Annual Financial and Actuarial Information Reporting, 15432-15440 [2016-06470]

Agencies

• Pension Benefit Guaranty Corporation

[Federal Register Volume 81, Number 56 (Wednesday, March 23, 2016)]
[Rules and Regulations]
[Pages 15432-15440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06470]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4010

RIN 1212-AB30


Annual Financial and Actuarial Information Reporting

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: The Pension Benefit Guaranty Corporation (``PBGC'') is 
amending its regulation on Annual Financial and Actuarial Information 
Reporting to codify provisions of recent legislation and related 
guidance that affect reporting under ERISA section 4010. The final rule 
modifies the reporting waiver under the current regulation tied to 
aggregate plan underfunding of $15 million or less to be based on non-
stabilized interest rates. In addition, the final rule adds new 
reporting waivers for smaller plans and for plans that must file solely 
on the basis of either a statutory lien resulting from missed

[[Page 15433]]

contributions over $1 million or outstanding minimum funding waivers 
exceeding the same amount (provided the missed contributions or 
applications for minimum funding waivers were previously reported to 
PBGC). The final rule also provides alternative methods of compliance 
for reporting certain actuarial information and makes a few technical 
changes to the regulation.

DATES: Effective April 22, 2016. See Applicability in SUPPLEMENTARY 
INFORMATION.

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 recent statutory 
changes--under the Moving Ahead for Progress in the 21st Century Act 
(``MAP-21''),\1\ the Highway Transportation and Funding Act of 2014 
(``HATFA'') \2\ and the Bipartisan Budget Act of 2015 (``BBA'') \3\--
that affect reporting under PBGC's regulation on Annual Financial and 
Actuarial Information Reporting (29 CFR part 4010), to modify the 
regulation's waivers and information requirements to better balance the 
burden of reporting with PBGC's need for information, and to make 
certain technical changes.
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    \1\ Public Law 112-141, enacted July 6, 2012.
    \2\ Public Law 113-159, enacted August 8, 2014.
    \3\ Public Law 114-74, enacted November 3, 2015.
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    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

Interest Rate Stabilization 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. BBA further extended that period, generally 
effective for plan years beginning after December 31, 2015. MAP-21 
included statutory provisions regarding the application of the 
stabilized rates to ERISA section 4010 reporting requirements. The 
final rule codifies the statutory changes and PBGC guidance on when 
stabilized rates are and are not taken into account for purposes of 
4010 reporting.

Changes to $15 Million Aggregate Underfunding Waiver

    Section 4010.11(a) of the regulation provides a waiver from 
reporting if the aggregate underfunding (the ``4010 funding 
shortfall'') of pension plans in a controlled group does not exceed $15 
million. PBGC's experience with this waiver under the old regulation, 
especially since MAP-21, was that it resulted 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 was significantly undermined. To address this 
issue, PBGC proposed to limit the waiver to smaller plans. In response 
to public comments, the final rule permits plans of any size to use 
this waiver (as was the case under the old rule), but modifies how the 
4010 funding shortfall is determined and, as explained below, provides 
a separate waiver based solely on plan size to ensure that smaller 
plans qualify for a waiver.

New Waivers

    The final rule adds a waiver from reporting for plans with 
controlled groups with fewer than 500 participants, regardless of plan 
underfunding. Further, 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 
other new waivers. As in the proposed rule, the final rule waives 
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 applications for 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

    In response to comments, the final rule provides alternative 
methods of compliance for reporting certain actuarial information and 
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.\4\
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    \4\ 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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4010 Regulation

    PBGC's regulation on Annual Financial and Actuarial Information 
Reporting (29 CFR part 4010) \5\ implements ERISA section 4010. Under 
Sec.  4010.4(a), reporting is required if any of the following 
conditions exist:
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    \5\ For ease of reference, this preamble refers to the 
regulation as it exists before the final rule becomes applicable as 
the ``old regulation'' and the regulation as amended by this final 
rule as the ``new regulation''. If a statement is true for both the 
old and new regulations, this preamble will simply refer to the 
``regulation.''
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    1. The funding target attainment percentage (``FTAP'') \6\ 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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    \6\ 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 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. Filings under part 4010 play a major role in PBGC's 
ability to protect

[[Page 15434]]

