participants moved to union - in TH calc?

[AlbanyConsultant]

This is a plan for a plan sponsor who has union employees, but they are an excluded class. There are several employees who were participants while they were non-union and now have moved to be in the union.

I'm fine with the plan not having to give them a top heavy minimum allocation now that they are not in an eligible class (and 416(i)(4) supports this - assuming that retirement benefits were collectively bargained). But are their balances included in the TH determination? They are still active employees, so I'm leaning towards "yes".

Thanks.

[Kevin C]

Here is a similar discussion.

http://benefitslink.com/boards/index.php?/topic/54458-top-heavy-minimum-for-participant-moved-to-excluded-class/#.VCxDLPldXRM

The gist of it is that a non-key employee who was a participant in a TH plan for a portion of the year, changes to an excluded class during the year and is still employed on the last day of the plan year needs to get the TH minimum. I don't see that it changes when the exclusion involved is the statutory one for union employees. I also think you are misreading 416(i)(4). For the non-union plan they were in prior to joining the union, the retirement benefits under that plan were not subject to collective bargaining, so I don't see 416(i)(4) as applying to the non-union plan. 416(i)(4) would apply to the union plan if the benefits under it were subject to collective bargaining.

416(i)(4)Treatment of employees covered by collective bargaining agreements.—

The requirements of subsections (b), ©, and (d) shall not apply with respect to any employee included in a unit of employees covered by an agreement which the Secretary of Labor finds to be a collective bargaining agreement between employee representatives and 1 or more employers if there is evidence that retirement benefits were the subject of good faith bargaining between such employee representatives and such employer or employers.

I think you would count their balances in the non-union plan in the TH determination. Whether or not you count their balances in the union plan will depend on whether the union plan is part of a required aggregate group (1.416-1, T6) or permissive aggregation group (1.416-1, T7-T8) with the plan in question.