What makes a union plan cover only union employees?

[jkharvey]

I haven't had to deal with this until now, so I need to get some clarification. An employer has both union and nonunion employees. They establish 2 401k plan. The plan for the nonunion employees excludes the union employees, but the plan for the union employees has no exclusion for the nonunion employees. I am being told by someone in my office that it isn't necessary to exclude the non union employees. Is there some language elsewhere that is required to allow this document to benefit only the union employees?

Thank you

[K2retire]

What does the definition of eligible employee say?

[ETA Consulting LLC]

I'm with K2retire on this one. The document should clearly identify which employees are eligible for the plan.

Good Luck!

[Bill Presson]

I've seen this a couple of times and, frankly, it's an issue if the union plan document doesn't exclude the non union employees. We've had to get legal counsel involved in both situations.

Naturally they were takeover plans.

[ESOP Guy]

I am with the others. The regulation say you have to test the union group seperately and in fact in many cases simply don't test that group. But that isn't the same as saying the union document doesn't have to define who an eligible employee.

[buckaroo]

Can the person in your office provide details regarding their opinion? Perhaps a citation?