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 and older data, is less accurate, 
which may negatively impact asset recoveries and participant benefits 
if the plan terminates underfunded.
    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 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.\7\
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    \7\ 74 FR 11022 (Mar. 16, 2009), https://www.gpo.gov/fdsys/pkg/FR-2009-03-16/pdf/E9-5741.pdf.
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MAP-21 and Statutory Extensions of Interest Rate Stabilization Rules

    MAP-21 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, under MAP-21, the 
stabilized rates are otherwise extended to all other 4010 requirements 
involving minimum funding-related determinations, including those 
requirements created solely by regulation, such as the 4010 funding 
shortfall waiver.
    MAP-21 provided that the stabilized interest rate corridor would 
begin phasing-out in 2013. HATFA delayed the start of that phase-out 
until 2018. BBA further delayed the start of the phase-out until 2020, 
thereby further extending the period for which the interest rate 
stabilization rules are likely to impact 4010 filings (by making it 
more likely that the $15 million aggregate underfunding waiver will 
apply).
    IRS issued Notice 2012-61 providing guidance on pension funding 
stabilization under MAP-21.\8\
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    \8\ https://www.pbgc.gov/Documents/n-12-61.pdf.
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    PBGC issued two Technical Updates providing guidance on applying 
the statutory rate stabilization provisions that began with MAP-21 to 
4010 reporting.\9\
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    \9\ 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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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,\10\ 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.
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    \10\ See https://www.pbgc.gov/documents/plan-for-regulatory-review.pdf.
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Proposed Rule

    On July 27, 2015 (at 80 FR 44312), PBGC published in the Federal 
Register a proposed rule (the ``proposed rule'') for notice and comment 
that codified the statutory stabilized interest rate provisions related 
to 4010 reporting, made changes to the waiver structure, and other 
technical changes. The proposed rule limited the $15 million aggregate 
underfunding waiver to smaller plans and added 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 applications for minimum funding waivers were 
previously reported to PBGC).
    PBGC received ten comment letters (from a total of twelve entities) 
on the proposed rule.\11\ The commenters represented several 
professional and business trade organizations, pension plan 
consultants, plan sponsors, and a law firm. Generally, commenters 
opposed the proposal to limit the $15 million aggregate underfunding 
waiver to small plans while supporting PBGC's effort to add other 
waivers. Commenters provided suggestions on the proposal and on other 
matters under the regulation. The comments on the proposed rule and 
PBGC's responses are discussed below with the topics to which they 
relate.
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    \11\ See comments at https://www.pbgc.gov/prac/pg/other/guidance/pending-proposed-rules.html.
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Regulatory Changes

MAP-21 Interest Rate Stabilization 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 interest rate stabilization rules, 
the FTAP used for the 80-percent Gateway Test is also determined 
without regard to such rules.\12\
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    \12\ 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.
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    To codify the statutory change and the guidance in Technical 
Updates 12-2 and 14-2, the final rule revises the definition of 
``funding target attainment percentage'' in Sec.  4010.2 to provide 
that it is determined without regard to the interest rate stabilization 
rules and rename it the ``4010 funding target attainment percentage.'' 
The final rule includes conforming changes in Sec. Sec.  4010.4(a)(1), 
4010.4(b), and 4010.8(a)(6). In addition, the final rule

[[Page 15435]]

revises 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 interest rate stabilization rules.
    To reduce the administrative burden of determining whether a 4010 
filing is required, Technical Update 12-2 waived reporting if the FTAP 
of each plan maintained by the filer's controlled group, determined 
without regard to the statutory stabilized interest rate provisions, 
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.\13\ (See Technical Update 12-2 for more 
explanation.) The final rule effectively codifies this waiver from 
reporting and extends the relief to the related information 
requirement.
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    \13\ https://www.irs.gov/irb/2012-42_IRB/ar10.html.
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Changes to $15 Million Aggregate Underfunding Waiver

