Union 401K Plan and Non-Discrimination Testing (ADP/ACP)

[Guest ROB VIDOVICH]

I have an Union 401K Plan in which only union members are eligible to participate... There are two union members who earned in the prior plan year (12/31/2000) salaries in excess of $85,000.00.

Would these two participants be considered Highly Compensated Employees even though they are part of a union??????

[KJohnson]

Yes, while you generally get a pass for purposes of coverage--410(B)--discrimination under a profit sharing or money purchase contributionk--401(a)(4)--and 401(m) --the ACP test-- you do not get a pass under 401(K)--the ADP test. Collectively bargained plans (whether multi or single employer) must run ADP.