Separate Line of Business Rules
(for tax-qualified retirement plans)

The IRS has established a procedure under Code §414(r) that allows a company to file a Form 5310-A in order to notify the IRS that one or more separate lines of business (SLOBs) will be tested independently for minimum participation and coverage and nondiscrimination purposes because they --

  • have a valid business purpose;
  • have at least 50 employees within each line of business; and
  • either obtain an IRS determination recognizing QSLOB status or meet a safe harbor nondiscrimination requirement to the effect that the percentage of highly compensated employees is not less than one-half and not more than twice the percentage of highly compensated employees of all employees of the employer on a controlled group basis.

Controlling Law:  

  • Code §414(r)
  • Treas. Reg. 1.414(r)-1
  • Form 5310-A - Form 5310-A Instructions -- for making QSLOB elections for filing with the IRS.
  • Rev. Proc. 93-40 re notification requirements.
  • IRS Publication 6393 - for Cycle C (ending 1/31/14) re coverage and nondiscrimination.
  • "Good Cause" for Late 5310-A: see Private Letter Rulings 200232034, 200414049 and 201140030.
  • ERISA Controlled Group Home