    As mentioned above, PBGC added the $15 million aggregate 
underfunding waiver to the 4010 regulation in 2009. The preamble to the 
2009 final rule 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.'' \14\
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    \14\ 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.
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    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 rule (see 
footnote 7) stated that ``the waiver will generally exempt controlled 
groups maintaining only small plans from section 4010 reporting.''
    Because of the impact of stabilized interest rates that began with 
MAP-21, PBGC believes that further refinement of the $15 million 
aggregate underfunding waiver is necessary. Under the old regulation, 
many sponsors that would not have qualified for the waiver prior to 
MAP-21 were waived from reporting because underfunding was under $15 
million based on stabilized rates.
    As a result, PBGC was 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 stabilized rates 
resulted in aggregate underfunding being less than $15 million).\15\ To 
put that number in context, it is comparable to the 207 filings PBGC 
received for 2014. 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.
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    \15\ PBGC was 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 was not 
receiving solely due to the stabilized rates applicable to the $15 
million aggregate underfunding waiver test was much greater than 
200. Besides the 200 prior filers, PBGC was aware of other 
controlled groups that did not have to file in the past, but would 
have been required to file if not for the fact that the waiver is 
based on stabilized rates.
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    The vast majority of plans for which 4010 reporting would be 
required if not for the statutory stabilized interest rate provisions 
cover more than 1,000 participants and have very large unfunded benefit 
liabilities measured on a termination basis. Thus, the old regulation 
did 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 has 
not been receiving information it would otherwise receive solely 
because plans that were never intended to qualify for the regulatory 
waiver were, in fact, qualifying as a result of the statutory 
stabilized interest rate provisions that began with MAP-21.
    In the preamble to the proposed rule, PBGC stated that because 
Congress provided that stabilized rates are disregarded for purposes of 
determining whether a 4010 filing is required, it was 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 at the time that doing so would be 
overly complicated and administratively burdensome. PBGC was also 
concerned that this approach might make it more difficult to verify 
compliance because the liability underlying the shortfall calculation 
would not be reported on Schedule SB to Form 5500. 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 proposed 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 was fewer than 500.
    All commenters opposed limiting the availability of the $15 million 
aggregate underfunding waiver to controlled groups with fewer than 500 
participants and reported that such limitation would unnecessarily 
burden many large plans by requiring 4010 reporting. Some commenters 
pointed out instances in which the proposed waiver would be unavailable 
due to circumstances that were incidental to the aims of the regulation 
(e.g., recent acquisitions of small plans where additional funding may 
not have yet occurred or multiple employer plans that have over 500 
participants but where individual employers may not have control over 
plan funding). Some commenters suggested that the proposed change would 
result in lower funding contributions for large plans by eliminating 
the incentive under the old rule to fund up to qualify for the waiver. 
In addition, several commenters believed that the proposed participant 
count limit would be a permanent change to the regulation to address a 
temporary condition that would impact reporting long after stabilized 
rates no longer had an impact on plan liabilities.\16\
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    \16\ PBGC received comments on the proposed rule before BBA was 
enacted. Although BBA does not make stabilized interest rates 
permanent, it still lengthens the amount of time such rates impact 
4010 reporting.
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    As an alternative to the proposal to limit the $15 million 
aggregate underfunding waiver to controlled groups with fewer than 500 
participants, six commenters (including three who commented in one 
letter) suggested that PBGC's concerns could be addressed if potential 
filers were required to use non-stabilized rates (instead of stabilized 
rates) to determine the 4010 funding shortfall instead of stabilized 
rates. Two of these commenters pointed out that sponsors still use non-
stabilized

[[Page 15436]]

