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Sometimes, research is not difficult. https://www.irs.gov/pub/irs-pdf/i1099gi.pdf

You cannot retroactively adopt a safe harbor matching plan. Despite the fact that the non-safe harbor plan has a discretionary match, the IRS (fairly enough) does not like the idea of allowing plans to retroactively adopt the safe harbor (benefits) with a matching formula after the start of the year since, the participants didn't know that they had a guaranteed, fully-vested match available at the start of the year. If I understand correctly, you have a situation where a company was acquired and now the employer/related employer group has two plans: a safe harbor 401(k) and a non-safe harbor 401(k). That, in-and-of-itself, is not an issue. You can have plans that cover two separate groups, and those plans do not have to have identical features. One can be safe harbor and the other not. One is subject to ADP/ACP testing, the other not. The discretionary match can always mirror the safe harbor match formula. The employer could probably even make the match as a QNEC (or amend the plan to provide for full vesting) to mirror the safe harbor - if that is the objective. There rules have a few complications but aren't a major red flag. Do you have a specific concern regarding the different benefits/nondiscrimination testing?

You can use statutory exclusions of 21 & 1 with dual entry for testing if that's what you are asking.

A business (sole prop, partnership, corp, etc.) must be the sponsor of a qualified plan such as a 401(k) Plan. If the plan never has contributions other than the initial rollover, the IRS could challenge the position that the plan was intended to be a permanent retirement plan from it's onset. Now if they are expecting earned income in the future to make contributions to the plan and are establishing the plan now to accept rollovers with the expectation of future contributions, keep good business notes to show the plan was intended to have contributions because plan permanency is a facts and circumstances gray area sometimes. But if they are just expecting passive income going forward, then this probably won't pass the smell test.

It might be stating the obvious here, but *if* the plan sponsor determines that a restorative payment is warranted (under the guidance given by my esteemed professional colleagues above), the the plan sponsor is essentially *admitting* (at least the serious possibility) of a fiduciary breach and that breach essentially entails the selection of the SVF fund in the initial instance (with the possibility of an MVA.) While a restorative payment may solve the back end issue of a MVA, it leaves the fiduciary exposed for any other damages that an enterprising plaintiff's counsel may see for the entirety of the fund being in the plan. We never recommend a restorative payment (which is iffy in any event), and usually advise that the client seek an alternative (installment payments, a "put" or the like,) If the contract is benefit responsive, participant's generally will suffer no loss. Inconvenient, yup, but we do it all the time (both with respect to incoming business, and outgoing business using our SVF).