IRS Instruction 5310 – IRS Forms, Instructions, Pubs 2026

IRS Instruction 5310 – IRS Forms, Instructions, Pubs 2026 – In the complex world of retirement plan management, terminating a pension or deferred compensation plan requires careful adherence to IRS guidelines to ensure compliance and avoid penalties. IRS Instruction 5310 provides detailed guidance for completing Form 5310, the Application for Determination for Terminating Plan. This form is essential for plan sponsors seeking a determination letter (DL) confirming the plan’s qualified status under sections 401(a) or 403(a) of the Internal Revenue Code upon termination. Whether you’re an employer, plan administrator, or financial advisor handling plan terminations, understanding these instructions is crucial for a smooth process.

This comprehensive guide breaks down IRS Instruction 5310, covering its purpose, filing requirements, step-by-step instructions, and recent updates. We’ll use the latest information from official IRS sources to help you navigate the termination process effectively. If you’re searching for “how to file Form 5310” or “IRS requirements for terminating a pension plan,” you’ve come to the right place.

What Is Form 5310 and Why Is It Important?

Form 5310 is used by plan sponsors or administrators to request an IRS determination on whether a terminating retirement plan maintains its qualified status. This applies to various plans, including pension plans, profit-sharing plans, and other deferred compensation arrangements like 403(b) plans for nonprofits or educational institutions.

Key Benefits of Filing Form 5310

  • Confirmation of Qualification: A favorable DL assures participants and sponsors that the plan termination complies with tax laws, protecting tax-deferred benefits.
  • Avoidance of Penalties: Ensures distributions are not treated as taxable events due to disqualification.
  • Required for Certain Terminations: While not mandatory for all plans, it’s recommended for those seeking certainty, especially for defined benefit (DB) or defined contribution (DC) plans.
  • Public Inspection: If the plan has more than 25 participants, Form 5310 becomes publicly available, promoting transparency.

Without a DL, plan terminations risk audits or challenges from the IRS, potentially leading to excise taxes or benefit recalculations. For instance, in cases involving employee stock ownership plans (ESOPs) or plans with asset reversions, filing is particularly advisable to document compliance.

Who Must File Form 5310?

Not every terminating plan requires Form 5310, but it’s applicable in specific scenarios:

  • Eligible Filers: Plan sponsors or administrators of pension, profit-sharing, or 403(b) plans (excluding multi-employer plans covered by Pension Benefit Guaranty Corporation (PBGC) insurance).
  • Ineligible Filers:
    • Multi-employer plans under PBGC insurance (use Form 5300 instead).
    • Requests for partial terminations.
    • Members of affiliated service groups (ASGs).
    • Applications not directly tied to full plan termination.

The form must be filed in connection with the termination, typically no later than one year from the effective termination date or the adoption of the termination action, and not beyond 12 months after distributing substantially all plan assets. If you’re unsure about ASG status, consult IRS guidelines before proceeding.

Special Considerations for Plan Types

  • Defined Contribution (DC) Plans: Individual account-based plans where benefits depend on contributions, income, expenses, gains, losses, and forfeitures.
  • Defined Benefit (DB) Plans: Plans guaranteeing specific benefits, not based on individual accounts.
  • 403(b) Plans: For tax-exempt organizations or public schools, with additional questions on employer type and contribution structures.

Governmental and nonelecting church plans may have exemptions from certain qualification rules, such as nondiscrimination testing.

How and When to File Form 5310?

Filing Form 5310 is now exclusively electronic through Pay.gov, a secure government payment portal. Here’s a step-by-step overview:

  1. Register on Pay.gov: Create an account if you don’t have one.
  2. Search for the Form: Enter “5310” in the search box and select Form 5310.
  3. Complete and Submit: Fill out the form digitally, attach required documents as a single PDF (max 15MB), and sign electronically with your title and authority.
  4. Handle Large Files: If attachments exceed 15MB, remove excess items and contact IRS Customer Accounts Services at 877-829-5500 for submission guidance.

Timing Requirements

  • File no later than the later of:
    • 1 year from the effective termination date.
    • 1 year from the date the termination is adopted.
  • Must be within 12 months of distributing all plan assets.
  • For mergers, consolidations, spinoffs, or transfers, file Form 5310-A at least 30 days prior if applicable.