rates for other purposes and therefore, basing the 4010 funding 
shortfall determination on non-stabilized rates would not be overly 
burdensome.\17\ These same commenters suggested that if PBGC were to 
have a participant count limit, the threshold should be increased (with 
suggested limits ranging from 1,000 or 3,000 participants). Two other 
commenters recommended that PBGC consider incorporating the low-default 
risk waiver from PBGC's 2015 final rule on Reportable Events \18\ into 
the 4010 regulation as an effective way to tie risk to reporting. Other 
suggestions for alternatives included incorporating funding ratios of 
at least 90 percent on a stabilized interest rate basis, allowing for 
simplified reporting if the waiver under the proposed rule were to be 
retained, and increasing the participant count threshold.
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    \17\ These uses include: 4010 Funding Target Attainment 
Percentage, Variable Rate Premium under the alternative method, 
annual funding notice supplement, and Code section 404 deduction 
limits.
    \18\ 80 FR 54979 (Sept. 11, 2015), https://www.gpo.gov/fdsys/pkg/FR-2015-09-11/pdf/2015-22941.pdf.
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    PBGC was interested to learn that commenters were not concerned 
that basing the determination of the waiver on non-stabilized rates 
would result in overly burdensome reporting requirements. Given that a 
substantial segment of the commenters supported this suggestion and the 
fact that statutory stabilized interest rate provisions are scheduled 
to eventually phase-out, PBGC believes making this modification to the 
waiver is appropriate to reduce potential filer burden even though the 
data underlying the calculation does not get reported on Schedule SB. 
PBGC will be able to estimate the 4010 funding shortfall to evaluate 
compliance with the filing requirements using other information 
sponsors routinely file. As a result, the final rule eliminates the 
participant count limit for purposes of the $15 million aggregate 
underfunding waiver and instead requires that the liability used to 
determine the 4010 funding shortfall be determined using non-stabilized 
rates. The final rule does not change how the asset portion of the 4010 
funding shortfall is calculated (i.e., the asset value used for this 
purpose is the asset value used for funding purposes, including 
averaging, if applicable, with no reduction for prefunding or carryover 
balances).
    PBGC acknowledges that under this change, some smaller plans that 
would have qualified for the waiver under the proposed rule would not 
qualify for the waiver under the final rule. Accordingly, as described 
below, the final rule adds a new waiver for controlled groups with less 
than 500 participants, regardless of plan underfunding.
    With the final rule modification to the $15 million aggregate 
underfunding waiver and the new smaller plans waiver, PBGC believes 
that most of the commenters' concerns about modifying the waiver have 
been addressed. However, PBGC may reconsider suggestions from 
commenters that are not incorporated into the final rule, as well as 
other possibilities, as it gains experience with reporting under the 
new regulation.

New Waivers--Smaller Plans

    PBGC concluded that it could provide burden relief for smaller 
plans without compromising the pension insurance system. Thus, the 
final rule provides that 4010 reporting is waived for controlled groups 
where the aggregate number of participants in all plans (including any 
exempt plans) is fewer than 500 (the ``smaller plans waiver'').
    The final regulation provides that for purposes of the new smaller 
plans waiver, the aggregate number of participants in all plans 
maintained by a person's controlled group includes any participants 
covered by a multiple employer plan in which the person participates 
(including participants covered by the multiple employer plan who are 
not or were not employed by the person). In other words, the person is 
treating as ``maintaining'' the whole multiple employer plan. For 
example, in the case of a multiple employer plan where each 
contributing sponsor has fewer than 500 participants in all of its 
plans, but the multiple employer plan as a whole covers 500 or more 
participants, the smaller plans waiver would not apply. This treatment 
is analogous to how the aggregate funding shortfall of a multiple 
employer plan is determined for purposes of the $15 million aggregate 
underfunding waiver under the current regulation; for that purpose, the 
multiple employer plan's entire shortfall is taken into account.

New Waivers--Missed Contributions Resulting in a Lien or Outstanding 
Minimum Funding Waivers

    As part of PBGC's implementation of its Plan for Regulatory Review 
(which included public comment on how PBGC could reduce reporting 
burden), PBGC reviewed part 4010 to see how it could reduce burden 
while preserving its ability to receive critical information. As part 
of this process, PBGC proposed to waive 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 2014, there were 
10 such filers. PBGC can look to reportable events filings \19\ to 
obtain information similar to that reported in 4010 filings required 
solely because of these reporting triggers.
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    \19\ 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.
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    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 $16,000 
in actuarial costs (depending in part on whether it was a first-time 
filing). Based on 2014 data, the aggregate actuarial cost savings for 
all filers could be over $160,000.
    Therefore, to reduce the burden of duplicative reporting, the 
proposed rule added 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 applications for minimum funding 
waivers were reported under part 4043 by the due date for the 4010 
filing.
    PBGC did not receive any comments on these proposed new waivers. 
The final rule retains these waivers as proposed.

