Annual Financial and Actuarial Information Reporting; Changes to Waivers, 44312-44318 [2015-18177]
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Authority: 15 U.S.C. 1453, 1454, 1455; 21
U.S.C. 321, 331, 342, 343, 348, 371; 42 U.S.C.
243, 264, 271.
2. In § 101.9, revise paragraphs (c)(9),
(d)(9), and (j)(13)(ii)(C) to read as
follows:
■
§ 101.9
*
Nutrition labeling of food.
*
*
*
*
(c) * * *
(9) The following DRVs,
nomenclature, and units of measure are
established for the following food
components:
DRV
Food component
Unit of measurement
Fat .....................................................
Saturated fatty acids .........................
Cholesterol ........................................
Total carbohydrate ............................
Sodium ..............................................
Dietary fiber .......................................
Protein ...............................................
Added Sugars ...................................
Grams (g) .........................................
Grams (g) .........................................
Milligrams (mg) .................................
Grams (g) .........................................
Milligrams (mg) .................................
Grams (g) .........................................
Grams (g) .........................................
Grams (g) .........................................
1 Based
2 Based
Infants 7
through 12
months
1 65
30
N/A
N/A
95
N/A
N/A
N/A
N/A
1 20
300
1 300
2,300
1 28
1 50
1 50
Children 1
through 3
years
Pregnant and
lactating
women
2 39
1 65
2 10
1 20
300
2 150
1,500
2 14
2 13
2 25
300
1 300
2,300
1 28
N/A
1 50
on the reference caloric intake of 2,000 calories for adults and children aged 4 years and older, and for pregnant and lactating women.
on the reference caloric intake of 1,000 calories for children 1 through 3 years of age.
(d) * * *
(9) A footnote, preceded by an
asterisk, shall be placed beneath the list
of vitamins and minerals and shall be
separated from the list by a hairline,
except that the footnote may be omitted
from foods that can use the terms
‘‘calorie free,’’ ‘‘free of calories,’’
‘‘without calories,’’ ‘‘trivial source of
calories,’’ ‘‘negligible source of
calories,’’ or ‘‘dietary insignificant
source of calories’’ on the label or in the
labeling of foods as defined in
§ 101.60(b). The footnote shall state:
*The % Daily Value tells you how much
a nutrient in a serving of food
contributes to a daily diet. 2,000 calories
a day is used for general nutrition
advice.
*
*
*
*
*
(j) * * *
(13) * * *
(ii) * * *
(C) Omitting the footnote statement
required in paragraph (d)(9) of this
section and placing another asterisk at
the bottom of the label followed by the
statement ‘‘%DV=%Daily Value.’’
*
*
*
*
*
■ 3. In § 101.36, revise paragraph
(b)(2)(iii)(D) to read as follows:
*
*
*
*
*
(b) * * *
(2) * * *
(iii) * * *
(D) If the percent of Daily Value is
declared for total fat, saturated fat, total
carbohydrate, dietary fiber, protein, or
added sugars, a symbol shall follow the
value listed for those nutrients that
refers to the same symbol that is placed
at the bottom of the nutrition label,
below the bar required under paragraph
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(e)(6) of this section and inside the box,
that is followed by the statement
‘‘Percent Daily Values are based on a
2,000 calorie diet.’’ If the product is
represented or purported to be for use
by children 1 through 3 years of age,
and if the percent of Daily Value is
declared for total fat, total carbohydrate,
dietary fiber, protein, or added sugars, a
symbol shall follow the value listed for
those nutrients that refers to the same
symbol that is placed at the bottom of
the nutrition label, below the bar
required under paragraph (e)(6) of this
section and inside the box, that is
followed by the statement ‘‘Percent
Daily Values are based on a 1,000
calorie diet.’’
*
*
*
*
*
Dated: July 17, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015–17928 Filed 7–24–15; 8:45 am]
BILLING CODE 4164–01–P
PENSION BENEFIT GUARANTY
CORPORATION
29 CFR Part 4010
RIN 1212–AB30
§ 101.36 Nutrition labeling of dietary
supplements.
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Adults and
children
≥ 4 years
Annual Financial and Actuarial
Information Reporting; Changes to
Waivers
Pension Benefit Guaranty
Corporation.
ACTION: Proposed rule.
AGENCY:
The Pension Benefit Guaranty
Corporation (PBGC) is proposing to
amend its regulation on Annual
Financial and Actuarial Information
Reporting to codify provisions of the
SUMMARY:
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Moving Ahead for Progress in the 21st
Century Act and the Highway
Transportation and Funding Act of 2014
and related guidance that affect
reporting under ERISA section 4010. In
addition, PBGC is proposing to limit the
reporting waiver under the current
regulation tied to aggregate plan
underfunding of $15 million or less to
smaller plans and to add reporting
waivers for plans that must file solely
on the basis of either a statutory lien
resulting from missed contributions
over $1 million or outstanding
minimum funding waivers exceeding
the same amount (provided the missed
contributions or funding waivers were
previously reported to PBGC). The
proposed rule also makes some
technical changes.
DATES: Comments must be submitted on
or before September 25, 2015.
ADDRESSES: Comments may be
submitted by any of the following
methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the Web
site instructions for submitting
comments.
• Email: reg.comments@pbgc.gov.
• Fax: 202–326–4224.
• Mail or Hand Delivery: Office of the
General Counsel, Pension Benefit
Guaranty Corporation, 1200 K Street
NW., Washington, DC 20005–4026.
All submissions must include the
Regulatory Identification Number for
this rulemaking (RIN 1212–AB30).
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
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NW., Washington, DC 20005–4026, or
calling 202–326–4040 during normal
business hours. (TTY and TDD users
may call the Federal relay service tollfree at 1–800–877–8339 and ask to be
connected to 202–326–4040.)
FOR FURTHER INFORMATION CONTACT:
Catherine B. Klion (Klion.Catherine@
pbgc.gov), Assistant General Counsel for
Regulatory Affairs, Office of the General
Counsel; or Daniel S. Liebman
(Liebman.Daniel@pbgc.gov), 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 tollfree at 1–800–877–8339 and ask to be
connected to 202–326–4024.)
SUPPLEMENTARY INFORMATION:
Executive Summary—Purpose of the
Regulatory Action
This rulemaking is necessary to
implement statutory changes under the
Moving Ahead for Progress in the 21st
Century Act (MAP–21) and Highway
Transportation and Funding Act of 2014
(HATFA) affecting reporting under
PBGC’s regulation on Annual Financial
and Actuarial Information Reporting (29
CFR part 4010), to modify the
regulation’s waivers to better balance
the burden of reporting with PBGC’s
need for information, and to make
certain technical changes.
PBGC’s legal authority for this 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, and
section 4010 of ERISA.
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Executive Summary—Major Provisions
of the Regulatory Action
MAP–21 and HATFA Stabilized Interest
Rate Rules
MAP–21 provided rules that limited
the volatility of interest rates (which are
used for certain funding and benefit
restriction purposes) by constraining
them within a range, or ‘‘corridor,’’
around the 25-year average segment
rates. The rates inside the corridor are
referred to as ‘‘stabilized rates.’’ HATFA
extended the period during which the
narrowest range applies. MAP–21 and
HATFA included statutory provisions
regarding the application of the
stabilized rates to ERISA section 4010
reporting requirements. The proposed
rule codifies the statutory changes and
PBGC guidance on when stabilized rates
are and are not taken into account for
purposes of PBGC’s regulation on
Annual Financial and Actuarial
Information Reporting.
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Changes to $15 Million Aggregate
Underfunding Waiver
Section 4010.11(a) of the current
regulation provides a waiver from
reporting if the aggregate underfunding
of pension plans in a controlled group
does not exceed $15 million. PBGC’s
experience with this waiver, especially
after MAP–21 and HATFA, is that it
results in critical information not being
reported. As a result, PBGC’s ability to
timely intervene to protect potentially
troubled plans, participant benefits, and
the pension insurance system is
significantly undermined. To address
this issue, the proposed rule provides
that the waiver would be limited to
controlled groups with fewer than 500
participants.
§ 4010.4(a), reporting is required if any
of the following conditions exist:
New Waivers
As part of PBGC’s review of its
regulations under Executive Order
13563, PBGC determined that it could
reduce the burden of 4010 reporting and
avoid duplicative reporting by adding
two new waivers. The proposed rule
would waive reporting required solely
on the basis of either a statutory lien
resulting from missed contributions
over $1 million or outstanding
minimum funding waivers exceeding
the same amount, provided that the
missed contributions resulting in the
lien or minimum funding waivers were
reported to PBGC under its regulation
on Reportable Events and Certain Other
Notification Requirements (part 4043)
by the due date for the 4010 filing.
Part 4010 of PBGC’s regulations
specifies the identifying, financial, and
actuarial information that filers must
submit under ERISA section 4010.
PBGC reviews the information that is
filed and enters it into an electronic
database for more detailed analysis.
This analysis helps PBGC to anticipate
possible threats to the pension
insurance system and focus its resources
on situations that pose the greatest risks
to that system.
Filings under part 4010 play a major
role in PBGC’s ability to protect
participant and plan interests because
4010 information is typically more
current than other sources of
information available to PBGC.
Protection for participants may be lost if
a company completes a transaction that
creates possible significant risk to the
plan and participants before PBGC can
act. PBGC can use 4010 information to
quickly evaluate a fast-moving
transaction to protect participants.
