80 FR 18172 - Multiemployer Plans; Electronic Filing Requirements

PENSION BENEFIT GUARANTY CORPORATION

Federal Register Volume 80, Issue 64 (April 3, 2015)

The Pension Benefit Guaranty Corporation (PBGC) is proposing to amend its regulations to require electronic filing of certain multiemployer notices. These changes would make the provision of information to PBGC more efficient and effective.

[Federal Register Volume 80, Number 64 (Friday, April 3, 2015)]
[Proposed Rules]
[Pages 18172-18175]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-07602]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4000, 4041A, and 4281

RIN 1212-AB28


Multiemployer Plans; Electronic Filing Requirements

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Proposed rule.

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SUMMARY: The Pension Benefit Guaranty Corporation (PBGC) is proposing 
to amend its regulations to require electronic filing of certain 
multiemployer notices. These changes would make the provision of 
information to PBGC more efficient and effective.

DATES: Comments must be submitted on or before June 2, 2015.

ADDRESSES: Comments, identified by Regulation Identifier Number (RIN) 
1212-AB28, may be submitted by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the Web site instructions for submitting comments.
     Email: [email protected].
     Fax: 202-326-4112.
     Mail or Hand Delivery: Regulatory Affairs Group, Office of 
the General Counsel, Pension Benefit Guaranty Corporation, 1200 K 
Street NW., Washington, DC 20005-4026.

All submissions must include the Regulation Identifier Number for this 
rulemaking (RIN 1212-AB28). Comments received, including personal 
information provided, will be posted to www.pbgc.gov. Copies of 
comments may also be obtained by writing to Disclosure Division, Office 
of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K 
Street NW., Washington DC 20005-4026, or calling 202-326-4040 during 
normal business hours. (TTY and TDD users may call the Federal relay 
service toll-free at 1-800-877-8339 and ask to be connected to 202-326-
4040.)

FOR FURTHER INFORMATION CONTACT: Catherine B. Klion 
([email protected]), Assistant General Counsel for Regulatory 
Affairs, or Donald McCabe ([email protected]), Attorney, Office of 
the General Counsel, Pension Benefit Guaranty Corporation, 1200 K 
Street NW., Washington, DC 20005-4026; 202-326-4024. (TTY/TDD users may 
call the Federal relay service toll-free at 1-800-877-8339 and ask to 
be connected to 202-326-4024.)

SUPPLEMENTARY INFORMATION:

Executive Summary

Purpose of the Regulatory Action

    This proposed rule is part of PBGC's ongoing implementation of the 
Government Paperwork Elimination Act and is consistent with the Office 
of Management and Budget's directive to remove regulatory impediments 
to electronic transactions. The proposal builds in flexibility to allow 
PBGC to update the electronic filing process as technology advances.
    PBGC's legal authority for this regulatory action comes from 
section 4002(b)(3) of the Employee Retirement Income Security Act of 
1974 (ERISA), which authorizes PBGC to issue regulations to carry out 
the purposes of title IV of ERISA; section 4041A(f)(2), which gives 
PBGC authority to prescribe reporting requirements for terminated 
plans; section 4245(e)(4), which authorizes PBGC to issue regulations 
on notices related to insolvency and resource benefit levels; and 
section 4281(d), which directs PBGC to prescribe by regulation the 
notice requirements to plan participants and beneficiaries in the event 
of a benefit suspension under an insolvent plan.
    This proposed rule does not involve any conforming amendments 
reflecting the Multiemployer Pension Reform Act of 2014 (MPRA).\1\ PBGC 
expects to address such changes in a future rulemaking.
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    \1\ Division O of the Consolidated and Further Continuing 
Appropriations Act, 2015, Public Law No. 113-235, enacted December 
16, 2014.
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Major Provisions of the Regulatory Action

    This proposed rule would require the following notices to be filed 
electronically with PBGC: notices of termination under part 4041A, 
notices of insolvency and of insolvency benefit level under parts 4245 
and 4281, and applications for financial assistance under part 4281.