Alternative Methods of Compliance for Reporting Certain Actuarial 
Information

    ERISA section 4010(d) requires that certain information be reported 
to PBGC when a filer makes a report under ERISA section 4010, including 
the funding target of the plan determined as if the plan has been in 
at-risk status for at least five plan years and determined without 
regard to the interest rate stabilization rules.\20\ Section 4010.8 of 
the regulation implements the statutory information requirements. While 
not addressed in the proposed rule, three comment letters (representing 
five entities) suggested that PBGC either

[[Page 15437]]

eliminate the requirement for plans that are not in at-risk status or 
provide a simpler alternative method of compliance for such plans. 
These commenters stated that PBGC does not need that information and 
that plans are not required to do the calculation for any purpose other 
than 4010 reporting. In addition, commenters noted that due to the 
complications of the at-risk rules, doing the calculation substantially 
increases the costs of preparing a 4010 filing.
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    \20\ See ERISA section 4010(d)(1)(B). Under Sec.  4010.2, at-
risk status means, with respect to a plan for a plan year, at-risk 
status as defined in ERISA section 303(i)(4) and Code section 
430(i)(4).
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    PBGC finds these comments credible and agrees that PBGC generally 
does not need this information from plans that are not in at-risk 
status. And although PBGC does need information about the at-risk 
funding target from plans that are in at-risk status, the relevant 
information for PBGC is the at-risk funding target determined using 
stabilized rates, not the statutorily-required information determined 
without regard to the stabilization rules. However, because it is 
possible that PBGC might need the statutorily-required information from 
a particular plan or that Congress might request that information, PBGC 
concluded that providing an alternate method of compliance is 
preferable to waiving the requirement altogether. Therefore, the final 
rule provides that plans are not required to provide the at-risk 
funding target information (determined without regard to the 
stabilization rules) unless PBGC makes a written request for the 
information. In that event, the plan would have at least 30 days after 
PBGC's written request to provide the information. In addition, to 
ensure that PBGC receives relevant and timely information about the at-
risk funding target from plans that are in at-risk status (i.e., 
determined using stabilized rates), PBGC is adding that information to 
the list in Sec.  4010.8(a)(11) of information required to be reported 
in an attachment to the 4010 filing (the valuation report).
    Some of these same commenters also suggested that PBGC eliminate or 
provide for an alternate method of compliance for reporting the year-
end plan termination liability calculation information required under 
ERISA section 4010(d)(1)(A) and Sec.  4010.8(a)(3) of the regulation. 
PBGC needs this information to run its analysis of whether a 4010 filer 
poses a risk to the pension insurance system. Thus, PBGC is not 
modifying or eliminating the year-end plan termination liability 
calculation in the final rule.
    One commenter expressed its appreciation for the proposed rule's 
codification of relief provided in Technical Update 12-2, under which 
reporting would be waived if the 4010 FTAP of each plan maintained by a 
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 interest rate 
stabilization rules (i.e., the amount determined in accordance with IRS 
notice 2012-61, Q&A NA 3). However, under the proposed rule, if 
reporting were required, a filer would still need to calculate asset 
values without regard to the interest rate stabilization rules (in 
accordance with IRS notice 2012-61) for purposes of determining the 
4010 FTAP to be reported in the filing. This commenter believed that 
this calculation should not be required at all since the difference in 
values (i.e., the value of assets determined without regard to the 
interest rate stabilization rules compared to the value of plan assets 
used for minimum funding purposes) would generally be small. The 
commenter also noted that IRS and the Department of Labor (``DOL'') do 
not require this calculation and that if PBGC were to require it, then 
two sets of asset values would need to be reported in the Annual 
Funding Notice (under ERISA section 101(f)) resulting in complexity and 
participant confusion.
    PBGC agrees that requiring this calculation for a 4010 report is 
unnecessary. Thus, the final rule provides that for purposes of 
determining the 4010 FTAP, the value of plan assets used for minimum 
funding purposes may be substituted for the asset value determined 
without regard to interest rate stabilization rules. By doing so, there 
is no need to provide for the alternative 4010 FTAP waiver that was 
included in the proposed rule and thus, that waiver has been eliminated 
from the final rule.

