Appendix |
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Sample Plan Amendment |
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Article . ROTH ELECTIVE DEFERRALS |
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Section 1. General Application. |
1.1 This article will apply to contributions beginning with the effective
date specified in the adoption agreement but in no event before the first
day of the first taxable year beginning on or after January 1, 2006.
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1.2 As of the effective date under section 1.1, the plan will accept
Roth elective deferrals made on behalf of participants. A participant’s
Roth elective deferrals will be allocated to a separate account maintained
for such deferrals as described in section 2.
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1.3 Unless specifically stated otherwise, Roth elective deferrals
will be treated as elective deferrals for all purposes under the plan.
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Section 2. Separate Accounting |
2.1 Contributions and withdrawals of Roth elective deferrals will
be credited and debited to the Roth elective deferral account maintained for
each participant.
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2.2 The plan will maintain a record of the amount of Roth elective
deferrals in each participant’s account.
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2.3 Gains, losses, and other credits or charges must be separately
allocated on a reasonable and consistent basis to each participant’s
Roth elective deferral account and the participant’s other accounts
under the plan.
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2.4 No contributions other than Roth elective deferrals and properly
attributable earnings will be credited to each participant’s Roth elective
deferral account.
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Section 3. Direct Rollovers |
3.1 Notwithstanding section , a direct rollover of a distribution
from a Roth elective deferral account under the plan will only be made to
another Roth elective deferral account under an applicable retirement plan
described in § 402A(e)(1) or to a Roth IRA described in § 408A,
and only to the extent the rollover is permitted under the rules of § 402(c).
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3.2 Notwithstanding section , unless otherwise provided by the employer
in the adoption agreement, the plan will accept a rollover contribution to
a Roth elective deferral account only if it is a direct rollover from another
Roth elective deferral account under an applicable retirement plan described
in § 402A(e)(1) and only to the extent the rollover is permitted
under the rules of § 402(c).
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3.3 The plan will not provide for a direct rollover (including an
automatic rollover) for distributions from a participant’s Roth elective
deferral account if the amount of the distributions that are eligible rollover
distributions are reasonably expected to total less than $200 during a year.
In addition, any distribution from a participant’s Roth elective deferral
account is not taken into account in determining whether distributions from
a participant’s other accounts are reasonably expected to total less
than $200 during a year. However, eligible rollover distributions from a
participant’s Roth elective deferral account are taken into account
in determining whether the total amount of the participant’s account
balances under the plan exceeds $1,000 for purposes of mandatory distributions
from the plan.
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3.4 The provisions of the plan that allow a participant to elect a
direct rollover of only a portion of an eligible rollover distribution but
only if the amount rolled over is at least $500 is applied by treating any
amount distributed from the participant’s Roth elective deferral account
as a separate distribution from any amount distributed from the participant’s
other accounts in the plan, even if the amounts are distributed at the same
time.
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Section 4. Correction of Excess Contributions |
4.1 In the case of a distribution of excess contributions, a highly
compensated employee may designate the extent to which the excess amount is
composed of pre-tax elective deferrals and Roth elective deferrals but only
to the extent such types of deferrals were made for the year.
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4.2 If the highly compensated employee does not designate which type
of elective deferrals are to be distributed, the plan will distribute pre-tax
elective deferrals first.
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Section 5. Definition |
5.1 Roth Elective Deferrals. A Roth elective deferral is an elective
deferral that is:
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(a) Designated irrevocably by the participant at the time of
the cash or deferred election as a Roth elective deferral that is being made
in lieu of all or a portion of the pre-tax elective deferrals the participant
is otherwise eligible to make under the plan; and
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(b) Treated by the employer as includible in the participant’s
income at the time the participant would have received that amount in cash
if the participant had not made a cash or deferred election.
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