When PBGC evaluates the risk of a
plan terminating underfunded, it needs
the plan’s termination liability. If PBGC
has a recent 4010 filing for the plan, it
has the plan’s termination liability
calculated directly using seriatim data
and certified by an enrolled actuary.
With reliable information readily
available, PBGC can conduct a timely
and accurate analysis. But if PBGC does
not have a 4010 filing for the plan,
PBGC must estimate the plan’s
termination liability based on outdated
Form 5500 Schedule SB data. This
analysis takes time and, because it is
based on estimates, may be less
accurate, which may negatively impact
asset recoveries and participant benefits
if the plan terminates underfunded.
Other Changes
The proposed rule also makes a few
technical changes to the regulation.
Background
PBGC administers the pension
insurance programs under Title IV of
ERISA. ERISA section 4010 requires the
reporting of actuarial and financial
information by controlled groups with
single-employer pension plans that have
significant funding problems. ERISA
section 4010 also requires PBGC to
provide an annual summary report to
Congress containing aggregate
information filed with PBGC under that
section.1
Current 4010 Regulation
PBGC’s regulation on Annual
Financial and Actuarial Information
Reporting (29 CFR part 4010)
implements ERISA section 4010. Under
1 See ERSIA section 4010(e). The report is
submitted to the Committee on Health, Education,
Labor, and Pensions and the Committee on Finance
of the Senate and the Committee on Education and
the Workforce and the Committee on Ways and
Means of the House of Representatives.
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1. The funding target attainment
percentage (FTAP) 2 at the end of the
preceding plan year of a plan maintained by
the contributing sponsor or any member of its
controlled group is less than 80 percent (80percent Gateway Test).
2. The conditions specified in ERISA
section 303(k) and section 430(k) of the
Internal Revenue Code (Code) for imposing a
lien for missed contributions exceeding $1
million have been met with respect to any
plan maintained by any member of the
controlled group.
3. The Internal Revenue Service (IRS) has
granted one or more minimum funding
waivers totaling in excess of $1 million to
any plan maintained by any member of the
controlled group, and any portion of the
waiver(s) is still outstanding.
2 The FTAP is a measure of how well the plan is
funded. In general, a plan’s FTAP is the ratio
(expressed as a percentage) of the value of plan
assets to the plan’s funding target. See ERISA
section 303(d)(2).
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PBGC also uses information from
4010 filings to value its contingent
liabilities, as reported in its annual
financial statements. Under ERISA
section 4010(e), PBGC submits an
annual report to Congress summarizing
the data received in 4010 filings.
Under § 4010.11(a) of the current
regulation, reporting is waived if the
aggregate underfunding of all plans
(4010 funding shortfall) maintained by
the filer’s controlled group does not
exceed $15 million (referred to in this
preamble as the ‘‘$15 million aggregate
underfunding waiver’’). PBGC added
this waiver to the regulation in March
2009 when PBGC amended the
regulation to implement changes under
the Pension Protection Act of 2006.3
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MAP–21 and HATFA
MAP–21 (enacted July 6, 2012)
provided relief from the minimum
funding requirements that apply to plan
sponsors of single-employer defined
benefit plans. This was accomplished by
establishing rules that limit the
volatility of certain interest rates used
for funding purposes by constraining
them within a corridor. MAP–21 also
contained provisions on the application
of those rules to ERISA section 4010
reporting requirements. Section
40211(b)(3)(D) of MAP–21 amended
ERISA section 4010 by adding
paragraph (d)(3), which provides that
the stabilized interest rates do not apply
for purposes of determining the funding
target or the FTAP required to be
reported under ERISA section 4010(d).
However, they apply for all other 4010
requirements involving minimum
funding-related determinations,
including those requirements created
solely by regulation.
MAP–21 provided that the stabilized
interest rate corridor would begin
phasing-out in 2013. HATFA (enacted
August 8, 2014) delayed the start of that
phase-out until 2018, thereby extending
the period for which the stabilized
interest rate rules are most likely to
impact 4010 filings.
IRS issued Notice 2012–61 providing
guidance on pension funding
stabilization under MAP–21.4
PBGC issued two Technical Updates
providing guidance on applying the
statutory provisions of MAP–21 and
HATFA to 4010 reporting.5 PBGC
3 74 FR 11022 (Mar. 16, 2009), https://
www.gpo.gov/fdsys/pkg/FR-2009-03-16/pdf/E95741.pdf., (2009 rule).
4 https://www.pbgc.gov/Documents/n-12-61.pdf.
5 Technical Update 12–2: Effect of MAP–21 on
4010 Reporting (Sept. 11, 2012), https://
www.pbgc.gov/prac/other-guidance/tu/tu12-2.html;
Technical Update 14–2: Effect of HATFA on 4010
Reporting (Oct. 17, 2014), https://www.pbgc.gov/
prac/other-guidance/tu/tu14-2.html.
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wanted to provide guidance to the
pension community more quickly than
could be done through rulemaking.
PBGC is now codifying the statutory
changes and guidance in the 4010
regulation, after giving the public an
opportunity to comment.
Regulatory Review
On January 18, 2011, the President
issued Executive Order 13563,
‘‘Improving Regulation and Regulatory
Review,’’ to ensure that Federal
regulations seek more affordable, less
intrusive means to achieve policy goals,
and that agencies give careful
consideration to the benefits and costs
of those regulations. In response to the
Executive Order, PBGC on August 23,
2011, promulgated its Plan for
Regulatory Review,6 noting several
regulatory areas—including 29 CFR part
4010—for review to see how PBGC can
reduce burden while preserving its
ability to receive critical information.
The plan identified expansion of
waivers from 4010 reporting as an area
to explore.
is determined without regard to the
stabilized interest rate rules.
To reduce the administrative burden
of determining whether a 4010 filing is
required, Technical Update 12–2 waives
reporting if the FTAP of each plan
maintained by the filer’s controlled
group, determined without regard to the
MAP–21 stabilized interest rate rules,
would be at least 80 percent if the value
of plan assets used for minimum
funding purposes were substituted for
the value described in IRS Notice 2012–
61, Q&A NA–3. The proposed rule
would codify this waiver. (See
Technical Update 12–2 for more
explanation.)
ERISA section 4010(b)(1) provides
that 4010 reporting is required if any
plan sponsored by a member of the
controlled group has an FTAP, ‘‘as
determined as defined in subsection
(d),’’ below 80 percent. Because section
4010(d), as amended by MAP–21,
requires that the FTAP be determined
without regard to the MAP–21 stabilized
interest rate rules, the FTAP used for the
80-percent Gateway Test is also
determined without regard to such
rules.7
To codify the statutory change and the
guidance in Technical Updates 12–2
and 14–2, PBGC is proposing to revise
the definition of ‘‘funding target
attainment percentage’’ in § 4010.2 to
provide that it is determined without
regard to the stabilized interest rate
rules and rename it the ‘‘4010 funding
target attainment percentage.’’ The
proposed rule includes conforming
changes in §§ 4010.4(a)(1), 4010.4(b),
and 4010.8(a)(6). In addition, the
proposed rule would revise
§ 4010.8(a)(5) to clarify that the plan’s
funding target as of the valuation date
(required to be reported in a 4010 filing)
Changes to $15 Million Aggregate
Underfunding Waiver
As mentioned above, PBGC added the
$15 million aggregate underfunding
waiver to the 4010 regulation in 2009.
In the preamble to the 2009 final rule,
PBGC cited the Technical Explanation
of the Pension Protection Act of 2006
prepared by the Staff of the Joint
Committee on Taxation as support for
the waiver. The Technical Explanation
stated: ‘‘It is intended that the PBGC
may waive the requirement [for
reporting under ERISA section 4010
based upon the 80-percent Gateway
Test] in appropriate circumstances, such
as in the case of small plans.’’ 8
PBGC set the waiver threshold at $15
million in aggregate underfunding based
on its experience that underfunding
below that amount presented a level of
risk and exposure to PBGC that was
sufficiently low to warrant the waiver of
reporting based solely on the 80-percent
Gateway Test. The preamble to the 2009
final regulation stated that ‘‘the waiver
will generally exempt controlled groups
maintaining only small plans from
section 4010 reporting.’’
Because of the impact of MAP–21 and
HATFA, PBGC believes that further
refinement of the $15 million aggregate
underfunding waiver is necessary. Many
sponsors that would not have qualified
for the waiver if not for MAP–21 and
HATFA are waived from reporting
because, using stabilized rates,
underfunding falls below $15 million.
As a result, PBGC is not receiving
valuable information from
approximately 200 controlled groups for
which 4010 reporting was required
before MAP–21 and HATFA (i.e., after
MAP–21 and HATFA, reporting was not
required solely because the use of
6 See https://www.pbgc.gov/documents/plan-forregulatory-review.pdf.
7 Thus, the FTAP used for purposes of the 80percent Gateway Test might not be the same as the
FTAP reported on line 14 of the 2014 Schedule SB
of Form 5500.
8 See Joint Committee on Taxation, Technical
Explanation of H.R. 4, the ‘‘Pension Protection Act
of 2006,’’ as passed by the House on July 26, 2006,
and as considered by the Senate on August 3, 2006
(JCX–38–06), August 3, 2006 on page 115. https://
www.jct.gov/x-38-06.pdf.