Other Changes

    The final 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 final 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 final rule makes two corrections to the regulation.
    First, the final rule amends Sec.  4010.8(b)(1) to correct a cross 
reference from Sec.  4010.11(b) to Sec.  4010.10(b).
    Second, the final 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) and make a related conforming change. 
This change conforms the regulation to the statutory requirement. As a 
result of a drafting error in the 2009 final rule, the old regulation 
provided that, for purposes of determining a plan's benefit 
liabilities, the form-of-payment assumption must be the same as that 
used to determine the minimum required contribution. Although this 
assumption has had 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.\21\
---------------------------------------------------------------------------

    \21\ 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.
---------------------------------------------------------------------------

    Three commenters suggested that PBGC retain the option of using the 
Sec.  4044.51 assumption. However it appeared to PBGC that none of 
these commenters held a particularly strong belief in this regard and 
that making any software program changes would not be too difficult. 
Further, PBGC has concluded that this information will help PBGC to 
conduct its analysis of the impact of a 4010 filing on the pension 
insurance system more effectively. For these reasons, and to conform to 
the statutory requirement, PBGC decided not to retain this provision 
from the proposed rule. Thus, the final rule requires the use of the 
Sec.  4044.51 assumption for purposes of Sec.  4010.8(d)(2).

Timing

    PBGC proposed that the final rule would be applicable to 
information years beginning after December 31, 2015. Three commenters 
urged PBGC to allow a longer transition period/effective date so that 
controlled groups can plan for, or take action to avoid, 4010 filings 
(such as making funding contribution). One of these commenters 
specifically recommended that the effective date be no earlier than 
information years beginning 18 months after the final rule is 
published. Another

[[Page 15438]]

commenter recommended that the ``effective date be changed to 
information years beginning one year after the final rule is final or 
at [a] minimum allow plans to substitute their 2016 FTAP for applicable 
4010 calculations if necessary to avoid filing.''
    PBGC did not change the applicability date from the proposed rule. 
PBGC believes sponsors will have sufficient time to make additional 
contributions in order to qualify for the $15 million aggregate 
underfunding waiver or make additional contributions or waive carryover 
or prefunding balances to increase the 4010 FTAP to above 80 
percent.\22\ Moreover, as always, PBGC will consider case-by-case 
waivers in the case of unusual situations. Finally, PBGC has been 
without 4010 information from certain plans since MAP-21 and needs that 
information from those plans as soon as practicable to better 
understand their current status and its impact on the pension insurance 
system. Accordingly, PBGC did not change the proposed applicability 
date in the final rule.
---------------------------------------------------------------------------

    \22\ PBGC is aware that in the case of a controlled group with a 
calendar year information year that includes a plan with a non-
calendar year plan year, that plan may have needed to make decisions 
about funding or contributions before this final rule was published. 
However, PBGC believes that in such a case the plan had sufficient 
notice in the proposed rule that it would likely need to fund up to 
avoid a 4010 filing for the 2016 information year.
---------------------------------------------------------------------------

Applicability

    The regulatory changes in the final rule are applicable to 
information years beginning after December 31, 2015. The first filings 
under the new regulation are due April 17, 2017.\23\
---------------------------------------------------------------------------

    \23\ April 15, 2017, is a Saturday. In the rare case of a short 
information year beginning in 2016, the due date would be earlier; 
filers in that situation should contact PBGC.
---------------------------------------------------------------------------

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 final 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 final 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 final 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 final 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 final rule changes would far be less than $100 million. See 
discussion under Paperwork Reduction Act.
    This final 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 final rule 
is not likely to have a significant economic impact on a substantial 
number of small entities, section 604 of the Regulatory Flexibility Act 
requires that the agency present a final regulatory flexibility 
analysis at the time of the publication of the final rule describing 
the impact of the rule on small entities and steps taken to minimize 
the impact. Small entities include small businesses, organizations and 
governmental jurisdictions.
    For purposes of the Regulatory Flexibility Act requirements with 
respect to the 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 \24\ and is consistent with 
certain requirements in Title I of ERISA \25\ and the Internal Revenue 
Code,\26\ as well as the definition of a small entity that DOL has used 
for purposes of the Regulatory Flexibility Act.\27\
---------------------------------------------------------------------------

    \24\ See e.g., special rules for small plans under part 4007 
(Payment of Premiums).
    \25\ 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.
    \26\ 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.
    \27\ See, e.g., DOL's final rule on Prohibited Transaction 
Exemption Procedures, 76 FR 66637, 66644 (Oct. 27, 2011).
---------------------------------------------------------------------------

    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 final 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 requested 
comments on the appropriateness of the size standard used in the 
proposed rule. PBGC received no comments on this point.
    PBGC certifies under section 605(b) of the Regulatory Flexibility 
Act that the amendments in this final rule would not have a significant 
economic impact on a substantial number of small entities. 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.