Background

    The Pension Benefit Guaranty Corporation (PBGC) is a federal 
corporation created under the Employee Retirement Income Security Act 
of 1974 (ERISA) to guarantee the payment of pension benefits earned by 
more than 41 million American workers and retirees in nearly 24,000 
private-sector defined benefit pension plans. PBGC administers two 
insurance programs--one for single-employer defined benefit pension 
plans and a second for multiemployer defined benefit pension plans.
    The multiemployer program protects benefits of approximately 10 
million workers and retirees in approximately 1,400 plans. A 
multiemployer plan is a collectively bargained pension arrangement 
involving two or more unrelated employers, usually in a common industry 
such as construction or trucking, where workers move from employer to 
employer on a regular basis. Under PBGC's multiemployer program, when a 
plan becomes insolvent, PBGC provides financial assistance directly to 
the insolvent plan sufficient to pay guaranteed benefits to 
participants and beneficiaries, and the reasonable and necessary 
administrative expenses of the insolvent plan.

Multiemployer Plan Notices

    ERISA section 4041A provides for two types of multiemployer plan 
terminations: mass withdrawal and plan amendment. A mass withdrawal 
termination occurs when all employers withdraw or cease to be obligated 
to contribute to the plan. A plan amendment termination occurs when the 
plan adopts an amendment that provides that participants will receive 
no credit for service with any employer after a specified date, or an 
amendment that makes it no longer a covered plan. Unlike terminated 
single-employer plans, terminated multiemployer plans generally 
continue to pay all vested benefits out of existing plan assets and 
withdrawal liability payments. PBGC's regulation on Termination of 
Multiemployer Plans (29 CFR part 4041A) implements these provisions, 
among other things by requiring the plan sponsor of a terminated 
multiemployer plan to file with PBGC a notice of termination containing 
basic information necessary to alert PBGC to possible demands on the 
multiemployer insurance program.
    ERISA section 4245(e) requires two types of notice:
     Notice of insolvency, which states a plan sponsor's 
determination that the plan is or may become insolvent.

[[Page 18173]]

     Notice of insolvency benefit level, which states the level 
of benefits that will be paid during an insolvency year.

Section 4245(e)(4) provides that these notices are to be given in 
accordance with rules promulgated by PBGC. PBGC's regulation on Notice 
of Insolvency, 29 CFR part 4245, establishes the procedure for 
complying with these notice requirements. The regulation allows a 
single notice of insolvency to cover more than one plan year, thereby 
generally permitting plan sponsors to file only a single notice (a 
notice of insolvency benefit level) for any future year. The regulation 
also prescribes, among other things, the manner in which the notices 
must be given. The recipients of these notices include PBGC, in 
addition to other parties.
    PBGC's regulation on Duties of Plan Sponsor Following Mass 
Withdrawal (29 CFR part 4281) implements the requirements of ERISA 
section 4281. The regulation prescribes rules under which plan sponsors 
must:
     Provide notices to PBGC and to participants and 
beneficiaries that a plan is, or will be, insolvent (Sec. Sec.  4281.43 
and 4281.44).
     Provide notices of insolvency benefit level to PBGC and to 
participants and beneficiaries who are in pay status or may reasonably 
be expected to enter pay status during the year (Sec. Sec.  4281.45 and 
4281.46).
     Submit an application to PBGC for financial assistance if 
a plan is, or will be, unable to pay guaranteed benefits when due 
(Sec.  4281.47).

Mandatory Electronic Filing

    Section 4000.3 of PBGC's regulation on Filing, Issuance, 
Computation of Time, and Record Retention (29 CFR part 4000) already 
requires electronic filing of premium declarations under part 4007 
(Payment of Premiums) and information required under part 4010 (Annual 
Financial and Actuarial Information Reporting).

