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plan which produces income from

2. The separate lines of business

test if the excludable employee and

rentals, etc. Do not include this property

that have employees benefiting under

mandatory disaggregation rules for

in line 20e (buildings and other property

the plan,

collectively bargained and

used in plan operations).

3. A demonstration of how the plan

noncollectively bargained employees

meets the nondiscriminatory

did not apply.

Line 20c(7)(B). Include the current

classification requirement of section

4. In addition to the above information,

value of real property owned by the

410(b)(5)(B) and Regulations section

plan which is not producing income or

the average benefit percentage

1.414(r)-8(b)(2) on an employer-wide

demonstration must identify and

used in plan operations.

basis, and

describe the method used for

Line 20c(9) and (10). Attach a list

4. If the requirements of section

determining employee benefit

regarding loans from the plan. Include

410(b) or section 401(a)(26) are to be

percentages (see Regulations sections

the following information:

applied to this plan on an

1.410(b)-5(d) and (e)). Also, include the

1. Name,

employer-wide basis under the special

applicable information listed below,

2. Dollar amount of each loan(s),

rules for employer-wide plans, a

under the heading All Plans.

3. Date of loan,

demonstration of how the plan meets

Note. The demonstration must include

the requirements of the applicable

4. Balance of the loan at the date of

the portion of the coverage test

termination,

special rule in Regulations sections

showing the data used in the

5. Account balance prior to the date

1.414(r)-1(c)(2)(ii) or 1.414(r)-1(c)(3)(ii).

calculations and the calculations for

of the loan,

each participant. Participants need not

6. Identify all disqualified persons as

Demo 4 - Test for

be identified. However, the IRS may

described by section 4975(f), and

Restructuring, Mandatory

request that additional information be

7. Amortization and/or repayment

submitted if necessary.

Disaggregation or

schedule.

Permissive Aggregation

All Plans

Line 20c(12). Include allocated and

Explain the basis of the disaggregation,

All plans using the average benefit test

unallocated contracts including

permissive aggregation, or

must also include the following

plan-owned life insurance.

restructuring, identifying the aggregated

information on Demo 5:

Line 20i. ‘‘Acquisition indebtedness,’’

or separate disaggregated plans or

1. The testing period (see Regulations

for debt-financed property other than

component plans, and demonstrate

section 1.410(b)-5(e)(5) for an optional

real property, means the outstanding

how any restructured component plans

averaging rule).

amount of the principal debt incurred:

satisfy section 410(b) as if they were

2. The definition of testing service

separate plans.

1. By the organization in acquiring

(including imputed and pre-participation

or improving the property,

Any other plan that has been

service).

2. Before the acquisition or

permissively aggregated with this plan

improvement of the property if the debt

3. A description of the testing group

should be identified by:

•

was incurred only to acquire or improve

(see Regulations section 1.410(b)-7(e)).

Name,

•

the property, or

Plan number, and

4. Whether the employee benefit

•

3. After the acquisition or

Employer Identification Number

percentages are determined on a

improvement of the property if the debt

(EIN).

contributions or benefits basis.

was incurred only to acquire or improve

Describe the benefit or allocation

5. Whether permitted disparity under

the property and was reasonably

formula of the other plan and indicate if

Regulations section 1.401(a)(4)-7 is

foreseeable at the time of such

that plan has received or been

imputed in determining employee

acquisition or improvement. For more

submitted for a determination letter.

benefit percentages.

details, see section 514(c).

6. An explanation of how allocation or

Demo 5 - Average Benefit

accrual rates are grouped on the test.

Guidelines for

Test

7. A description of how contributions or

Demonstrations

1. A demonstration that a plan satisfies

benefits are normalized on the test,

the average benefit test must describe

including the actuarial assumptions

The following instructions describe

compliance with the nondiscriminatory

used.

additional information that must be

classification test of Regulations section

included in the demonstrations.

8. The definition of section 414(s)

1.410(b) including, if applicable, the

compensation used in determining plan

Note. Applicants must follow the

facts and circumstances determination

year compensation or average annual

guidelines in these instructions and

under Regulations section

compensation and a demonstration

indicate in their demonstrations where

1.410(b)-4(c)(3).

showing the definition as

the elements in the guidelines are

Note. The determination regarding the

nondiscriminatory. If plan year

addressed. Applicants must explain

average benefit test is not available to a

compensation or average annual

why any elements have not been

plan that satisfies the ratio percentage

compensation is determined using a

addressed.

test.

definition of compensation that satisfies

Information or computations that are

Regulations section 1.414(s)-1(c)(2) or

2. The demonstration for the average

used for more than one purpose or

(3), the explanation should state

benefit test should provide, for each

provided elsewhere in the application

whether the definition satisfies

HCE and each NHCE, the

may not be cross-referenced.

compensation used in the test, the

Regulations section 1.414(s)-1(c)(2) or

(3). For guidance pertaining to this

allocation or benefit being tested, and

Demo 1 - Qualified Separate

demonstration, see the guidelines for

the actual benefit percentages. The

Lines of Business

average benefit percentages for HCEs

Demo 9, nondiscriminatory

compensation, in the instructions for

Provide a schedule with the following

and NHCEs must be provided.

Schedule Q (Form 5300).

information, as applicable:

3. A plan that is deemed to satisfy the

1. The section(s) for which the

average benefit percentage test under

9. A description of the method of

employer is testing on a separate line

the special rule in Regulations section

determining compensation used in

of business basis (for example, section

1.410(b)-5(f) must demonstrate that the

determining employee benefit

410(b) or section 401(a)(26)),

plan would satisfy the ratio percentage

percentages.

-6-

Instructions For Form 5310 - Application For Determination For Terminating Plan - Department Of Treasury Page 6

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