1) steps to implementing the Roth 401(k) Ameritas Life Insurance Corp. of New York RP 1030 NY 11-15 For Financial Professional and Plan Sponsor Use Only.
2) We’re here to help you. Now that you’ve made the decision to offer the Roth 401(k) feature to your plan participants, here are a few things you need to consider. 1. eview your payroll system to be sure it has R the capability to calculate both pre-tax salary deferrals and after-tax Roth contributions or a combination of both. The recordkeeping system will need to store this information in order to provide an accurate account of the amount of each type of contribution for year-end IRS Form W-2 reporting. 2. e sure to enter the participant’s traditional preB tax salary deferral and Roth after-tax deferrals under the correct source on our deposit website. This is critical because our participant reporting segregates Roth contributions from pre-tax contributions on all participant correspondence and statement reporting, as required by IRS regulation. 4. omplete and sign the Roth 401(k) Amendment C provided to you. This must be executed prior to the implementation of the Roth feature. Upon request, we can provide a sample “Certificate of Resolution” to document your formal adoption of the Roth feature. Information explaining the Roth after-tax contribution feature is provided in the employee enrollment booklet. The enrollment form allows participants to enter the percentage split between their Roth and traditional pre-tax salary deferral contribution election. The following chart is an overview of the Roth, the traditional 401(k), and the Roth IRA. If you have any questions, please contact your financial professional or your client services representative at 866-816-0561. 3. hile Roth contributions are eligible for employer W matching contributions as well as Safe Harbor match, this match contribution must be credited to a pre-tax account and cannot be credited to the Roth account. For Financial Professional and Plan Sponsor Use Only.
3) Overview of the Roth 401(k) Salary Deferral Option Contributions Funded with pre-tax dollars 2016 Contribution $18,000 Limits ($24,000 if age 50 or older) Income Limits N/A Traditional with Roth 401(k) Salary Deferral Option Roth IRA Funded with after-tax dollars Funded with after-tax dollars $18,000 ($24,000 if age 50 or older) The combination of Roth and traditional 401(k) deferrals cannot exceed the 402(g) deferral limit. $5,500 ($6,500 if age 50 or older) Individuals who make a contribution, not to exceed the annual limits, must have compensation equal to amount contributed. N/A Traditionalâ€ˆ401(k) Salary Deferral Option Deductible contributions are not available for those with income over certain limits.* * Married AGI $194,000 Single AGI $132,000 Matching Contributions Allowed Allowed. The Employer Match N/A is a pre-tax contribution. Subject to ADP testing Yes, unless plan is Safe Harbor 401(k). Yes, unless plan is Safe Harbor 401(k). Taxation on Earnings Tax-deferred until distributed Tax-free earnings if Qualified Distribution Tax Implications Contributions are deducted from income. Distributions are included in income. Withdrawals of contributions and earnings not taxed if: • • • • Tax-free if Qualified Distribution Contributions are included in income. Qualified Distributions are not included in income. 1) ayments on or after age P 1) ayments on or after P 59½, death, disability or age 59½, death or qualify as first time home disability AND buyer. AND 2) Payments made after initial P 5 year period following first 2) ayments made after initial 5 year period following first Roth 401(k) contribution Roth IRA contribution. “Qualified Distributions” N/A Access to Money Contributions are included in income. Qualified Distributions are not included in income. N/A Terminate Employment Disabled Death Age 59½ (if plan provides) Minimum Required Required to be made to the Distribution participant upon the later of age 70½ or retirement and to a beneficiary upon the death of the participant. Availability for Rollovers Can be rolled over into another qualified plan or a traditional IRA. Terminate Employment Disabled Death Age 59½ (if plan provides) You always have access to your Roth IRA. Required to be made to the participant upon the later of age 70½ or retirement and to a beneficiary upon the death of the participant. However, a Roth 401(k) can be rolled over to a Roth IRA where minimum distribution rules may not apply to distributions made prior to death. N/A prior to death of policyholder. Applicable to the beneficiary upon the death of the policyholder. Can be rolled over into another Roth 401(k) or a Roth IRA. Can be rolled into another Roth IRA. Generally, traditional IRAs may be rolled into a Roth IRA if income is below certain limits, although a traditional IRA to a Roth IRA rollover is taxable. • • • • For Financial Professional and Plan Sponsor Use Only.
4) Ameritas Life Insurance Corp. of New York Ameritas Life Insurance Corp. of New York Retirement Plans Division 1350 Broadway, Suite 2201 New York, NY 10018 800-923-2732 ameritas.com This information is provided by Ameritas®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company, including, but not limited to: Ameritas Life Insurance Corp., 5900 O Street, Lincoln, NE 68510; Ameritas Life Insurance Corp. of New York, (licensed in New York) 1350 Broadway, Suite 2201, New York, NY 10018; and Ameritas Investment Corp., member FINRA/SIPC. Each company is solely responsible for its own financial condition and contractual obligations. For more information about Ameritas®, visit ameritas.com. Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp. Fulfilling life® is a registered service mark of affiliate Ameritas Holding Company. © 2015 Ameritas Mutual Holding Company For Financial Professional and Plan Sponsor Use Only.