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From a plan perspective it doesn't change the characteristic of the funds in the Plan for participants. As for what happens to the nondeductible contribution that was not deductible because minimum required contribution was larger than self-employment income , I believe the excise tax is waived and you can carry forward the deduction to future years but I'm not a CPA and not 100% sure on how that works or what would need to be filed with the IRS and maintained by the client.

No, because part of the 80-120 rule is that if you filed as a small plan last year you can file as a small plan this year. Its a new plan, you didn't file last year. The determining factor for a new plan is the number of participants with a balance at EOY.

First, check for any provisions in your service agreement, if any, dealing with the ending of your relationship with the plan, a merger, or other plan amendments that could impact your scope of services or fees. Look specifically for provisions for a deconversion. You may be pleasantly surprised that the service agreement spells out some terms and conditions that are favorable to you. The SA may also say explicitly services that you will not provide. This can provide you with an opportunity to charge extra for a service you are not obligated to provide but are willing to provide. Also note that your SA may specify time frames for deliverables as part of the process. Don't feel obligated to make extraordinary efforts and jump through hoops for the convenience of the successor provider. Next, try to get a copy of what the receiving plan's service providers have in their requirements documents regarding their assumptions about data to be provided by you (as @Lou S. lists in his post). If your service agreement does not commit you to provide what is being asked of you, you can refuse or negotiate what you are willing to provide.

I agree with Lou. I also suggest that you reach out to the PBGC and ask them how to proceed. I have found them to be generally responsive and very willing to work with you.

Your best bet is the ERISA Outline Book. Start with an advanced search for "peo" and "hce". You should review the agreement between the PEO and the company, the PEO plan, and the proposed plan for the company. You also should look at the PEOs payroll practices, vacation, holidays, work schedules and other similar time for which employees receive compensation. It is fairly easy for an arrangement with a PEO to be treated as a leasing arrangement due to how the PEO functions operationally. Do not rely solely on representations about the status of the employees from the PEO or from the company. Facts matter more than representations. It is very likely that the PEO employees working for the company will need to be considered in coverage and nondiscrimination testing for the company plan.