Act Contains 403(b) Plan Roth Contribution Correction

December 30, 2005 – The recently enacted Gulf Opportunity Zone Act of 2005 (H.R. 4440, Public Law 109-73) provides tax incentives for investment in the hurricane-stricken Gulf Coast region, and also provides to Hurricane Rita and Wilma victims the special retirement arrangement relief previously made available to victims of Hurricane Katrina. The Act also includes technical corrections to several previous public laws, including the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).

The EGTRRA technical correction is contained in Sec. 407 of Public Law 109-73, and pertains to the special catch-up deferral option that is available to 403(b) plan participants who have 15 or more years of service to an organization. The ability to designate such additional deferrals as “designated Roth contributions” (Roth 403(b) deferrals) was apparently not enabled by EGTRRA as it was enacted in 2001. This technical correction makes that option available to qualifying individuals.