The passage of the American Taxpayer Relief Act of 2012 -- the early-January "fiscal cliff" deal -- included a measure that removed restrictions, so holders of 401(k) retirement accounts can convert some of their savings into Roth 401(k)s at any time.
It's a good retirement planning deal for workers. The only problem is that many employers that offer traditional 401(k)s don't offer their employees the Roth version. But that could be changing.
According to a survey by human resources consultant Aon Hewitt, of the 49 percent of companies that currently don't offer Roth provisions, 29 percent plan to add Roth features in the next 12 months. Of those, 76 percent plan to include in-plan conversion features.
Patti Balthazor Bjork, director of retirement research at Aon Hewitt, says the reason that more employers don't offer Roths is they believe employees aren't interested, plus they perceive Roths to be expensive to administer.
But Bjork points out that a company could be making a big human resources mistake because Roths are most attractive to younger employees, the ones that companies want to attract and retain. "The heaviest users of Roths are in their 20s. They elect Roths knowing that their incomes will be higher in the future," she says.
If your company doesn't offer a Roth retirement plan and you'd like to participate in one, Bjork urges you to make your preferences heard. She believes that if enough employees say they want a Roth, companies will get past their concerns over conversion issues and give workers what they want. "I think communication is the biggest challenge," she says.