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Compliance Corner

Retirement Updates

IRS Releases Draft Form 5310 Instructions

On March 22, 2021, the IRS released the draft instructions for Form 5310, Application for Determination for Terminating Plan. The IRS updates the form instructions annually for clarification purposes and to incorporate any regulatory or reporting changes.

As background, the Form 5310 can be filed by a plan sponsor of a terminating pension, profit-sharing or other deferred compensation plan (other than a multi-employer plan covered under Pension Benefit Guaranty Corporation insurance) to request an IRS determination on the plan’s qualification status at the time of termination. The IRS does not require the form to be filed. However, the issuance of a favorable letter provides assurance that eligible participant distributions can be rolled over to another qualified plan or individual retirement account.

The instructions provide line-by-line specifications for the form’s completion and outline the required supporting documentation. The draft was updated for completion on pay.gov. (As of August 1, 2021, the Form 5310 must be completed electronically on the government website. From April 16, 2021, through July 31, 2021, submissions may be made on paper or electronically.)

Employers that sponsor retirement plans may want to be aware of the availability of the draft instructions. However, the instructions should not be relied upon until the final version is issued.

Form 5310 Instructions »

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