BG5150 Posted March 14, 2022 Posted March 14, 2022 Company sponsors two plans, one for union EEs and one for non-Union EEs. Do I combine them for Top Heavy, or do them separately? Or, do I have the option to test them together or separate? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
C. B. Zeller Posted March 14, 2022 Posted March 14, 2022 Does the union plan cover any key employees? If so, then it's part of the required aggregation group. See 1.416-1 T-3. Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
CuseFan Posted March 14, 2022 Posted March 14, 2022 If not, it may be able to be permissively aggregated provided the union plan was subject to good faith bargaining AND contributions/benefits are comparable to the NU plan, T-7. I did not dig further to see if comparability was defined or explained. There was a BL discussion on this from 20 years ago that came up on Google search, but which didn't seem to reach consensus. https://www.law.cornell.edu/cfr/text/26/1.416-1 Luke Bailey 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
BG5150 Posted March 14, 2022 Author Posted March 14, 2022 No key EEs. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
justanotheradmin Posted March 30, 2022 Posted March 30, 2022 Can I tag onto this question? If the union and non-union plans are not permissively aggregated - and someone changes status during the year, and immediately enters the non-union plan. is the Top Heavy minimum to that employee based on only non-union compensation? Or full year compensation including compensation earned during the early part of the year when they were covered by the collective bargaining agreement? I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?
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