Can you include SOME of your collective bargained employees in your SIMPLE plan?

[Guest retpro]

An employer who has 3 classes of union employees runs a SIMPLE plan for their non-union employees.

Can the employer elect to include in their SIMPLE plan the union employees who are only covered under the national contributory DB plan?

If so, would the portion of compensation that is held out of their paycheck for the db plan be used in calculating the overall deferral limit of $14,000? Is the limit actually $10,000 due to the SIMPLE limits? Is it $10,000 minus their contribution to the db plan?

Any help would be greatly appreciated.

[Gary Lesser]

An employer who has 3 classes of union employees runs a SIMPLE plan for their non-union employees. Including ALL unionized employees, how many employee's are we talking about (this year, last year--that wd be eligible)?

Can the employer elect to include in their SIMPLE plan the union employees who are only covered under the national contributory DB plan? Possibly. An individually designed SIMPLE plan would probably be needed. It could be approved by IRS in a Priv. Ltr. Ruling request.

If so, would the portion of compensation that is held out of their paycheck for the db plan be used in calculating the overall deferral limit of $14,000? This would depend whether the "db" payment is an elective contribution under IRC 402(g) or some other mandatory payment that just happens to reduce gross income.

Is the limit actually $10,000 due to the SIMPLE limits? NO

Is it $10,000 minus their contribution to the db plan? See above. If all contributions are 402(g) elective contributions, then the annual limit can not be exceeded in the aggregate. What's defered by the participant in the SIMPLE certainly eats up the annual limit. You may need to explain in more detail what the "db" contribution is all about.