Multiemployer 401(k) Plan

[PJ2009]

The multiemployer 401(k) plan will be amended to include non-union employees of participating employers. It appears that this will cause the plan to become a multiple employer plan as well.

Has anybody encountered such an arrangement? Would ADP/ACP testing and application of other qualfiication rules be applied by "carving out" the non-union group? Would each employer have to file a separate 5500, or only those with non-union participants? Would this cause the arrangement to CEASE to be a multiemployer plan?

This is a new arrangment for me and I'm afraid there could be a number of landmines. Any insights would be most appreciated!

[Below Ground]

One document. Separate Adoptions. Single 5500. Separate ADP/ACP & Top Heavy Testing. Consolidated for 415 Limits. Full portability between adopting entities.

[PJ2009]

One document. Separate Adoptions. Single 5500. Separate ADP/ACP & Top Heavy Testing. Consolidated for 415 Limits. Full portability between adopting entities.

Very helpful. Just a follow up. Could the Form 5500 be designated as a multiemployer and multiple employer plan? In the case of a filing for a multiple employer plan, do you think separate schedules are required for each adopting employer with respect to the non-bargaining unit employees?

Thank you!

[Below Ground]

No separate schedules for 5500. I seem to recall that there was separate Schedule T's years ago for multiple employer, but no more.

I'm not sure on the designation between multi and multiple for the 5500. That was the one issue I was not 100% confident with, so I didn't address in my first reply. I would most likely use multiple employer as the 5500 instructions seems to indicate that multiple employer is the right choice. (I think you might be able to select both. I would need to review in more depth to make a solid decision.) I include the the instructions for that box below. Emphasis added is mine.

Box A(3). Multiple-Employer Plan. Check this box if the Form 5500 is being filed for a multiple-employer plan. A multiple-employer plan is a plan that is maintained by more than one employer and is not one of the plans already described. Multiple-employer plans can be collectively bargained and collectively funded, but if covered by PBGC termination insurance, must have properly elected before September 27, 1981, not to be treated as a multiemployer plan under Code section 414(f)(5) or ERISA sections 3(37)(E) and 4001(a)(3). Participating employers do not file individually for this type of plan. Do not check this box if the employers maintaining the plan are members of the same controlled group.

[PJ2009]

Interesting. The Instructions to the 5500 state that only one choice can be made. It appears that your position is that the choice would be multiple employer plan, with just one 5500. However, does this mean that the plan would cease to be a multiemployer plan, which has rules that are different from other types of qualified plans? I thought that perhaps it would make sense to file two 5500s - one for the multiemployer part and one for the multiple employer part. What are your thoughts on this rather unusual approach?

I completely agree that other non-related employers would have to execute a participation agreement to become members of the multiple employer arrangement.

Thank you.

No separate schedules for 5500. I seem to recall that there was separate Schedule T's years ago for multiple employer, but no more.

I'm not sure on the designation between multi and multiple for the 5500. That was the one issue I was not 100% confident with, so I didn't address in my first reply. I would most likely use multiple employer as the 5500 instructions seems to indicate that multiple employer is the right choice. (I think you might be able to select both. I would need to review in more depth to make a solid decision.) I include the the instructions for that box below. Emphasis added is mine.

Box A(3). Multiple-Employer Plan. Check this box if the Form 5500 is being filed for a multiple-employer plan. A multiple-employer plan is a plan that is maintained by more than one employer and is not one of the plans already described. Multiple-employer plans can be collectively bargained and collectively funded, but if covered by PBGC termination insurance, must have properly elected before September 27, 1981, not to be treated as a multiemployer plan under Code section 414(f)(5) or ERISA sections 3(37)(E) and 4001(a)(3). Participating employers do not file individually for this type of plan. Do not check this box if the employers maintaining the plan are members of the same controlled group.

[Below Ground]

Sorry, but I can't research this right now for you. I have several projects that are demanding my time. I do think that if you review multiple employer plans you will that it also has different rules from other plans.

I do not think that the selection of "Multiple Employer Filing Status" means that the Plan is no longer a multiemployer plan. (Please note use of "think" as opposed to "know".) I am fairly certain that 2 5500 Forms would not be correct.

In post #4, I said that I was not 100% sure about the impact on 5500 Filing Status. With this qualification I can only say that until I look deeper into this issue, I can only say that the Multiple Employer Filing Status makes the most sense to me. It seems to best describe the entire plan.

I am glad that my other comments were "very helpful". Let me know what you determine on the 5500 Filing Status as it is interesting. I wish I had a bit more time available for that topic.

Good Luck.

[PJ2009]

Sorry, but I can't research this right now for you. I have several projects that are demanding my time. I do think that if you review multiple employer plans you will that it also has different rules from other plans.

I do not think that the selection of "Multiple Employer Filing Status" means that the Plan is no longer a multiemployer plan. (Please note use of "think" as opposed to "know".) I am fairly certain that 2 5500 Forms would not be correct.

In post #4, I said that I was not 100% sure about the impact on 5500 Filing Status. With this qualification I can only say that until I look deeper into this issue, I can only say that the Multiple Employer Filing Status makes the most sense to me. It seems to best describe the entire plan.

I am glad that my other comments were "very helpful". Let me know what you determine on the 5500 Filing Status as it is interesting. I wish I had a bit more time available for that topic.

Good Luck.

Again, many thanks for your valuable insights.