Company hires Collective Bargain employees - need direction

[HarleyBabe]

Took over a plan that now includes union employees as of 1/1/15. I have little experience with this as only several of the employees will be subject to a collective bargaining agreement.

How exactly do I handle these folks and do I need two plan documents as it appears I do from what I am reading. The agreement states these folks must have a safe harbor plan basically and that the company will also contribute an amount of their pay to the union plan. I am a bit lost. Can someone offer me direction as far as documents and admin.

Thank you.

[jpod]

The employer needs to set up a plan for those employees to satisfy its obligation to under the CBA. Whether it can be the existing plan with some tweaks is not up for you to decide. Employer's labor/ERISA counsel needs to provide direction.

[Stable Two Financial]

Took over a plan that now includes union employees as of 1/1/15. I have little experience with this as only several of the employees will be subject to a collective bargaining agreement.

How exactly do I handle these folks and do I need two plan documents as it appears I do from what I am reading. The agreement states these folks must have a safe harbor plan basically and that the company will also contribute an amount of their pay to the union plan. I am a bit lost. Can someone offer me direction as far as documents and admin.

Thank you.

It can be done on one document but there are a number of design considerations. Not every pre-approved document will give you the flexibility you might need if there is one design for the union and another for non-union employees.

[HarleyBabe]

thanks all. Employer wants to provide everyone the same, the issue is this percentage the employer has to provide to the union plan for each of the folks. How do I write that in a document or is it as easy as writing that in the document for those union members.

[Stable Two Financial]

Are you using a pre-approved document? What type? Will the employer contribution be treated as a Profit Sharing contribution?

[HarleyBabe]

Yes, FT Williams Volume Submitter. Was setting up the safe harbor for all, that's easy enough but that extra percent that goes to the Union plan for the union folks, yes, how do you write that a contribution will be made and go to another plan, and what do you provide the non-union folks or do you have to provide anything.... a profit sharing in the additional amount, cross-tested with each participant being a group?

[Stable Two Financial]

I'm not familiar with that specific document but if I understand the situation you would create the safe harbor for everyone. The additional amounts would go as an additional profit sharing contribution which might be subject to a vesting schedule. Each bargaining group would be listed with their fixed contribution amount (this is where it can get tricky depending on what they negotiated and the flexibility of the document)

The cross test shouldn't apply since the union is dis-aggregated from the NDT test.

Good luck.

[HarleyBabe]

Let me clarify - Union agreement requires the employer (my client) to provide a safe harbor plan, so no issue there, and we will provide to all employees, but the only extra piece is a .50% of pay contribution based on each union employees pay to the local union plan for the union folks. Those are the requirements of collective bargain agreement. That's what I don't know what to do with?

And there are testing questions I have.

[HarleyBabe]

You see, that extra percentage goes out to the union plan. Does that even go in our plan document?

[Stable Two Financial]

What you describe sounds like you are using two plans. I wouldn't expect the .50% to be reflected in the safe harbor 401k.