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First, so sorry to hear about your health problems. Best of luck on all that. As to the retirement issue, I do suspect that it will drive some of us out of the business earlier than otherwise might be expected. Trying to be positive, we've weathered big changes before, and eventually adjusted. I remember TRA 86, OBRA, GATT, EGTRRA, etc., etc. - there were a lot of changes over the years, and we managed to adjust. But this has so much more stupidity, and I'm a lot older and less enthusiastic about work these days!

Manage the timing and the effective dates of any plan amendments very carefully. A significant change in a plan's provisions will end the transition period immediately.

I haven't heard of running your ACP test if the underlying match component hasn't passed 410b yet.

From 31.3121(a)-1(d): (d) Generally the basis upon which the remuneration is paid is immaterial in determining whether the remuneration constitutes wages. Thus, it may be paid on the basis of piecework, or a percentage of profits; and it may be paid hourly, daily, weekly, monthly, or annually. See, however, § 31.3121(a)(8)-1 which relates to the treatment of cash remuneration computed on a time basis for agricultural labor. Most of 3121(a) is devoted to the idea of saying, "it doesn't matter what you call the payment, treat it as 'wages'". Specific to this question, I think the "percentage of profits" will sweep up self-employment income. One fun fact I found: 31.3121(b)(17)-1 Services in employ of Communist organization. The term “employment” does not include services performed in the employ of any organization in any calendar quarter beginning after June 30, 1956, and during any part of which such organization is registered, or there is in effect a final order of the Subversive Activities Control Board requiring such organization to register, under the Internal Security Act of 1950 (50 U.S.C. 781 et seq.), as amended, as a Communist-action organization, a Communist-front organization, or a Communist-infiltrated organization. For all those who would say, that's not a thing anymore, you would be correct to the extent that the Board was abandoned after Nixon budgeted $0 to it in 1973(?). However, it has never been dealt with legislatively and is technically still in existence. I wonder if there are any of the registered organizations that still exist whose members should not be recognizing wages???

Yes, there is no limit on the number of employees of an employer to be eligible to sponsor a SEP, so a larger employer MAY provide a SEP. However, examining the pros and cons of a SEP versus a qualified plan (i.e., PS 401(k)), it very questionable if a larger employer SHOULD provide a SEP. There might be some special circumstances where a SEP works better, but I would imagine those are few and far between.

Peter, You are welcome. I feel compelled to note that comments you have made in the past have helped me, so I am glad that I was able to help you. Dave

You cannot test a safe harbor plan and a non-safe harbor plan on a combined basis. Therefore, after the transition period the plans would have to satisfy minimum coverage under 410(b) in order to test separately. If you can't satisfy coverage, then you would have to amend one of the plans so that they're either both safe harbor or non-safe harbor (or merge the plans) so that they can be tested on a combined basis.