Model Notice of Multiemployer Plan in Critical Status, 15688-15694 [E8-5855]

Download as PDF 15688 Federal Register / Vol. 73, No. 58 / Tuesday, March 25, 2008 / Proposed Rules rwilkins on PROD1PC63 with PROPOSALS Act states that ‘‘[t]o the extent the disclosure of returns or return information is required [for the whistleblower or his or her legal representative] to render such assistance, the disclosure must be pursuant to an IRS tax administration contract.’’ Joint Committee of Taxation, Technical Explanation of H.R. 6408, The ‘‘Tax Relief and Health Care Act of 2006,’’ as Introduced in the House on December 7, 2006, at 89 (JCX–50–06), December 7, 2006. The legislative history further states that ‘‘[i]t is expected that such disclosures will be infrequent and will be made only when the assigned task cannot be properly or timely completed without the return information to be disclosed.’’ Id. Under section 6103(a), returns and return information are confidential unless the Internal Revenue Code (Code) authorizes disclosure. Section 6103(n) is the authority by which returns and return information may be disclosed pursuant to a tax administration contract. Section 6103(n) authorizes, pursuant to regulations prescribed by the Secretary, returns and return information to be disclosed to any person, including any person described in section 7513(a), for purposes of tax administration, to the extent necessary in connection with: (1) The processing, storage, transmission, and reproduction of returns and return information; (2) the programming, maintenance, repair, testing, and procurement of equipment; and (3) the providing of other services. These proposed regulations describe the circumstances, pursuant to section 6103(n), by which officers and employees of the Treasury Department may disclose return information to whistleblowers and, if applicable, their legal representatives, in connection with written contracts for services relating to the detection of violations of the internal revenue laws or related statutes. The text of the temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains these proposed regulations. Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, these VerDate Aug<31>2005 17:21 Mar 24, 2008 Jkt 214001 regulations have been submitted to the Chief Counsel of the Small Business Administration for comment on its impact on small businesses. DEPARTMENT OF LABOR Comments and Request for a Public Hearing 29 CFR Part 2540 Before these proposed regulations are adopted as final regulations, consideration will be given to any electronic and written comments (a signed original and eight (8) copies) that are submitted timely to the IRS. The IRS and Treasury Department request comments on the clarity of the proposed rule and how it may be made easier to understand. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by a person that timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place of the hearing will be published in the Federal Register. RIN 1210–AB26 Drafting Information The principal author of these regulations is Helene R. Newsome, Office of the Associate Chief Counsel (Procedure & Administration). List of Subjects in 26 CFR Part 301 Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements. Proposed Amendments to the Regulations Accordingly, 26 CFR part 301 is proposed to be amended as follows: PART 301—PROCEDURE AND ADMINISTRATION Paragraph 1. The authority citation for part 301 is amended by adding an entry in numerical order to read as follows: Authority: 26 U.S.C. 7805 * * * Section 301.6103(n)–2 also issued under 26 U.S.C. 6103(n); * * * Par. 2. Section 301.6103(n)–2 is added to read as follows: § 301.6103(n)–2 Disclosure of return information in connection with written contracts among the IRS, whistleblowers, and legal representatives of whistleblowers. [The text of this proposed section is the same as the text of § 301.6103(n)–2T published elsewhere in this issue of the Federal Register.] Linda E. Stiff, Deputy Commissioner for Services and Enforcement. [FR Doc. E8–6040 Filed 3–24–08; 8:45 am] BILLING CODE 4830–01–P PO 00000 Frm 00011 Fmt 4702 Sfmt 4702 Employee Benefits Security Administration Model Notice of Multiemployer Plan in Critical Status Employee Benefits Security Administration, Labor. ACTION: Proposed rule. AGENCY: SUMMARY: The Pension Protection Act of 2006 amended the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code) to require that sponsors of multiemployer defined benefit pension plans that are in, or will be in, endangered or critical status for a plan year provide notice of this status to participants, beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation and the Department of Labor. This document contains a model notice that is intended to facilitate compliance with this notification requirement under ERISA and the Code. DATES: Written comments should be received by the Department of Labor on or before April 24, 2008. ADDRESSES: You may submit comments, identified by RIN 1210–AB26, by one of the following methods: • Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. • E-mail: e-ORI@dol.gov. Include ‘‘Notice of Critical Status: RIN 1210– AB26’’ in the subject line of the message. • Mail: Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N–5655, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210, Attention: Model Notice of Critical Status. Instructions: All submissions received must include the agency name and Regulatory Information Number (RIN) for this rulemaking. Comments received will be posted without change to http://www.regulations.gov and http:// www.dol.gov/ebsa, and available for public inspection at the Public Disclosure Room, N–1513, Employee Benefits Security Administration, 200 Constitution Avenue, NW., Washington, DC 20210, including any personal information provided. Persons submitting comments electronically are encouraged not to submit paper copies. FOR FURTHER INFORMATION CONTACT: Susan Elizabeth Rees, Office of