ugueth

I think the confusion is that it's not a Health & Welfare plan, but rather a Husband & Wife DB plan

Above is correct

I guess it depends on the IRS agent. In the 1980s, we set up a DB plan for a pro boxer with an NRA of 35. The IRS did question it, but ultimately allowed it. As a follow up note, he fought consistently until age 35, then sporadically for about 10 more years thereafter, finally retiring completely at age 45. So we were fortunate to be able to have a plan that fully funded his benefits while his earnings were high, and not diluted by his later year earnings, as MoJo accurately described.

An actuary is a person who, after reading this quip, checked to make sure the "once every 17 years" calculation is correct.

I don't think the return has to be refiled in this case. IRC 404(a)(6) states that the contribution has to be made before the due date for filing the return. In this case, the return was filed before the due date, and if I understand correctly, the full contribution of $160,000 claimed on the return was made before the due date -- perfectly acceptable even though a portion of the contribution was made after the date the return was filed. Rev. Rul 76-28 appears to deal with the case where a contribution of one amount is claimed on the return, but a larger contribution is made before the due date of the return. That would require a re-filing of the return in order to claim the larger amount. If the return by the accountant only claimed $150,000, then I agree with the analyses above.

Correct, plan is not considered terminated and must be restated. See Rev. Rul. 89-87.

If you need a cite, it's Reg. 1.401(k)-2(c)(i) (c) Additional rules for prior year testing method—(1) Rules for change in testing method—(i) General rule. A plan is permitted to change from the prior year testing method to the current year testing method for any plan year. A plan is permitted to change from the current year testing method to the prior year testing method only in situations described in paragraph (c)(1)(ii) of this section. For purposes of this paragraph (c)(1), a plan that uses the safe harbor method described in §1.401(k)-3 or a SIMPLE 401(k) plan is treated as using the current year testing method for that plan year.

This thread, while not directly applicable, may still be helpful:

Years ago, it was common practice for a sale price to be set as a multiple of gross revenue, usually anywhere from 90% to 150% of gross revenue. Sale prices now are more frequently determined as a multiple of EBITDA, since two firms with the same revenue can have very different profitability. "Discretionary" expenses are also sometimes added back into the income figure. The most important advice I can give you is not to even think about doing this without hiring an experienced corporate transactions attorney. They can be expensive, but there are critical considerations most people would never think of that are very important when buying or selling a business. If you're selling the company's assets, as opposed to stock, you'll want a higher multiple, since gains on the sale are taxable as ordinary income for asset sales, whereas stock sales give you capital gains tax treatment. Be aware that an intelligent buyer should not purchase stock without exhaustive due diligence, since any liability for work done in the past would be transferred. Many other factors also come into play, such as health insurance and other benefits, retirement plans, business relationships, etc. There's generally some type of retention period, and proceeds of the sale are paid over that period. For example, if you sell for 120% of revenue, you might get 20% of the last three years' average revenues up front, then 20% of collections for each of the next 5 years. In that instance, it's in your best interest to make sure as much business stays on during the retention period as possible. This is one reason why many sellers stay around for a year or two after the sale. Buying/selling a firm is a complex transaction that involves a lot of time if done correctly. Don't expect this to happen quickly. Get a good attorney!

Be careful if there are any participants in the 401(k) Plan who have employer discretionary (profit sharing) accounts that are not fully vested. Should one of them terminate and have forfeitures that are reallocated, that could be considered an allocation that blows eligibility for a SIMPLE IRA.

Interesting that there are lots of (often conflicting) answers to the differences between a merger, consolidation, acquisition, and amalgamation for various purposes. https://www.quora.com/What-is-the-difference-between-a-merger-acquisition-consolidation-and-amalgamation

Here's an interesting article from Wolters Kluwer on this topic. https://www.ftwilliam.com/articles/415Comp20080811.html

Perhaps the plan sponsor felt that they were willing to have discretionary contributions vest quickly since they are voluntary; but since they're forced to make top heavy contributions, they want them to vest over the maximum time frame allowable.