Working on 401(k) cross tested plan. Employer makes QNEC to satisfy ADP. QNEC in excess of amount needed to pass ADP. My understanding is that any QNEC used to pass ADP cannot be used in rate group testing. What about a QNEC not used to satisfy ADP? Can that be used in the rate group testing. First time dealing with QNEC. This is not a safe harbor plan. Would appreciate any comments. Thanks.

these comments come from The ERISA outline Book:

"A plan must be able to satisfy 401(a)(4) when QNECs are combined with other nonelective contributions, and also when other nonelective contributions are tested separately from the QNECs. see treas reg 1.401(a)(4)-1(B)(2), 1.401(k)-1(B)(5) and 1.401(m)-1(B)(5)"

one of the examples is a plan that provides a profit sharing contribution with last day provision, but a QNEC to all nhces. "The plan does not satisfy the multiple formual rule (for safe harbor plans) The allocations made under both formulas must be combined and tested under the rate group testing method...Note that the rate group testing method should be easily satisfied because the QNECs are allocated only to NHCEs.

Thanks, Tom.