Switching a 401(K) balance to a Roth 401(K) will be easier, now that the IRS has issued guidance to employers on how to do these in-plan rollovers. A law enacted this past Jan. allows employers to transfer their 401(k) money directly to the Roth account, even if they are ineligible to take a distribution from the plan because they aren’t age 59 1/2 , etc.
The new rules clarify that amounts eligible to be rolled over to the Roth 401(k) include employee salary deferrals as well as employer matching and nonelective payins. Note that the converted funds and any later earnings in the Roth remain subject to the plans distribution rules. 401(k) plans can permit the 2013 rollovers prior to being officially amended, as long as the amendment was adopted by the later end of the 2013 plan year or Dec. 31, 2013.
See www.kiplinger,com/letterlinks/rothplans for full details