I received a call from a client today asking about the Special Tax Notice. I met with them recently to amend the plan to allow Roth deferrals and now they are asking about the Special Tax Notice because it says specifically that you cannot roll over benefits to a Roth IRA. My client pointed out this could be very confusing to some participants. Has anyone else thought of this? Is there an updated Special Tax Notice?

No updates to the old IRS model notice. There is a lot to update in the 402(f) notice for Roths. For example, the employee’s period of participation under the distributing plan is not carried over to the Roth IRA for purposes of determining whether the employee satisfies the 5-taxable-year requirement under the IRA.

Of course, these are proposed regs. Anyone think we can wait to update tax notices for the distribution details until the proposed regs are finished.