Going Union, what to do with the existing 401K

[Guest jblanscett]

An employer had an existing 401(K) plan when it became unionized. Under the collective bargaining agreement, the employer is contributing to the multi-employer pension and annuity trusts. The existing employees want to be able to continue to contribute to their 401k accounts but the employer will no longer be making any contributions. Is this permissible? Anything to watch out for?

[david rigby]

1. Probably the employee group "became unionized" rather than the plan.

2. The plan may contain language that will exclude those employees from active participation, based on the negotiation of the collective bargaining unit. It is unlikely the CBA and the employer anticipate that those employees will continue to participate in the 401(k) for deferrals only, while the employer makes other contributions for them to another plan. Possible, but look to the provisions of the CBA and plan document.