- 2 -
|
Form 6088 (Rev. 3-2008) Page 2
Column (a). First list any participant who at any time during the 5-year
General Instructions period prior to the date of plan termination or proposed plan termination
Section references are to the Internal Revenue Code unless otherwise owned directly or indirectly 5% or more of the voting stock or 5% or
noted. more of the business. Next list the remaining participants in order of
Purpose of form. The Internal Revenue Service (IRS) uses the current compensation (see Definitions above and the instructions for
information on Form 6088 to analyze an application for a determination column (e)) starting with the highest-paid participant followed by the next
letter on the qualification of the plan upon termination. highest-paid, and so on.
Who must file. A plan sponsor or administrator of a defined benefit or an Column (b). Check column (b) to indicate that a participant is a highly
underfunded defined contribution plan that files an application for an IRS compensated employee under section 414(q). Enter “NA” if the
determination letter regarding a plan termination must attach Form(s) participant is not a highly compensated employee.
6088 to Form 5310, Application for Determination for Terminating Plans Column (c). (Defined benefit plans only.) List years of participation prior
or Form 5300, Application for Determination for Employee Benefit Plan, to the earliest of plan termination, retirement, or separation from
whichever applies. employment. If the accrued benefit described in column (f) is based on
A plan sponsor or administrator of a collectively bargained years of credited service that is different than years of participation,
underfunded defined contribution plan must file Form 6088 only if the attach a separate schedule to add this information for each participant.
plan benefits employees who are not collectively bargained employees or Column (d). (Defined benefit plans only.) List the participant’s age as of
more than 2% of the employees covered by the plan are professional plan termination.
employees. See Regulations section 1.410(b)-6(d) and 1.410(b)-9 for Column (e). For defined contribution plans. Enter the participant’s
definitions of collectively bargained employee and professional employee. compensation for the current 12-month period. The current 12-month
If this form is required for a collectively bargained underfunded plan that period can be the last calendar or plan year ending on or before plan
benefits noncollectively bargained employees, file a separate Form 6088 termination. For participants who are no longer employed as of the date
for each employer with noncollectively bargained employees benefiting of plan termination, compensation is the compensation received for the
under the plan as if such noncollectively bargained employees were applicable period immediately before the earlier of retirement or
benefiting under a separate plan. Do not file a Form 6088 for the portion separation from employment. See Regulations section 1.415(c)-2(e)(3) for
of an underfunded defined contribution plan benefiting collectively additional rules.
bargained employees. If more than 2% of the employees covered by a For defined benefit plans. Enter the participant’s average compensation
collectively bargained plan are professional employees, file as if all for the high 3 years. Average compensation for the “high 3 years” means
employees covered by the plan were noncollectively bargained the participant’s average compensation determined on an annual basis
employees. for the period of consecutive calendar years (but not more than 3) during
File a separate Form 6088 for each employer participating in a multiple which the participant had the greatest aggregate compensation from the
employer defined benefit or underfunded defined contribution plan employer (or earned income if the participant is self-employed or an
described in section 413(c) (all employers in each affiliated service group, owner-employee). For participants no longer employed as of the
controlled group of corporations, or group of trades or businesses under proposed termination date, use compensation and years of participation
common control are considered one employer). prior to the earliest of the proposed date of plan termination, retirement,
Public inspection. Section 6104(a)(1)(B) provides generally that or separation from employment. If the accrued benefit described in
applications, filed for the qualification of a pension, profit-sharing, or column (f) is based on compensation other than the “high 3 years,”
stock bonus plan, will be open to public inspection. However, section please attach a separate schedule to report those amounts for each
6104(a)(1)(C) provides that information concerning the compensation of participant.
