DAVIS BACON AND VESTING REQS

[cheersmate]

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!

[ETA Consulting LLC]

No. The Davis Bacon portion has it's own rules with respect to eligibility and vesting; and these will, typically, be hard-written in the Basic Plan Document. This has nothing to do with the Profit Sharing vesting.

Good Luck!

[cheersmate]

Thank you. That is what I thought but recently read an article and it said if the plan doesn't have immediate eligibility and 100% vesting... must annualize. Thank you for clearing this up!

Happy Holidays!