Can a Plan Require That All Contributions Be Roth?

Q: I realize that Roth contributions are optional, and thus, a retirement plan can opt to offer only pre-tax deferrals if it so chooses. But what about the other way around? Can a plan offer only Roth contributions?

A: In a word, no. Roth contributions can only be made to a designated Roth account, which can be elected in a new or existing 401(k), 403(b) or governmental 457(b) plan. Therefore, to provide for Roth contributions, a plan must offer traditional, pre-tax elective deferrals.

Having said that, as discussed in a prior Ask the Experts column, contributions for individuals who are automatically enrolled in a 403(b) or governmental 457(b) retirement plan can be defaulted to Roth contributions if the plan so provides. So Roth contributions can be made the default for automatic enrollment when an employee has not made an affirmative election to participate.

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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