Plan Document vs. Union Agreement?

[Guest Chaffee]

In the case of conflicting provisions, what have most people experienced as having more legal authority (or what would prevail upon audit)?

For example, Union Agreement indicates all employees will receive $1.00 / hour profit sharing, and specifically indicates that amount is to be funded weekly.

Plan Document indicates that profit sharing will be made in amount noted in Union Agreement. It further sets allocation condition as being employed on last day of Plan Year and completing > 1,000 hours (no exceptions for disability/death/ NRD/etc.).

If an Employees receives contributions for first half of the year, terminates, and takes distribution, will the Plan have a qualification issue, or will the Union Agreement prevail (considering it is incorporated by reference in the Plan Doc)?

I'm not looking for a definite answer (lawyers will be consulted), but just wondering what people's general experience has been in these types of conflicts.

[Guest b2kates]

does the plan contain a break in service rule before authorizing a distribution?

[Guest Chaffee]

This was a theoretical plan (based very closely to a real-life fact pattern), but assume for this example that distributions were proper. However, the issue I'm interested in is whether the contribution (made and now removed from Plan Assets) would be proper or not.

Again, I'm not looking for a legal opinion on this case in particular, but trying to just get a sense of what people see when Union Contract Provisons and Plan Provisions conflict, especially when the Union Agreement in incorporated by reference. Perhaps the answer is that it depends on a facts and circumstances test. Perhaps the DOL would say follow the Union Agreement, while the IRS may disallow the deduction.

[david rigby]

IMHO, the plan sponsor is on the horns of a dilemma [all you mathematicians will recognize the redundancy ]. The sponsor appears to be bound by separate, and conflicting, documents. Perhaps this means the sponsor's and union's attorneys should get together ASAP and clarify. It seems the sponsor should insist upon it.

[GBurns]

The Union Agreement provisions if they were communicated to the members most likely would be regarded as supplemental to the SPD. If the UA and the SPD agree, I would say that the case law would lean towards the UA/SPD interpretation and override a conflicting Plan Document.

The best course seems to be, as pax suggested, that the sponsor and union get together ASAP and come up with a compromise to resolve the differences.