E:\FR\FM\25MRP1.SGM 25MRP1 Federal Register / Vol. 73, No. 58 / Tuesday, March 25, 2008 / Proposed Rules Regulations and Interpretations, Employee Benefits Security Administration (EBSA), U.S. Department of Labor, (202) 693–8500. This is not a toll-free number. SUPPLEMENTARY INFORMATION: A. Background rwilkins on PROD1PC63 with PROPOSALS Section 202 of the Pension Protection Act of 2006, Public Law 109–280 (PPA), amended the Employee Retirement Income Security Act of 1974 (ERISA or Act) by adding section 305, and section 212 of the PPA amended the Internal Revenue Code (Code) by adding section 432, to provide additional rules for multiemployer defined benefit pension plans in endangered status or critical status. All references to section 305 of ERISA should be read to include section 432 of the Code. Pursuant to Reorganization Plan No. 4, the Department of the Treasury has interpretive authority over the minimum funding rules of Title I of ERISA, including section 305 of ERISA.1 In general, section 305(b)(3)(A) of ERISA provides that not later than the 90th day of each plan year, the actuary of a multiemployer defined benefit pension plan shall certify to the Secretary of the Treasury and to the plan sponsor 2—(i) whether or not the plan is in endangered status for such plan year and whether or not the plan is or will be in critical status for such plan year, and (ii) in the case of a plan which is in a funding improvement or rehabilitation period, whether or not the plan is making the scheduled progress in meeting the requirements of its funding improvement or rehabilitation plan. Section 305(b)(3)(D)(i) of ERISA provides that, in any case in which it is certified under section 305(b)(3)(A) that a multiemployer plan is or will be in endangered or critical status for a plan year, the plan sponsor shall, not later than 30 days after the date of the certification, provide notification of the endangered or critical status to participants and beneficiaries, the bargaining parties, the Pension Benefit Guaranty Corporation, and the Secretary of Labor. Section 305(b)(3)(D)(ii) of ERISA provides that if it is certified under section 305(b)(3)(A) that a 1 Reorganization Plan No. 4 of 1978, 43 FR 47713 (Oct. 17, 1978). 2 Section 3(16)(B)(ii) of ERISA defines the term ‘‘plan sponsor’’ to mean, in the case of a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan. VerDate Aug<31>2005 16:26 Mar 24, 2008 Jkt 214001 multiemployer plan is or will be in critical status, the plan sponsor shall include in the notice an explanation of the possibility that—(i) adjustable benefits (as defined in section 305(e)(8) of ERISA) may be reduced, and (ii) such reductions may apply to participants and beneficiaries whose benefit commencement date is on or after the date such notice is provided for the first plan year in which the plan is in critical status. Section 305(b)(3)(D)(iii) provides that the Secretary of Labor shall prescribe a model notice that a multiemployer plan may use to satisfy the requirements of section 305(b)(3)(D)(ii) of ERISA. The Department consulted with both the PBGC and the IRS in developing the model notice. Other provisions in section 305 define when a plan is in endangered or critical status and what corrective steps must be taken, by when, and by whom. These other provisions are beyond the scope of this notice. The Department of the Treasury and IRS have advised that they are developing guidance on these other provisions. Section 202(f)(1) of the PPA provides, generally, that the amendments made by this section shall apply with respect to plan years beginning after 2007, while section 202(f)(3) provides a special rule in the case of plans having certain restored benefits. Section 202(f)(2) of the PPA provides that in any case in which a plan’s actuary certifies that it is reasonably expected that a multiemployer plan will be in critical status under section 305(b)(3) of the ERISA, with respect to the first plan year beginning after 2007, the notice required under section 305(b)(3)(D) of ERISA may be provided at any time after the date of enactment, so long as it is provided on or before the last date for providing the notice under such subparagraph. B. Model Pursuant to section 305(b)(3)(D)(iii) of ERISA, the Department is publishing a model notice, entitled Notice of Critical Status, that a multiemployer plan may use to satisfy the content requirements of section 305(b)(3)(D) of ERISA.3 The IRS advises that it will consider the sponsor of a plan in critical status who uses the model notice to notify participants and others of the status of the plan to have satisfied its content obligations under 432(b)(3)(D) of the Code. While the model notice contained in this document specifically relates to 3 Plans may not use the model notice published herein to satisfy the notice requirement under section 305(e)(8)(C) of ERISA. PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 15689 plans in critical status, the Department believes that the model may be useful in preparing notices required to be furnished by plans in endangered status. To discharge the obligation to furnish a notice to the Department of Labor, plans may mail notices to U.S. Department of Labor, Employee Benefits Security Administration, Public Disclosure Room, N–1513, 200 Constitution Ave., NW., Washington, DC 20210. Alternatively, notices may be e-mailed to criticalstatusnotice@dol.gov. Critical Status notices received by the Department will be available for public inspection at the Public Disclosure Room, and accessible on EBSA’s Web site at: http://www.dol.gov/ebsa. To discharge the obligation to furnish a notice to the Pension Benefit Guaranty Corporation, plans may mail notices to Multiemployer Program Division, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Suite 930, Washington, DC 20005. Alternatively, notices may be e-mailed to multiemployerprogram@pbgc.gov. C. Effective Date This regulation will be effective 60 days after the date of