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White House Budget Recommends Elimination of in-Plan Roth Rollovers of After-Tax Contributions

As reported here, the Internal Revenue Code currently permits a plan design that allows plan participants to convert non-Roth after-tax contributions to Roth contributions through in-plan Roth rollovers.  This design would allow a participant to maximize deferrals to a defined contribution plan while limiting future tax liability.  However, among the White House’s Fiscal Year 2016 budget proposals, which were released in February 2015, is a proposal that would eliminate the ability to convert after-tax contributions to Roth contributions through an in-plan Roth rollover.  This change would be effective for distributions made after December 31, 2015.  Of course, there is no guarantee that this proposal will be enacted by Congress.  We will provide updates as further developments occur.

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About this Author

Damian A Myers Labor and employment law attorney proskauer rose
Senior Counsel

Damian Myers is an Associate in the Employee Benefits, Executive Compensation and ERISA Litigation Practice Center, resident in the Washington, DC office.

Damian represents public and private companies on matters related to employee benefits and executive compensation including compliance with ERISA, tax, corporate and securities laws and regulations affecting employee benefit plans, programs and arrangements. He concentrates on all aspects of compensation and employee benefit programs, including the design, implementation, administration and funding of non-qualified retirement...

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