This page provides changes to our Mega Backdoor Roth Policy.
During our administration process, some clients misinterpreted our role in the Mega Backdoor Roth (“Mega”) process. As a result, we wanted to clarify and provide guidance regarding our services as they relate to the Mega.
What is a Mega Backdoor Roth?
A Mega Backdoor Roth is a special type of 401(k) plan that allows after-tax contributions. This allows non-deductible contributions to the 401(k) plan up to the annual limit.
While the IRS allows the Mega, a provision must be specifically included in the plan document. As a result, if you have a 401(k) set up through Schwab, Fidelity, or Vanguard, your plan likely does not allow after-tax contributions. If you are using an Emparion plan document, you likely have the ability to do a Mega.
Please review this article to learn more about what a Mega Backdoor Roth is and how it works. You may also join us for the following webinar.
Mega Backdoor Roth Administration Process
Many people come to us and are already contributing to a Mega and providing their own administration. While you may administer your own plan, please note that we cannot provide you with any services unless we are compensated under our Terms & Conditions.
Updated Policy
As an update to our Terms & Conditions, we are making the following change regarding our Mega Backdoor Roth Policy.
We will only provide information regarding your Mega if you are paying us an administration fee of $300. Our services provide for the following:
- Calculation of amounts
- 1099-R filing
- Updated IRS guidance
- Investment account assistance
- Ongoing support
Please note that the above fee is in addition to any fees for Form 5500 preparation and filing.
You can find out more about our Mega administration process and services here.
How do I know if Emparion administers my Mega?
You can review your engagement letter to determine if we administer your Mega. Also, you can review your annual administration invoice that is sent in April each year to determine. If we administer your Mega, there will be a line on the invoice stating “Mega Backdoor Roth Administration”.
If you are unsure as to whether we are administering your Mega, please respond to the email and our support team will review and let you know.