Notify interested parties (e.g., participants) if section 410 applies, using a prescribed notice format. Failure to notify can delay processing.

User Fees for Form 5310

User fees vary based on plan type and complexity. Refer to the annual Revenue Procedure (e.g., Rev. Proc. 2026-4) for current amounts. For combined DB and DC plans, submit two forms and fees. Payments are made via Pay.gov; separate sanctions or compliance fees if applicable.

As of the latest updates, no specific changes to fees were noted for 2026, but always check IRS.gov for revisions.

Required Attachments and Documentation

To avoid rejection, include these with your submission:

  • Completed Form 5310.
  • Copy of the plan’s last determination letter (if any).
  • Opinion or advisory letter for pre-approved plans, plus adoption agreements.
  • All plan amendments since the last DL or required amendments list.
  • Compliance statements or closing agreements from prior IRS interactions.
  • Records of termination actions (e.g., board resolutions).
  • Form 6088 for DB plans or underfunded DC plans.
  • For ESOPs: Asset purchase agreements, fairness opinions, valuations, and details on securities or indebtedness.
  • Explanation of amendments’ impact.
  • For 403(b) plans: Details on accounts, distributions, and vesting.

Consolidate into one PDF. If the plan involves in-kind distributions or annuity contracts, provide supporting evidence per IRS rulings like Rev. Rul. 2020-23.

Line-by-Line Instructions for Form 5310

IRS Instruction 5310 provides detailed guidance for each line. Here’s a summarized overview:

Employer and Plan Information (Lines 1-3)

  • Enter sponsor details, EIN, tax year end, and contact info.
  • Plan name (limited to 70 characters), number, and year end.

Participant and Compensation Data (Lines 3-4)

  • Total participants include active employees, retirees, and beneficiaries.
  • Compensation details per Notice 2002-1.

Termination Details (Line 5)

  • Attach termination records; indicate if asset reversion to employer.

Plan Type and Features (Lines 6-8)

  • Identify if DB hybrid (e.g., cash balance), governmental, or church plan.

Transactions and Pending Matters (Lines 9-10)

  • Detail mergers/spinoffs; disclose any IRS/DOL/PBGC investigations.

Compliance and Testing (Lines 16-18)

  • Cite safe harbor provisions; detail offsets or combined plans.

Notifications and Features (Lines 19-23)

  • Confirm interested party notices; attach AFTAP certifications for DB plans.

Additional Plan-Specific Lines (Lines 28-59)

  • For multiple employers: List details.
  • For 403(b): Specify employer type, contributions, and accounts.
  • Asset/liability statements, including FMV and forfeitures.

For ESOPs, provide extensive documentation on transactions to ensure no prohibited allocations.

Procedural Requirements and Best Practices

Follow Rev. Proc. 2025-4 (updated annually) for DL program rules. Key tips:

  • No plan restatement required, but amend for law changes before termination.
  • Cannot reduce accrued benefits post-termination.
  • Retain records for audits.
  • Use Form 2848 or 8821 for authorizations.

Privacy and Paperwork Notices

Information is used for qualification determinations and may be disclosed to agencies for enforcement. Estimated completion time: About 97 hours total, including recordkeeping and preparation.

Recent Updates to IRS Instruction 5310

The instructions were revised in April 2025 to include more details on ESOPs and 403(b) plans. As of January 2026, no further developments have been announced. Rev. Proc. 2026-4 updates ruling procedures, including for Cycle 2 403(b) plans through December 31, 2026. Always visit IRS.gov/Form5310 for the latest.

Conclusion

Navigating IRS Instruction 5310 ensures your plan termination is compliant and efficient. By following these guidelines, you can secure a favorable determination letter and protect participant benefits. For personalized advice, consult a tax professional or visit the IRS website for forms and resources.

Frequently Asked Questions

  • What if my plan is underfunded? Attach Form 6088 and details; DB plans need AFTAP certifications.
  • Can I file paper forms? No, electronic only via Pay.gov since 2021.
  • How long does processing take? Varies; check IRS status tools.

Stay informed with official IRS updates to handle your terminating plan seamlessly.