Proposed Regulatory Changes
MAP–21 and HATFA Stabilized Interest
Rate Rules
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stabilized rates resulted in aggregate
underfunding being less than $15
million).9 To put that number in
context, PBGC received only 313 filings
for 2013. PBGC’s ability to protect plans
can be reduced significantly if it does
not have 4010 information to use to
analyze transactions, evaluate
termination risks, and measure its
contingent liabilities for its financial
statements.
The vast majority of plans for which
4010 reporting would be required if not
for MAP–21 and HATFA cover more
than 1,000 participants and have very
large unfunded benefit liabilities
measured on a termination basis. Thus,
the current regulation does not allow
PBGC to access important available
information on plans that present
substantial risk and exposure to the
pension insurance system. Further,
because PBGC is required to submit an
annual report to Congress summarizing
the data received in 4010 filings,
Congress is not receiving information it
would otherwise receive solely because
plans that were never intended to
qualify for the regulatory waiver are, in
fact, qualifying as a result of MAP–21
and HATFA.
Because Congress provided that
stabilized rates are disregarded for
purposes of determining whether a 4010
filing is required, PBGC believes it is
appropriate to modify the $15 million
aggregate underfunding waiver to fix
this anomalous and unintended result.
PBGC considered modifying the waiver
to require that the 4010 funding
shortfall be determined using nonstabilized rates, but concluded that
doing so would be overly complicated
and administratively burdensome. In
order to preserve simplicity, better align
the waiver with the plans it was
originally intended to cover, and
eliminate any need to do an additional
calculation solely to determine if the
waiver applies, PBGC is proposing to
leave the determination of the 4010
funding shortfall unchanged and instead
limit the availability of the $15 million
aggregate underfunding waiver to
controlled groups where the aggregate
number of participants in all defined
9 PBGC is aware of these 200 controlled groups
because PBGC’s regulation requires an explanation
be provided where a filing is required one year, but
not the next. These 200 controlled groups indicated
on their 4010 filings that they had a plan below 80percent funded, but the aggregate underfunding was
below $15 million. PBGC believes the total number
of reports it is not receiving solely due to the
stabilized rates applicable to the $15 million
aggregate underfunding waiver test is much greater
than 200. Besides the 200 prior filers, PBGC is
aware of other controlled groups that did not have
to file in the past, but would be required to file now
if not for the fact that the waiver is based on
stabilized rates.
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benefit plans maintained by the
controlled group is fewer than 500. For
purposes of the waiver, the number of
participants in any plan could be
determined either as of the end of the
plan year ending within the information
year or as of the valuation date for that
plan year.
Basing the participant count threshold
on fewer than 500 participants would
provide PBGC with 4010 information on
nearly all of the approximately 200
controlled groups for which reporting
would have been required if not for
MAP–21 and HATFA. In addition, the
threshold would be similar to an
exemption under § 4010.8(c) for plans
with fewer than 500 participants from
providing § 4010.11 actuarial
information in a 4010 report. PBGC
specifically requests public comment on
whether using a different participant
count threshold or tying the $15 million
aggregate underfunding waiver directly
to non-stabilized rates would be more
appropriate.
New Waivers
In response to several public
comments and as part of its
implementation of its Plan for
Regulatory Review, PBGC has reviewed
part 4010 to see how it could reduce
burden while preserving its ability to
receive critical information. As part of
this process, PBGC considered waiving
reporting for plans that must file 4010
information solely on the basis of either
a statutory lien resulting from missed
required contributions of over $1
million or outstanding minimum
funding waivers exceeding the same
amount.
In 2012 and 2013, less than five
percent of 4010 filers were required to
report based on these two filing tests; in
2013, there were 15 such filers. PBGC
can look to reportable events filings 10 to
obtain information similar to that
reported in 4010 filings required solely
because of these reporting triggers.
Waiving reporting based on these two
tests would reduce the compliance and
cost burden on filers. A filer waived
from 4010 reporting might save between
six and 24 hours annually by not having
to provide identifying and financial
information and approximately $17,000
in actuarial costs (depending in part on
whether it was a first-time filing). Based
on 2013 data, the aggregate actuarial
cost savings for all filers could be over
$310,000.
Therefore, to reduce the burden of
duplicative reporting, the proposed rule
10 PBGC receives reports for missed funding
contributions under §§ 4043.25 and 4043.81 (Form
200) and applications for minimum funding
waivers under § 4043.33.
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adds waivers from reporting for persons
that must file a 4010 report solely on the
basis of either a reporting trigger under
§ 4010.4(a)(2) for a statutory lien
resulting from missed required
contributions of over $1 million or
under § 4010.4(a)(3) for outstanding
minimum funding waivers exceeding
the same amount, provided that the
missed contributions or minimum
funding waivers were reported under
part 4043 by the due date for the 4010
filing.
Other Changes
The proposed rule revises § 4010.11 to
conform to the new waivers discussed
above, remove a paragraph on transition
rules that are no longer necessary, and
reorganize the paragraphs under the
section.
The proposed rule deletes transition
rules in current §§ 4010.4(b)(3) and (4)
and 4010.8(h) that are no longer
necessary and updates provisions
regarding special funding rules.
Finally, the proposed rule makes two
corrections to the regulation.
First, the proposed rule amends
§ 4010.8(b)(1) to correct a cross
reference from § 4010.11(b) to
§ 4010.10(b).
Second, the proposed rule amends
§ 4010.8(d)(2) to provide that the formof-payment assumption used when
determining benefit liabilities for
purposes of 4010 reporting is the
assumption prescribed in § 4044.51 of
PBGC’s regulation on Allocation of
Assets in Single-Employer Plans (part
4044). This change would conform the
regulation to the statutory requirement.
As a result of a drafting error in the 2009
4010 final rule, the current regulation
provides that, for purposes of
determining a plan’s benefit liabilities,
the form-of-payment assumption must
be the same as what is used to
determine the minimum required
contribution. Although this assumption
has a relatively minor impact on the
overall calculation, PBGC was
concerned about the programming
changes that would need to be made to
valuation software to effectuate this
unintended assumption change and
therefore issued guidance that the
actuary may use either the form-ofpayment assumption prescribed in
§ 4044.51 or the form-of-payment
assumption used to determine the
minimum required contribution for the
plan year ending within the filer’s
information year.11 PBGC specifically
11 Technical Update 09–2: ERISA section 4010
reporting; Alternative form-of-payment assumption
for determining benefit liabilities (Mar. 25, 2009),
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Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Proposed Rules
requests comments on whether
eliminating the option of using the latter
form-of-payment assumption (i.e.,
requiring that the § 4044.51 assumption
be used) would necessitate significant
programming changes or result in
additional burden or cost.
Applicability
The proposed rule would be
applicable to information years
beginning after December 31, 2015.
mstockstill on DSK4VPTVN1PROD with PROPOSALS
Compliance With Rulemaking
Guidelines
Executive Orders 12866 ‘‘Regulatory
Planning and Review’’ and 13563
‘‘Improving Regulation and Regulatory
Review’’
PBGC has determined, in consultation
with the Office of Management and
Budget (OMB), that this rulemaking 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. Executive
Orders 12866 and 13563 require a
comprehensive regulatory impact
analysis be performed for any
economically significant regulatory
action, defined as an action that would
result in an annual effect of $100
million or more on the national
economy or which would have other
substantial impacts.
Pursuant to section 1(b)(1) of E.O.
12866 (as amended by Executive Order
13422), PBGC has determined that
regulatory action is required in this area.
Principally, this regulatory action is
necessary to codify changes made to
4010 reporting by MAP–21 and HATFA
and related guidance. In addition, this
proposed rule is necessary to modify
waivers from 4010 reporting to better
balance the burden of reporting with
PBGC’s need for the information and to
target those plans with the highest risk
and exposure to PBGC and the pension
insurance system. Finally, the proposed
rule is needed to correct errors in the
current regulation. In accordance with
OMB Circular A–4, PBGC also has
examined the economic and policy
https://www.pbgc.gov/prac/other-guidance/tu/tu092.html.
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implications of this proposed rule and
has concluded that the action’s benefits
justify its costs.
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. The annual effect of the
regulation with the proposed rule
changes would far be less than $100
million. See discussion under
Paperwork Reduction Act.
This proposed rule is associated with
retrospective review and analysis in
PBGC’s Plan for Regulatory Review
issued in accordance with Executive
Order 13563.
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 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 the proposed amendments to
the Annual Financial and Actuarial
Information Reporting regulation, PBGC
considers a small entity to be a plan
with fewer than 100 participants. This
is substantially the same criterion PBGC
uses in other regulations 12 and is
consistent with certain requirements in
12 See e.g., special rules for small plans under part
4007 (Payment of Premiums).
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Frm 00016
Fmt 4702
Sfmt 4702
Title I of ERISA 13 and the Code,14 as
well as the definition of a small entity
that the Department of Labor (DOL) has
used for purposes of the Regulatory
Flexibility Act.15
Further, while some large employers
may have small plans, in general most
small plans are maintained by small
employers. Thus, PBGC believes that
assessing the impact of the proposed
rule 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 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 part 4010.
PBGC certifies under section 605(b) of
the Regulatory Flexibility Act that the
amendments in this proposed rule
would not have a significant economic
impact on a substantial number of small
entities. The proposed amendments
would limit application of a reporting
waiver to larger plans and provide two
new reporting waivers to plans of all
sizes. Accordingly, as provided in
section 605 of the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.), sections 603
and 604 do not apply.
