Instructions for Form 5310-A (4/2006)

Purpose of Form

Form 5310-A is used by employers to give notice of:

A plan merger or consolidation which is the combining of two or more plans into a single plan.
A plan spinoff which is the splitting of a single plan into two or more spinoff plans.
A plan transfer of plan assets or liabilities to another plan which is the splitting off of a portion of the assets or liabilities of the transferor plan and the concurrent acquisition or assumption of these split-off assets or liabilities by the transferee plan.
Qualified separate lines of business (QSLOBs).

An IRS determination letter will not be issued when a Form 5310-A is filed.

Who Must File

Pension plan, profit-sharing plan, or other deferred compensation plan. Any sponsor or plan administrator of a pension, profit-sharing, or other deferred compensation plan (except a multi-employer plan covered by PBGC insurance) should file this form for a plan merger or consolidation, a spinoff, or a transfer of plan assets or liabilities to another plan. See section 6058(b).

Note.

This form must be filed for each plan with a separate employer identification and plan number if that plan is involved in a merger or transfer of plan assets or liabilities. This includes plans that were not in existence before the plan merger and plans that cease to exist after the plan merger. In the case of a plan spinoff, file Form 5310-A only for the plan in existence prior to the spinoff.
Qualified separate lines of business. The employer must file notice that it elects to be treated as operating QSLOBs or that it either modifies or revokes a previously filed notice. Only one notice per employer, within the meaning of Code sections 414(b), (c), and (m) is required.

Examples

Example One - Initial Notice

Employer A is composed of four separate corporations that are treated as one employer within the meaning of section 414(b). Employer A treats each corporation as a separate line of business. The 2003 testing year is the first year for which Employer A elects to be treated as operating QSLOBs for the purpose of section 410(b) (see When To File on page 3 for a definition of “testing year”). Employer A must file Form 5310-A and provide information on each of the four QSLOBs on or before the notification date for the 2003 testing year (see When To File for a definition of “notification date”). If the notice is not timely filed, Employer A is not treated as operating QSLOBs for purposes of the coverage rules for the 2003 testing year (see Part III ).

Example Two - Modification

The facts are the same as in Example One. During the 2004 testing year, Employer A sold QSLOB four. Also, assume that Employer A timely filed Form 5310-A for the 2003 testing year. For the 2004 testing year, Employer A intends to treat QSLOBs one and two as a single QSLOB. Employer A must modify its initial notice by filing Form 5310-A on or before the notification date for the 2004 testing year, including a revised list of QSLOBs for line 10 of the form. If Employer A does not timely provide a new notice, the initial notice filed for the 2003 testing year will be treated as the only notice filed for the 2004 testing year (see Part III).

Example Three - Revocation

The facts are the same as in Example Two. Assume that Employer A timely filed a new notice for the 2004 testing year. During 2005, Employer A elects not to treat itself as operating QSLOBs for the 2005 testing year. Employer A must revoke the last notice it filed (that is, the notice for the 2004 testing year). Employer A must revoke the notice filed for the 2004 testing year by filing Form 5310-A for the 2005 testing year and indicating on line 8 of the Form 5310-A that it is revoking a previously filed notice and is no longer testing on a QSLOB basis. If such notice is not filed on or before the notification date for the 2005 testing year, the notice filed for the 2004 testing year will be treated as the only notice filed for the 2005 testing year (see Part III).

Exceptions From Filing Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities

Direct Rollover. Do not file Form 5310-A for an eligible rollover distribution that is paid directly to an eligible retirement plan in a direct rollover as described in section 401(a)(31).

Plan Merger or Consolidation or Spinoff. Do not file Form 5310-A if the plan merger or consolidation or the spinoff complies with Regulations section 1.414(l)-1(d), (h), (m), or (n)(2).

