Scenario

One employer

Plan A- covers all employees including union employees. This plan was set up in addition to whatever plan that union employees may have through their union.

Plan B- covers non-union employees only.

All of the employees in Plan B are in Plan A.

Can I exclude the union employees from the coverage test when combining both plans?

Thank you for any suggestions.

Probably, but what do you mean by "when combining both plans"? For what purpose are you doing that?

I believe I have to test both plans together for 410(b) purposes. The employer wants to make a contribution to Plan B only.

I read in the ERISA outline book that if you have a plan that covers union employees, it is deemed to pass coverage.

I am not certain that the plan that is given as an example in the ERISA Outline Book was set up as a separate benefit aside from a plan that may have been negotiated as a union benefit.

No, I think you've got things a bit mixed up.



No, if the plan ONLY covers union employees (and meets other criteria-bargained in good faith, etc). You can't get a free pass by including one union person. Only part of that plan would get a free pass.

If you have one plan that is non-union and another that has both, you have three plans for testing purposes. The "union" group is treated as if they are in a separate plan.

See 1.410(b)-(6)(d).

And be careful of the word union. Collectively bargained would be more accurate. There sometimes are employees who are subject to a collective bargaining agreement that are not "union". And not all union people meet the collectively bargained exemption.

Hope this helps. I think the cite will explain the testing rules.