State-mandated pension contributions

[lexi]

A State has a law that requires employers in the coal industry to remit monies to a pension fund on behalf of coal workers employed in that state (and to make matters more complicated, some are union and some are non-union employees).

Is there any reason to think that employers could disregard these state-mandated contributions when doing 410(b) discrimination testing?

[Don Levit]

lexi:

I am curious how a state can legally require private employers to contribute to a pension plan, when ERISA clearly states these plans are voluntary on the employers' part?

Just wondering, are the contributions a percentage of salary?

Don Levit

[lexi]

contribution is equal to a % of employer's earnings.

[Guest David Lacy]

I am curious how a state can legally require private employers to contribute to a pension plan, when ERISA clearly states these plans are voluntary on the employers' part?

Remember that governmental pension plans are not subject to ERISA. It sounds like the plan is a state plan that might be governmental.

[masteff]

Is there any reason to think that employers could disregard these state-mandated contributions when doing 410(b) discrimination testing?

Short of consulting an ERISA attorney in that state, my best answer would be to call the company's peers w/ operations in that state and ask how they handle it. Might even be able to get an intelligent answer by calling the state agency that administers that plan (since this isn't brand new then surely they've had the same question asked of them before).

Two other thoughts: Following on David's comment... it may well constitute a governmental plan and thus be outside the pervue of ERISA discrim testing. Also, is the company treated as being an "employer" within the terms of the plan (such as in a multi-employer plan)? Because if isn't, then I'm not seeing a clear linkage that would pull that external plan into the company's discrim testing.