SECTION 12. TERMINATION

OR DISCONTINUANCE OF CONTRIBUTIONS; NOTICE OF MERGERS, CONSOLIDATIONS, ETC.

January 2, 2001 214 2001–1 I.R.B.

Scope .01 This section contains procedures for requesting determination letters involving plan termination or discontinuance of contributions. This section also contains procedures regarding required notice of merger, consolidation, or transfer of assets or liabilities.

Forms .02 Required Forms

(1) Form 5310, Application for Determination for Terminating Plan, is filed by plans other than multiemployer plans covered by the insurance program of the Pension Benefit Guaranty Corporation (PBGC).

(2) Form 5303, Application for Determination for Collectively Bargained Plan, is filed in the case of a multiemployer plan covered by PBGC insurance.

(3) Schedule Q, (Form 5300) Nondiscrimination Requirements, is required to be filed as an attachment to Form 5310 or Form 5303.

(4) Form 6088, Distributable Benefits from Employee Pension Benefit Plans, is also required of a sponsor or plan administrator of a defined benefit plan or an underfunded defined contribution plan who files only an application for a determination letter regarding plan termination. For collectively bargained plans, a Form 6088 is required only if the plan benefits employees who are not collectively bargained employees within the meaning of § 1.410(b)-6(d). A separate Form 6088 is required for each employer employing such employees.

(5) Form 5310-A, Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities - Notice of Qualified Separate Lines of Business, if required, generally must be filed not later than 30 days before merger, consolidation or transfer of assets and liabilities. The filing of Form 5310-A will not result in the issuance of a determination letter.

Supplemental information .03 The application for a determination letter involving plan termination must also include any supplemental information or schedules required by the forms or form instructions. For example, the application must include copies of all records of actions taken to terminate the plan (such as a board of director’s resolution) and a schedule providing certain information regarding employees who separated from vesting service with less than 100% vesting.

Required demonstration of .04 An applicant requesting a determination letter upon termination may not decline to nondiscrimination requirements elect that the plan be reviewed for the average benefit test (if applicable) or the nondiscrimination in amount requirement, as otherwise permitted under sections 5.03 and 5.04, unless the following conditions are satisfied:

(1) With respect to the average benefit test, the plan must have received a favorable determination letter that stated that the plan satisfied the requirements of the test;

(2) With respect to the nondiscrimination in amount requirement, the plan must have received a favorable determination letter that stated that the plan satisfied the requirements of either a nondesign-based safe harbor or the general test for nondiscrimination in amount;

(3) The favorable determination letter was issued during the immediately preceding three plan years; and

(4) There has been no material change in the facts (including benefits provided under the plan and employee demographics) or law upon which the determination was based.

Compliance with Title .05 In the case of plans subject to Title IV of ERISA, a favorable determination letter IV of ERISA issued in connection with a plan’s termination is conditioned on approval that the termi

2001–1 I.R.B. 215 January 2, 2001

nation is a valid termination under Title IV of ERISA. Notification by PBGC that a plan may not be terminated will be treated as a material change of fact.

Termination prior to time .06 A plan that terminates after the effective date of a change in law, but prior to the date for amending for change in law that amendments are otherwise required, must be amended to comply with the applicable provisions of law from the date on which such provisions become effective with respect to the plan. Because such a terminated plan would no longer be in existence by the required amendment date and therefore could not be amended on that date, such plan must be amended in connection with the plan termination to comply with those provisions of law that become effective with respect to the plan on or before the date of plan termination. (Such amendments include any amendments made after the date of plan termination that were required in order to obtain a favorable determination letter.) In addition, annuity contracts distributed from such terminated plans also must meet all the applicable provisions of any change in law.