Davis Bacon and general testing

[gregburst]

Assume a safe harbor 401k plan is cross tested and each person is in a separate class for allocating profit sharing. The plan is then amended to allow prevailing wage contributions for certain employees who work government contracts. According to the plan document, these Davis Bacon contributions are considered QNECs. As such, may they be used in the 401a4 general test? Does this answer change if a defined benefit plan is added to the mix (even though most of the prevailing wage workers won't qualify for it)?

[Lou S.]

Been a while since I worked on any Davis-Bacon but I seem to recall that if it was treated as a QNEC in the document then it went into your ADP test (subject to the targeted QNEC retrictions that I believe are slightly more liberal for Davis-Bacon) but that you then could not use them in general test (except to the extent that they are in the ABT). But if you did not have them as QNEC for ADP in the document then you did include them in general test.

So if you are a safe harbor 401(k) what whould the advantage of treating the D-B contribs as QNEC be?