Paperwork Reduction Act
PBGC is submitting the information
requirements under part 4010 to OMB
for review and approval under the
Paperwork Reduction Act. The
information requirements under part
4010 have been approved by the OMB
under the Paperwork Reduction Act
(OMB control number 1212–0049,
expires July 31, 2015). Copies of PBGC’s
request may 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 estimates that once the final
rule takes effect it will receive 4010
filings from about 450 contributing
sponsors or controlled group members
annually and that the total annual
burden of the collection of information
13 See, e.g., ERISA section 104(a)(2), which
permits the Secretary of Labor to prescribe
simplified annual reports for pension plans that
cover fewer than 100 participants.
14 See, e.g., Code section 430(g)(2)(B), which
permits plans with 100 or fewer participants to use
valuation dates other than the first day of the plan
year.
15 See, e.g., DOL’s final rule on Prohibited
Transaction Exemption Procedures, 76 FR 66637,
66644 (Oct. 27, 2011).
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Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Proposed Rules
will be about 3,900 hours and
$7,632,000.
Comments on the paperwork
provisions under this proposed rule
should be mailed 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 OIRA_DOCKET@
omb.eop.gov or by fax to (202) 395–
6974. Although comments may be
submitted through September 25, 2015,
the Office of Management and Budget
requests that comments be received on
or before August 26, 2015 to ensure
their consideration. Comments may
address (among other things)—
• Whether the 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 the 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 the
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 in 29 CFR Part 4010
Pension insurance, Pensions,
Reporting and recordkeeping
requirements.
For the reasons given above, PBGC
proposes to amend 29 CFR part 4010 as
follows:
PART 4010—ANNUAL FINANCIAL AND
ACTUARIAL INFORMATION
REPORTING
1. The authority citation for part 4010
continues to read as follows:
■
Authority: 29 U.S.C. 1302(b)(3), 1310.
2. Section 4010.2 is amended by
removing the definition for ‘‘Funding
target attainment percentage’’ and
adding a definition for ‘‘4010 funding
target attainment percentage’’ in
alphanumeric order to read as follows:
mstockstill on DSK4VPTVN1PROD with PROPOSALS
■
§ 4010.2
Definitions.
*
*
*
*
*
4010 funding target attainment
percentage means, with respect to a
plan for a plan year, the percentage as
determined under § 4010.4(b) for the
plan year.
*
*
*
*
*
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16:26 Jul 24, 2015
Jkt 235001
3. In § 4010.4:
a. Paragraph (a) introductory text is
amended by removing the words ‘‘A
contributing sponsor’’ and adding in
their place the words ‘‘Subject to the
waivers in § 4010.11, a contributing
sponsor’’.
■ b. Paragraph (a)(1) is amended by
adding ‘‘4010’’ before the phrase
‘‘funding target attainment percentage’’.
■ c. Paragraph (d) is removed, and
paragraphs (e) and (f) are redesignated
as paragraphs (d) and (e), respectively.
■ d. Paragraph (b) and newly
redesignated paragraph (e) are revised to
read as follows:
■
■
§ 4010.4
Filers.
*
*
*
*
*
(b) 4010 funding target attainment
percentage—(1) General. The 4010
funding target attainment percentage for
a plan for a plan year equals the funding
target attainment percentage as provided
under ERISA section 303(d)(2) and Code
section 430(d)(2) determined as of the
valuation date for the plan year without
regard to the segment rate stabilized
interest provisions of ERISA section
303(h)(2)(iv) and Code section
430(h)(2)(iv).
(2) Prefunding balance and funding
standard carryover balance elections.
For purposes of determining the 4010
funding target attainment percentage for
a plan for the plan year, prefunding
balances and funding standard
carryover balances must reflect any
elections (or deemed elections) under
ERISA section 303(f) and Code section
430(f) that affect the value of such
balances as of the beginning of the plan
year, regardless of when the elections
(or deemed elections) are made.
*
*
*
*
*
(e) Certain plans to which special
funding rules apply. Except for purposes
of determining the information to be
submitted under § 4010.8(h) (in
connection with the actuarial valuation
report), the following statutory
provisions are disregarded for purposes
of this part:
(1) Section of 402(b) of the Pension
Protection Act of 2006, Public Law 109–
280, dealing with certain frozen plans of
commercial passenger airlines and
airline caterers.
(2) Section 104 of the Pension
Protection Act of 2006 as amended by
the Preservation of Access to Care for
Medicare Beneficiaries and Pension
Relief Act of 2010, Public Law 111–192,
dealing with eligible charity plans and
plans of certain rural cooperatives.
(3) The Cooperative and Small
Employer Charity Pension Flexibility
Act, Public Law 113–97, dealing with
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Frm 00017
Fmt 4702
Sfmt 4702
44317
certain defined benefit pension plans
maintained by more than one employer.
■ 4. In § 4010.8:
■ a. Paragraph (a)(6) is amended by
adding ‘‘4010’’ before ‘‘funding target
attainment percentage.’’
■ b. Paragraph (b)(1) is amended by
removing the reference ‘‘§ 4010.11(b)’’
and adding in its place the reference
‘‘§ 4010.10(b)’’.
■ c. Paragraph (c)(1)(i) is amended by
removing the reference ‘‘§ 4010.11(c)’’
and adding in its place the reference
‘‘§ 4010.11(b)’’.
■ d. Paragraph (d)(2)(i) is amended by
adding the words ‘‘form of payment,’’
after ‘‘Interest,’’.
■ e. Paragraph (d)(2)(ii) is amended by
removing the words ‘‘form of payment’’.
■ f. Paragraph (h) is removed and
paragraph (i) is redesignated as
paragraph (h).
■ g. Paragraph (a)(5) and newly
redesignated paragraph (h) are revised
to read as follows:
§ 4010.8
Plan actuarial information.
(a) * * *
(5) The funding target (as of the
valuation date) for the plan year ending
within the information year determined
in accordance with ERISA section 303(i)
and Code section 430(i)—
(i) Without regard to the segment rate
stabilized interest provisions of ERISA
section 303(h)(2)(iv) and Code section
430(h)(2)(iv); and
(ii) As if the plan has been in at-risk
status for a consecutive period of at least
five plan years;
*
*
*
*
*
(h) Plans subject to special funding
rules. Instead of the requirements of
paragraph (a)(11) of this section:
(1) In the case of a plan year for which
a plan is subject to section 402(b) of the
Pension Protection Act of 2006, Public
Law 109–280, dealing with certain
frozen plans of commercial passenger
airlines and airline caterers, the plan
must meet the requirements in
connection with the actuarial valuation
report in accordance with instructions
on PBGC’s Web site, https://
www.pbgc.gov.
(2) In the case of a plan year for which
the application of new funding rules is
deferred for a plan under section 104 of
the Pension Protection Act of 2006,
Public Law 109–280, as amended by the
Preservation of Access to Care for
Medicare Beneficiaries and Pension
Relief Act of 2010, Public Law 111–192,
dealing with eligible charity plans and
plans of certain rural cooperatives, the
plan must meet the requirements in
paragraph (a)(5) of this section (in
connection with the actuarial valuation
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Federal Register / Vol. 80, No. 143 / Monday, July 27, 2015 / Proposed Rules
report) in effect as of December 31,
2007.
(3) In the case of a plan year for which
a plan is subject to the Cooperative and
Small Employer Charity Pension
Flexibility Act, Public Law 113–97,
dealing with certain defined benefit
pension plans maintained by more than
one employer, the plan must meet the
requirements in connection with the
actuarial valuation report in accordance
with instructions on PBGC’s Web site,
https://www.pbgc.gov.
■ 5. Section 4010.11 is revised to read
as follows:
mstockstill on DSK4VPTVN1PROD with PROPOSALS
§ 4010.11
Waivers and extensions.
(a) Plan funding/participant count
waiver. Unless reporting is required by
§ 4010.4(a)(2) or (3), reporting is waived
for a person (that would be a filer if not
for the waiver) for an information year
if, for the plan year ending within the
information year—
(1) The aggregate 4010 funding
shortfall for all plans (including any
exempt plans) maintained by the
person’s controlled group (disregarding
those plans with no 4010 funding
shortfall) does not exceed $15 million;
and
(2) The aggregate number of
participants in all plans (including any
exempt plans) maintained by the
person’s controlled group is fewer than
500. For this purpose, the number of
participants in any plan may be
determined either as of the end of the
plan year ending within the information
year or as of the valuation date for that
plan year.
(b) 4010 funding shortfall for waivers
and exemptions—(1) General. A plan’s
4010 funding shortfall for a plan year
equals the funding shortfall as provided
under ERISA section 303(c)(4) and Code
section 430(c)(4) determined as of the
valuation date for the plan year, except
that the value of plan assets is
determined without regard to the
reduction under ERISA section
303(f)(4)(B) and Code section
430(f)(4)(B) (dealing with reduction of
assets by the amount of prefunding and
funding standard carryover balances).
(2) Multiple employer plans. For
purposes of § 4010.8(c) and paragraph
(a) of this section, the entire 4010
funding shortfall of any multiple
employer plan of which the filer or any
member of the filer’s controlled group is
a contributing sponsor is included.
(c) Alternative 4010 FTAP. Unless
reporting is required by § 4010.4(a)(2) or
(3), reporting is waived for a person for
an information year if the 4010 funding
target attainment percentage of each
plan maintained by the person’s
controlled group would be at least 80
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16:26 Jul 24, 2015
Jkt 235001
percent if the value of plan assets used
for minimum funding purposes were
substituted for the asset value
determined without regard to the
segment rate stabilized interest
provisions of ERISA section
303(h)(2)(iv) for purposes of
determining such percentage.