Generally, these requirements will be satisfied in the following four situations:

Two or more defined contribution plans are merged and all of the following conditions are met:
1. The sum of the account balances in each plan prior to the merger (including unallocated forfeitures, an unallocated suspense account for excess annual additions, and an unallocated suspense account for an ESOP) equals the fair market value of the entire plan assets.
  Example: Neither plan has an outstanding section 412(d) waiver balance.
2. The assets of each plan are combined to form the assets of the plan as merged.
3. Immediately after the merger, each participant in the plan has an account balance equal to the sum of the account balances the participant had in the plans immediately prior to the merger.
There is a spinoff of a defined contribution plan and all of the following conditions are met:
1. The sum of the account balances in the plan prior to the spinoff equals the fair market value of the entire plan assets.
  Example: The plan does not have an outstanding section 412(d) waiver balance.
2. The sum of the account balances for each of the participants in the resulting plan(s) equals the account balances of the participants in the plan before the spinoff.
3. The assets in each of the plans immediately after the spinoff equal the sum of the account balances for all participants in that plan.
  Example: The plan does not have unallocated accounts.
Two or more defined benefit plans are merged into one defined benefit plan and both of the following conditions are met:
1. The total liabilities (the present value of benefits whether or not vested) that are merged into the larger plan involved in the merger are less than 3% of the assets of the larger plan. This condition must be satisfied on at least 1 day in the larger plan's plan year during which the merger occurs. All previous mergers (including transfers from another plan) occurring in the same plan year are taken into account in determining the percentage of assets described above.
  Example: Assume that a merger involving almost 3% of the assets of the larger plan occurs in the first month of the larger plan's plan year. In the fourth month of the larger plan's plan year, a second merger occurs involving liabilities equal to 2% of the assets of the larger plan. The total of both mergers exceeds 3% of the assets of the larger plan. As a result of the second merger, both mergers must be reported on Form 5310-A. Enter the date of the second merger on line 5g.
  
  Also, mergers occurring in previous plan years are taken into account in determining the percentage of assets above if the series of mergers is, in substance, one transaction with the merger occurring during the current plan year.
  
  Aggregating mergers may cause a merger, for which a Form 5310-A was not initially required to be filed, to become reportable as a result of a subsequent merger. In this case, the merger(s) must be reported on the Form 5310-A filed for the subsequent merger.
2. The provisions of the larger plan that allocate assets at the time of termination must provide that, in the event of a spinoff or termination of the plan within 5 years following the merger, plan assets will be allocated first for the benefit of the participants in the other plan(s) to the extent of their benefits on a termination basis just prior to the merger.
There is a spinoff of a defined benefit plan into two or more defined benefit plans and both of the following conditions are met:
1. For each plan that results from the spinoff, other than the spunoff plan with the greatest value of plan assets after the spinoff, the value of the assets spun off is not less than the present value of the benefits spun off (whether or not vested).
2. The value of the assets spun off to all the resulting spunoff plans (other than the spunoff plan with the greatest value of plan assets after the spinoff) plus other assets previously spun off (including transfers to another plan) during the plan year in which the spinoff occurs is less than 3% of the assets of the plan before the spinoff as of at least 1 day in that plan's plan year.
  Example: Assume that a spinoff involving almost 3% of the assets of the plan occurs in the first month of the plan year. In the fourth month of the plan year a second spinoff occurs involving liabilities equal to 2% of the assets of the plan. The total of both spinoffs exceeds 3% of the plan assets. As a result of the second spinoff, Form 5310-A must be filed to report both spinoffs. Enter the date of the second spinoff on line 5g.

Spinoffs occurring in previous or subsequent plan years are taken into account in determining the percentage of assets spun off if such spinoffs are, in substance, one transaction with the spinoff occurring during the current plan year.

Aggregating spinoffs may cause a spinoff, for which a Form 5310-A was not initially required to be filed, to become reportable as a result of a subsequent spinoff. In this case, report the spinoff(s) on the Form 5310-A filed for the subsequent spinoff. Enter the date of the subsequent spinoff on line 5g.

Transfer of Plan Assets or Liabilities. A transfer of plan assets or liabilities is considered a combination of separate plan spinoffs and mergers.

Do not file Form 5310-A for:

The transferor plan in a transfer transaction if the assets transferred satisfy the spinoff conditions in 2 or 4 above.
The transferee plan in a transfer transaction if the plan liabilities transferred satisfy the merger conditions in 1 or 3 above.

Thus, in some situations, the transferor plan may have to file Form 5310-A but not the transferee plan, or, the transferee plan may have to file but not the transferor plan.

