Disclosure to Shareholders; Pension Benefit Disclosures, 68376-68377 [2014-27192]

Download as PDF 68376 Proposed Rules Federal Register Vol. 79, No. 221 Monday, November 17, 2014 This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. FARM CREDIT ADMINISTRATION 12 CFR Part 620 RIN 3052–AD02 Disclosure to Shareholders; Pension Benefit Disclosures Farm Credit Administration. Proposed rule. AGENCY: ACTION: The Farm Credit Administration (FCA, we or our) is proposing to amend our regulations related to Farm Credit System (System) bank and association disclosures to shareholders and investors. The proposed rule would exclude certain employees and their associated compensation amounts from the reporting requirement in our regulations. Under the proposed rule, there would be no reporting requirement for employees that are not senior officers and would not otherwise be considered ‘‘highly compensated employees’’ but for payments related to or change(s) in value of the employee’s qualified pension plan. Under the proposed rule, such employees’ pension plans must have been available to all similarly situated employees on the same basis. DATES: Submit comments on or before December 17, 2014. ADDRESSES: We offer a variety of methods for you to submit your comments. For accuracy and efficiency reasons, we encourage commenters to submit comments by email or through the FCA’s Web site. As facsimiles (fax) are difficult for us to process and achieve compliance with section 508 of the Rehabilitation Act, we no longer accept comments submitted by fax. Regardless of the method you use, please do not submit your comment multiple times via different methods. You may submit comments by any of the following methods: • Email: Send us an email at regcomm@fca.gov. • FCA Web site: https://www.fca.gov. Select ‘‘Public Commenters,’’ then mstockstill on DSK4VPTVN1PROD with PROPOSALS SUMMARY: VerDate Sep<11>2014 16:18 Nov 14, 2014 Jkt 235001 ‘‘Public Comments,’’ and follow the directions for ‘‘Submitting a Comment.’’ • Federal eRulemaking Portal: https:// www.regulations.gov. Follow the instructions for submitting comments. • Mail: Barry F. Mardock, Deputy Director, Office of Regulatory Policy, Farm Credit Administration, 1501 Farm Credit Drive, McLean, VA 22102–5090. You may review copies of all comments we receive at our office in McLean, Virginia, or from our Web site at https://www.fca.gov. Once you are on the Web site, select ‘‘Public Commenters,’’ then ‘‘Public Comments,’’ and follow the directions for ‘‘Reading Submitted Public Comments.’’ We will show your comments as submitted, including any supporting data you provide, but for technical reasons we may omit items such as logos and special characters. Identifying information that you provide, such as phone numbers and addresses, will be publicly available. However, we will attempt to remove email addresses to help reduce Internet spam. FOR FURTHER INFORMATION CONTACT: Michael T. Wilson, Policy Analyst, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102–5090, (703) 883–4124, TTY (703) 883–4056, Or Jeff Pienta, Senior Attorney, Office of General Counsel, Farm Credit Administration, McLean, VA 22102– 5090, (703) 883–4020, TTY (703) 883– 4056. SUPPLEMENTARY INFORMATION: I. Objective The objective of this proposed rule is to improve the quality of disclosure information shareholders receive that is related to senior officer and other highly compensated employee compensation. II. Background Congress explained in section 514 of the Farm Credit Banks and Associations Safety and Soundness Act of 1992 (1992 Act) 1 that disclosures of financial information and compensation paid to senior officers, among other disclosures, provide System shareholders with information necessary to better manage their institution and make informed decisions regarding the operation of their institution. In addition, the FCA 1 Public PO 00000 Law 102–552, 106 Stat. 4131 (1992). Frm 00001 Fmt 4702 Sfmt 4702 Board declared its commitment to support the cooperative business model and structure by encouraging memberborrowers to participate in the management, control, and ownership of their institutions.2 Providing memberborrowers with transparent and complete disclosures regarding the compensation of senior officers and certain other highly compensated employees is essential to fostering an environment wherein memberborrowers can do so effectively. With this as one of our objectives, we issued a final rule on October 3, 2012, that enhanced disclosure of compensation and other related topics. III. Analysis Section 620.6(c)(2) requires System banks and associations to disclose the number of senior officers and their compensation for the last 3 completed fiscal years. For the purposes of this reporting requirement only, existing § 620.6(c)(2)(i) essentially extends the regulatory definition of ‘‘senior officers’’ to include any employee whose compensation level was among the five highest paid during the reporting period. The intent of this extension was to ensure that System banks and associations provide shareholders with necessary compensation information on highly compensated employees, even though such employees did not necessarily fall within the regulatory definition of ‘‘senior officer’’ during the reporting period. On the other hand, the intent of this extension was not to have System banks and associations provide shareholders with compensation information regarding employees who would only reach the ‘‘highly compensated employee’’ threshold solely because of payments related to or change(s) in value of a qualified pension plan that was available to all employees on the same basis at the time they joined the plan. We believe that application of the existing rule could create such an unintended effect and reduce the effectiveness of the disclosure. For instance, the existing requirement could result in a mid-level employee being considered a top five highest paid employees and thus being considered a 2 See FCA Policy Statement ‘‘Cooperative Operating Philosophy—Serving the Members of Farm Credit System Institutions’’ (FCA–PS–80), dated October 14, 2010. E:\FR\FM\17NOP1.SGM 