Amendment to multiemployer plan to become multiple employer plan as well

[PJ2009]

Can a collectively bargained, multiemployer plan be amended to allow non-union employees of other employers to participate in the plan? I would think that this would make the plan a multiple employer plan as well. If this is allowed, would the multiemployer plan rules only apply to the union portion of the "plan"? Also, would there still be just one 5500 for the entire "plan"?

[Bill Ecklund]

Can a collectively bargained, multiemployer plan be amended to allow non-union employees of other employers to participate in the plan? I would think that this would make the plan a multiple employer plan as well. If this is allowed, would the multiemployer plan rules only apply to the union portion of the "plan"? Also, would there still be just one 5500 for the entire "plan"?

The definition of a “multiemployer plan” is a plan to which more than one employer contributes by reason of a collective bargaining agreement. The fact that there may be non-union employees participating or even non-union employers does not change the characterization of the plan. For example, it is not uncommon to have a trade association that is the sponsor of a multiemployer plan also participate as a contributing employer, even though the association itself is not union. It is highly unusual, however, for a typical multiemployer plan to have other non-union employers participating. Generally, the sponsoring unions do not like to see that. It is very common to have non-bargaining unit employees (NBU’s) participate in a multiemployer plan. If a multiemployer health and welfare plan contains too many NBU’s, it may become a MEWA, which has several ramifications.

The plan would only file one 5500, and the plan rules would normally apply to all contributing employers, unless the trustees created separate rules. Any non-union employer participating in such a multiemployer plan should be required to sign a participation agreement, which would set forth the rules under which it participates, and these rules could be different than the rules that apply to the contributing union employers.

[PJ2009]

Thanks much. Your reply is consistent with another response I received to an earlier similar question.

Can a collectively bargained, multiemployer plan be amended to allow non-union employees of other employers to participate in the plan? I would think that this would make the plan a multiple employer plan as well. If this is allowed, would the multiemployer plan rules only apply to the union portion of the "plan"? Also, would there still be just one 5500 for the entire "plan"?

The definition of a “multiemployer plan” is a plan to which more than one employer contributes by reason of a collective bargaining agreement. The fact that there may be non-union employees participating or even non-union employers does not change the characterization of the plan. For example, it is not uncommon to have a trade association that is the sponsor of a multiemployer plan also participate as a contributing employer, even though the association itself is not union. It is highly unusual, however, for a typical multiemployer plan to have other non-union employers participating. Generally, the sponsoring unions do not like to see that. It is very common to have non-bargaining unit employees (NBU’s) participate in a multiemployer plan. If a multiemployer health and welfare plan contains too many NBU’s, it may become a MEWA, which has several ramifications.

The plan would only file one 5500, and the plan rules would normally apply to all contributing employers, unless the trustees created separate rules. Any non-union employer participating in such a multiemployer plan should be required to sign a participation agreement, which would set forth the rules under which it participates, and these rules could be different than the rules that apply to the contributing union employers.