Self-Directed, sort of

[gregburst]

I have a client with a few "Davis Bacon" employees (most of their employees are not). Generally, the plan has a one-year eligibility wait. However, Davis Bacon contributions start from day one. All plan assets are self-directed. However, the client wants the Davis Bacon money to default into a QDIA. The affected employees could switch their money into different funds of their choosing the next day if desired. The client does not want this QDIA route for any other money types in the plan. The document is a Datair Volume Submitter; and I don't see any option under self-direction to cover this treatment for just one money type. The client could implement it as policy, but it doesn't sit right with me. Any suggestions?

[SFSD]

Maybe I'm missing something, but why would the employer want to direct the Davis-Bacon money to the QDIA?

[shERPA]

Greg,

Sometimes clients come up with things, for what in their mind is a good reason, but actually doesn't accomplish their objective at all, and often makes it worse.

Agree with SFSD, you need to find out what the client is after here. Then you educate them on why it is a bad idea and won't do what they want.

[Doghouse]

Why do you have to limit it to this one money type? What happens to contributions for other money types if there is no investment designation? On the plans I've had like this, the prevailing wage money is really the only kind that ends up coming in without investment direction, so having that same QDIA for everything works just fine.