cpc0506 Posted February 21, 2019 Share Posted February 21, 2019 We have a 401(k) safe harbor plan that is top heavy for the first time in the 2018 plan year. There are employees who only receive Davis Bacon prevailing wage contributions who have not met the eligibility requirements for any other portion of the plan (including deferrals). Client is making a Profit Sharing contribution this year, so top heavy waiver no longer applies. Does the client need to provide Top Heavy minimum contributions to these DB employees? Link to comment Share on other sites More sharing options...
PensionPro Posted February 21, 2019 Share Posted February 21, 2019 yes and gateway min if applicable PensionPro, CPC, TGPC Link to comment Share on other sites More sharing options...
david rigby Posted February 21, 2019 Share Posted February 21, 2019 At the risk of stating the obvious, this might be a good time to review the plan provisions that describe TH benefits, esp w/r/t multiple plans. While it (theoretically) should not be necessary, we have seen examples of inadequate plan drafting. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
BG5150 Posted February 21, 2019 Share Posted February 21, 2019 46 minutes ago, david rigby said: At the risk of stating the obvious, this might be a good time to review the plan provisions that describe TH benefits, esp w/r/t multiple plans. While it (theoretically) should not be necessary, we have seen examples of inadequate plan drafting. David, I don't think there are multiple plan in play here. "DB" is Davis Bacon. Not Defined Benefit. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left. Link to comment Share on other sites More sharing options...
david rigby Posted February 21, 2019 Share Posted February 21, 2019 35 minutes ago, BG5150 said: David, I don't think there are multiple plan in play here. "DB" is Davis Bacon. Not Defined Benefit. Well, thanks for the clarification. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
justanotheradmin Posted February 21, 2019 Share Posted February 21, 2019 Wouldn't the Davis Bacon contributions trigger Top Heavy minimums anyways? Even if there was no planned profit sharing? Maybe your document is drafted differently, but for ours, the TH waiver on safe harbor plans only stays intact in very narrow circumstances (such as SH + allocated forfeiture). Other types of employer contributions, including Davis Bacon would cause plans on our document to lose their TH waiver, and a TH minimum would be due (which the davis bacon would count towards). But maybe I've been doing it wrong? I don't see many Davis Bacon plans. I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say? Link to comment Share on other sites More sharing options...
Mike Preston Posted February 22, 2019 Share Posted February 22, 2019 Something does not make sense to me. Every davis-bacon plan I've ever worked on provided much more than top-heavy minimum to the davis-bacon participants. Otherwise it is not taking advantage of the davis-bacon provisions.??? Link to comment Share on other sites More sharing options...
justanotheradmin Posted February 22, 2019 Share Posted February 22, 2019 Well, the ones I've seen the contributions vary quite a bit and the explanation I've been given is that the sponsor has a a mix of private (non-prevailing wage, non-davis bacon) jobs, and davis bacon projects. They would only give Davis bacon contributions for the work projects that mandate it. So if an employee is seasonal, or project based, and happens to work on a lot of private jobs for the employer, they would have very little davis bacon contributions. Compared to an employee who gets assigned to more jobs subject to prevailing wage. The second employee would have higher plan contributions. I'm a stranger on the internet. Nothing I write is tax or legal advice. I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say? Link to comment Share on other sites More sharing options...
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