Roth Deferral Provision



Roth contributions are similar to 401(k) deferrals in that employees may defer a portion of their compensation into the plan. However, Roth contributions are not tax deferred contributions. An employee pays normal tax on his Roth contributions at the time of contribution, but is then able to withdrawal his contributions AND earnings from the plan on a post-tax basis when they are over age 59½ and have been contributing for over five years.

Like 401(k) deferrals, a discretionary Employer Match may be set up to encourage participation. Roth contributions are also subject to the same annual limit per individual as 401(k) deferrals. For the 2018 plan year, the limit is $18,500. An individual over the age of 50 may also make an additional $6,000 catch up contribution. Combined 401(k) and Roth elective deferrals may not exceed an individual's limit for the year.

AGC Retirement Plan Service Center: (877) 690-5410 | Fax (206) 938-5987