Multiemployer Plan Discrimination Testing

[Flyboyjohn]

Are multiemployer retirement plans subject to non-discrimination testing and if so who does it and don't they need census data from contributing employers?

My client is contributing to a union plan on behalf of an HCE and has never been asked for census data and they're wondering if they should have any concerns.

Thanks

[My 2 cents]

For what it's worth, it is my understanding that,under most circumstances, collectively bargained plans get pretty much a free ride on the non-discrimination and coverage rules.

[Jim Dexter]

There's no blanket exemption for multiemployer plans but there is a rule that allows you to exclude bargained employees from testing (see Internal Revenue Code § 410(b)(3) which is referenced by § 401(a)(4)). That generally makes such testing unnecessary. However, multiemployer plans do need to worry about discrimination testing with respect to any nonunion employees covered under the plan (e.g., union officials covered under a special agreement).

[My 2 cents]

There's no blanket exemption for multiemployer plans but there is a rule that allows you to exclude bargained employees from testing (see Internal Revenue Code § 410(b)(3) which is referenced by § 401(a)(4)). That generally makes such testing unnecessary. However, multiemployer plans do need to worry about discrimination testing with respect to any nonunion employees covered under the plan (e.g., union officials covered under a special agreement).

Agreed!