What are the requirements to be considered a union retirement plan?

Union retirement plans are eligible for special coverage and non-discrimination testing rules. However, being a union retirement plan

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is not a state of mind. It is not sufficient for an employer to sit down with a leader from the employees and come to an agreement about the employee’s retirement benefits. There are specific requirements for a plan to be considered collectively bargained and a union plan:

  • The employees must be included in a bargaining unit such as a union.
  • Retirement benefits must have been the subject of good faith bargaining.
  • The Secretary of Labor must approve the agreement.
  • A plan that covers more than 2% of professional employees is not considered a union plan.
  • The plan must benefit primarily non-owners.