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.
Reported by PS
“Are there any rules that would restrict a participant from including Roth contributions as part of the transfer?”
David Levine, Groom Law Group, answers:
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.