Severance From Employment in a Union Plan

[emmetttrudy]

When does severance from employment occur in a union sponsored 401(k) plan? If an employee is laid off by one of the member employers does that mean that he has incurred a severance from employment, which would make him eligible for a distribution? Since the union is sponsoring the plan and the individual is still a union member I’m not sure that a severance from employment has occurred.

[PensionPro]

From the definition of severance of employment in the 415 Regs: A participant in a multiemployer plan (within the meaning of section 414(f)) is not treated as having incurred a severance from employment with the employer maintaining the multiemployer plan for purposes of this section and §§1.415(b)–1, 1.415(b)–2, 1.415©–1, 1.415©–2, 1.415(d)–1, 1.415(f)–1, 1.415(g)–1, and 1.415(j)–1 if the participant continues to be an employee of another employer maintaining the multiemployer plan.