ricaurte Knebel  

Oct. 28 --Retirement plans may see further guidance from the Internal Revenue Service concerning a 2012 statute that expanded opportunities for individuals to make Roth 401(k) in-plan transfers, an attorney said during a session of the American Society of Pension Professionals & Actuaries' Annual Conference.

“We do not have guidance from the IRS yet, I'm beginning to despair that we will. We'll see what happens, but I would guess that if we did get guidance, it will look an awful lot like the guidance we got back in 2010 for in-plan Roth rollovers,” S. Derrin Watson, an attorney at employee benefits software and services provider SunGard Relius, said Oct. 28.

The American Taxpayer Relief Act of 2012 (ATRA) (2 PBD, 1/3/13; 40 BPR 62, 1/8/13) allowed for in-plan Roth 401(k) transfers beginning Jan. 1, 2013, but so far there hasn't been any guidance on it, Watson said.

“That's one of the things I'd really like to see some guidance on, so particularly the fiscal year plans could at least have until the end of the year to adopt it and so that safe harbor plans could add it midyear. In the absence of guidance, it's just last day of the plan year and safe harbor plans wait until the next year begins,” he said.

Annual Limits

Watson also said the 2014 cost-of-living adjustments affecting dollar limits on tax-deferred contributions to retirement plans and eligibility for retirement-related benefits for the 2014 tax year should be out by Oct. 30.

The tax code Section 415 limits for defined contribution and defined benefit plans are expected to increase, as well as compensation limits, he said.

Watson estimated that the rest of the annual limits will go unchanged for 2014.

“The one thing that's on the bubble here, at least in terms of my calculations, is [Section] 415(b). If the cost-of-living went down about half a percentage point from where it was in August, we would not see an increase in the DB limit, but we will see what happens,” he said.

 

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at kknebel@bna.com

To contact the editor responsible for this story: Phil Kushin at pkushin@bna.com