Collectively Bargained Plans

[Guest AJR]

I have a client that maintains both a 401(k) and defined benefit plan that covers both union and nonunion employees. The union employees are covered by a collective bargaining agreement. The benefits provided under the 401(k) plan were not subject to good faith bargaining but the benefits under DB plan were. Since the k plan was not included in the bargaining, would the union employees meet the definition of an excludable employee under Section 410(b)-6? The section indicates "a collectively bargained employee is an ee who is included in a unit of ee's covered by an agreement....provided that there is evidence that retirement benefits were subject to good faith bargaining between ee representatives and the employer". Must the specific plan be part of the bargaining or does any plan of the ER that is bargained qualify the employees for the exclusion under 410b?

[Kirk Maldonado]

IRS Reg. Section 1.410(b)-1©(1) provides as follows:

(1) Bargaining unit. Under section 410(b)(2)(A) and this paragraph, there may be excluded from consideration employees not included in the plan who are included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and one or more employers, if the Internal Revenue Service finds that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers. For purposes of determining whether such bargaining occurred, it is not material that such employees are not covered by another plan or that the plan was not considered in such bargaining.