17NOP1 Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / Proposed Rules ‘‘highly compensated employee’’ solely because of a one-time or lump sum pension payment that occurred at the end of their career. Such a result would necessarily cause an otherwise highly compensated employee who is not a ‘‘senior officer’’ to fall out of the top five highest compensated employees for that reporting period, and thus, to not be included in the disclosure required under § 620.6(c)(2)(i). This proposed rule would improve the quality of the disclosure required under existing § 620.6(c)(2)(i) by eliminating the potential for unintended results such as the one outlined above. Therefore, we propose to amend § 620.6(c)(2)(i) to exclude any such employee from the Compensation Table if the employee would be considered highly compensated solely because of payments related to or change(s) in value of the employee’s qualified pension plan provided that the plan was available to all similarly situated employees on the same basis at the time the employee joined the plan. IV. Regulatory Flexibility Act Pursuant to section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), the FCA hereby certifies that the proposed rule would not have a significant economic impact on a substantial number of small entities. Each of the banks in the Farm Credit System, considered together with its affiliated associations, has assets and annual income in excess of the amounts that would qualify them as small entities. Therefore, Farm Credit System institutions are not ‘‘small entities’’ as defined in the Regulatory Flexibility Act. List of Subjects in 12 CFR Part 620 Accounting, Agriculture, Banks, banking, Reporting and recordkeeping requirements, Rural areas. For the reasons stated in the preamble, part 620 of chapter VI, title 12 of the Code of Federal Regulations is proposed to be amended as follows: PART 620—DISCLOSURE TO SHAREHOLDERS 1. The authority citation for part 620 continues to read as follows: mstockstill on DSK4VPTVN1PROD with PROPOSALS ■ Authority: Secs. 4.3, 4.3A, 4.19, 5.9, 5.19 of the Farm Credit Act (12 U.S.C. 2154, 2154a, 2207, 2243, 2252, 2254); sec. 424 of Pub. L. 100–233, 101 Stat. 1568, 1656, sec. 514 of Pub. L. 102–552, 106 Stat. 4102. 2. Section 620.6(c)(2)(i) is revised to read as follows: ■ VerDate Sep<11>2014 16:18 Nov 14, 2014 Jkt 235001 § 620.6 Disclosures in the annual report to shareholders relating to directors and senior officers. * * * * * (c) * * * (2) * * * (i) If applicable, when any employee who is not a senior officer has annual compensation at a level that is among the five highest paid by the institution during the reporting period, include the highly compensated employee(s) in the aggregate number and amount of compensation reported in the Compensation Table. However, exclude any such employee from the Compensation Table if the employee would be considered highly compensated solely because of payments related to or change(s) in value of the employee’s qualified pension plan provided that the plan was available to all similarly situated employees on the same basis at the time the employee joined the plan. * * * * * Dated: November 12, 2014. Dale L. Aultman, Secretary, Farm Credit Administration Board. [FR Doc. 2014–27192 Filed 11–14–14; 8:45 am] BILLING CODE 6705–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA–2014–0227; Directorate Identifier 2013–NM–211–AD] RIN 2120–AA64 Airworthiness Directives Lockheed Martin Corporation/Lockheed Martin Aeronautics Company Airplanes Federal Aviation Administration (FAA), DOT. ACTION: Supplemental notice of proposed rulemaking (NPRM); reopening of comment period. AGENCY: We are revising an earlier proposed airworthiness directive (AD) that proposed to supersede AD 95–26– 11, for all Lockheed Martin Corporation/ Lockheed Martin Aeronautics Company Model L–1011 series airplanes. AD 95– 26–11 currently requires repetitive inspections to detect cracking of the fittings that attach the aft pressure bulkhead to the fuselage stringers, repetitive inspections to detect cracking of the fittings and of the splice tab of the aft pressure bulkhead, and corrective actions if necessary. The NPRM proposed to reduce the compliance SUMMARY: PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 68377 time; add inspections for cracking of certain aft fuselage skin panels; add a structural modification; and also add a post-modification inspection program. The NPRM was prompted by a determination that the fittings at stringer attachments to the upper region of the aft pressure bulkhead are subject to widespread fatigue damage (WFD), which could result in cracking in the aft pressure bulkhead. This action revises the NPRM by reducing the poststructural modification repetitive inspection interval. We are proposing this supplemental NPRM (SNPRM) to prevent simultaneous failure of multiple stringer end fittings through fatigue cracking at the aft pressure bulkhead, which could lead to rapid decompression of the airplane. Since this action imposes an additional burden over that proposed in the NPRM, we are reopening the comment period to allow the public the chance to comment on these proposed changes. DATES: We must receive comments on this SNPRM by January 2, 2015. ADDRESSES: You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods: • Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments. • Fax: 202–493–2251. • Mail: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590. • Hand Delivery: U.S. Department of Transportation, Docket Operations, M– 30, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. For service information identified in this AD, contact Lockheed Martin Corporation/Lockheed Martin Aeronautics Company, L1011 Technical Support Center, Dept. 6A4M, Zone 0579, 86 South Cobb Drive, Marietta, GA 30063–0579; telephone 770–494– 5444; fax 770–494–5445; email L1011.support@lmco.com; Internet https://www.lockheedmartin.com/ams/ tools/TechPubs.html. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425–227– 1221. Examining the AD Docket You may examine the AD docket on the Internet at https:// E:\FR\FM\17NOP1.SGM 17NOP1