publication of the final regulation in the Federal Register. However, because section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code are effective with respect to plan years beginning after 2007, the Department, as well as Treasury and IRS, will, for purposes of notices required to be furnished prior to the effective date of a final regulation, view utilization of the model notice contained in this document, if accurately completed and timely furnished, as satisfying the notice requirements of section 305(b)(3)(D) of ERISA and 432(b)(3)(D) of the Code. D. Regulatory Impact Analysis Summary The Notice of Critical Status (‘‘Model Notice’’) in paragraph (b) of the proposed regulation will help sponsors of plans in critical status who use the model notice to satisfy their obligations under section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code. While the Model Notice is not mandatory, the sponsor of a plan in critical status who uses the model notice to notify participants and others of the status of the plan will be considered to have satisfied its obligations under ERISA and the Code. The anticipated benefit of the Model Notice, therefore, is to help plan sponsors fulfill their disclosure responsibilities with greater certainty and less cost. E:\FR\FM\25MRP1.SGM 25MRP1 15690 Federal Register / Vol. 73, No. 58 / Tuesday, March 25, 2008 / Proposed Rules Executive Order 12866 Under Executive Order 12866 (58 FR 51735), the Department must determine whether a regulatory action is ‘‘significant’’ and therefore subject to review by the Office of Management and Budget (OMB). Section 3(f) of the Executive Order defines a ‘‘significant regulatory action’’ as an action that is likely to result in a rule (1) having an annual effect on the economy of $100 million or more, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as ‘‘economically significant’’); (2) creating serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the Executive Order. It has been determined that this action is not significant under section 3(f) of the Executive Order. rwilkins on PROD1PC63 with PROPOSALS Paperwork Reduction Act As part of its continuing effort to reduce paperwork and respondent burden, the Department conducts a preclearance consultation program to provide the general public and federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. The Department is not soliciting comments concerning an information collection request (ICR) pertaining to the Model Notice. As noted above, pursuant to Reorganization Plan No. 4, the Department of the Treasury has interpretive authority over the minimum funding rules of Title I of ERISA, including section 305 of ERISA, and it has advised that it is developing guidance under this provision. Costs and burdens associated with complying with the notice requirement in section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code, therefore, will be accounted for in an ICR associated with the Treasury guidance. To the VerDate Aug<31>2005 16:26 Mar 24, 2008 Jkt 214001 extent the Model Notice includes an ICR, persons are not required to respond to, and generally are not subject to any penalty for failing to comply with, the ICR unless the ICR has a valid OMB control number.4 Regulatory Flexibility Act The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes certain requirements with respect to Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551 et seq.) and which are likely to have a significant economic impact on a substantial number of small entities. Unless an agency certifies that a proposed rule is not likely to have a significant economic impact on a substantial number of small entities, section 603 of RFA requires that the agency present an initial regulatory flexibility analysis at the time of the publication of the notice of proposed rulemaking 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. The Department has deemed that an employee benefit plan shall be considered a small entity if it has fewer than 100 participants.5 By this standard, data from the EBSA Private Pension Bulletin 2004 (the latest available information) show that only 67 multiemployer pension plans or 4% of all multiemployer pension plans are small entities. The Department does not consider this to be a substantial number of small entities. Therefore, pursuant to section 605(b) of RFA, the Department hereby certifies that the proposed rule is not likely to have a significant economic impact on a substantial number of small entities. Further, to the Department’s knowledge, there are no federal regulations that might duplicate, overlap, or conflict with the proposed rule. Congressional Review Act The Model Notice being issued here is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.) and, if finalized, will be transmitted to Congress and the Comptroller General for review. 5 CFR 1320.1 through 1320.18. basis for this definition is found in section 104(a)(2) of the Act, which permits the Secretary of Labor to prescribe simplified annual reports for pension plans that cover fewer than 100 participants. Unfunded Mandates Reform Act For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4), as well as Executive Order 12875, the proposal does not include any Federal mandate that may result in expenditures by State, local, or tribal governments, and does not impose an annual burden exceeding $100 million on the private sector, adjusted for inflation. Federalism Statement Executive Order 13132 (August 4, 1999) outlines fundamental principles of federalism, and requires the adherence to specific criteria by Federal agencies in the process of their formulation and implementation of policies that have substantial direct effects on the States, the relationship between the national government and States, or on the distribution of power and responsibilities among the various levels of government. This proposed rule does not have federalism implications because it has no substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Section 514 of ERISA provides, with certain exceptions specifically enumerated, that the provisions of Titles I and IV of ERISA supersede any and all laws of the States as they relate to any employee benefit plan covered under ERISA. The proposed rule does not alter the fundamental reporting and disclosure requirements of the statute with respect to employee benefit plans, and as such have no implications for the States or the relationship or distribution of power between the national government and the States. List of Subjects in 29 CFR Part 2540 Employee benefit plans, Pension plans, Multiemployer plans. For the reasons set forth above, the Department proposes to amend Chapter XXV of Title 29 of the Code of Federal Regulations by adding Subchapter E to read as follows: Subchapter E—Funding PART 2540—MINIMUM FUNDING STANDARDS 4 See 5 The PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 Authority: 29 U.S.C. 1135 and Secretary of Labor’s Order No. 1–2003, 68 FR 5374 (Feb. 3, 2003). Section 2540.305–1 is also issued under 29 U.S.C. 1085(b)(3)(D)(iii). E:\FR\FM\25MRP1.SGM 25MRP1 Federal Register / Vol. 73, No. 58 / Tuesday, March 25, 2008 / Proposed Rules § 2540.305–1 Model Notice of Critical Status for Multiemployer Plans. rwilkins on PROD1PC63 with PROPOSALS (a) Pursuant to section 305(b)(3)(D)(iii) of the Employee Retirement Income Security Act of 1974 (ERISA or Act), paragraph (b) of this section provides a model notice that a VerDate Aug<31>2005 16:26 Mar 24, 2008 Jkt 214001 multiemployer plan may use to satisfy the content requirements under section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code. Use of the model notice is not mandatory. However, the plan sponsor of a plan in critical status who uses the model PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 15691 notice to notify participants and others of the status of the plan is considered to have satisfied its content obligations under section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code. (b) Model notice: BILLING CODE 4510–29–P E:\FR\FM\25MRP1.SGM 25MRP1 VerDate Aug<31>2005 Federal Register / Vol. 73, No. 58 / Tuesday, March 25, 2008 / Proposed Rules 16:26 Mar 24, 2008 Jkt 214001 PO 00000 Frm 00015 Fmt 4702 Sfmt 4725 E:\FR\FM\25MRP1.SGM 25MRP1 EP25MR08.009</GPH> rwilkins on PROD1PC63 with PROPOSALS 15692 VerDate Aug<31>2005 16:26 Mar 24, 2008 Jkt 214001 PO 00000 Frm 00016 Fmt 4702 Sfmt 4725 E:\FR\FM\25MRP1.SGM 25MRP1 15693 EP25MR08.010</GPH> rwilkins on PROD1PC63 with PROPOSALS Federal Register / Vol. 73, No. 58 / Tuesday, March 25, 2008 / Proposed Rules 15694 Federal Register / Vol. 73, No. 58 / Tuesday, March 25, 2008 / Proposed Rules BILLING CODE 4510–29–C DEPARTMENT OF AGRICULTURE Forest Service 36 CFR Parts 223, 228, 261, 292, and 293 RIN 0596–AB98 Locatable Minerals Operations Forest Service, USDA. Proposed rule; request for comments. AGENCY: ACTION: This proposed rule would revise the regulations for locatable minerals operations conducted on National Forest System lands. The revised rule would apply to prospecting, exploration, development, mining and processing operations, and reclamation under the Mining Law of May 10, 1872, as amended. The Forest Service invites written comments on this proposed rule. rwilkins on PROD1PC63 with PROPOSALS SUMMARY: VerDate Aug<31>2005 16:26 Mar 24, 2008 Jkt 214001 Comments must be received by May 27, 2008. Pursuant to the Paperwork Reduction Act, comments on the information collection burden that would result from this proposal must be received by May 27, 2008. DATES: Send written comments to Forest Service, USDA, Attn: Director, Minerals and Geology Management (MGM) Staff, (2810), Mail Stop 1126, Washington, DC 20250–1125; by electronic mail to 36cfr228a@fs.fed.us; by fax to (703) 605–1575; or by the electronic process available at Federal eRulemaking portal at http:// www.regulations.gov. If comments are sent by electronic mail or by fax, the public is requested not to send duplicate written comments via regular mail. Please confine written comments to issues pertinent to the proposed rule; explain the reasons for any recommended changes; and, where possible, reference the specific wording being addressed. All comments, including names and addresses when provided, will be placed in the record and will be available for public inspection and copying. The public may inspect comments received on the proposed rule in the Office of the Director, MGM Staff, 5th Floor, Rosslyn Plaza Central, 1601 North Kent Street, Arlington, Virginia, on business days between the hours of 8:30 a.m. and 4 ADDRESSES: PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 p.m. Those wishing to inspect comments are encouraged to call ahead at (703) 605–4646 to facilitate entry into the building. Comments concerning the information collection requirements contained in this action should reference OMB No. 0596–New, the docket number, date, and page number of this issue of the Federal Register. Comments should be sent to the address listed in the above paragraph. FOR FURTHER INFORMATION CONTACT: Mike Doran, Minerals and Geology Management Staff, (208) 373–4132. Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1–800–877–8339 between 8 a.m. and 8 p.m., Eastern Daylight Time, Monday through Friday. SUPPLEMENTARY INFORMATION: Background and Need for Proposed Rule Locatable mineral operations on National Forest System (NFS) lands have been regulated under the rules now at 36 CFR part 228, subpart A, since 1974. Under these rules, the Forest Service requires operators proposing to conduct such operations to file with the agency a notice of intent, or a plan of operation, or to amend a plan of operation, as appropriate, whenever the E:\FR\FM\25MRP1.SGM 25MRP1 EP25MR08.011</GPH> Signed at Washington, DC, this 18th day of March, 2008. Bradford P. Campbell, Assistant Secretary, Employee Benefits Security Administration, Department of Labor. [FR Doc. E8–5855 Filed 3–24–08; 8:45 am]