Examples:

Transfer of Plan Assets or Liabilities

Plans A, B, and C are separate plans within the meaning of section 414(l). A portion of the assets and liabilities of both Plan B and Plan C will be transferred to Plan A. None of the plans is excluded from filing under the exceptions from filing listed above. In this situation, three Forms 5310-A must be filed. Each of the plans must file a completed Form 5310-A; enter code 4 (notice of a transfer of plan assets or liabilities) as the reason for filing and complete all of Parts I and II of the form. For Plan A, line 5 of the form will show information regarding Plan B and an attached statement with the line 5 information for Plan C. Plan B and Plan C will each enter the information regarding Plan A on line 5.

Plan Merger

Plans A, B, and C are separate plans within the meaning of section 414(l). Plans A, B, and C are being merged. Assets and liabilities from each plan will be merged into Plan D, a new plan that was established for the purpose of effecting the merger. None of the plans are excluded from filing under the exceptions from filing above.

In this situation, four separate Forms 5310-A must be filed. Because Plan D is receiving assets from Plans A, B, and C, Plan D must file a complete Form 5310-A, enter code 2 (notice of a plan merger) as the reason for filing and complete all of Parts I and II of the form. Line 5 of the form will show information regarding Plan A and an attached statement with the line 5 information for Plans B and C. Plans A, B, and C are merging with Plan D. Plans A, B, and C will each file a separate Form 5310-A completed as follows: Enter code 2 as the reason for filing, complete all of Parts I and II, and enter the information regarding Plan D on line 5.

When To File

File Form 5310-A at least 30 days prior to a plan merger or consolidation, spinoff, or transfer of plan assets or liabilities to another plan.
If you are filing Form 5310-A to notify the IRS that the employer treats itself as operating QSLOBs or either modifies or revokes a previously filed notice, file Form 5310-A on or before the notification date for the testing year. The “Notification Date” for a testing year is the later of: (a) October 15 of the year following the testing year, or (b) the 15th day of the 10th month after the close of the plan year of the plan of the employer that begins earliest in the testing year. “Testing Year” means the calendar year.

Penalties

If you are filing Form 5310-A to report a plan merger or consolidation, spinoff, or transfer of plan assets or liabilities, there is a penalty for late filing. The penalty is $25 a day for each day the Form 5310-A is late (up to a maximum of $15,000). The form is late if it is not filed at least 30 days before the plan merger or consolidation, spinoff, or transfer of plan assets or liabilities.

Where To File

File Form 5310-A at the address indicated below:

Internal Revenue Service

P.O. Box 192

Covington, KY 41012-0192

Private Delivery Services. In addition to the United States mail, you can use certain private delivery services designated by the IRS to meet the “timely mailing as timely filing/paying” rule for tax returns and payments. These private delivery services include only the following.

DHL Express (DHL): DHL Same Day Service, DHL Next Day 10:30 am, DHL Next Day 12:00 pm, DHL Next Day 3:00 pm, and DHL 2nd Day Service.
Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2Day, FedEx International Priority, and FedEx International First.
United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The private delivery service can tell you how to get written proof of the mailing date.

Signature

In general, the employer or plan administrator must sign the form. For single employer plans the plan administrator and the employer are generally the same person. When the plan administrator is a joint employer — union board or committee — at least one employer representative and one union representative must sign. A Form 5310-A filed with the IRS by a representative on behalf of an employer or plan administrator must be accompanied by:

A power of attorney specifically authorizing such representation in this matter (you may use Form 2848, Power of Attorney and Declaration of Representative), or
A written declaration that the representative is a currently qualified attorney, certified public accountant, enrolled actuary, or is currently enrolled to practice before the IRS (include either the enrollment number or the expiration date of the enrollment card) and is authorized to represent the employer or plan administrator.

How to Complete the Application

Form 5310-A is screened for completeness. Incomplete notices will be returned. Here are some tips to help you complete the form correctly.

N/A (not applicable) is accepted as a response only for line 1c.
If a number is requested, a number must be entered.
For questions regarding this form, call the Employee Plans Customer Service at 1-877-829-5500.

The IRS may, at its discretion, require additional information when it is deemed necessary.

General Instructions