exclude SOME union employees?

[AlbanyConsultant]

We've known that our client NR is in a controlled group with RR (has their own plan but not our client) for several years, and we actually get the RR data every other year or so to prove that it passes 410b for all the various BRF, which it does.

We've convinced the owners to let us take over the RR plan, and as part of the discussion they mentioned the RR plan includes union employees (they were included in the data we received, but not identified as such).  NR's plan excludes union employees, and there are union employees that are excluded.

They want to keep the two plans separate (getting close to the audit threshold, don't want a conversion, etc.).  Is this union thing going to be a problem for coverage?  I'd like to think that since we can exclude all union employees, it's OK to include some class of them.

Thanks.

[friedliver]

Following this for Project Labor Agreement 401(k)s

[ESOP Guy]

Does the RR plan document allow for the RR in?  

Are the NR union employees excluded by document and the benefit subject to good faith bargaining? 

If you are excluding the one group by document and they had good faith bargaining to that effect that is a statutory exclusion.   They aren't in the coverage test. 

I am pretty sure you test the included union people separately from the non-union for 410b testing by regulation.  But check me on that or someone tell me I am wrong.  It has been a number of years since I had a mixed union and non-union plan.   

The first step is to make sure the groups are included and excluded per the document and contract and move forward from there. 

 

[CuseFan]

Union covered employees (if retirement subject to GFB) and non-union employees are subject to mandatory disaggregation. Furthermore, if you have a plan covering employees in different unions, I believe that each union represented constitutes its own disaggregated "plan" for coverage and nondiscrimination.

As @ESOP Guy states, be sure to check the plan documents for proper inclusion or exclusion of union covered employees.