Roth Contributions in 401(k) and 403(b) Plans
Allows Roth Contributions in 401(k) and 403(b) plans for taxable years beginning in 2006. The Roth Contributions are similar to the Roth IRA.
Allows members to designate all or part of their elective deferrals to a 401(k) and 403(b) plan as a Roth Contribution.
Earnings are tax-free if left in the plan at least 5 years and distributed after age 59 and a half.
These "after-tax" contributions will be tested along with pre-tax deferrals as part of the nondiscrimination test and would be combined with pre-tax elective deferrals for purposes of the maximum deferral amount.