Are there reasons not to merge union and non-union plans?

An employer maintains two § 401(a)-(k) plans, one for manufacturing employees, who are union-represented, and another for office employees, none of whom is union-represented.

The employer is considering merging the two plans into one.

The plan for office employees uses a safe-harbor matching contribution to meet rules about coverage, nondiscrimination, and top-heavy.

Even after the plans’ merger, there would be no risk, even with substantial growth in both headcounts, that the merged plan’s participant count would reach a number that calls for engaging an independent qualified public accountant.

The employer is not worried about a tax-qualification defect for either plan.

Are there other reasons for not merging the plans?

Are there other reasons to prefer the hygiene of separate plans?

If the employer is relying on an IRS-preapproved plan document, it might be difficult, if not impossible, to accommodate different benefit structures for the union and non-union employees on a single document. Not just the safe harbor contributions (or lack thereof), but if there are any different eligibility or distribution options for the two groups.

If there are different pay schedules (e.g. weekly for the union employees and semi-monthly for the office employees), the plan's recordkeeper or other service provider may struggle to correctly account for that difference within a single plan.

Employee benefits for unions are collectively bargained and timing of the effective dates of changes to the union plan are tied to effective date of the bargaining agreement.  That often differs from the effective dates of changes in the nonunion plan.

C.B. Zeller and Paul I, thank you for your thoughtful good help.

Beyond simply crediting contributions when the recordkeeper receives them, is there another reason for the employer to worry that different payroll schedules confuses the recordkeeper?

There are a number of reasons why a recordkeeper might care about an employee's pay schedule.

If the plan allows loans, and the recordkeeper produces the loan repayment schedule, that schedule would normally need to be aligned to the employee's pay dates.

Some recordkeepers may provide missed contribution notifications to the employer, if an expected contribution is not received by a certain date.

Below Ground, thank you for a most compelling reason to leave the plans distinct.

Peter,

You are welcome.  I feel compelled to note that comments you have made in the past have helped me, so I am glad that I was able to help you.

Dave