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Employer entered into a new collective bargaining agreement a couple of years ago that provided additional non-elective contributions and full vesting under the 401(k) plan (more generous than what the plan provides). The Plan was not amended to incorporate these negotiated terms of the CBA. What is the fix? Technically, there is no plan failure. Rev. Proc. 2021-30 states that "VCP provides general procedures for correction of all Qualification Failures: Operational, Plan Document, Demographic, and Employer Eligibility." The plan has been operated in accordance with its terms, so there is no "Operational" failure, and it doesn't violate Section 401(a) by its terms, so there is no "Plan Document" failure. There is no failure to satisfy the requirements of § 401(a)(4), 401(a)(26), or 410(b) ("Demographic" failure) and the employer is eligible to establish a 401(k) plan, so there is no "Employer Eligibility" failure. Thus, I read EPCRS to say that there is no relief available for this scenario. Is that accurate??

I have a 401(k) plan where the employer has many union employees covered by a collective bargaining agreement. The union employees are currently excluded from the 401(k) plan. The owner is covered by the CBA under a separate union agreement, along with only a few other employees. For a little background, about 75% of the company's workforce is made up of union employees. If the plan were to amend to allow employees from only the separate union agreement that includes the owner, would all union employees need to be included in the compliance testing, regardless if they are excluded from the plan? The concern is that including all union employees would more than likely result in failed coverage testing.

(Sorry, I posted this in "other kinds of welfare benefit plans" as well, but I'm not sure that's the right place for it. So I'm posting it here as well.) Stumbled on this forum, what a great wealth of wisdom! I'm a union rep and we are considering starting a healthcare plan for our members. Instead of the various employers having their own healthcare plans for our members, the employers are going to give us the money and we will provide the healthcare plan for our own members. I believe we will need to start a VEBA and a MEWA, but I am uncertain as to how much we will need to allocate for start-up costs (e.g. legal advice, documents, etc.). We have 10-15k local union members. I'm assuming it will cost $500-$1mm to start up and at least 1.5 years before we can go live. Am I even in the ballpark? Anyone know how much it will cost us to get this started? Any help is much appreciated!

Can I allow union employees to make elective deferrals but exclude them from the safe harbor match or do I have to set up a separate plan for them?

Stumbled on this forum, what a great wealth of wisdom! I'm a union rep and we are considering starting a healthcare plan for our members. Instead of the various employers having their own healthcare plans for our members, the employers are going to give us the money and we will provide the healthcare plan for our own members. I believe we will need to start a VEBA and a MEWA, but I am uncertain as to how much we will need to allocate for start-up costs (e.g. legal advice, documents, etc.). We have 10-15k local union members. I'm assuming it will cost $500-$1mm to start up and at least 1.5 years before we can go live. Am I even in the ballpark? Anyone know how much it will cost us to get this started? Any help is much appreciated!

An employee was working for City A and was covered under a union contract hat provided she was an eligible employee for purposes of Plan X (a defined benefit plan). After ten years of service, Employee became a certified teacher and took a job with the Board of Education for (same) City A and is now covered under a statewide retirement system for teachers of State S and no longer an eligible employee for Plan X. Assume that her last day of work with the City was on Friday and she started teaching in the schools of City A on the following Monday. Did this employee terminate service with City A when she became a teacher or has she continued to work for the same employer and just stopped being eligible for Plan X? Must she wait until she retires as a teacher (totally leaving employment with City A or its Bd of Ed or any other subdivision or related employer) in order to commence benefits? The plan does not permit in service commencement of benefits. The plan (which is based on statutes, ordinances and collective bargaining agreements) has very imprecise language so it's really not helpful at all in determining whether or not she terminated employment. If anyone can point me to guidance on how to determine separation from employment or application of controlled group rules as may be applicable to governmental plans in such a case, I would be appreciative. Thanks!

Are there special rules that might apply to a collectively bargained plan for allocation condition purposes? In this takeover plan, the collective bargaining agreement was found to have required that the match be allocated on a monthly basis and that the participant work 120 hours in a month to get the match for that month. This would exceed the annual 1,000 hour DOL rule that typically applies.

In a SEP plan (5305 SEP) that excludes union employees and has a one year service requirement, if an employee changes to non-union mid-year, is he ineligible for a contribution until the next year?