What does DRC stand for?

Comments: The current model notice as modified to reflect changes in the law can be confusing with respect to participants in plans that do not permit designated Roth contributions.

However, permissive withdrawals of designated Roth contributions are not included in gross income because the participant made the contributions on an after-tax basis.

Also, all participants, regardless of income, will be eligible to make designated Roth contributions.

Treasury Decision 9324) The final rules redefine "designated Roth accounts" to include only those accounts under a plan to which designated Roth contributions are made in place of pretax 401(k) contributions.

This separate accounting requirement begins when the designated Roth contribution is contributed and continues until all assets in such account have been distributed.

Designated Roth contributions allow employees to designate all or a portion of their elective contributions under a Sec.

Definition: The final regulations define a designated Roth contribution as an elective contribution under a qualified CODA that is (1) designated irrevocably by the employee at the time of the cash or deferred election as a designated Roth contribution; (2) treated by the employer as includible in the employee's income at the time the employee would have received the amount in cash if he or she had not made the cash or deferred election; and (3) maintained by the plan in a separate account.

A designated Roth contribution will be treated like a contribution to a Roth IRA.