Union Contract with wage concession

[Guest Jennyb473]

My boss asked me to post this question- We have a client with a union contract that has wage concessions. As part of that employees put dollars that are withheld from their pay into a IAM pension plan. Is this after tax or before tax as far as how it is reported? It is not 401k money, they have that too.

If it is after tax, does the employee contribution come out non-taxable when it comes out of the IAM pension plan?

thanks!

[david rigby]

You may have answered your own questions.

The amounts withheld from pay should be defined by the plan document and/or the CBA. It is unlikely pre-tax amounts would be defined for a defined benefit plan. (Is this a defined benefit plan?) However, it may be prudent that someone investigate how the payroll function worked in practice.

Assuming after-tax, yes these amounts would later be distrbuted on an after-tax basis. But check the plan document (and IRC 72) for the coordination between after-tax and pre-tax amounts.