(d) Missed contributions resulting in a
lien or outstanding minimum funding
waivers. Reporting is waived for a
person (that would be a filer if not for
the waiver) for an information year if,
for the plan year ending within the
information year, reporting would have
been required solely under
§ 4010.4(a)(2) or (3), provided that the
missed contributions or minimum
funding waivers (as applicable) were
reported to PBGC under part 4043 of
this chapter by the due date for the 4010
filing.
(e) Other waiver authority. PBGC may
waive the requirement to submit
information with respect to one or more
filers or plans or may extend the
applicable due date or dates specified in
§ 4010.10. PBGC will exercise this
discretion in appropriate cases where it
finds convincing evidence supporting a
waiver or extension; any waiver or
extension may be subject to conditions.
A request for a waiver or extension must
be filed in writing with PBGC at the
address provided in § 4010.10(c) no
later than 15 days before the applicable
due date specified in § 4010.10, and
must state the facts and circumstances
on which the request is based.
Issued in Washington, DC, this 17th day of
July, 2015.
Alice C. Maroni,
Acting Director, Pension Benefit Guaranty
Corporation.
[FR Doc. 2015–18177 Filed 7–24–15; 8:45 am]
BILLING CODE 7709–02–P
DEPARTMENT OF VETERANS
AFFAIRS
38 CFR Part 17
RIN 2900–AP34
Payment of Emergency Medication by
VA
Department of Veterans Affairs.
Proposed rule.
AGENCY:
ACTION:
The Department of Veterans
Affairs (VA) proposes to amend its
medical regulations that govern
reimbursement of emergency treatment
provided by non-VA medical care
providers. VA proposes to clarify its
regulations insofar as it involves the
reimbursement of medications
SUMMARY:
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Frm 00018
Fmt 4702
Sfmt 4702
prescribed or provided to the veteran
during the episode of non-VA
emergency treatment.
DATES: Comments must be received by
VA on or before September 25, 2015.
ADDRESSES: Written comments may be
submitted through https://
www.Regulations.gov; by mail or handdelivery to: Director, Regulation Policy
and Management (02REG), Department
of Veterans Affairs, 810 Vermont Ave.
NW., Room 1068, Washington, DC
20420; or by fax to (202) 273–9026.
(This is not a toll-free telephone
number.) Comments should indicate
that they are submitted in response to
‘‘RIN 2900–AP34–Payment of
Emergency Medication by VA.’’ Copies
of comments received will be available
for public inspection in the Office of
Regulation Policy and Management,
Room 1068, between the hours of 8:00
a.m. and 4:30 p.m., Monday through
Friday (except holidays). Please call
(202) 461–4902 for an appointment.
(This is not a toll-free telephone
number.) In addition, during the
comment period, comments may be
viewed online through the Federal
Docket Management System (FDMS) at
https://www.Regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Kristin J. Cunningham, Director,
Business Policy, Chief Business Office
(10NB6), Veterans Health
Administration, Department of Veterans
Affairs, 810 Vermont Ave. NW.,
Washington, DC 20420; (202) 382–2508.
(This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: VA is
authorized under 38 U.S.C. 1725 to
reimburse an eligible veteran (or the
provider of the emergency treatment or
another person or entity who paid such
expenses on the veteran’s behalf) for the
reasonable value of emergency
treatment furnished to the Veteran at a
non-VA medical facility. Under 38
U.S.C. 1728, VA is authorized to
reimburse eligible veterans (or the
provider of the emergency treatment or
another person or entity who paid such
expenses on the veteran’s behalf) for the
customary and usual charges of non-VA
emergency treatment furnished to the
veteran.
Section 1725 provides that in order
for VA to reimburse a veteran for the
reasonable value of non-VA emergency
treatment under that section, such
veteran must, among other things, be
personally liable for the emergency
treatment received in a non-VA medical
facility, be enrolled in the VA health
care system, and must have received
medical care under chapter 17 of title 38
U.S.C. within the 24-month period prior
to the receipt of such emergency
E:\FR\FM\27JYP1.SGM
27JYP1
Agencies
[Federal Register Volume 80, Number 143 (Monday, July 27, 2015)]
[Proposed Rules]
[Pages 44312-44318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18177]
=======================================================================
-----------------------------------------------------------------------
PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4010
RIN 1212-AB30
Annual Financial and Actuarial Information Reporting; Changes to
Waivers
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Pension Benefit Guaranty Corporation (PBGC) is proposing
to amend its regulation on Annual Financial and Actuarial Information
Reporting to codify provisions of the Moving Ahead for Progress in the
21st Century Act and the Highway Transportation and Funding Act of 2014
and related guidance that affect reporting under ERISA section 4010. In
addition, PBGC is proposing to limit the reporting waiver under the
current regulation tied to aggregate plan underfunding of $15 million
or less to smaller plans and to add reporting waivers for plans that
must file solely on the basis of either a statutory lien resulting from
missed contributions over $1 million or outstanding minimum funding
waivers exceeding the same amount (provided the missed contributions or
funding waivers were previously reported to PBGC). The proposed rule
also makes some technical changes.
DATES: Comments must be submitted on or before September 25, 2015.
ADDRESSES: Comments may be submitted by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the Web site instructions for submitting comments.
Email: reg.comments@pbgc.gov.
Fax: 202-326-4224.
Mail or Hand Delivery: Office of the General Counsel,
Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC
20005-4026.
All submissions must include the Regulatory Identification Number for
this rulemaking (RIN 1212-AB30). 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
[[Page 44313]]
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
(Klion.Catherine@pbgc.gov), Assistant General Counsel for Regulatory
Affairs, Office of the General Counsel; or Daniel S. Liebman
(Liebman.Daniel@pbgc.gov), 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 rulemaking is necessary to implement statutory changes under
the Moving Ahead for Progress in the 21st Century Act (MAP-21) and
Highway Transportation and Funding Act of 2014 (HATFA) affecting
reporting under PBGC's regulation on Annual Financial and Actuarial
Information Reporting (29 CFR part 4010), to modify the regulation's
waivers to better balance the burden of reporting with PBGC's need for
information, and to make certain technical changes.
PBGC's legal authority for this 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, and section 4010 of ERISA.
Executive Summary--Major Provisions of the Regulatory Action
MAP-21 and HATFA Stabilized Interest Rate Rules
MAP-21 provided rules that limited the volatility of interest rates
(which are used for certain funding and benefit restriction purposes)
by constraining them within a range, or ``corridor,'' around the 25-
year average segment rates. The rates inside the corridor are referred
to as ``stabilized rates.'' HATFA extended the period during which the
narrowest range applies. MAP-21 and HATFA included statutory provisions
regarding the application of the stabilized rates to ERISA section 4010
reporting requirements. The proposed rule codifies the statutory
changes and PBGC guidance on when stabilized rates are and are not
taken into account for purposes of PBGC's regulation on Annual
Financial and Actuarial Information Reporting.
Changes to $15 Million Aggregate Underfunding Waiver
Section 4010.11(a) of the current regulation provides a waiver from
reporting if the aggregate underfunding of pension plans in a
controlled group does not exceed $15 million. PBGC's experience with
this waiver, especially after MAP-21 and HATFA, is that it results in
critical information not being reported. As a result, PBGC's ability to
timely intervene to protect potentially troubled plans, participant
benefits, and the pension insurance system is significantly undermined.
To address this issue, the proposed rule provides that the waiver would
be limited to controlled groups with fewer than 500 participants.
New Waivers
As part of PBGC's review of its regulations under Executive Order
13563, PBGC determined that it could reduce the burden of 4010
reporting and avoid duplicative reporting by adding two new waivers.
The proposed rule would waive reporting required solely on the basis of
either a statutory lien resulting from missed contributions over $1
million or outstanding minimum funding waivers exceeding the same
amount, provided that the missed contributions resulting in the lien or
minimum funding waivers were reported to PBGC under its regulation on
Reportable Events and Certain Other Notification Requirements (part
4043) by the due date for the 4010 filing.
Other Changes
The proposed rule also makes a few technical changes to the
regulation.
Background
PBGC administers the pension insurance programs under Title IV of
ERISA. ERISA section 4010 requires the reporting of actuarial and
financial information by controlled groups with single-employer pension
plans that have significant funding problems. ERISA section 4010 also
requires PBGC to provide an annual summary report to Congress
containing aggregate information filed with PBGC under that section.\1\
---------------------------------------------------------------------------
\1\ See ERSIA section 4010(e). The report is submitted to the
Committee on Health, Education, Labor, and Pensions and the
Committee on Finance of the Senate and the Committee on Education
and the Workforce and the Committee on Ways and Means of the House
of Representatives.
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Current 4010 Regulation
PBGC's regulation on Annual Financial and Actuarial Information
Reporting (29 CFR part 4010) implements ERISA section 4010. Under Sec.
4010.4(a), reporting is required if any of the following conditions
exist:
1. The funding target attainment percentage (FTAP) \2\ at the
end of the preceding plan year of a plan maintained by the
contributing sponsor or any member of its controlled group is less
than 80 percent (80-percent Gateway Test).
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\2\ The FTAP is a measure of how well the plan is funded. In
general, a plan's FTAP is the ratio (expressed as a percentage) of
the value of plan assets to the plan's funding target. See ERISA
section 303(d)(2).
