For eligible employees who participate in the UCOR 401(k) Retirement Savings Plan, a new Roth in-plan conversion feature has been established. Now you can move money you have saved in an eligible workplace retirement plan into a designated Roth account within that plan. However, there are tax impacts that you should fully consider as mentioned below.
An in-plan conversion feature allows for eligible vested plan balances to be rolled over to a designated Roth account within your workplace savings plan, even if those amounts are not currently available for withdrawal.
For UCOR participants who are currently contacting Fidelity by phone to request a weekly rollover manually, they will now be able to establish this weekly rollover automatically with Fidelity. Because the conversion of non-Roth money into a Roth account within your plan is a complex decision, the initial action feature requires the participant to contact Fidelity for set up. You may also want to seek advice from your tax advisor. A couple of things to remember, but they are not all inclusive:
- You must pay all applicable taxes incurred as result of a Roth in-plan conversion for the income tax year in which you made the conversion. Taxes incurred because of an in-plan conversion are not withheld from your pay or converted contributions, and you are responsible for the tax liability.
- You must pay taxes on both the base contribution and any associated earnings if you convert pretax contributions to a Roth account.
- You will receive an IRS Form 1099-R at the end of the calendar year that will include consolidated tax information on all your applicable conversions for the year.
- Fidelity does not charge a fee to convert eligible contributions to an in-plan Roth account.
Fidelity can be contacted by either calling 800-835-5095 or by logging into your account www.netbenefits.com.
