Fidelity Investments, the Boston-based money management behemoth, says nearly one-third of its Roth IRA conversions in 2010 occurred during the month of December. As expected, Roth IRA conversion activity was up all year, with the firm experiencing a fourfold increase in Roth IRA Conversions in 2010 as compared to the year prior.
New conversion rules meant demand for Roth IRA conversion advice and service hit an all time high, the company says. A provision passed in September 2010 as part of the Small Business Jobs Act of 2010 allows in-plan Roth conversions for certain eligible workers in a workplace savings plan with Designated Roth Accounts. This includes Roth 401(k), 403(b) and governmental 457(b) plans.
The company has seen growing demand by plan sponsors for the Roth 401(k) offering and the conversion opportunity. As of Dec. 31, 2010, 50% of large Fidelity-administered workplace savings plans now offer a Roth 401(k).