Proposed Regulatory Changes

    PBGC is proposing to require electronic filing of the following 
multiemployer plan filings:
     Notices of termination under part 4041A.
     Notices of insolvency and of insolvency benefit level 
under part 4245.
     Notices of insolvency and of insolvency benefit level 
under part 4281 (following mass withdrawal).
     Applications for financial assistance under part 4281 
(following mass withdrawal).

PBGC would grant case-by-case exemptions to the electronic filing 
requirement in appropriate circumstances for filers that demonstrate 
good cause for exemption. PBGC believes that requiring electronic 
filing for these notices would result in benefits for both the public 
and the government.
    Electronic filing would simplify the filing process for the public 
by building in all required and optional fields and including readily 
accessible guidance in the application. This is expected to reduce the 
need to contact PBGC for assistance. PBGC estimates that the amendments 
in the proposed rule would result in a total savings in administrative 
burdens for the public of 25 percent (about 22 hours and $99,000 
annually).
    Electronic filing would also result in greater efficiencies for the 
government. Currently, documents submitted by filers need to be 
manually uploaded to electronic depositories. With electronic filing, 
those documents would be automatically uploaded. Electronic filing 
would also save the government time by reducing the need to provide 
assistance to filers. It would also improve the government's 
recordkeeping, records retrieval, and records archiving process by 
eliminating the possibility of missing or lost paper files due to human 
error.
    Moreover, the PBGC expects electronic filing will improve the 
government's ability to protect potential personally identifiable 
information (PII), or otherwise sensitive information, since only pre-
approved personnel will have access to PBGC's electronic records 
systems, and limited access will be approved for officials of pension 
plans.
    PBGC is not proposing at this time to require electronic filing of 
notices of benefit reduction and of restoration of benefits under part 
4281. PBGC may in the future require that other multiemployer filings 
also be made electronically.

Applicability

    The amendments to all these regulations would be applicable for 
filings made on or after January 1, 2016.

Compliance With Rulemaking Requirements

Executive Order 12866 ``Regulatory Planning and Review'' and Executive 
Order 13563 ``Improving Regulation and Regulatory Review''

    PBGC has determined in consultation with the Office of Management 
and Budget that this rule is not a ``significant regulatory action'' 
under Executive Order 12866. Executive Orders 12866 and 13563 direct 
agencies to assess all costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, distributive impacts, 
and equity). Executive Order 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility.
    Under Section 3(f)(1) of Executive Order 12866, a regulatory action 
is economically significant if ``it is likely to result in a rule that 
may . . . [h]ave an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities.'' PBGC has determined that this proposed rule does not 
cross the $100 million threshold for economic significance and is not 
otherwise economically significant (see discussion above).

Regulatory Flexibility Act

    The Regulatory Flexibility Act imposes certain requirements with 
respect to rules that are subject to the notice and comment 
requirements of section 553(b) of the Administrative Procedure Act and 
that are likely to have a significant economic impact on a substantial 
number of small entities. Unless an agency determines that a proposed 
rule is not likely to have a significant economic impact on a 
substantial number of small entities, section 603 of the Regulatory 
Flexibility Act requires that the agency present an initial regulatory 
flexibility analysis at the time of the publication of the proposed 
rule describing the impact of the rule on small entities and seeking 
public comment on such impact. Small entities include small businesses, 
organizations and governmental jurisdictions.
    For purposes of the Regulatory Flexibility Act requirements with 
respect to this proposed rule, PBGC considers a small entity to be a 
plan with fewer than 100 participants. This is the same criterion PBGC 
uses in other aspects of its regulations involving small plans, and is 
consistent with certain requirements in Title I of ERISA and the 
Internal Revenue Code, as well as the definition of a small entity that 
the Department of Labor (DOL) has used for purposes of the Regulatory 
Flexibility Act.

