Union EEs in 401(k) PSP

[BG5150]

I have a couple questions regarding Union EE's in a 401(k) PSP.

I have a controlled group wherein some of the companies have union employees. And for some companies, the union ee's are eligible to participate, and in some they are not.

1) How do I do the coverage test? Test "regular" and union separately? And if I test the unions by themselves, what does that population look like? Because union ee's can be excluded statutorily, will I have a 100% rate because I can exclude some of them right off?

Here's an example:

5 Regular

6 Union A (eligible)

4 Union B (not eligible)

Does my coverage test have 15 people (regular + all union)? 11 (regular + elig union)? 5 in one test (regular) and 11 in another test (all union)? Or 5 in one test and 6 in the other (excluding the 4 non-eligible union from test completely)?

2) And I'm assuming my ADP testing will be done the same way? (Though I know I have to at least separate the regulars from the unions).

[ESOP Guy]

I am assuming for this discussion that retirement benefits WERE subject to collective bargaining discussions. All the rules for union plans require that to be true.

Treas Reg 1.410(b)-6(d) will tell you test union and non-union separately. So the non-union group is simply its own group. You use just them in the numerator and denominator.

There are rules for some reason about having more than one bargaining agreement covering employees. It is found at 1.410(b)-7©(4)(ii)(B).

However, the most important thing to know is union plans are deemed to pass coverage. See 1.410(b)-2(b)(7). So they simply pass coverage.

Someone else is going to have to help you with the ADP/ACP testing and unions.

I have only worked with union PS and ESOP plans.

I think I have the reg references correct. But if you spend some time with the 410(b) regulations you will find your answers.

I have a couple questions regarding Union EE's in a 401(k) PSP.

I have a controlled group wherein some of the companies have union employees. And for some companies, the union ee's are eligible to participate, and in some they are not.

1) How do I do the coverage test? Test "regular" and union separately? And if I test the unions by themselves, what does that population look like? Because union ee's can be excluded statutorily, will I have a 100% rate because I can exclude some of them right off?

Here's an example:

5 Regular

6 Union A (eligible)

4 Union B (not eligible)

Does my coverage test have 15 people (regular + all union)? 11 (regular + elig union)? 5 in one test (regular) and 11 in another test (all union)? Or 5 in one test and 6 in the other (excluding the 4 non-eligible union from test completely)?

2) And I'm assuming my ADP testing will be done the same way? (Though I know I have to at least separate the regulars from the unions).

[Tom Poje]

same rules apply to the ADP test. ACP test automatically pases.