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2. The conditions specified in ERISA section 303(k) and section
430(k) of the Internal Revenue Code (Code) for imposing a lien for
missed contributions exceeding $1 million have been met with respect
to any plan maintained by any member of the controlled group.
3. The Internal Revenue Service (IRS) has granted one or more
minimum funding waivers totaling in excess of $1 million to any plan
maintained by any member of the controlled group, and any portion of
the waiver(s) is still outstanding.
Part 4010 of PBGC's regulations specifies the identifying,
financial, and actuarial information that filers must submit under
ERISA section 4010. PBGC reviews the information that is filed and
enters it into an electronic database for more detailed analysis. This
analysis helps PBGC to anticipate possible threats to the pension
insurance system and focus its resources on situations that pose the
greatest risks to that system.
Filings under part 4010 play a major role in PBGC's ability to
protect participant and plan interests because 4010 information is
typically more current than other sources of information available to
PBGC. Protection for participants may be lost if a company completes a
transaction that creates possible significant risk to the plan and
participants before PBGC can act. PBGC can use 4010 information to
quickly evaluate a fast-moving transaction to protect participants.
When PBGC evaluates the risk of a plan terminating underfunded, it
needs the plan's termination liability. If PBGC has a recent 4010
filing for the plan, it has the plan's termination liability calculated
directly using seriatim data and certified by an enrolled actuary. With
reliable information readily available, PBGC can conduct a timely and
accurate analysis. But if PBGC does not have a 4010 filing for the
plan, PBGC must estimate the plan's termination liability based on
outdated Form 5500 Schedule SB data. This analysis takes time and,
because it is based on estimates, may be less accurate, which may
negatively impact asset recoveries and participant benefits if the plan
terminates underfunded.
[[Page 44314]]
PBGC also uses information from 4010 filings to value its
contingent liabilities, as reported in its annual financial statements.
Under ERISA section 4010(e), PBGC submits an annual report to Congress
summarizing the data received in 4010 filings.
Under Sec. 4010.11(a) of the current regulation, reporting is
waived if the aggregate underfunding of all plans (4010 funding
shortfall) maintained by the filer's controlled group does not exceed
$15 million (referred to in this preamble as the ``$15 million
aggregate underfunding waiver''). PBGC added this waiver to the
regulation in March 2009 when PBGC amended the regulation to implement
changes under the Pension Protection Act of 2006.\3\
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\3\ 74 FR 11022 (Mar. 16, 2009), https://www.gpo.gov/fdsys/pkg/FR-2009-03-16/pdf/E9-5741.pdf., (2009 rule).
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MAP-21 and HATFA
MAP-21 (enacted July 6, 2012) provided relief from the minimum
funding requirements that apply to plan sponsors of single-employer
defined benefit plans. This was accomplished by establishing rules that
limit the volatility of certain interest rates used for funding
purposes by constraining them within a corridor. MAP-21 also contained
provisions on the application of those rules to ERISA section 4010
reporting requirements. Section 40211(b)(3)(D) of MAP-21 amended ERISA
section 4010 by adding paragraph (d)(3), which provides that the
stabilized interest rates do not apply for purposes of determining the
funding target or the FTAP required to be reported under ERISA section
4010(d). However, they apply for all other 4010 requirements involving
minimum funding-related determinations, including those requirements
created solely by regulation.
MAP-21 provided that the stabilized interest rate corridor would
begin phasing-out in 2013. HATFA (enacted August 8, 2014) delayed the
start of that phase-out until 2018, thereby extending the period for
which the stabilized interest rate rules are most likely to impact 4010
filings.
IRS issued Notice 2012-61 providing guidance on pension funding
stabilization under MAP-21.\4\
---------------------------------------------------------------------------
\4\ https://www.pbgc.gov/Documents/n-12-61.pdf.
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PBGC issued two Technical Updates providing guidance on applying
the statutory provisions of MAP-21 and HATFA to 4010 reporting.\5\ PBGC
wanted to provide guidance to the pension community more quickly than
could be done through rulemaking. PBGC is now codifying the statutory
changes and guidance in the 4010 regulation, after giving the public an
opportunity to comment.
---------------------------------------------------------------------------
\5\ Technical Update 12-2: Effect of MAP-21 on 4010 Reporting
(Sept. 11, 2012), https://www.pbgc.gov/prac/other-guidance/tu/tu12-2.html; Technical Update 14-2: Effect of HATFA on 4010 Reporting
(Oct. 17, 2014), https://www.pbgc.gov/prac/other-guidance/tu/tu14-2.html.
---------------------------------------------------------------------------
Regulatory Review
On January 18, 2011, the President issued Executive Order 13563,
``Improving Regulation and Regulatory Review,'' to ensure that Federal
regulations seek more affordable, less intrusive means to achieve
policy goals, and that agencies give careful consideration to the
benefits and costs of those regulations. In response to the Executive
Order, PBGC on August 23, 2011, promulgated its Plan for Regulatory
Review,\6\ noting several regulatory areas--including 29 CFR part
4010--for review to see how PBGC can reduce burden while preserving its
ability to receive critical information. The plan identified expansion
of waivers from 4010 reporting as an area to explore.
---------------------------------------------------------------------------
\6\ See https://www.pbgc.gov/documents/plan-for-regulatory-review.pdf.
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Proposed Regulatory Changes
MAP-21 and HATFA Stabilized Interest Rate Rules
ERISA section 4010(b)(1) provides that 4010 reporting is required
if any plan sponsored by a member of the controlled group has an FTAP,
``as determined as defined in subsection (d),'' below 80 percent.
Because section 4010(d), as amended by MAP-21, requires that the FTAP
be determined without regard to the MAP-21 stabilized interest rate
rules, the FTAP used for the 80-percent Gateway Test is also determined
without regard to such rules.\7\
---------------------------------------------------------------------------
\7\ Thus, the FTAP used for purposes of the 80-percent Gateway
Test might not be the same as the FTAP reported on line 14 of the
2014 Schedule SB of Form 5500.
---------------------------------------------------------------------------
To codify the statutory change and the guidance in Technical
Updates 12-2 and 14-2, PBGC is proposing to revise the definition of
``funding target attainment percentage'' in Sec. 4010.2 to provide
that it is determined without regard to the stabilized interest rate
rules and rename it the ``4010 funding target attainment percentage.''
The proposed rule includes conforming changes in Sec. Sec.
4010.4(a)(1), 4010.4(b), and 4010.8(a)(6). In addition, the proposed
rule would revise Sec. 4010.8(a)(5) to clarify that the plan's funding
target as of the valuation date (required to be reported in a 4010
filing) is determined without regard to the stabilized interest rate
rules.
To reduce the administrative burden of determining whether a 4010
filing is required, Technical Update 12-2 waives reporting if the FTAP
of each plan maintained by the filer's controlled group, determined
without regard to the MAP-21 stabilized interest rate rules, would be
at least 80 percent if the value of plan assets used for minimum
funding purposes were substituted for the value described in IRS Notice
2012-61, Q&A NA-3. The proposed rule would codify this waiver. (See
Technical Update 12-2 for more explanation.)
Changes to $15 Million Aggregate Underfunding Waiver
As mentioned above, PBGC added the $15 million aggregate
underfunding waiver to the 4010 regulation in 2009. In the preamble to
the 2009 final rule, PBGC cited the Technical Explanation of the
Pension Protection Act of 2006 prepared by the Staff of the Joint
Committee on Taxation as support for the waiver. The Technical
Explanation stated: ``It is intended that the PBGC may waive the
requirement [for reporting under ERISA section 4010 based upon the 80-
percent Gateway Test] in appropriate circumstances, such as in the case
of small plans.'' \8\
---------------------------------------------------------------------------
\8\ See Joint Committee on Taxation, Technical Explanation of
H.R. 4, the ``Pension Protection Act of 2006,'' as passed by the
House on July 26, 2006, and as considered by the Senate on August 3,
2006 (JCX-38-06), August 3, 2006 on page 115. https://www.jct.gov/x-38-06.pdf.
---------------------------------------------------------------------------
PBGC set the waiver threshold at $15 million in aggregate
underfunding based on its experience that underfunding below that
amount presented a level of risk and exposure to PBGC that was
sufficiently low to warrant the waiver of reporting based solely on the
80-percent Gateway Test. The preamble to the 2009 final regulation
stated that ``the waiver will generally exempt controlled groups
maintaining only small plans from section 4010 reporting.''
Because of the impact of MAP-21 and HATFA, PBGC believes that
further refinement of the $15 million aggregate underfunding waiver is
necessary. Many sponsors that would not have qualified for the waiver
if not for MAP-21 and HATFA are waived from reporting because, using
stabilized rates, underfunding falls below $15 million.
As a result, PBGC is not receiving valuable information from
approximately 200 controlled groups for which 4010 reporting was
required before MAP-21 and HATFA (i.e., after MAP-21 and HATFA,
reporting was not required solely because the use of
[[Page 44315]]
stabilized rates resulted in aggregate underfunding being less than $15
million).\9\ To put that number in context, PBGC received only 313
filings for 2013. PBGC's ability to protect plans can be reduced
significantly if it does not have 4010 information to use to analyze
transactions, evaluate termination risks, and measure its contingent
liabilities for its financial statements.
