Union Plan

[Randy Watson]

If union employees cease to be union employees during a plan year is there any kind of transition rule that allows the employer to keep the union plan (and the employees) separate from its other plan for the remainder of the year purposes of coverage/discrim testing?

[ERISAnut]

No. There is mandatory disaggregation when testing amounts received while part of the union from those amounts received while not part of the union. While an employee may earn compensation as both union and nonunion during the year, the amounts are tested separately.

Now, if this were a mere distinction between hourly and salaried employees (where that is no mandatory disaggregation), then you could test the employee within one group for the entire year (and this will be the group he was in on the last day of the plan year being tested). This is a no-go for union & nonunion.

Hope this helps.