We have several dc plans with fewer than 10 lower paid participants and one key/highly paid owner. The owners (mostly doctors) have rollovers within the plan with non-qualified assets requiring plan bonds and/or audits. Due to the type of non-qual assets (jewelery, artwork), we have found that the bonds are quite expensive. Here is my question- what would be the problem with having each owner simply "tranfer/roll out" their rollover account into a separate qualified plan? I assume they could easily transfer the rollover accounts to an IRA but what about another qualified plan whereby we could just do an EZ for them. The only issue I can think of at this point is that there would be no "recurring deposits" (if the rollover was tranferred to a new ps plan).

Any thoughts or ideas would be appreciated.

How do you plan on limiting participation to the owner under the new plan (to allow the EZ filing) and still be able to pass coverage?

Coverage and 5500-EZ rules aside, one way to get around the "recurring and substantial" employer contributions requirement for profit sharing plans is to establish a 0% contribution formula MPP. See Chapter 3 of Sal's ERISA outline, pages 3.6 and 3.18.

Problem with rolling to an IRA is IRA's cannot have collectibles as assets.

I assume you are going to limit the ability to "roll" out to employees with at least five years of participation, and possibly who have attained a certain minimum age - otherwise you run afoul of the in-service distribution rules.

isn't there an issue about having collectibles in segregated accounts. 408m

Not sure how that applies to a 1 person plan.