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What do you mean "RMD from the ABC company"? RMD comes from the plan. Is the 5% owner a participant in the plan?

And I'll bet there are surrender charges too. Your options are 1) to muddle along and maybe allow new people to own brokerage accounts. It sounds like you are the agent/broker and not the TPA, and the TPA is not going to like this, or at least is going to have to charge more. You are going to have a hard time finding individual annuity contracts that will work. 2) Bite the bullet and surrender all of the contracts and pay the surrender charges and move the money to a platform that works for small plans, like the American Funds.

Yikes! Since you cannot possibly present all the facts here, you should not trust any advice on your question from this Message Board, except this: Talk to your legal counsel.