Contribution Classification

[Guest Powers]

I am new to working with Unions, but have had this situation arise and I am unsure how to proceed.

We have a union contract that was just signed and it provides that all union members that were participating in the Defined Benefit Plan be awarded a lump sum contribution (10K – 25K) to be deposited into the 401(k) Plan. This was a negotiation to, among other things, freeze the DB Plan. We are ready to move forward on this contribution, I am just unsure what type/source it should be. Off the cuff, I am thinking that it must be 100% vested and should be a QNEC. Does anyone have any thoughts on this? Any assistance would be great.