Single Employer to Multiemployer

[Guest srgardner]

An employer sponsors a single-employer 401(k). Some of the participants in the plan recently went union. We are now being asked to transfer the union participants accounts form the single-employer 401(k) plan to the multiemployer DC plan. The union sponsors the multiemployer plan.

Is this transfer possible? If so, what is the best way to accomplish this task?

Thanks!!

[Effen]

What was the "event" that is triggering the distribution? Are they still your employees? If so, I don't think "going union" generally meets the requirements, but you need to look in the plan document.

[Guest srgardner]

They are still employees of the employer. There is no distributable event as far as we see it. The plan doc does allow an employer to transfer assets to another plan 'of the employer'. However, the union sponsors the multiemployer plan and the company is just a 'participating employer'. Do you see any way this transfer can take place? Of course, we will be checking the 411(d)(6) protected benefits.

[mbozek]

Its a spin off of plan assets. See Instructions to IRS form 5310A. Its not a distribution but a trustee to trustee transfer of assets. Amend the plan to permit transfer to another qualfied plan.