Different Multiemployer Plan Formulas

[Guest RMM]

Can a Multiemployer plan have completely different benefit formulas for different contributors to the plan? The case Caterino v. Barry, 761 F. Supp. 897 @ p. 902 seems to indicate the answer may be no.

[Guest Keith N]

I think we need more details regarding your question.

X% of the amount contributed on the participants behalf is a very common formula for multiemployer plans. This type of formula produces different benefit for each participant depending on the amount of contribution negotiated with his employer.

For example, if the formula is 3% and if my employer contributes $1000 to the Fund on my behalf, I earn a monthly benefit of $30. If your employer contributes $5,000 for you, you earn $150. Does that help?

Are you suggesting that Employer A and Employer B both contribute the same $/hr but employees of A get $30/Yr and B's employees get $50? Although I don't think there would be any problem under ERISA, assuming the Plan can comply with 401(a)-4, I would question the Trustees motives. Why would they give one employer preference over another. That smells a little fishy. I also don't think the employees of ER A would be realy happy with their "brothers" of ER B or on the Board of Trustees.