Memory check - plans with both union and non-union employees

We virtually never get a plan that has union employees, so I'm a bit rusty on this. I can look it all up, but thought perhaps someone who works with it would know in a snap right off the top of the head.

As I recall, for a plan where there are both union and non-union employees, even if all have identical coverage or not, mandatory disaggregation of union employees for coverage and nondiscrimination testing, and the union employees' "plan" is deemed to pass both. Top heavy treatment does not disregard the union employees. And if there is more than one collective bargaining unit with employees participating in the plan, each unit is considered a different "plan."

Is my recollection correct? Thanks!

Generally, there is nothing wrong with your memory!  There some nuances, though, that are worth checking.

For example, if there is a key employee in the union, then the union employees are included in the required aggregation group for determining if the plan is top heavy.  Otherwise, the union employees may be permissively aggregated with the nonunion employees when determining if the plan is top heavy.  (The permissively aggregated group would need to pass coverage and nondiscrimination tests.)  If the union employees are included in the determination of whether the plan is top heavy and the plan is top heavy, the union employees do not have to receive a top heavy contribution.

There are some other fun things to consider such as the union employees are not subject to the LTPT rules, or whether the plan as actually has been subject to good faith bargaining.

As I recall, there is also a requirement that the relevant benefit is "subject to good faith bargaining".  Not sure if anyone has defined that term, but it may be possible to fail the test.

Thank you both!! As it turns out, by a happy chance, the plan in question turns out to be a 403(b), so top heavy doesn't apply, and the eligibility is such that LTPT will never apply. Woohoo! It's about time we caught a break on something...although, preliminary info appears to indicate that coverage and nondiscrimination were NOT disaggregated. I don't think it is likely to make any difference in coverage, but might affect the ACP test.

16 hours ago, Paul I said:

Otherwise, the union employees may be permissively aggregated with the nonunion employees when determining if the plan is top heavy.  (The permissively aggregated group would need to pass coverage and nondiscrimination tests.)

*Hi Paul - one question - I believe that this permissive aggregation is solely for top heavy purposes, correct? In other words, permissive aggregation isn't allowed for normal coverage/nondiscrimination testing? 

*Never mind - not eligible for permissive aggregation. Thanks.