Agencies

[Federal Register Volume 73, Number 58 (Tuesday, March 25, 2008)]
[Proposed Rules]
[Pages 15688-15694]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5855]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2540

RIN 1210-AB26


Model Notice of Multiemployer Plan in Critical Status

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Proposed rule.

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SUMMARY: The Pension Protection Act of 2006 amended the Employee 
Retirement Income Security Act (ERISA) and the Internal Revenue Code 
(Code) to require that sponsors of multiemployer defined benefit 
pension plans that are in, or will be in, endangered or critical status 
for a plan year provide notice of this status to participants, 
beneficiaries, the bargaining parties, the Pension Benefit Guaranty 
Corporation and the Department of Labor. This document contains a model 
notice that is intended to facilitate compliance with this notification 
requirement under ERISA and the Code.

DATES: Written comments should be received by the Department of Labor 
on or before April 24, 2008.

ADDRESSES: You may submit comments, identified by RIN 1210-AB26, by one 
of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: e-ORI@dol.gov. Include ``Notice of Critical 
Status: RIN 1210-AB26'' in the subject line of the message.
     Mail: Office of Regulations and Interpretations, Employee 
Benefits Security Administration, Room N-5655, U.S. Department of 
Labor, 200 Constitution Avenue, NW., Washington, DC 20210, Attention: 
Model Notice of Critical Status.
    Instructions: All submissions received must include the agency name 
and Regulatory Information Number (RIN) for this rulemaking. Comments 
received will be posted without change to http://www.regulations.gov 
and http://www.dol.gov/ebsa, and available for public inspection at the 
Public Disclosure Room, N-1513, Employee Benefits Security 
Administration, 200 Constitution Avenue, NW., Washington, DC 20210, 
including any personal information provided. Persons submitting 
comments electronically are encouraged not to submit paper copies.

