Form 6088 (Rev. 3-2008) Page 2
General Instructions
Section references are to the Internal Revenue Code unless otherwise
noted.
Purpose of form. The Internal Revenue Service (IRS) uses the
information on Form 6088 to analyze an application for a determination
letter on the qualification of the plan upon termination.
Who must file. A plan sponsor or administrator of a defined benefit or an
underfunded defined contribution plan that files an application for an IRS
determination letter regarding a plan termination must attach Form(s)
6088 to Form 5310, Application for Determination for Terminating Plans
or Form 5300, Application for Determination for Employee Benefit Plan,
whichever applies.
A plan sponsor or administrator of a collectively bargained
underfunded defined contribution plan must file Form 6088 only if the
plan benefits employees who are not collectively bargained employees or
more than 2% of the employees covered by the plan are professional
employees. See Regulations section 1.410(b)-6(d) and 1.410(b)-9 for
definitions of collectively bargained employee and professional employee.
If this form is required for a collectively bargained underfunded plan that
benefits noncollectively bargained employees, file a separate Form 6088
for each employer with noncollectively bargained employees benefiting
under the plan as if such noncollectively bargained employees were
benefiting under a separate plan. Do not file a Form 6088 for the portion
of an underfunded defined contribution plan benefiting collectively
bargained employees. If more than 2% of the employees covered by a
collectively bargained plan are professional employees, file as if all
employees covered by the plan were noncollectively bargained
employees.
File a separate Form 6088 for each employer participating in a multiple
employer defined benefit or underfunded defined contribution plan
described in section 413(c) (all employers in each affiliated service group,
controlled group of corporations, or group of trades or businesses under
common control are considered one employer).
Public inspection. Section 6104(a)(1)(B) provides generally that
applications, filed for the qualification of a pension, profit-sharing, or
stock bonus plan, will be open to public inspection. However, section
6104(a)(1)(C) provides that information concerning the compensation of
any participant will not be open to public inspection. Therefore, Form
6088 will not be made available to the public, plan participants, or other
employees of the employer who established the plan.
Definitions
Participant. For purposes of this form, participant means any individual who
satisfied the plan participation requirements and is entitled to receive plan
benefits upon termination of the plan. This includes employees with accrued
nonvested benefits and individuals who are former employees at the time of
plan termination who are entitled to future benefits under the plan.
Compensation. Compensation, for purposes of completing columns (a)
and (e), means section 415 compensation as defined in Regulations
section 1.415(c)-2.
Underfunded defined benefit plan. Generally, an underfunded defined
benefit plan is a defined benefit plan under which, at the time of plan
termination, the sum of the value of benefit liabilities for all participants
exceeds the value of plan assets available to pay those benefit liabilities.
Benefit liabilities include participants’ accrued benefits, qualified
preretirement survivor annuities, and any other plan benefits payable on
or after plan termination.
Underfunded defined contribution plan. Generally, an underfunded
defined contribution plan is a defined contribution plan in which the sum
of the account balances exceeds the plan’s assets available to provide
the benefits (for example, a money purchase plan terminates before a
funding waiver has been fully amortized).
Specific Instructions
Prepare the participant census as of the date of plan termination or
proposed date of plan termination.
For underfunded defined benefit plans (except those benefiting only
collectively bargained employees of which not more than 2% are
professional employees), provide the information in columns (a) through
(h) for all participants. If there are more than 25 participants, attach
additional sheets providing the information in the same format as
Form 6088.
For defined benefit plans other than those subject to the preceding
paragraph, complete all columns on Form 6088 except (g)(1), (g)(2), and
(g)(3). If there are fewer than 25 participants, list all of the participants.
Otherwise, submit only the first 25 who fall under the priorities specified
in the instructions for column (a).
For underfunded defined contribution plans, complete only columns
(a), (b), (e), (g)(1), (g)(3), and (h). Provide this information for all
participants. If there are more than 25 participants, attach additional
sheets providing the information in the same format as the Form 6088.
