Initial short year due to SIMPLE-IRA plan

[Belgarath]

Employer maintains a SIMPLE-IRA for 2015. Employer's fiscal year is 7/1 to 6/30. Wants to install a 401(k) plan for 2016, with an initial short year from 1/1/2016 to 6/30/2016 due to the SIMPLE-IRA plan being in place for 2105. Any thoughts on the following?

1. Deduction limit is based on fiscal year compensation, so Employer will need to be aware of this.

2. Deferral limits are calendar year anyway, so nothing out of the ordinary there for 2016. Same as always with off-calendar year plans.

3. Not sure yet if this will be safe harbor plan or not. If not safe harbor, then I believe for ADP/ACP testing purposes, since no calendar year ENDS in the short plan year, that compensation used for testing must be short plan year comp, and compensation limits under 401(a)(17) must be pro-rated. What if it is a safe harbor plan, with no ADP/ACP testing required? Is the compensation limit still required to be pro-rated if they wanted to do a profit sharing contribution? (I think it must be prorated, since compensation period is defined as plan year, and it is a short plan year)

4. Limitation year is full 7/1 to 6/30, so I don't think any pro-rating of 415 limits required.

I should know better than to look at this stuff in the afternoon. Thanks for any thoughts!