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If you have old terminated participants who were previously reported on SSA you'll want to remove them from t he old plan and report them on the new plan. But if they are active employees, I agree with Bill Presson. Doesn't seem to be anything to report unless they separate from service with vested benefits.

Yes, the correction was not complete until the earnings posted, so you will file for 2020 and 2021. Keep in mind the tax is cumulative.

I once heard it put this way once and it has stuck with me: IRC 401(a)(4) says a plan may not discriminate in favor of highly compensated employees. It says nothing about discriminating in favor of non-highly compensated employees. You can discriminate in favor of non-highly compensated employees all you like. If the plan is using a Cycle 3 pre-approved document, they will have to provide a notice describing their discretionary match formulas and what formulas apply to which groups of employees. As Mike said, they should make sure that they are not including a disguised age or service condition that would disqualify the plan.

In general, a plan sponsor should be able to vary contributions as if they had amended the plan to state what they want to do, without actually amending the plan. But the plan sponsor can't do what is otherwise prohibited. For example, the plan sponsor might feel that only those with service greater than 3 years should share in a given year's contributions. Even if it passes all the discrimination tests because the only participants are NHCE's, the IRS will disqualify the plan.

With respect to profit sharing set up everyone in their own group you shouldn't have any issues. The match I'm not sure. I honestly don't know if you can set up a truly discretionary match were you pick and choose what match you give by individual. I'm not sure why I feel the match might be an issue while the profit sharing isn't but for some reason I can't put my finger on it just doesn't feel definitly determinable. Maybe someone has some more insight on it.