Can you split up a Multi Employer Union Plan?

[CTipper]

Yes, this is somewhat related to another post

I'm looking at a prospect with a multi employer plan.

There are currently (supposedly) only 3 firms participating/sponsoring the plan.

Total number of participants is just above 120.

From what I'm hearing about actuarial certification costs for a multi employer plan, it seems like the actuarial costs for 3 separate single employer plans would be less than the cost for 1. Not to mention that if each employer split off to their own plan they'd be way below the audit limit and would save those costs.

Is this possible?

What obvious pitfall am I missing?

Thanks

Christopher

[Effen]

I'm not so sure I agree. Yes there is a lot of PPA work related to multi's, but the singles have a fair amount as well. Most importantly, a multiemployer plan doesn't need to fund based on the new method and doesn't need to use the yield curve as a funding assumption. Therefore, required contributions will generally be lower.

I have heard of a number of employers who are trying to change their plans from singles to multi's in order to take advantage of the differences.

If you don't work on other multi's or if you haven't in the past, you probably shouldn't be bidding. Multi's are different animal.

Can you split them? I think it can be done but I don't know. You would need to assign each participant's liability to one of the remaining employers which sounds like a political nightmare. Seems like you would spend a ton in legal and actuarial fees to do it.

[Lori Friedman]

CTipper,

If I'm reading your message correctly, it seems as if you're asking about a multiple-employer plan, and not a multiemployer plan. Could you please clarify? The two types of plans are governed by very different rules.

[CTipper]

no, the 5500 and Schedule B say Multi

not Multiple

what lead you to believe Multiple?

Christopher