QSLOB - coverage testing

[Guest ppapdx]

A plan sponsor must submit Form 5310-A to notifiy the IRS when electing QSLOB testing. They must also submit a 5310-A when they revoke such testing.

Does anyone know if filing 5310-A requires the plan sponsor to test on a QSLOB basis? For instance, if the plan sponor files a 5310-A for the 2012 plan/calendar year - but they test coverage and nondiscrimination on a total group basis, ignoring the QSLOB designation, is that okay?

Obviously, testing on a total group basis is allowable (as long as corrections are made timely). But if this was caught in an audit - would the employer be required to re-do their testing on a QSLOB basis due to the fact that they submitted at 5310-A?

From what I'm reading in 1.414®, it appears that filing a 5310-A requires that QSLOB testing be done, and testing on a total group basis would not be allowed.

Thoughts?

[DMcGovern]

The instructions for 5310-A state:

"Notice given by an employer applies to all plans maintained by the employer for plan years beginning in the testing year. Once the notification date for a testing year has passed, the employer is deemed to have irrevocably elected to apply the specified section(s) on the basis of QSLOBs for all plan years beginning in the testing year. In addition, after the notification date, notice cannot be modified, withdrawn, or revoked, and will be treated as applying to subsequent testing years unless the employer takes timely action to provide new notice."

My take on this is that you must test on a QSLOB basis once you file 5310-A, and until you timely file another 5310-A to revoke QSLOB status.

[Guest ppapdx]

Thanks. That is essentially what's outlined in 1.414®-4 as well.