[[Page 18174]]

    Thus, PBGC believes that assessing the impact of the proposal on 
small plans is an appropriate substitute for evaluating the effect on 
small entities. The definition of small entity considered appropriate 
for this purpose differs, however, from a definition of small business 
based on size standards promulgated by the Small Business 
Administration (13 Sec.  CFR 121.201) pursuant to the Small Business 
Act. PBGC therefore requests comments on the appropriateness of the 
size standard used in evaluating the impact on small entities of the 
proposed amendments to the reportable events regulation.
    On the basis of its proposed definition of small entity, PBGC 
certifies under section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.) that the amendments in this rule would not have a 
significant economic impact on a substantial number of small entities. 
Very few multiemployer plans are small.\2\ And, as discussed above, the 
amendments would not have a significant economic impact on entities of 
any size. Accordingly, as provided in section 605 of the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.), sections 603 and 604 would not 
apply. PBGC invites public comment on this burden estimate.
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    \2\ According to data from 2012 5500 filings, only 32 of 1,407 
active plans have fewer than 100 participants. Further, PBGC is not 
aware of a multiemployer plan that was established and covered by 
ERISA that was not initially a large plan. Generally it is only 
after a plan terminates and employers withdraw from the plan that a 
plan might reduce in size to fewer than 100 participants.
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Paperwork Reduction Act

    PBGC is submitting the information requirements under this proposed 
rule to the Office of Management and Budget (OMB) for review and 
approval under the Paperwork Reduction Act. An agency may not conduct 
or sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.
    The collection of information in Part 4041A is approved under 
control number 1212-0020 (expires June 30, 2017). PBGC estimates that 
there will be 10 respondents each year and that the total annual burden 
of the collection of information will be about 17 hours and $3,850.00 
(about 2 hours and $385 per respondent).
    The collection of information in Part 4245 is approved under 
control number 1212-0033 (expires June 30, 2017). PBGC estimates that 
there will be one respondent each year and that the total annual burden 
of the collection of information will be about $1,550.
    The collection of information in Part 4281 is approved under 
control number 1212-0032 (expires July 31, 2017). PBGC estimates that 
there will be 324 respondents each year and that the total annual 
burden of the collection of information will be about 61 hours and 
$309,000 (about $950 per respondent).
    Copies of PBGC's requests will be posted at http://www.pbgc.gov/res/laws-and-regulations/information-collections-under-omb-review.html 
and may also be obtained free of charge by contacting the Disclosure 
Division of the Office of the General Counsel of PBGC, 1200 K Street 
NW., Washington, DC 20005, 202-326-4040. PBGC is proposing to make 
changes for the following information collections: notices of 
termination; notices of insolvency; notices of insolvency benefit 
level; and applications for financial assistance.
    Comments on the paperwork provisions under this proposed rule 
should be sent to the Office of Information and Regulatory Affairs, 
Office of Management and Budget, Attention: Desk Officer for Pension 
Benefit Guaranty Corporation, via electronic mail at 
[email protected] or by fax to (202) 395-6974. Although comments 
may be submitted through June 2, 2015, the Office of Management and 
Budget requests that comments be received on or before May 4, 2015 to 
ensure their consideration. Comments may address (among other things)--
     Whether each proposed collection of information is needed 
for the proper performance of PBGC's functions and will have practical 
utility;
     The accuracy of PBGC's estimate of the burden of each 
proposed collection of information, including the validity of the 
methodology and assumptions used;
     Enhancement of the quality, utility, and clarity of the 
information to be collected; and
     Minimizing the burden of each collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.

List of Subjects

29 CFR Part 4000

    Pension insurance, Pensions, Reporting and recordkeeping 
requirements.

29 CFR Part 4041A

    Employee benefit plans, Pension insurance, Reporting and 
recordkeeping requirements.

29 CFR Part 4281

    Employee benefit plans, Pension insurance, Reporting and 
recordkeeping requirements.

    For the reasons given above, the PBGC is proposing to amend 29 CFR 
parts 4000, 4041A, and 4281 as follows.

