DB participant with union & non-union income

[Cynchbeast]

We have a client that has a number of union employees, and does not cover them in DB. One employee gets both union and non-union income (non-union income is from another company in controlled group). Can he be included in the DB to the extent of his non-union earnings?

If so, does it make a difference if he is the owner?

[masteff]

You need to identify where in your document it excludes union employees and how it defines that exclusion and what it excludes. For example, I would expect it to exclude at the employee level and not at the comp level.

[BG5150]

I remember reading somewhere that an owner is not considered an employee--she's simply the owner. So you can include the owner.

I have a DC plan where the owner is also in the union. We use his non-Union comp for plan purposes.

(I don't remember the cite, b/c it was someone in my office who found it.)

[My 2 cents]

Situation: Employee A is employed by two members of the controlled group. Company X knows Employee A as a member of the collective bargaining unit. Company Y knows Employee A as a non-union employee. Wouldn't A's status with respect to employee benefit programs offered by Company X be union employee and A's status with respect to employee benefit programs offered by Company Y be non-union employee? Depending on the language in the respective plans, wouldn't A's benefits under Company X's union plan be determined solely based on compensation from Company X and A's benefits under Company Y's plans be solely based on compensation from Company Y? Presumably, service with both companies would have to be recognized for eligibility and vesting (but not necessarily for benefit accrual purposes), and the total compensation between Company X and Company Y would be restricted by IRC Section 401(a)(17).

How does it work if the owner is a union member? Does he or she use props at the bargaining table to indicate whether what he or she is saying is in the capacity of union member or in the capacity of owner? Takes off baseball cap and puts on top hat, and says "Speaking as the owner..."

[PJF414]

I have a similar situation. Employee works for Company as both a union and a non-union employee. Union employees are excluded from the plan. It's a 401k plan.

Would they not have to count all of the Employee's service in figuring his eligibility as a non-union employee? I believe that once the person meets eligibility on the basis of all service, he would be able to participate based on his non-union income?

Any thoughts on this?