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When your client drinks too much tequila on Cinco De Mayo, the next morning they may end up seeing double double and start asking about the feasibility of quadruple vesting. After they sleep it off over the weekend, maybe you can talk them out of this awful idea. 😀

This should be fine. The group of employees who met age 21/1 year of service are all covered by the safe harbor, so no ADP test on that group. The otherwise excludable group has to be ADP tested, but you could count the SHNEC as a QNEC in the test if you wanted. None? Why safe harbor at all then? If they really want to make a 3%, fully-vested contribution, just do it as a discretionary contribution, that way they're not subject to the rules of 2016-16 if they want to change it later.

Also check 26 C.F.R. § 1.401(a)-20, Q&A-25(b)(3) ("If a participant dies after the annuity starting date, the spouse to whom the participant was married on the annuity starting date is entitled to the QJSA protection under the plan. The spouse is entitled to this protection . . . even if the participant and spouse are not married on the date of the participant's death, except as provided in a QDRO.").

Yes, you need to have a detailed conversation with the client. Plan sponsors say things incorrectly all the time using retirement plan terminology that they do not understand. I still have many a client that refers to their safe harbor non-elective and/or profit sharing in their 401(k) plan as a match. The only thing that comes to mind for this is quarterly vesting computation periods, for example, you vest 5% for 250+ hours in a quarter rather than 20% for 1000+ hours in a year? Doubt pre-approved plan has specific accommodation, don't know if such a modification would cause it to lose reliance. Regardless, I think you would have to have a 1000 hour annual vesting provision override, so if someone was +250 for only three quarters but still +1000 for the year, they would have to vest 20% rather than 15%. Interesting concept if that's what they're thinking, but have fun administering!

No. Start by asking what they are trying to accomplish.

If owner doesn't want to contribute for employees and employees don't contribute enough to let owner benefit much then why have the plan? Dump the plan, have owner do an IRA max and move on. If you wanna dance, pay the piper or get off the dance floor.

If the Plan has $0 deferral limit for HCEs written into the plan document but allows for catch-up contributions your can probably get away with it. But no you can't just call the first $6,500 catch-up because you want to as it helps you out.