union employees and separate plan provisions

[Guest Iwonder]

To what extent is it permissible for non-excluded union employees to have separate provisions in a plan?

I believed that it was permissible, if the benefits were collectively bargained, but I am unclear as to what limitations there are, and would appreciate any guidance/direction to the appropriate reg. or authority.

Conversely, if different provisions are not permitted, I would appreciate knowing that also.

Specifically, in a plan, there is no exclusion for collective bargaining employees. The plan would like to permit the union employees to be able to have in-service withdrawals. In-service withdrawals are not otherwise permitted nder the plan, and the plan sponsor does not want the non-union participants to be able to take in-service withdrawals.

Is this permissible?

Thank you

[Guest Offender]

IRC 410(b)(3) provides for the exclusion of collectively-bargained employees from coverage testing. Since 410(b) is also the basis for proof of nondiscrimination under 401(a)(4) it follows that collectively-bargained employees are also excluded from such tests. Therefore, collectively-bargained employees may be subject to any number of different provisions under a plan without impacting non-CBA employees under the same plan.

It is easiest to think of them as separate plans that do not need to be aggregated for purposes of nondiscrimination testing.

[Guest Sieve]

It's a bit more complicated than earlier suggested, but, as indicated, CBA employees are disaggregated from others and not subject to IRC Section 410(b) (Treas Reg. Section 1.410(b)-2(b)(7) & -7©(4)(ii)(B)), nor are they subject to IRC Section 401(a)(4) (Treas. Reg. Section 1.401(a)(4)-1©(5)), so you can do as you suggest--it will not adversely impact either the CBA employees themselves or the non-CBA employees.

But, CBA employees are subject to ADP/ACP testing (see, e.g., Treas. Reg. Section 1.401(k)-1(b)(4)(iii) & -1(b)(4)(v)(B), and 401(m)-1(b)(4)(iii)).

[Guest Iwonder]

Offender and Sieve,

Thank you very much for your help. Your guidance is greatly appreciated.