FOR FURTHER INFORMATION CONTACT: Susan Elizabeth Rees, Office of

[[Page 15689]]

Regulations and Interpretations, Employee Benefits Security 
Administration (EBSA), U.S. Department of Labor, (202) 693-8500. This 
is not a toll-free number.

SUPPLEMENTARY INFORMATION: 

A. Background

    Section 202 of the Pension Protection Act of 2006, Public Law 109-
280 (PPA), amended the Employee Retirement Income Security Act of 1974 
(ERISA or Act) by adding section 305, and section 212 of the PPA 
amended the Internal Revenue Code (Code) by adding section 432, to 
provide additional rules for multiemployer defined benefit pension 
plans in endangered status or critical status. All references to 
section 305 of ERISA should be read to include section 432 of the Code. 
Pursuant to Reorganization Plan No. 4, the Department of the Treasury 
has interpretive authority over the minimum funding rules of Title I of 
ERISA, including section 305 of ERISA.\1\
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    \1\ Reorganization Plan No. 4 of 1978, 43 FR 47713 (Oct. 17, 
1978).
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    In general, section 305(b)(3)(A) of ERISA provides that not later 
than the 90th day of each plan year, the actuary of a multiemployer 
defined benefit pension plan shall certify to the Secretary of the 
Treasury and to the plan sponsor \2\--(i) whether or not the plan is in 
endangered status for such plan year and whether or not the plan is or 
will be in critical status for such plan year, and (ii) in the case of 
a plan which is in a funding improvement or rehabilitation period, 
whether or not the plan is making the scheduled progress in meeting the 
requirements of its funding improvement or rehabilitation plan.
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    \2\ Section 3(16)(B)(ii) of ERISA defines the term ``plan 
sponsor'' to mean, in the case of a plan established or maintained 
by two or more employers or jointly by one or more employers and one 
or more employee organizations, the association, committee, joint 
board of trustees, or other similar group of representatives of the 
parties who establish or maintain the plan.
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    Section 305(b)(3)(D)(i) of ERISA provides that, in any case in 
which it is certified under section 305(b)(3)(A) that a multiemployer 
plan is or will be in endangered or critical status for a plan year, 
the plan sponsor shall, not later than 30 days after the date of the 
certification, provide notification of the endangered or critical 
status to participants and beneficiaries, the bargaining parties, the 
Pension Benefit Guaranty Corporation, and the Secretary of Labor.
    Section 305(b)(3)(D)(ii) of ERISA provides that if it is certified 
under section 305(b)(3)(A) that a multiemployer plan is or will be in 
critical status, the plan sponsor shall include in the notice an 
explanation of the possibility that--(i) adjustable benefits (as 
defined in section 305(e)(8) of ERISA) may be reduced, and (ii) such 
reductions may apply to participants and beneficiaries whose benefit 
commencement date is on or after the date such notice is provided for 
the first plan year in which the plan is in critical status.
    Section 305(b)(3)(D)(iii) provides that the Secretary of Labor 
shall prescribe a model notice that a multiemployer plan may use to 
satisfy the requirements of section 305(b)(3)(D)(ii) of ERISA. The 
Department consulted with both the PBGC and the IRS in developing the 
model notice.
    Other provisions in section 305 define when a plan is in endangered 
or critical status and what corrective steps must be taken, by when, 
and by whom. These other provisions are beyond the scope of this 
notice. The Department of the Treasury and IRS have advised that they 
are developing guidance on these other provisions.
    Section 202(f)(1) of the PPA provides, generally, that the 
amendments made by this section shall apply with respect to plan years 
beginning after 2007, while section 202(f)(3) provides a special rule 
in the case of plans having certain restored benefits.
    Section 202(f)(2) of the PPA provides that in any case in which a 
plan's actuary certifies that it is reasonably expected that a 
multiemployer plan will be in critical status under section 305(b)(3) 
of the ERISA, with respect to the first plan year beginning after 2007, 
the notice required under section 305(b)(3)(D) of ERISA may be provided 
at any time after the date of enactment, so long as it is provided on 
or before the last date for providing the notice under such 
subparagraph.

