Formula Wording in Document

[Guest amm19]

A potential client wishes to provide an employer contribution based upon the number of miles driven during a plan year. The client is a trucking and freight company. All employees are union members, no HCES or keys. They have proposed a certain fraction of a cent for each mile driven up to a various cap. Has anyone seen this done before? If so, how did you word this in the document? Thanks!

[Guest Kevin A. Wiggins]

Is this a DB or DC plan? If DB, is the fraction of a cent per mile a monthly pension? For example, assume the driver gets $.001 per mile. Assume in one month a driver drives 10,000 miles. Would that be a $10/mo pension payable each month for life beginning at age 65? Or it would be a $10 contribution? Something else?

[Guest amm19]

It is a DC plan. They look at miles driven each month and multiply by the factor for the contribution. The union rep assured me this is standard in the trucking industry and produced several samples from other CBAs.

[Guest Kevin A. Wiggins]

It is difficult to give appropriate wording without looking at the context of the plan, but how about something like the following:

After the end of each month each employer will contribute on behalf of each eligible Participant an amount equal to $0.___ multiplied by the number of eligible miles driven by such participant for such employer during such month.

You may need more precision such as the date contributions will or may be made (e.g., at end of year, each month, each quarter, other?) and how contributions are allocated to each participant's account.

Or why not just use the language you have in the sample CBAs?