ADP Test for Prevailing Wage Plan

[Guest notapensiongeek]

We have a 401(k) Plan that consists of Pre-Tax deferrals, Roth deferrals, Wage Rate contributions, and a 4% Match (note: the match is only allocated to non-prevailing wage participants). The plan document states that "all matching contributions are QMAC's".

It is my understanding that we can include up to 10% of each participant's Wage Rate contributions in the ADP test pursuant to 1.401(k)-2(6)(iv)(D); however, in addition to this, are we permitted to include the 4% match / QMAC in the ADP test?

Any input on this would be greatly appreciated!

Thanks.

[ERISAnut]

Yes. The 10% you are referring to is a limit on QNECs that can be used. If the plan document designates all employer matching as QMACs, then you are allowed to use all QMACs (and also any other QNECs not funded by the remaining 90% of the prevailing wage contributions).

Hope this helps.

[Guest notapensiongeek]

Thanks ERISAnut!