Dual Classification Employees Considered Both Union And Non-Union

[KJohnson]

I think that there is a distinction between being a union member and being "collectively bargained." Typically, owners cannot be part of a collective bargaining unit. If the "union" plan is not doing so, I would think that the owners must be disaggregated from the rest of the bargaining unit and tested separately. (No automatic 410 pass) However, there are certain "bargaining unit alumni" rules for multiemployer plans where someone who was once in the bargaining unit will be "deemed" to still be in the unit. If this is a multi, you may want to check the alumni rules.

I don't think that the alumni rules apply to single employer plans. To the extent that the owners are not truly collectively bargained, you could set up a separate plan for them and exclude all truly collectively bargained individuals from the Plan. However, since they participate in the union plan, watch out for top heavy aggregation and aggregation for 415 problems.

[Guest Edward McElroy]

A Company is owned by three individuals. All three owners are union employees. The Company employees another 100 union employees. The owners receive 50,000 as compensation for being union members and 150,000 additional compensation from the Company. The Company contributes to a union retirement plan for all 103 union members. The Company wants to establish a qualified plan for the benefit of the three owners. The Company wants to exclude the 100 purely union employees. Can this be accomplished without having the 3 owners giving up their union membership? Would the Company need to issue separate W-2s? Should a administrative company be set up to provide for the plan? Forgetting about 401(a)(17), is the compensation of the owners 200,000 or 150,000? Any thoughts? Thanks.