---------------------------------------------------------------------------
\9\ PBGC is aware of these 200 controlled groups because PBGC's
regulation requires an explanation be provided where a filing is
required one year, but not the next. These 200 controlled groups
indicated on their 4010 filings that they had a plan below 80-
percent funded, but the aggregate underfunding was below $15
million. PBGC believes the total number of reports it is not
receiving solely due to the stabilized rates applicable to the $15
million aggregate underfunding waiver test is much greater than 200.
Besides the 200 prior filers, PBGC is aware of other controlled
groups that did not have to file in the past, but would be required
to file now if not for the fact that the waiver is based on
stabilized rates.
---------------------------------------------------------------------------
The vast majority of plans for which 4010 reporting would be
required if not for MAP-21 and HATFA cover more than 1,000 participants
and have very large unfunded benefit liabilities measured on a
termination basis. Thus, the current regulation does not allow PBGC to
access important available information on plans that present
substantial risk and exposure to the pension insurance system. Further,
because PBGC is required to submit an annual report to Congress
summarizing the data received in 4010 filings, Congress is not
receiving information it would otherwise receive solely because plans
that were never intended to qualify for the regulatory waiver are, in
fact, qualifying as a result of MAP-21 and HATFA.
Because Congress provided that stabilized rates are disregarded for
purposes of determining whether a 4010 filing is required, PBGC
believes it is appropriate to modify the $15 million aggregate
underfunding waiver to fix this anomalous and unintended result. PBGC
considered modifying the waiver to require that the 4010 funding
shortfall be determined using non-stabilized rates, but concluded that
doing so would be overly complicated and administratively burdensome.
In order to preserve simplicity, better align the waiver with the plans
it was originally intended to cover, and eliminate any need to do an
additional calculation solely to determine if the waiver applies, PBGC
is proposing to leave the determination of the 4010 funding shortfall
unchanged and instead limit the availability of the $15 million
aggregate underfunding waiver to controlled groups where the aggregate
number of participants in all defined benefit plans maintained by the
controlled group is fewer than 500. For purposes of the waiver, the
number of participants in any plan could be determined either as of the
end of the plan year ending within the information year or as of the
valuation date for that plan year.
Basing the participant count threshold on fewer than 500
participants would provide PBGC with 4010 information on nearly all of
the approximately 200 controlled groups for which reporting would have
been required if not for MAP-21 and HATFA. In addition, the threshold
would be similar to an exemption under Sec. 4010.8(c) for plans with
fewer than 500 participants from providing Sec. 4010.11 actuarial
information in a 4010 report. PBGC specifically requests public comment
on whether using a different participant count threshold or tying the
$15 million aggregate underfunding waiver directly to non-stabilized
rates would be more appropriate.
New Waivers
In response to several public comments and as part of its
implementation of its Plan for Regulatory Review, PBGC has reviewed
part 4010 to see how it could reduce burden while preserving its
ability to receive critical information. As part of this process, PBGC
considered waiving reporting for plans that must file 4010 information
solely on the basis of either a statutory lien resulting from missed
required contributions of over $1 million or outstanding minimum
funding waivers exceeding the same amount.
In 2012 and 2013, less than five percent of 4010 filers were
required to report based on these two filing tests; in 2013, there were
15 such filers. PBGC can look to reportable events filings \10\ to
obtain information similar to that reported in 4010 filings required
solely because of these reporting triggers.
---------------------------------------------------------------------------
\10\ PBGC receives reports for missed funding contributions
under Sec. Sec. 4043.25 and 4043.81 (Form 200) and applications for
minimum funding waivers under Sec. 4043.33.
---------------------------------------------------------------------------
Waiving reporting based on these two tests would reduce the
compliance and cost burden on filers. A filer waived from 4010
reporting might save between six and 24 hours annually by not having to
provide identifying and financial information and approximately $17,000
in actuarial costs (depending in part on whether it was a first-time
filing). Based on 2013 data, the aggregate actuarial cost savings for
all filers could be over $310,000.
Therefore, to reduce the burden of duplicative reporting, the
proposed rule adds waivers from reporting for persons that must file a
4010 report solely on the basis of either a reporting trigger under
Sec. 4010.4(a)(2) for a statutory lien resulting from missed required
contributions of over $1 million or under Sec. 4010.4(a)(3) for
outstanding minimum funding waivers exceeding the same amount, provided
that the missed contributions or minimum funding waivers were reported
under part 4043 by the due date for the 4010 filing.
Other Changes
The proposed rule revises Sec. 4010.11 to conform to the new
waivers discussed above, remove a paragraph on transition rules that
are no longer necessary, and reorganize the paragraphs under the
section.
The proposed rule deletes transition rules in current Sec. Sec.
4010.4(b)(3) and (4) and 4010.8(h) that are no longer necessary and
updates provisions regarding special funding rules.
Finally, the proposed rule makes two corrections to the regulation.
First, the proposed rule amends Sec. 4010.8(b)(1) to correct a
cross reference from Sec. 4010.11(b) to Sec. 4010.10(b).
Second, the proposed rule amends Sec. 4010.8(d)(2) to provide that
the form-of-payment assumption used when determining benefit
liabilities for purposes of 4010 reporting is the assumption prescribed
in Sec. 4044.51 of PBGC's regulation on Allocation of Assets in
Single-Employer Plans (part 4044). This change would conform the
regulation to the statutory requirement. As a result of a drafting
error in the 2009 4010 final rule, the current regulation provides
that, for purposes of determining a plan's benefit liabilities, the
form-of-payment assumption must be the same as what is used to
determine the minimum required contribution. Although this assumption
has a relatively minor impact on the overall calculation, PBGC was
concerned about the programming changes that would need to be made to
valuation software to effectuate this unintended assumption change and
therefore issued guidance that the actuary may use either the form-of-
payment assumption prescribed in Sec. 4044.51 or the form-of-payment
assumption used to determine the minimum required contribution for the
plan year ending within the filer's information year.\11\ PBGC
specifically
[[Page 44316]]
requests comments on whether eliminating the option of using the latter
form-of-payment assumption (i.e., requiring that the Sec. 4044.51
assumption be used) would necessitate significant programming changes
or result in additional burden or cost.
---------------------------------------------------------------------------
\11\ Technical Update 09-2: ERISA section 4010 reporting;
Alternative form-of-payment assumption for determining benefit
liabilities (Mar. 25, 2009), https://www.pbgc.gov/prac/other-guidance/tu/tu09-2.html.
---------------------------------------------------------------------------
Applicability
The proposed rule would be applicable to information years
beginning after December 31, 2015.
Compliance With Rulemaking Guidelines
Executive Orders 12866 ``Regulatory Planning and Review'' and 13563
``Improving Regulation and Regulatory Review''
PBGC has determined, in consultation with the Office of Management
and Budget (OMB), that this rulemaking 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. Executive Orders 12866 and 13563 require a comprehensive
regulatory impact analysis be performed for any economically
significant regulatory action, defined as an action that would result
in an annual effect of $100 million or more on the national economy or
which would have other substantial impacts.
Pursuant to section 1(b)(1) of E.O. 12866 (as amended by Executive
Order 13422), PBGC has determined that regulatory action is required in
this area. Principally, this regulatory action is necessary to codify
changes made to 4010 reporting by MAP-21 and HATFA and related
guidance. In addition, this proposed rule is necessary to modify
waivers from 4010 reporting to better balance the burden of reporting
with PBGC's need for the information and to target those plans with the
highest risk and exposure to PBGC and the pension insurance system.
Finally, the proposed rule is needed to correct errors in the current
regulation. In accordance with OMB Circular A-4, PBGC also has examined
the economic and policy implications of this proposed rule and has
concluded that the action's benefits justify its costs.
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. The annual effect of the regulation
with the proposed rule changes would far be less than $100 million. See
discussion under Paperwork Reduction Act.
This proposed rule is associated with retrospective review and
analysis in PBGC's Plan for Regulatory Review issued in accordance with
Executive Order 13563.
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 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 the proposed amendments to the Annual Financial and
Actuarial Information Reporting regulation, PBGC considers a small
entity to be a plan with fewer than 100 participants. This is
substantially the same criterion PBGC uses in other regulations \12\
and is consistent with certain requirements in Title I of ERISA \13\
and the Code,\14\ as well as the definition of a small entity that the
Department of Labor (DOL) has used for purposes of the Regulatory
Flexibility Act.\15\
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\12\ See e.g., special rules for small plans under part 4007
(Payment of Premiums).
\13\ See, e.g., ERISA section 104(a)(2), which permits the
Secretary of Labor to prescribe simplified annual reports for
pension plans that cover fewer than 100 participants.
\14\ See, e.g., Code section 430(g)(2)(B), which permits plans
with 100 or fewer participants to use valuation dates other than the
first day of the plan year.
\15\ See, e.g., DOL's final rule on Prohibited Transaction
Exemption Procedures, 76 FR 66637, 66644 (Oct. 27, 2011).
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Further, while some large employers may have small plans, in
general most small plans are maintained by small employers. Thus, PBGC
believes that assessing the impact of the proposed rule 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 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 part 4010.
PBGC certifies under section 605(b) of the Regulatory Flexibility
Act that the amendments in this proposed rule would not have a
significant economic impact on a substantial number of small entities.
The proposed amendments would limit application of a reporting waiver
to larger plans and provide two new reporting waivers to plans of all
sizes. Accordingly, as provided in section 605 of the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.), sections 603 and 604 do not
apply.
