401(k) with union employees

[FJR]

I have a client who has a 401(k) that includes all employees. Document does not say to exclude members of a collective barganing agreement. A few years later, the company now has employees that are part of a cba and are enrolled in the plan. They contribute and receive a match.

Do I automatically test this group seperatly? Even though the document includes these employees. Free pass on the ACP test?

Anything else would be appreciated. What other admin. issues to worry about?

[QDROphile]

See Treas. Reg. section 1.401(k)-1(g)(11)

[jaemmons]

Yes, plans which cover both union(as defined in the Treasury Regulations) and non-union ee's is deemed to have separate plans for testing purposes. Therefore, they are mandatorily dissagregated into component plans and tested as such. The only test to perform for the union is the adp, no acp is required as the IRS deems the "union part" to automatically pass 401m testing.

Keep in mind that the documents language to not exclude them from participation pertains ONLY to initial participation. The disaggregated testing is a requirement under Treas Reg 1.401(k)-1(g)(11)(ii)(B).