Column (a). First list any participant who at any time during the 5-year
period prior to the date of plan termination or proposed plan termination
owned directly or indirectly 5% or more of the voting stock or 5% or
more of the business. Next list the remaining participants in order of
current compensation (see Definitions above and the instructions for
column (e)) starting with the highest-paid participant followed by the next
highest-paid, and so on.
Column (b). Check column (b) to indicate that a participant is a highly
compensated employee under section 414(q). Enter “NA” if the
participant is not a highly compensated employee.
Column (c). (Defined benefit plans only.) List years of participation prior
to the earliest of plan termination, retirement, or separation from
employment. If the accrued benefit described in column (f) is based on
years of credited service that is different than years of participation,
attach a separate schedule to add this information for each participant.
Column (d). (Defined benefit plans only.) List the participant’s age as of
plan termination.
Column (e). For defined contribution plans. Enter the participant’s
compensation for the current 12-month period. The current 12-month
period can be the last calendar or plan year ending on or before plan
termination. For participants who are no longer employed as of the date
of plan termination, compensation is the compensation received for the
applicable period immediately before the earlier of retirement or
separation from employment. See Regulations section 1.415(c)-2(e)(3) for
additional rules.
For defined benefit plans. Enter the participant’s average compensation
for the high 3 years. Average compensation for the “high 3 years” means
the participant’s average compensation determined on an annual basis
for the period of consecutive calendar years (but not more than 3) during
which the participant had the greatest aggregate compensation from the
employer (or earned income if the participant is self-employed or an
owner-employee). For participants no longer employed as of the
proposed termination date, use compensation and years of participation
prior to the earliest of the proposed date of plan termination, retirement,
or separation from employment. If the accrued benefit described in
column (f) is based on compensation other than the “high 3 years,”
please attach a separate schedule to report those amounts for each
participant.
Column (f). (Defined benefit plans only.) List the accrued benefit, as of
the date of plan termination, of each participant (in the normal form
payable at normal retirement age under the plan) excluding any benefits
attributable to voluntary employee contributions (including rollovers). In
lieu of providing the information in the preceding sentence for
participants in pay status, the accrued benefit in the form being paid may
be entered with an asterick and the form of the payout described on an
attachment. If the accrued benefit is increased or decreased because of
top-heaviness, section 415 limitations or offsets, report this in an
attachment that includes a detailed calculation of the increased or
decreased benefit. However, do not adjust for an election of a majority
owner to forego receipt of a distribution under PBGC Regulations section
4041.21(b)(2).
Column (g). If the sum of the amounts in columns (g)(1), (g)(2), and (g)(3)
does not equal line 20(I) of Form 5310, attach an explanation of the
difference.
For defined contribution plans. Enter in column (g)(1) the total assets
distributable to each participant attributable to mandatory and voluntary
employee contributions and rollover contributions. Leave column (g)(2)
blank and enter in column (g)(3) the total assets distributable to each
participant attributable to employer contributions including elective
deferrals to a qualified cash or deferred arrangement (section 401(k) plan)
and employer matching contributions.
For underfunded defined benefit plans. Enter in column (g)(1) amounts
allocated in accordance with section 4044(a)(1) and (2) of the Employee
Retirement Income Security Act of 1974. In column (g)(2), enter amounts
allocated in accordance with section 4044(a)(3) and (4)(A). In column
(g)(3), enter all amounts allocated other than those entered in columns
(g)(1) and (g)(2).
Column (h). For defined benefit plans. Enter the present value of the
participant’s total benefit liabilities (determined as of the termination date, and
whether or not forfeitable) at the date of distribution of the plan assets. Use
the date of plan termination for plans to be trusteed by the PBGC. For this
purpose, present value is the single-sum distribution amount provided under
the terms of the plan. However, if the plan does not provide for a single-sum
distribution or the participant’s benefits are provided by an annuity contract,
present value is the cost (or estimated cost if actual cost is not available) of
the annuity. Attach a statement explaining how the present values were
determined (including the interest rate, lookback month, stability period, and
mortality table used). This statement also should indicate the specific interest
rates used to compute single-sum distributions. If the sum of the amounts in
column (h) does not equal line 20(I) of Form 5310, attach an explanation of the
difference.
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