Cross tested with Davis Bacon off-set

[Dazednconfused]

Plan is cross tested (last day + 1,000 for PS allocation requirements), Davis Bacon off-set. Some participants received davis bacon contributions but term'd before end of year (greater than 500 hrs) so not eligible to receive PS allocation. A few received davis bacon ( say $4,000) and would receive allocation of PS of $1,000, so the DB covers PS; and a few received only PS contributions.

Question: How is testing for 401a4 done, which contribution amounts are included for testing purposes? Are all the participants with DB contributions in rate groups or only the PS contributions? Ugh...

Thanks for the assistance.

[Mike Preston]

You'll need to clarify a few things, I think, because it isn't clear to me what benefits are being provided.

In any event, if the plans are aggregated for 410b/401a4, then you count all contributions or benefits other than deferrals and matching contributions in the aggregated analysis.

If you want more specific guidance, detail your first post a bit.

[PensionPro]

It appears from your questions that the PW contributions are being treated as non-elective rather than matching contributions.

To answer your questions, the non-elective component of the plan (PW and PS contributions) must satisfy the requirements of 401(a)(4). Since you are cross-testing, eligible employees will need to receive the gateway minimum. For example, if an eligible employee is receiving 3% PW and the GW minimum is 5%, they will need to receive 2% in the PS.

[Dazednconfused]

Hi,

Thanks! Yes the PW is treated as a non-elective and not matching.

I am ok with the Gateway test but then the 401a4 is where I am losing it. Are participants who are receiving only PW included in the 401a4 (rate groups and such, most terminated during year and would not be eligible for PS so no GW either) along with participants who are eligbile for PS allocations.

The test passes easily since participants with PW contributions are many. I think they all who are receiving a contribution be it a PW or PS or both I should include since they are 'benefiting'....

Thanks again for clearing the mud.