B. Model

    Pursuant to section 305(b)(3)(D)(iii) of ERISA, the Department is 
publishing a model notice, entitled Notice of Critical Status, that a 
multiemployer plan may use to satisfy the content requirements of 
section 305(b)(3)(D) of ERISA.\3\ The IRS advises that it will consider 
the sponsor of a plan in critical status who uses the model notice to 
notify participants and others of the status of the plan to have 
satisfied its content obligations under 432(b)(3)(D) of the Code. While 
the model notice contained in this document specifically relates to 
plans in critical status, the Department believes that the model may be 
useful in preparing notices required to be furnished by plans in 
endangered status.
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    \3\ Plans may not use the model notice published herein to 
satisfy the notice requirement under section 305(e)(8)(C) of ERISA.
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    To discharge the obligation to furnish a notice to the Department 
of Labor, plans may mail notices to U.S. Department of Labor, Employee 
Benefits Security Administration, Public Disclosure Room, N-1513, 200 
Constitution Ave., NW., Washington, DC 20210. Alternatively, notices 
may be e-mailed to criticalstatusnotice@dol.gov. Critical Status 
notices received by the Department will be available for public 
inspection at the Public Disclosure Room, and accessible on EBSA's Web 
site at: http://www.dol.gov/ebsa.
    To discharge the obligation to furnish a notice to the Pension 
Benefit Guaranty Corporation, plans may mail notices to Multiemployer 
Program Division, Pension Benefit Guaranty Corporation, 1200 K Street, 
NW., Suite 930, Washington, DC 20005. Alternatively, notices may be e-
mailed to multiemployerprogram@pbgc.gov.

C. Effective Date

    This regulation will be effective 60 days after the date of 
publication of the final regulation in the Federal Register. However, 
because section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the 
Code are effective with respect to plan years beginning after 2007, the 
Department, as well as Treasury and IRS, will, for purposes of notices 
required to be furnished prior to the effective date of a final 
regulation, view utilization of the model notice contained in this 
document, if accurately completed and timely furnished, as satisfying 
the notice requirements of section 305(b)(3)(D) of ERISA and 
432(b)(3)(D) of the Code.

D. Regulatory Impact Analysis

Summary

    The Notice of Critical Status (``Model Notice'') in paragraph (b) 
of the proposed regulation will help sponsors of plans in critical 
status who use the model notice to satisfy their obligations under 
section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code. 
While the Model Notice is not mandatory, the sponsor of a plan in 
critical status who uses the model notice to notify participants and 
others of the status of the plan will be considered to have satisfied 
its obligations under ERISA and the Code. The anticipated benefit of 
the Model Notice, therefore, is to help plan sponsors fulfill their 
disclosure responsibilities with greater certainty and less cost.

[[Page 15690]]

Executive Order 12866

    Under Executive Order 12866 (58 FR 51735), the Department must 
determine whether a regulatory action is ``significant'' and therefore 
subject to review by the Office of Management and Budget (OMB). Section 
3(f) of the Executive Order defines a ``significant regulatory action'' 
as an action that is likely to result in a rule (1) having an annual 
effect on the economy of $100 million or more, or adversely and 
materially affecting a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local or tribal governments or communities (also referred to as 
``economically significant''); (2) creating serious inconsistency or 
otherwise interfering with an action taken or planned by another 
agency; (3) materially altering the budgetary impacts of entitlement 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or (4) raising novel legal or policy issues arising 
out of legal mandates, the President's priorities, or the principles 
set forth in the Executive Order. It has been determined that this 
action is not significant under section 3(f) of the Executive Order.