Paperwork Reduction Act
PBGC is submitting the information requirements under part 4010 to
OMB for review and approval under the Paperwork Reduction Act. The
information requirements under part 4010 have been approved by the OMB
under the Paperwork Reduction Act (OMB control number 1212-0049,
expires July 31, 2015). Copies of PBGC's request may 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 estimates that once the final rule takes effect it will
receive 4010 filings from about 450 contributing sponsors or controlled
group members annually and that the total annual burden of the
collection of information
[[Page 44317]]
will be about 3,900 hours and $7,632,000.
Comments on the paperwork provisions under this proposed rule
should be mailed 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
OIRA_DOCKET@omb.eop.gov or by fax to (202) 395-6974. Although comments
may be submitted through September 25, 2015, the Office of Management
and Budget requests that comments be received on or before August 26,
2015 to ensure their consideration. Comments may address (among other
things)--
Whether the 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 the
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 the 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 in 29 CFR Part 4010
Pension insurance, Pensions, Reporting and recordkeeping
requirements.
For the reasons given above, PBGC proposes to amend 29 CFR part
4010 as follows:
PART 4010--ANNUAL FINANCIAL AND ACTUARIAL INFORMATION REPORTING
0
1. The authority citation for part 4010 continues to read as follows:
Authority: 29 U.S.C. 1302(b)(3), 1310.
0
2. Section 4010.2 is amended by removing the definition for ``Funding
target attainment percentage'' and adding a definition for ``4010
funding target attainment percentage'' in alphanumeric order to read as
follows:
Sec. 4010.2 Definitions.
* * * * *
4010 funding target attainment percentage means, with respect to a
plan for a plan year, the percentage as determined under Sec.
4010.4(b) for the plan year.
* * * * *
0
3. In Sec. 4010.4:
0
a. Paragraph (a) introductory text is amended by removing the words ``A
contributing sponsor'' and adding in their place the words ``Subject to
the waivers in Sec. 4010.11, a contributing sponsor''.
0
b. Paragraph (a)(1) is amended by adding ``4010'' before the phrase
``funding target attainment percentage''.
0
c. Paragraph (d) is removed, and paragraphs (e) and (f) are
redesignated as paragraphs (d) and (e), respectively.
0
d. Paragraph (b) and newly redesignated paragraph (e) are revised to
read as follows:
Sec. 4010.4 Filers.
* * * * *
(b) 4010 funding target attainment percentage--(1) General. The
4010 funding target attainment percentage for a plan for a plan year
equals the funding target attainment percentage as provided under ERISA
section 303(d)(2) and Code section 430(d)(2) determined as of the
valuation date for the plan year without regard to the segment rate
stabilized interest provisions of ERISA section 303(h)(2)(iv) and Code
section 430(h)(2)(iv).
(2) Prefunding balance and funding standard carryover balance
elections. For purposes of determining the 4010 funding target
attainment percentage for a plan for the plan year, prefunding balances
and funding standard carryover balances must reflect any elections (or
deemed elections) under ERISA section 303(f) and Code section 430(f)
that affect the value of such balances as of the beginning of the plan
year, regardless of when the elections (or deemed elections) are made.
* * * * *
(e) Certain plans to which special funding rules apply. Except for
purposes of determining the information to be submitted under Sec.
4010.8(h) (in connection with the actuarial valuation report), the
following statutory provisions are disregarded for purposes of this
part:
(1) Section of 402(b) of the Pension Protection Act of 2006, Public
Law 109-280, dealing with certain frozen plans of commercial passenger
airlines and airline caterers.
(2) Section 104 of the Pension Protection Act of 2006 as amended by
the Preservation of Access to Care for Medicare Beneficiaries and
Pension Relief Act of 2010, Public Law 111-192, dealing with eligible
charity plans and plans of certain rural cooperatives.
(3) The Cooperative and Small Employer Charity Pension Flexibility
Act, Public Law 113-97, dealing with certain defined benefit pension
plans maintained by more than one employer.
0
4. In Sec. 4010.8:
0
a. Paragraph (a)(6) is amended by adding ``4010'' before ``funding
target attainment percentage.''
0
b. Paragraph (b)(1) is amended by removing the reference ``Sec.
4010.11(b)'' and adding in its place the reference ``Sec.
4010.10(b)''.
0
c. Paragraph (c)(1)(i) is amended by removing the reference ``Sec.
4010.11(c)'' and adding in its place the reference ``Sec.
4010.11(b)''.
0
d. Paragraph (d)(2)(i) is amended by adding the words ``form of
payment,'' after ``Interest,''.
0
e. Paragraph (d)(2)(ii) is amended by removing the words ``form of
payment''.
0
f. Paragraph (h) is removed and paragraph (i) is redesignated as
paragraph (h).
0
g. Paragraph (a)(5) and newly redesignated paragraph (h) are revised to
read as follows:
Sec. 4010.8 Plan actuarial information.
(a) * * *
(5) The funding target (as of the valuation date) for the plan year
ending within the information year determined in accordance with ERISA
section 303(i) and Code section 430(i)--
(i) Without regard to the segment rate stabilized interest
provisions of ERISA section 303(h)(2)(iv) and Code section
430(h)(2)(iv); and
(ii) As if the plan has been in at-risk status for a consecutive
period of at least five plan years;
* * * * *
(h) Plans subject to special funding rules. Instead of the
requirements of paragraph (a)(11) of this section:
(1) In the case of a plan year for which a plan is subject to
section 402(b) of the Pension Protection Act of 2006, Public Law 109-
280, dealing with certain frozen plans of commercial passenger airlines
and airline caterers, the plan must meet the requirements in connection
with the actuarial valuation report in accordance with instructions on
PBGC's Web site, https://www.pbgc.gov.
(2) In the case of a plan year for which the application of new
funding rules is deferred for a plan under section 104 of the Pension
Protection Act of 2006, Public Law 109-280, as amended by the
Preservation of Access to Care for Medicare Beneficiaries and Pension
Relief Act of 2010, Public Law 111-192, dealing with eligible charity
plans and plans of certain rural cooperatives, the plan must meet the
requirements in paragraph (a)(5) of this section (in connection with
the actuarial valuation
[[Page 44318]]
report) in effect as of December 31, 2007.
(3) In the case of a plan year for which a plan is subject to the
Cooperative and Small Employer Charity Pension Flexibility Act, Public
Law 113-97, dealing with certain defined benefit pension plans
maintained by more than one employer, the plan must meet the
requirements in connection with the actuarial valuation report in
accordance with instructions on PBGC's Web site, https://www.pbgc.gov.
0
5. Section 4010.11 is revised to read as follows:
Sec. 4010.11 Waivers and extensions.
(a) Plan funding/participant count waiver. Unless reporting is
required by Sec. 4010.4(a)(2) or (3), reporting is waived for a person
(that would be a filer if not for the waiver) for an information year
if, for the plan year ending within the information year--
(1) The aggregate 4010 funding shortfall for all plans (including
any exempt plans) maintained by the person's controlled group
(disregarding those plans with no 4010 funding shortfall) does not
exceed $15 million; and
(2) The aggregate number of participants in all plans (including
any exempt plans) maintained by the person's controlled group is fewer
than 500. For this purpose, the number of participants in any plan may
be determined either as of the end of the plan year ending within the
information year or as of the valuation date for that plan year.
(b) 4010 funding shortfall for waivers and exemptions--(1) General.
A plan's 4010 funding shortfall for a plan year equals the funding
shortfall as provided under ERISA section 303(c)(4) and Code section
430(c)(4) determined as of the valuation date for the plan year, except
that the value of plan assets is determined without regard to the
reduction under ERISA section 303(f)(4)(B) and Code section
430(f)(4)(B) (dealing with reduction of assets by the amount of
prefunding and funding standard carryover balances).
(2) Multiple employer plans. For purposes of Sec. 4010.8(c) and
paragraph (a) of this section, the entire 4010 funding shortfall of any
multiple employer plan of which the filer or any member of the filer's
controlled group is a contributing sponsor is included.
(c) Alternative 4010 FTAP. Unless reporting is required by Sec.
4010.4(a)(2) or (3), reporting is waived for a person for an
information year if the 4010 funding target attainment percentage of
each plan maintained by the person's controlled group would be at least
80 percent if the value of plan assets used for minimum funding
purposes were substituted for the asset value determined without regard
to the segment rate stabilized interest provisions of ERISA section
303(h)(2)(iv) for purposes of determining such percentage.
(d) Missed contributions resulting in a lien or outstanding minimum
funding waivers. Reporting is waived for a person (that would be a
filer if not for the waiver) for an information year if, for the plan
year ending within the information year, reporting would have been
required solely under Sec. 4010.4(a)(2) or (3), provided that the
missed contributions or minimum funding waivers (as applicable) were
reported to PBGC under part 4043 of this chapter by the due date for
the 4010 filing.
(e) Other waiver authority. PBGC may waive the requirement to
submit information with respect to one or more filers or plans or may
extend the applicable due date or dates specified in Sec. 4010.10.
PBGC will exercise this discretion in appropriate cases where it finds
convincing evidence supporting a waiver or extension; any waiver or
extension may be subject to conditions. A request for a waiver or
extension must be filed in writing with PBGC at the address provided in
Sec. 4010.10(c) no later than 15 days before the applicable due date
specified in Sec. 4010.10, and must state the facts and circumstances
on which the request is based.
Issued in Washington, DC, this 17th day of July, 2015.
Alice C. Maroni,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2015-18177 Filed 7-24-15; 8:45 am]
BILLING CODE 7709-02-P