Agencies

[Federal Register Volume 79, Number 221 (Monday, November 17, 2014)]
[Proposed Rules]
[Pages 68376-68377]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27192]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 79, No. 221 / Monday, November 17, 2014 / 
Proposed Rules

[[Page 68376]]



FARM CREDIT ADMINISTRATION

12 CFR Part 620

RIN 3052-AD02


Disclosure to Shareholders; Pension Benefit Disclosures

AGENCY: Farm Credit Administration.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Farm Credit Administration (FCA, we or our) is proposing 
to amend our regulations related to Farm Credit System (System) bank 
and association disclosures to shareholders and investors. The proposed 
rule would exclude certain employees and their associated compensation 
amounts from the reporting requirement in our regulations. Under the 
proposed rule, there would be no reporting requirement for employees 
that are not senior officers and would not otherwise be considered 
``highly compensated employees'' but for payments related to or 
change(s) in value of the employee's qualified pension plan. Under the 
proposed rule, such employees' pension plans must have been available 
to all similarly situated employees on the same basis.

DATES: Submit comments on or before December 17, 2014.

ADDRESSES: We offer a variety of methods for you to submit your 
comments. For accuracy and efficiency reasons, we encourage commenters 
to submit comments by email or through the FCA's Web site. As 
facsimiles (fax) are difficult for us to process and achieve compliance 
with section 508 of the Rehabilitation Act, we no longer accept 
comments submitted by fax. Regardless of the method you use, please do 
not submit your comment multiple times via different methods. You may 
submit comments by any of the following methods:
     Email: Send us an email at reg-comm@fca.gov.
     FCA Web site: https://www.fca.gov. Select ``Public 
Commenters,'' then ``Public Comments,'' and follow the directions for 
``Submitting a Comment.''
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Barry F. Mardock, Deputy Director, Office of 
Regulatory Policy, Farm Credit Administration, 1501 Farm Credit Drive, 
McLean, VA 22102-5090.
    You may review copies of all comments we receive at our office in 
McLean, Virginia, or from our Web site at https://www.fca.gov. Once you 
are on the Web site, select ``Public Commenters,'' then ``Public 
Comments,'' and follow the directions for ``Reading Submitted Public 
Comments.'' We will show your comments as submitted, including any 
supporting data you provide, but for technical reasons we may omit 
items such as logos and special characters. Identifying information 
that you provide, such as phone numbers and addresses, will be publicly 
available. However, we will attempt to remove email addresses to help 
reduce Internet spam.

FOR FURTHER INFORMATION CONTACT:
Michael T. Wilson, Policy Analyst, Office of Regulatory Policy, Farm 
Credit Administration, McLean, VA 22102-5090, (703) 883-4124, TTY (703) 
883-4056, Or
Jeff Pienta, Senior Attorney, Office of General Counsel, Farm Credit 
Administration, McLean, VA 22102-5090, (703) 883-4020, TTY (703) 883-
4056.

SUPPLEMENTARY INFORMATION:

I. Objective

    The objective of this proposed rule is to improve the quality of 
disclosure information shareholders receive that is related to senior 
officer and other highly compensated employee compensation.

