401(k), Prevailing Wage, ADP Test

[Guest notapensiongeek]

We have a 401(k) Plan that allows for Elective Deferrals, Roth Deferrals, Wage Rate Contributions & a 4% match. The plan document states that "Wage Rate Contributions are Qualified Non-Elective Contributions".

When running the ADP test for this plan, can I include Wage Rate Contributions along with the 401(k) pre-tax & roth deferrals - and if so, is there a limit as to how much I can include (like 10%? or 5%?)

Any input would be greatly appreciated!!

Thanks ;-)

[austin3515]

Thank you for asking this quesiton. It just so happens that I am running an ADP test tomorrow with this very thing.

1.401(k)-2 (6)(iv)(D)

(D) Special rule for prevailing wage contributions. Notwithstanding paragraph (a)(6)(iv)(A) of this section, qualified nonelective contributions that are made in connection with an employer's obligation to pay prevailing wages under the Davis-Bacon Act (46 Stat. 1494), Public Law 71–798, Service Contract Act of 1965 (79 Stat. 1965), Public Law 89–286, or similar legislation can be taken into account for a plan year for an NHCE to the extent such contributions do not exceed 10 percent of that NHCE's compensation.

[Guest notapensiongeek]

You da man, Austin!! Thanks!!! ;-)