Discretionary Match - Stopped but Not for Everyone

[Guest SVA Retirement Plan Svc.]

Have a takover plan that stopped their descetionary match mid year. When we recieved year end information it was discovered that they continued that match for the Union employees only...we did not know they had union employees in the plan.

Union employees are not excluded from the plan. They are on a Relius prototype document.

The 410b test passes because the employees got matched for the first 7 months, but the %'s are not the same for all employees.

Is this legal? Can you exclude non-union employees from a employer contribution?

What are the options here???

[david rigby]

This looks like the age-old question: what does the plan say?

Likely, there is corollary question: what does the collective bargaining agreement say?

[JanetM]

Union CBA may require match. For non union, if this is really discretionary match, sure you can stop it.

[Tom Poje]

though you have 1 plan, the regs say you have 2 - one for union and one for non union.

and the ADP for union automatically passes

in otherwords, you have mandatory disaggregation, so each plan has to pass on its own things like 410(b), etc