Prevailing Wage Plan Question

[Guest 4:15 Limit]

We administer a calendar year cross-tested 401(k) plan with a prevailing wage component. Everyone is in their own allocation group. To receive an allocation of the PS contribution there is a last day & 1,000 hour requirement. The plan is not safe harbor.

For 2011 the client wants to allocate a 1% profit sharing contribution to everyone (HCE's and NHCE's). The plan document says to offset PS contributions by prevailing wage contributions.

There is one HCE that received a 10% prevailing wage contribution, and the other 8 HCE's did not receive any prevailing wage contributions.

Do I have to cross-test this plan if we allocate the 1% PS contribution (& therefore include the prevailing wage contributions in the test, which would trigger the gateway test) or is there a way we can test the PS separately (since the 1% PS is a uniform allocation) from the prevailing wage?

Thanks in advance for any help.

[Guest Quicksilver]

We always exclude all HCE's from the prevailing wage plan, makes things much easier.