II. Background

    Congress explained in section 514 of the Farm Credit Banks and 
Associations Safety and Soundness Act of 1992 (1992 Act) \1\ that 
disclosures of financial information and compensation paid to senior 
officers, among other disclosures, provide System shareholders with 
information necessary to better manage their institution and make 
informed decisions regarding the operation of their institution. In 
addition, the FCA Board declared its commitment to support the 
cooperative business model and structure by encouraging member-
borrowers to participate in the management, control, and ownership of 
their institutions.\2\ Providing member-borrowers with transparent and 
complete disclosures regarding the compensation of senior officers and 
certain other highly compensated employees is essential to fostering an 
environment wherein member-borrowers can do so effectively.
---------------------------------------------------------------------------

    \1\ Public Law 102-552, 106 Stat. 4131 (1992).
    \2\ See FCA Policy Statement ``Cooperative Operating 
Philosophy--Serving the Members of Farm Credit System Institutions'' 
(FCA-PS-80), dated October 14, 2010.
---------------------------------------------------------------------------

    With this as one of our objectives, we issued a final rule on 
October 3, 2012, that enhanced disclosure of compensation and other 
related topics.

III. Analysis

    Section 620.6(c)(2) requires System banks and associations to 
disclose the number of senior officers and their compensation for the 
last 3 completed fiscal years. For the purposes of this reporting 
requirement only, existing Sec.  620.6(c)(2)(i) essentially extends the 
regulatory definition of ``senior officers'' to include any employee 
whose compensation level was among the five highest paid during the 
reporting period. The intent of this extension was to ensure that 
System banks and associations provide shareholders with necessary 
compensation information on highly compensated employees, even though 
such employees did not necessarily fall within the regulatory 
definition of ``senior officer'' during the reporting period.
    On the other hand, the intent of this extension was not to have 
System banks and associations provide shareholders with compensation 
information regarding employees who would only reach the ``highly 
compensated employee'' threshold solely because of payments related to 
or change(s) in value of a qualified pension plan that was available to 
all employees on the same basis at the time they joined the plan. We 
believe that application of the existing rule could create such an 
unintended effect and reduce the effectiveness of the disclosure. For 
instance, the existing requirement could result in a mid-level employee 
being considered a top five highest paid employees and thus being 
considered a

[[Page 68377]]

``highly compensated employee'' solely because of a one-time or lump 
sum pension payment that occurred at the end of their career. Such a 
result would necessarily cause an otherwise highly compensated employee 
who is not a ``senior officer'' to fall out of the top five highest 
compensated employees for that reporting period, and thus, to not be 
included in the disclosure required under Sec.  620.6(c)(2)(i).
    This proposed rule would improve the quality of the disclosure 
required under existing Sec.  620.6(c)(2)(i) by eliminating the 
potential for unintended results such as the one outlined above. 
Therefore, we propose to amend Sec.  620.6(c)(2)(i) to exclude any such 
employee from the Compensation Table if the employee would be 
considered highly compensated solely because of payments related to or 
change(s) in value of the employee's qualified pension plan provided 
that the plan was available to all similarly situated employees on the 
same basis at the time the employee joined the plan.

IV. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), the FCA hereby certifies that the proposed rule 
would not have a significant economic impact on a substantial number of 
small entities. Each of the banks in the Farm Credit System, considered 
together with its affiliated associations, has assets and annual income 
in excess of the amounts that would qualify them as small entities. 
Therefore, Farm Credit System institutions are not ``small entities'' 
as defined in the Regulatory Flexibility Act.

List of Subjects in 12 CFR Part 620

    Accounting, Agriculture, Banks, banking, Reporting and 
recordkeeping requirements, Rural areas.

    For the reasons stated in the preamble, part 620 of chapter VI, 
title 12 of the Code of Federal Regulations is proposed to be amended 
as follows:

PART 620--DISCLOSURE TO SHAREHOLDERS

0
1. The authority citation for part 620 continues to read as follows:

    Authority: Secs. 4.3, 4.3A, 4.19, 5.9, 5.19 of the Farm Credit 
Act (12 U.S.C. 2154, 2154a, 2207, 2243, 2252, 2254); sec. 424 of 
Pub. L. 100-233, 101 Stat. 1568, 1656, sec. 514 of Pub. L. 102-552, 
106 Stat. 4102.

0
2. Section 620.6(c)(2)(i) is revised to read as follows:


Sec.  620.6  Disclosures in the annual report to shareholders relating 
to directors and senior officers.

* * * * *
    (c) * * *
    (2) * * *
    (i) If applicable, when any employee who is not a senior officer 
has annual compensation at a level that is among the five highest paid 
by the institution during the reporting period, include the highly 
compensated employee(s) in the aggregate number and amount of 
compensation reported in the Compensation Table. However, exclude any 
such employee from the Compensation Table if the employee would be 
considered highly compensated solely because of payments related to or 
change(s) in value of the employee's qualified pension plan provided 
that the plan was available to all similarly situated employees on the 
same basis at the time the employee joined the plan.
* * * * *

    Dated: November 12, 2014.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2014-27192 Filed 11-14-14; 8:45 am]
BILLING CODE 6705-01-P
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