Davis Bacon EE contributions?

[Guest Green92]

Has anyone ever been through a DOL plan audit where the investigator tried to apply 401(k) remmitance timing rules to Davis Bacon employer contributions? This is the very first time this interpretation has come up at our company but we have had 30-50 Davis Bacon prevailing wage profit sharing 401(k) for plans many years. If there is some guidance that supports the auditors position please point me that way. Thanks in advance.

[GBurns]

Probably the better question should be, Why would the rules not apply?

Regardless of whether this is a DBRA plan or not, it still is a 401(k) plan isn't it ?

So it seems, to me, that you should be the one with the onus to show that some other rule applies, and not the auditor.

What rules have you been following?

[PensionPro]

Has anyone ever been through a DOL plan audit where the investigator tried to apply 401(k) remmitance timing rules to Davis Bacon employer contributions? This is the very first time this interpretation has come up at our company but we have had 30-50 Davis Bacon prevailing wage profit sharing 401(k) for plans many years. If there is some guidance that supports the auditors position please point me that way. Thanks in advance.

Davis-Bacon employer fringe benefit contributions are not 401(k) employee deferrals, and are therefore not subject to the same depositing timing rules. However, Davis Bacon fringe benefit payments must be made to the plan "not less often than quarterly." 29 CFR 5.5 (a)(1).

[Guest Green92]

We have ben following Davis Bacon quarterly contribution guidelines for prevailing wage fringe. But in effect, all our clients do this monthly or weekly to a Health and Welfare trust. This was an audit of a monthly client's plan.

Prevailing wage fringe used for bona fide benefits is not considered an employee contribution as far as I know. But perhaps I'm wrong.

[GBurns]

Green92

What did you eventually find out from the audit etc?

[Guest Green92]

Green92

What did you eventually find out from the audit etc?

That the auditor was pretty new on the job, stressed out and overworked and she made a mistake. The advice I got here was correct, quarterly contributions are fine for prevailing wage fringe. Also, the sponsor and I found out after three full days of man-hours using the vfcp calculator for lost opportunity earnings that there were indeed $821.08 due to participants from mid 2004 until last fall. About half of these lost opportunity earnings due to the controller and the person who does the payroll 401(k) file submissions. But how many hours were wasted and how much money and time was wasted for the auditor to fly into that city, spend the day there and then fly home, then write a 11 page letter and submit it to her supervisor for approval and signature, a letter that turned out to be wrong anyway? Govt. efficiency at it's best.