Safe Harbor 401(k) with new controlled entity

A large (5,000+ participant) 401(k) plan has a 30-day wait for deferral and SH match for full time employees, and a 1-year wait (1,000 HOS) for part time employees.  The plan sponsor acquires an entity with 100 employees (most of whom are NHCEs) in November 2019 in a stock deal.  The plan sponsor wants to bring the new entity into the plan during 2020 for deferrals only, and then start match contributions in 2021.

Is there any problem with the new entity adopting the plan mid-year (it doesn't currently maintain any 401(k) plan) with 30-day wait for deferral contributions (granting service back to date of acquisition) and 1-year wait for match?  Will this in any way affect the safe harbor status of the plan?

thanks.

They don't have to bring these people into the plan at all this year.  Perhaps they should just wait until next year.  In a stock sale, all of the employees get credit for thier service with the acquired entity - you cannot ignore that.  if you brought them in for deferrals but denied them the SH portion of the plan (maybe by using an excluded classs) you would not have a safe harbor plan anymore.  You could set up a separate plan for them for the rest of the year and then merge them in at the end of this year or the year after but you cannot have a SH plan with eligible employees that denies SH eligiblility to people who have satisifed the eligibility requirements. 

You could use a 1 year wait for match - that is what the plan does now but you do have to credit thier prior service with the acquired company.  You cannot pretend they are new employees with no past service.

Thanks for your response.  I know that under 410(b) they don't have to offer any benefits through 2020, and possibly thereafter if they can satisfy minimum coverage.  But the parent company had promised 401(k) benefits sooner to the group.  I suppose the best course of action is to set up a separate 401(k) plan and then merge in 2021.