Roth 401(k) features: Treasury takes us all the way to ... um ... second base: now that Treasury has issued final regulations regarding adding Roth features to our 401(k) plans, we have the answers to some of our questions on this new and anxiously awaited plan provision.(401(k) Plans)

At long last, the Treasury has issued final regulations relating to the addition of Roth features to our 401(k) plans. {T.D. 9237, modifying sections of Treas. Reg. [subsection] 1.401(k)-1, 1.401(k)-2, 1.401(k)-6, 1.401(m)-2, and 1.401(m)-5, published in the Federal Register on January 3, 2006} We now have the answers to all ... er ... most ... er ... some of our questions on this new and anxiously awaited plan provision. Frankly, these regulations stop quite a bit short of making us ready to administer this type of plan provision fully, something of a regulatus interruptus. If the passage of the law itself takes us only to the first step in the process (that is, to first base), these regulations take us to second base, but no further.

What Is a Roth 401(k) Feature and a Designated Roth Contribution?

The Economic Growth and Tax Relief and Reconciliation Act (EGTRRA), added a provision to the Internal Revenue Code (Code or IRC), effective January 1, 2006, that permits participants to make after-tax contributions to a 401(k) plan, and receive tax benefits similar to those in a Roth IRA-that is, tax-free distribution of such funds and their earnings if such a distribution occurs under certain circumstances. The new regulations are also effective as of January 1, 2006.

The law and the new regulations define "designated Roth contributions" to be elective contributions under a 401(k) plan that are:

1. Irrevocably designated by the participant at the time of the cash or deferred election to be Roth contributions in lieu of any pre-tax contribution that is available to be …