What is the difference between multiemployer and multiple employer

Although multiple employer plans and multiemployer plans sound quite similar, there are some key differences between these two kinds of plans that concern multiple employers. First of all, a multiple employer plan is a pension plan that multiple employers manage.

This type of plan is also beneficial for investing purposes. A multiemployer plan is a plan that uses collective bargaining. Similar to a Multiple Employer Plan, multiple employers manage it. These employers tend to work in similar industries and labor unions. Employees who work in unionized fields can benefit from multiemployer plans. If they want to work for a different employer within their industry, they may be able to continue the retirement plan they had with their previous employer.

Employees who work for construction, trucking, or chain grocery store companies tend to benefit from multiemployer plans. Taft-Hartley plans are multiemployer plans sponsored by a board of trustees.

The board is made up of members that equally represent management and labor. They are in charge of the entire administration and operation of this kind of plan. The sports industry is a prime example. These kinds of plans include contributions from one or more collective bargaining agreements and multiple employers. Unlike a Taft-Hartley plan, there is no board of trustees to manage the trust funds. Employees in unionized industries reap the benefits of multiemployer plans.

Their benefits are more secure because multiple employers take on the risk associated with the plan. Example: An employee's service with one employer is treated as service with the other employers to determine if the employee is eligible to participate.

Example: The coverage requirements under IRC b are applied to a multiple employer plan on an employer-by-employer basis. Example: Top-heavy status under IRC is applied on an employer-by-employer basis.

Example: If one participating employer fails to satisfy the top-heavy rules, then the multiple employer plan is disqualified for all employers participating in the plan. Submission Period. Submission Procedures. Note: Before January 1, , participating employers could request their own DLs when the controlling member requested one. The application in IRM 7. If applicable, a completed adoption agreement, for each participating employer requesting a separate letter User fee for multiple employer plans in Rev.

Exhibit 7. Note: Mergers or Transfer of Assets - all assets available to pay benefits of employees covered under the plan must apply to the multiple employer plan as a whole. Page Last Reviewed or Updated: Nov Share Facebook Twitter Linkedin Print. DL filing procedures for individually designed multiple employer plans. DL User Fee Requirements. Circumstances when a plan sponsor may submit a DL application to EP. Delegation Order Issue DLs on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans to the Director, EP.

Cost of Living Adjustment. Determination Letter. Employee Plans. Highly Compensated Employee. Power of Attorney. Quality Assurance. Remedial Amendment Cycle. Tax Exempt Determination System. Tax Exempt Quality Measurement System. Participating Employer.

Any employer who participates in the multiple employer plan. The participating employer who sponsors the multiple employer plan. Controlling Plan Lead Plan. The plan submitted by the controlling member. Single Plan. A plan under which all assets, on an ongoing basis, are available to pay the benefits to employees covered by the plan and their beneficiaries.

There are about 1, multiemployer defined benefit pension plans, covering about 10 million participants. Many of these participants are employed by small companies in the building and construction industries.

Most plans are jointly administered and governed by a board of trustees, with labor and management equally represented. A trustee is required to act in the sole and exclusive interest of the plan and its participants, regardless of who elects or appoints the trustee. The bargaining parties negotiate a contribution rate and the trustees translate that rate into a benefit.

Decisions to increase benefits or change the plan are also typically made by the board of trustees. In some industries especially mining and segments of trucking , employers and unions fix the benefit levels through collective bargaining.

Multiemployer plans are subject to many of the vesting, accrual, and minimum participation rules that apply to single-employer plans. However, there are differences in plan design.