401k safe harbor nonunion/union

Why would a company offer safe harbor for nonunion employees and not union employees?

Benefits are negotiated between the company and the union.  The union represents the union employees in the negotiations.  Once an agreement is negotiated, there is a collective bargaining agreement documenting among other things, if the company will include the union employees in the company's retirement plan and if yes, any plan provisions that may or may not apply specifically to union employees.

You may want to first speak with your union representative and also read the most recent bargaining agreement to get an answer to your question.

Thanks Pual, for the replay. In my situation my employer runs the 401-k for the union and nonunion. The union has nothing to do with it. The problem I'm having when I max out my employer contribution and I max out my contribution then when the 401-k dose there testing I will have to take a portion of money back out due to the testing results. Any way around this?

The Internal Revenue Code requires that 401(k) plans be tested annually to demonstrate that contributions to the plan do not discriminate in favor of highly compensated employees (HCEs). The non-discrimination tests limit the amount of contributions that HCEs may make or receive under a 401(k) plan, based on the average percentage of contributions made by or on behalf of non-highly compensated employees who are eligible to participate in the plan.  Annual testing is performed after the close of each plan year. Based on the results of these required nondiscrimination tests, HCE contributions may need to be reduced. Testing the plan retrospectively and distributing excess contributions after the end of the plan year ensures that the contributions made or received by HCEs for the plan year equal the maximum amount permissible under the law.

Yes, the employer and not the union runs the plans but the union can (and should) collectively bargain the retirement plan provisions.

Sounds as if you are an HCE and in the union, and that plan fails ADP testing requiring you get a return of some of your deferrals, correct? You can discuss with your union hierarchy responsible for negotiations to consider asking for a safe harbor in the 401(k) plan come the next collective bargaining agreement.

Thank you for your reply CuseFan, yes last year I was returned about 10,000 because I was an HCE after testing. Is there a reason why the employer would not go for the safe harbor option for the union employees like they do for the nonunion employees?

It could simply be a matter of cost.  Are there a lot more union employees than non-union employees?  Also, there could be alot more turnover in the union group so they don't want to vest those amounts if they would otherwise be forfeited.  Another thing could be that with unions employers also don't like to give if they don't get...  so they might not want to give the SH unless they get something equivalent back from the union.  

Ha.  Circular non-answer.

Depending on how many HCEs are members of the union, maybe this becomes something to negotiate for....