Multiemployer 401(k) Plan

[Belgarath]

I don't really know beans about these. Had a question about such a plan that supposedly utilizes a standardized prototype - haven't seen a document so I can't say. I was able to look up the 5500 form, and the Plan Characteristics Codes do not indicate a pre-approved document is being used.

My general question is this: (I haven't looked at LRMS on this, by the way) - do you know, offhand, if a "normal - whatever that is" multiemployer 401(k) plan would require special multiemployer language, or can it use "regular" plan language? Seems like there would have to be some sort of special multiemployer language.

[Bill Presson]

I would be shocked if a standardized prototype could be used. I wouldn't even think a volume submitter would work without significant modification. Looking forward to what others say.

[Mike Preston]

As per usual, I'm with Bill.  Is the OP sure it isn't a multiple-eployer plan?

[QDROphile]

And if it is a multiple employer plan, do not overlook securities law compliance.

[Belgarath]

Mike - as sure as I can be without actually seeing a document. It was explained to me that it is a multiemployer plan, it is for a bunch of union employers (small employers but several of them) and the 5500 says it is a multiemployer plan. But I don't actually KNOW...

[Belgarath]

Update - Received a document. It appears to be Volume Submitter language with VERY minor modifications - I just did a 5 minute skim, and don't see anything referring to "multiemployer" status, etc.

Again, this is a 401(k) plan, with a bunch of small employers in the same industry who employ members of the YYYY union in their shops.

Here's how "Employer" is defined:

Employer shall mean the XXXX Insurance Trust and any Employer who is required to contribute to the Plan pursuant to the terms of the Collective Bargaining Agreement and who has agreed to the terms and conditions of the Plan and Trust. The term "Employer" as used herein shall also mean the Union with respect to its Employees for whom the required contribution is made pursuant to an agreement with the Trustee. If, under state law, an Employer at any time is not governed by directors but instead by its stockholders, or if the Employer is an unincorporated business and is governed by its owners, reference herein to the Board of Directors shall be deemed to refer to the individual(s) empowered to vote on the Employer's affairs.

I'm still not sure if this is truly a multiemployer plan, or a multiple employer plan, although it seems more like the latter...

Still don't have any resolutions, amendments, addendums, determination/advisory/opinion letters., etc., etc....

[John Feldt ERPA CPC QPA]

Well, that does sound a lot like multiemployer plan language being added, and if it actually is a multiemployer plan, they cannot rely on that document's pre-approved opinion letter or advisory letter.

[Belgarath]

So for a "normal" 401(k) multiemployer plan, is there really much in the way of any required "special" language? I assume there isn't any of that withdrawal liability stuff that pertains to multiemployer DB plans, etc. - actually seems like the document would mostly be fairly standard language. Obviously it needs to refer to the collective bargaining agreement for certain provisions, but that isn't anything startling. Thanks for any input.

[Kevin C]

I've never worked on a multiemployer plan and found it interesting that our document provider doesn't offer one.  A search found that Rev. Proc. 2017-41, 6.02(1) and 2015-36, 6.02(1) both say that opinion letters will not be issued for multiemployer plans.  Rev. Proc. 2007-44, 10.02 says multiemployer plans are on cycle D. So, it looks like a multiemployer plan would need to be individually designed.

[Belgarath]

Hi Kevin - thanks. Yeah, that makes sense. I just don't see much in the way of "special" language specific to a multiemployer plan that's actually necessary in a fairly standard situation such as what I was asked about. If they ultimately ask us to do anything with this plan, I'd probably go ahead and do a draft and then run it by an ERISA attorney. It's likely, however, that we'll end up with no involvement in this particular situation.

[John Feldt ERPA CPC QPA]

You may want to look over some of this. It says, for example, 415 and vesting rules differ (I assume that means the document language would likely fall outside that of a pre-approved document):

https://www.irs.gov/irm/part7/irm_07-011-006

 

[Belgarath]

Thanks John - this is VERY helpful!