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The 401k SHPSP provides for pre-tax deferrals, SHM, PS and Davis Bacon contributions. All sources are 100% immediately vested, with the exception of the PS component. The Davis Bacon contributions are used to offset the employer discretionary contributions (i.e. PS), and included in the general testing,etc, In order to be able to count the DB contributions and avoid annualization rules, does the PS component needs to be 100% vested also? Thank you!

This is for a cross tested 401k Safe Harbor plan that provides: 1 year eligibility for 401k, employer SHM, optional/discretionary ACP SHM and PS Immediate eligibility for Davis Bacon/Prevailing Wage type contribution Vesting is 2/20 for PS and optional ACP SHM 100% immediate Vesting for 401k, SHM and DB/PW type contributions The DB/PW provision states (N/S VS doc): "The Employer will make a Prevailing Wage Contribution on behalf of each Participant who performs services subject to the Service Contract Act, Davis-Bacon Act or similar... The Prevailing Wage Contribution shall be an amount equal to the balance [emphasis mine] of the fringe benefit payment for health and welfare for each Participant (after deducting the cost of cash differential payments for the Participant) based on the hourly contribution rate for the Participant's employment classification as designated on Schedule A as attached to this [Plan] The PW contribution is defined as non-elective (but specifically not a QNEC) and shall be used to offset the employer's contributions (other than ADP test SH contributions) The employer has a DB/PW job coming up and would like to contribute the fringe portion (or at least a portion of it) to the plan. It should be noted there have been other jobs subject to DB/PW completed in the past (while plan has been in place) whereby the basic wage and fringe were both paid in cash (i.e. wages). Will it be sufficient for the employer to provide advance notice to the affected employees that on Job X, $#.## per hour will be contributed to the Plan in lieu of cash payment in accordance with DB/PW? These contributions/hours will be tracked within payroll and plan record kept separately (i.e. own source bucket). It is okay for the employer to choose whether or not to contribute the DB/PW amounts from job to job, and how much of the fringe portion amount from job to job, in a discretionary manner so long as advance notice is provided to affected employees and the hours/contributions are tracked/record kept accordingly? It would appear to be permissible since the Plan's wording states the contribution to the Plan is the "balance"... (see above). Apologies for the length of this post. Thank you