I just had a broker call and ask if I would set up a 401(k) plan for a one member LLC that wants to terminate his 412(i) plan and roll the proceeds to the newly established k plan. The assets to be rolled over consist of a paid up whole life policy and an annuity. There are no other employees of the LLC and there will not be any other employees in the future. Also, there will not be any future premiums on the insurance policy.

Does anybody see any problems with this? I have no desire to work with 412(i) plans but am concerned I may end up getting involved with this one in a round about way.

Why not continue the 412(i) as a wasting trust, and set up a separate 401k plan for future accruals? That way you do not have any 412(i) taint (if there possibly is any) on the new accruals.