Mandatory disaggregation

[Guest Mike Melnick]

A 403(B) plan has a matching feature, subject to 401(m) testing. The level of the match is decided by collective bargaining. However, there are administrative employees covered by the plan who are non-union. The terms of the plan are the same for administrative employees and the union employees.

Do you conclude immediately that this plan is subject to mandatory disaggregation, so that the non-union employees must be tested separately? Or are there other factors to consider?

[mbozek]

See IRS Notice 89-23 for application of nondiscrimination rules to er contributions to 403(B) plans. I dont see why union employees in a 403b plan should be tested differently under IRC 401(a) (4)/m than union ee in a qualified plan since the same rules are to apply.