any participant will not be open to public inspection. Therefore, Form Column (f). (Defined benefit plans only.) List the accrued benefit, as of
6088 will not be made available to the public, plan participants, or other the date of plan termination, of each participant (in the normal form
employees of the employer who established the plan. payable at normal retirement age under the plan) excluding any benefits
attributable to voluntary employee contributions (including rollovers). In
Definitions lieu of providing the information in the preceding sentence for
Participant. For purposes of this form, participant means any individual who participants in pay status, the accrued benefit in the form being paid may
satisfied the plan participation requirements and is entitled to receive plan be entered with an asterick and the form of the payout described on an
benefits upon termination of the plan. This includes employees with accrued attachment. If the accrued benefit is increased or decreased because of
nonvested benefits and individuals who are former employees at the time of top-heaviness, section 415 limitations or offsets, report this in an
plan termination who are entitled to future benefits under the plan. attachment that includes a detailed calculation of the increased or
Compensation. Compensation, for purposes of completing columns (a) decreased benefit. However, do not adjust for an election of a majority
and (e), means section 415 compensation as defined in Regulations owner to forego receipt of a distribution under PBGC Regulations section
section 1.415(c)-2. 4041.21(b)(2).
Underfunded defined benefit plan. Generally, an underfunded defined Column (g). If the sum of the amounts in columns (g)(1), (g)(2), and (g)(3)
benefit plan is a defined benefit plan under which, at the time of plan does not equal line 20(I) of Form 5310, attach an explanation of the
termination, the sum of the value of benefit liabilities for all participants difference.
exceeds the value of plan assets available to pay those benefit liabilities. For defined contribution plans. Enter in column (g)(1) the total assets
Benefit liabilities include participants’ accrued benefits, qualified distributable to each participant attributable to mandatory and voluntary
preretirement survivor annuities, and any other plan benefits payable on employee contributions and rollover contributions. Leave column (g)(2)
or after plan termination. blank and enter in column (g)(3) the total assets distributable to each
Underfunded defined contribution plan. Generally, an underfunded participant attributable to employer contributions including elective
defined contribution plan is a defined contribution plan in which the sum deferrals to a qualified cash or deferred arrangement (section 401(k) plan)
of the account balances exceeds the plan’s assets available to provide and employer matching contributions.
the benefits (for example, a money purchase plan terminates before a For underfunded defined benefit plans. Enter in column (g)(1) amounts
funding waiver has been fully amortized). 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
Specific Instructions
allocated in accordance with section 4044(a)(3) and (4)(A). In column
Prepare the participant census as of the date of plan termination or (g)(3), enter all amounts allocated other than those entered in columns
proposed date of plan termination. (g)(1) and (g)(2).
For underfunded defined benefit plans (except those benefiting only
collectively bargained employees of which not more than 2% are Column (h). For defined benefit plans. Enter the present value of the
professional employees), provide the information in columns (a) through participant’s total benefit liabilities (determined as of the termination date, and
(h) for all participants. If there are more than 25 participants, attach whether or not forfeitable) at the date of distribution of the plan assets. Use
additional sheets providing the information in the same format as the date of plan termination for plans to be trusteed by the PBGC. For this
Form 6088. purpose, present value is the single-sum distribution amount provided under
For defined benefit plans other than those subject to the preceding the terms of the plan. However, if the plan does not provide for a single-sum
paragraph, complete all columns on Form 6088 except (g)(1), (g)(2), and distribution or the participant’s benefits are provided by an annuity contract,
(g)(3). If there are fewer than 25 participants, list all of the participants. present value is the cost (or estimated cost if actual cost is not available) of
Otherwise, submit only the first 25 who fall under the priorities specified the annuity. Attach a statement explaining how the present values were
in the instructions for column (a). determined (including the interest rate, lookback month, stability period, and
For underfunded defined contribution plans, complete only columns mortality table used). This statement also should indicate the specific interest
(a), (b), (e), (g)(1), (g)(3), and (h). Provide this information for all Printed on recycledrates usedpaperto compute single-sum distributions. If the sum of the amounts in
participants.sheets providingIf theretheareinformationmore thanin25theparticipants,same formatattachas theadditionalForm 6088. column (h) does not equal line 20(I) of Form 5310, attach an explanation of the
difference.
|