401(m) Test

[Guest Phil L]

Is it correct to say that the 401(m) test on after tax employee contributions is prepared as though all employees of all employers in the plan are a single employer (similar to the coverage test)?

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[KJohnson]

IF THIS IS A TRUE MULTIEMPLOYER PLAN (AS OPPOSED TO A MULTIPLE EMPLOYER PLAN) THE VAST MAJORITY OF THE PLAN, BY DEFINITION, IS COLLECTIVELY BARGAINED. YOU THEN HAVE AN AUTOMATIC PASS FOR THIS PORTION OF THE PLAN UNDER 1.401(m)-1(a)(3). IF THERE ARE NON-COLLECTIVELY BARGAINED EMPLOYEES IN THE PLAN, I BELIEVE THAT THEY WOULD NEED TO BE TESTED ON AN EMPLOYER BY EMPLOYER BASIS.