Ask the Experts July 30, 2013

(b)lines Ask the Experts – Using Roth Contributions to Purchase Service Credits

July 30, 2013 (PLANSPONSOR (b)lines) – “We sponsor a 403(b) plan that permits plan-to-plan transfers (as provided in Code Section 403(b)(13)) to a defined benefit governmental plan to purchase permissive service credit.
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“Are there any rules that would restrict a participant from including Roth contributions as part of the transfer?” 

David Levine, Groom Law Group, answers:

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Excellent question.  As you know, Roth contributions, except for the special rules about their after-tax features, are treated like pre-tax elective deferrals.  As such, there is no restriction on using Roth contributions as part of a transfer to defined benefit governmental plan to purchase permissive service credit.

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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