Union employees & standardized prototype

[Jean]

2 401k prototype plans are adopted. One plan

covers non-union only. In operation it is intended that the second plan covers only union (although not an option to exclude nonunion). There are no HCE in union. If both plans provide for same salary deferral but "union only" receives match and /or profit sharing, will this pass 410(B) if the nonunion do not receive the same match or profit sharing?

[Guest JMLSON]

The non union plan will exclude the participants under the collective bargained plan. This will only leave the non union employees to be tested in the non union plan, and if they only have a 401(k) feature, they will pass (if they don't exclude any other class of employees). The union plan automatically passes 410-b. Hope this helps.

[Guest JMLSON]

The non union plan will exclude the participants under the collective bargained plan for 410-b testing. This will only leave the non union employees to be tested in the non union plan, and if they only have a 401(k) feature, they will pass (if they don't exclude any other class of employees). The union plan automatically passes 410-b. Hope this helps.

[M R Bernardin]

If the document which covers the union employees doesn't exclude the non-union employees, you could have a serious problem, not under 410(B), but just because the non-union employees are going to be entitled to participate and receive the match.

[KJohnson]

I agree with the last comment. Plan document for union employees must be drafted to cover collectively bargained employees only and cannot just cover collectively bargained "in operation." You may have two plans for the non-union employees.