Davis Bacon plans annualization

A couple of questions:

1.  Plan accepts Prevailing Wage contributions and provides that they can be used to offset Profit Sharing.  PW contributions are 100% vested.  Although the plan document allows for  offset,  it doesn't address if those amounts used for that offset can also be subject to the Profit Sharing vesting schedule.  Does the plan document have to specifically allow for the application of a vesting schedule on those amounts that are used to offset PS?

2.   Can someone point me to a resource that discusses this in more detail?  I though that there used to be a Q&A on this site, but I am not finding it now.

Thanks for any guidance.

Are you asking if the PW can be subject to the profit sharing vesting schedule? 

If that's the question - the answer is no, the PW is 100% (I'm assuming this based on your statement and hopefully your plan document says the same). The fact that portions may or may not be used to offset profit sharing is irrelevant. 

That was the first question.  Thank you for your response.  I think that if the document provided for the offset amount to be subject to the vesting schedule then it would be permissible subject to annualization, but I think the document has to specifically provide it.  I don't think the annualization is automatic.

Thanks

14 minutes ago, justanotheradmin said:

Are you asking if the PW can be subject to the profit sharing vesting schedule? 

If that's the question - the answer is no, the PW is 100% (I'm assuming this based on your statement and hopefully your plan document says the same). The fact that portions may or may not be used to offset profit sharing is irrelevant. 

Agree; note also that New York does not allow for ignoring annualization at all (even fully vested contributions).  If you are looking at a PW plan for a New York contractor, be very careful as they usually just don't work if there is non-PW work as well as PW work.

2 minutes ago, Just Tri said:

That was the first question.  Thank you for your response.  I think that if the document provided for the offset amount to be subject to the vesting schedule then it would be permissible subject to annualization, but I think the document has to specifically provide it.  I don't think the annualization is automatic.

Thanks

Well, if you think annualization is ok, then yes, if you DON'T fully vest the PW amount, you are going to have to annualize and that usually is more expensive than just paying the PW in cash to your participants.

Your best source for resources is DOL: 

https://www.dol.gov/agencies/whd/government-contracts/construction/seminars/resources

And specifically, the PW Resources Book:

https://www.dol.gov/agencies/whd/government-contracts/prevailing-wage-resource-book

In my experience the vesting of PW (or any money source for that matter) is completely separate from any offset provisions. 

On line with what @Larry Starr mentions, many states don't allow a vesting schedule to be applied to PW at all, or if one is allowed, it's fairly nominal (I've seen a 1 year cliff for example, but only once). 

The participant should be able to determine their vested status without regard to whether or not the plan sponsor will give a profit sharing contribution each year. 

Thank you both.