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Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5299
Experience:  Extensive experience representing employees and management
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what is the legal authority for employer to sponsor 2 different

Customer Question

what is the legal authority for employer to sponsor 2 different types of pension plan?
First adoption:
There is an Administrative Services Agreement between the employer, who has adopted an retirement pension plan, the Trustee(s) and the Plan Adminstrator and the Service.
Adoption Agreement for The Manufacturers Life Insurance Co. Standardized Money Purchase Plan and Trust (with pairing provisions)

Second adoption:
Submitted: 4 years ago.
Category: California Employment Law
Expert:  Joseph replied 4 years ago.
Hello and welcome to JustAnswer.

I'm sorry to hear about your situation and hope I can help.

Are the two different pension plans that the employer is sponsoring based on differences in the length or time of service of employees?

If not, is it based on different classifications of employees? For instance only certain employees are eligible for a certian type of pension plan?
Expert:  Joseph replied 4 years ago.
26 USC § 430 provides that an employer can sponsor mutliple benefit plans, as long as each plan meets the minimum funding qualifications under the code.


You can view the entire code section here:


The relevant section of the code is below:


"(iii) Elections for multiple plans If a plan sponsor makes elections under paragraph (2)(D) with respect to 2 or more plans, the Secretary shall provide rules for the application of this paragraph to such plans, including rules for the ratable allocation of any installment acceleration amount among such plans on the basis of each plan’s relative reduction in the plan’s shortfall amortization installment for the first plan year in the amortization period described in subparagraph (A) (determined without regard to this paragraph)."