PART 4000--FILING, ISSUANCE, COMPUTATION OF TIME, AND RECORD 
RETENTION

0
1. The authority citation for part 4000 continues to read as follows:

    Authority: 29 U.S.C. 1082(f), 1302(b)(3).

0
2. In Sec.  4000.3, add paragraph (b)(3) to read as follows:


Sec.  4000.3  What methods of filing may I use?

* * * * *
    (b) * * *
    (3) When making filings to PBGC under parts 4041A, 4245, and 4281 
of this chapter (except for notices of benefit reductions and notices 
of restoration of benefits under part 4281), you must submit the 
information required under these parts electronically in accordance 
with the instructions on the PBGC's Web site, except as otherwise 
provided by the PBGC.
* * * * *

PART 4041A--TERMINATION OF MULTIEMPLOYER PLANS

0
3. The authority citation for part 4041A continues to read as follows:

    Authority: 29 U.S.C. 1302(b)(3), 1341a, 1441.

0
4. In Sec.  4041A.11, add new paragraph (d) to read as follows:


Sec.  4041A.11  Requirement of notice.

    (d) How and where to file. Filings to PBGC under this subpart must 
be submitted in accordance with the rules in subpart A of part 4000 of 
this chapter. See Sec.  4000.4 of this chapter for information on where 
to file.


Sec.  4041A.25  [Amended]

0
5. In Sec.  4041A.25, amend paragraph (d) by removing the words ``of 
the PBGC'' and adding in their place ``to the PBGC''.

PART 4281--DUTIES OF PLAN SPONSOR FOLLOWING MASS WITHDRAWAL

0
6. The authority citation for part 4281 continues to read as follows:


[[Page 18175]]


     Authority: 29 U.S.C. 1302(b)(3), 1341a, 1399(c)(1)(D) and 1441.

0
7. In Sec.  4281.3, revise paragraph (b) to read as follows:


Sec.  4281.3  Filing and issuance rules.

* * * * *
    (b) Method of issuance. For rules on method of issuance to 
interested parties, see Sec.  4281.32(c) for notices of benefit 
reductions, Sec.  4281.43(e) for notices of insolvency, and Sec.  
4281.45(c) for notices of insolvency benefit level.
* * * * *
0
8. In Sec.  4281.43, revise paragraph (a) to read as follows:


Sec.  4281.43  Notices of insolvency.

    (a) Requirement of notices of insolvency. A plan sponsor that 
determines that the plan is, or is expected to be, insolvent for a plan 
year shall file with the PBGC and issue to plan participants and 
beneficiaries notices of insolvency. Once notices of insolvency have 
been filed with the PBGC and issued to plan participants and 
beneficiaries, no notice of insolvency needs to be issued for 
subsequent insolvency years. Notices shall be delivered in the manner 
and within the time prescribed in this section and shall contain the 
information described in Sec.  4281.44.
* * * * *
0
9. In Sec.  4281.47, revise paragraph (b) to read as follows:


Sec.  4281.47  Application for financial assistance.

* * * * *
    (b) When, how, and where to apply. When the plan sponsor determines 
a resource benefit level that is less than guaranteed benefits, it 
shall apply for financial assistance at the same time that it submits 
its notice of insolvency benefit level pursuant to Sec.  4281.45. When 
the plan sponsor determines an inability to pay guaranteed benefits for 
any month, it shall apply for financial assistance within 15 days after 
making that determination. Application to the PBGC for financial 
assistance shall be made in accordance with the rules in subpart A of 
part 4000 of this chapter. See Sec.  4000.4 of this chapter for 
information on where to apply.
* * * * *

    Issued in Washington, DC, this 30th day of March 2015.
Judith R. Starr,
General Counsel, Pension Benefit Guaranty Corporation.
[FR Doc. 2015-07602 Filed 4-2-15; 8:45 am]
 BILLING CODE 7709-02-P