Paperwork Reduction Act

    As part of its continuing effort to reduce paperwork and respondent 
burden, the Department conducts a preclearance consultation program to 
provide the general public and federal agencies with an opportunity to 
comment on proposed and continuing collections of information in 
accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 
3506(c)(2)(A)). This helps to ensure that requested data can be 
provided in the desired format, reporting burden (time and financial 
resources) is minimized, collection instruments are clearly understood, 
and the impact of collection requirements on respondents can be 
properly assessed.
    The Department is not soliciting comments concerning an information 
collection request (ICR) pertaining to the Model Notice. As noted 
above, pursuant to Reorganization Plan No. 4, the Department of the 
Treasury has interpretive authority over the minimum funding rules of 
Title I of ERISA, including section 305 of ERISA, and it has advised 
that it is developing guidance under this provision. Costs and burdens 
associated with complying with the notice requirement in section 
305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the Code, therefore, 
will be accounted for in an ICR associated with the Treasury guidance. 
To the extent the Model Notice includes an ICR, persons are not 
required to respond to, and generally are not subject to any penalty 
for failing to comply with, the ICR unless the ICR has a valid OMB 
control number.\4\
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    \4\ See 5 CFR 1320.1 through 1320.18.
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Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the 
Administrative Procedure Act (5 U.S.C. 551 et seq.) and which are 
likely to have a significant economic impact on a substantial number of 
small entities. Unless an agency certifies that a proposed rule is not 
likely to have a significant economic impact on a substantial number of 
small entities, section 603 of RFA requires that the agency present an 
initial regulatory flexibility analysis at the time of the publication 
of the notice of proposed rulemaking 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.
    The Department has deemed that an employee benefit plan shall be 
considered a small entity if it has fewer than 100 participants.\5\ By 
this standard, data from the EBSA Private Pension Bulletin 2004 (the 
latest available information) show that only 67 multiemployer pension 
plans or 4% of all multiemployer pension plans are small entities. The 
Department does not consider this to be a substantial number of small 
entities. Therefore, pursuant to section 605(b) of RFA, the Department 
hereby certifies that the proposed rule is not likely to have a 
significant economic impact on a substantial number of small entities. 
Further, to the Department's knowledge, there are no federal 
regulations that might duplicate, overlap, or conflict with the 
proposed rule.
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    \5\ The basis for this definition is found in section 104(a)(2) 
of the Act, which permits the Secretary of Labor to prescribe 
simplified annual reports for pension plans that cover fewer than 
100 participants.
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Congressional Review Act

    The Model Notice being issued here is subject to the Congressional 
Review Act provisions of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (5 U.S.C. 801 et seq.) and, if finalized, will be 
transmitted to Congress and the Comptroller General for review.

Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4), as well as Executive Order 12875, the proposal does not include 
any Federal mandate that may result in expenditures by State, local, or 
tribal governments, and does not impose an annual burden exceeding $100 
million on the private sector, adjusted for inflation.

Federalism Statement

    Executive Order 13132 (August 4, 1999) outlines fundamental 
principles of federalism, and requires the adherence to specific 
criteria by Federal agencies in the process of their formulation and 
implementation of policies that have substantial direct effects on the 
States, the relationship between the national government and States, or 
on the distribution of power and responsibilities among the various 
levels of government. This proposed rule does not have federalism 
implications because it has no substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Section 514 of ERISA provides, with certain 
exceptions specifically enumerated, that the provisions of Titles I and 
IV of ERISA supersede any and all laws of the States as they relate to 
any employee benefit plan covered under ERISA. The proposed rule does 
not alter the fundamental reporting and disclosure requirements of the 
statute with respect to employee benefit plans, and as such have no 
implications for the States or the relationship or distribution of 
power between the national government and the States.

List of Subjects in 29 CFR Part 2540

    Employee benefit plans, Pension plans, Multiemployer plans.

    For the reasons set forth above, the Department proposes to amend 
Chapter XXV of Title 29 of the Code of Federal Regulations by adding 
Subchapter E to read as follows:

Subchapter E--Funding

PART 2540--MINIMUM FUNDING STANDARDS

    Authority: 29 U.S.C. 1135 and Secretary of Labor's Order No. 1-
2003, 68 FR 5374 (Feb. 3, 2003). Section 2540.305-1 is also issued 
under 29 U.S.C. 1085(b)(3)(D)(iii).

[[Page 15691]]

Sec.  2540.305-1  Model Notice of Critical Status for Multiemployer 
Plans.

    (a) Pursuant to section 305(b)(3)(D)(iii) of the Employee 
Retirement Income Security Act of 1974 (ERISA or Act), paragraph (b) of 
this section provides a model notice that a multiemployer plan may use 
to satisfy the content requirements under section 305(b)(3)(D) of ERISA 
and section 432(b)(3)(D) of the Code. Use of the model notice is not 
mandatory. However, the plan sponsor of a plan in critical status who 
uses the model notice to notify participants and others of the status 
of the plan is considered to have satisfied its content obligations 
under section 305(b)(3)(D) of ERISA and section 432(b)(3)(D) of the 
Code.
    (b) Model notice:
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    Signed at Washington, DC, this 18th day of March, 2008.
Bradford P. Campbell,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. E8-5855 Filed 3-24-08; 8:45 am]
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