[[Page 15439]]

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, 2018). An agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a currently valid OMB control number.
    PBGC estimates that once the final rule takes effect it will 
receive 4010 filings from about 410 contributing sponsors or controlled 
group members annually and that the total annual burden of the 
collection of information will be about 3,600 hours and $6,560,000.

List of Subjects in 29 CFR Part 4010

    Pension insurance, Pensions, Reporting and recordkeeping 
requirements.

    For the reasons given above, PBGC is amending 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 ``Unless a 
waiver in Sec.  4010.11 of this part applies, a contributing sponsor''.
0
b. Paragraph (a)(1) is amended by adding ``4010'' before the phrase 
``funding target attainment percentage''.
0
c. Paragraph (a)(2) is amended by adding the words ``or 306(g)'' after 
the word ``303(k)'' and adding the words ``or 433(g)'' after the word 
``430(k)''.
0
d. Paragraph (b) is revised.
0
e. Paragraph (d) is removed, and paragraphs (e) and (f) are 
redesignated as paragraphs (d) and (e), respectively.
0
f. Newly redesignated paragraph (e) is revised.
    The revisions 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 without regard 
to the interest rate stabilization provisions of ERISA section 
303(h)(2)(C)(iv) and Code section 430(h)(2)(C)(iv).
    (2) Assets used to determine 4010 funding target attainment 
percentage. For purposes of determining the 4010 funding target 
attainment percentage for a plan for the plan year, the value of plan 
assets determined under ERISA section 303(g)(3) and Code section 
430(g)(3) may (but need not) be substituted for the asset value 
determined without regard to the interest rate stabilization provisions 
of ERISA section 303(h)(2)(C)(iv) and Code section 430(h)(2)(C)(iv).
    (3) 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 certain cooperatives and charities.

0
4. In Sec.  4010.8:
0
a. Paragraph (a)(5) is revised.
0
b. Paragraph (a)(6) is amended by adding ``4010'' before ``funding 
target attainment percentage.''
0
c. Paragraph (a)(9) is amended by adding the words ``or 306(g)'' after 
the word ``303(k)'' and adding the words ``or 433(g)'' after the word 
``430(k)''.
0
d. Paragraph (a)(11)(vi) is amended by adding ``and funding target'' 
after ``the target normal cost.''
0
e. Paragraph (b) is revised.
0
f. Paragraph (c)(1)(i) is amended by removing the reference ``Sec.  
4010.11(c)'' and adding in its place the reference ``Sec.  
4010.11(a)(1)''.
0
g. Paragraph (d)(2)(i) is amended by adding the words ``form of 
payment,'' after ``Interest,''.
0
h. Paragraph (d)(2)(ii) is amended by removing the words ``form of 
payment'' from the parenthetical and adding the words ``form of 
payment'' after ``interest,''.
0
i. Paragraph (h) is removed and paragraph (i) is redesignated as 
paragraph (h) and revised.
    The revisions read as follows:


Sec.  4010.8  Plan actuarial information.

    (a) * * *
    (5) The at-risk funding target for the plan year ending within the 
information year determined under ERISA section 303(i) and Code section 
430(i)--
    (i) As if the plan has been in at-risk status for a consecutive 
period of at least five years, and
    (ii) Without regard to the interest rate stabilization provisions 
of ERISA section 303(h)(2)(C)(iv) and Code section 430(h)(2)(C)(iv);
* * * * *
    (b) Alternative methods of compliance--(1) At-risk funding target. 
Notwithstanding any other provision of this section, a filer is not 
required to provide the information specified in paragraph (a)(5) of 
this section for the plan year for which actuarial information is being 
reported unless PBGC requests in writing that the information be 
provided, in which case the filer must provide the information within 
30 days of such request or such later date as PBGC specifies in the 
request.
    (2) Actuarial valuation report. If any of the information specified 
in paragraph (a)(11) of this section is not available by the date 
specified in Sec.  4010.10(a), a filer may satisfy the requirement to 
provide such information by--

[[Page 15440]]

    (i) Including a statement, with the material that is submitted to 
PBGC, that the filer will file the unavailable information by the 
alternative due date specified in Sec.  4010.10(b), and
    (ii) Filing such information (along with a certification by an 
enrolled actuary under paragraph (a)(12) of this section) with PBGC by 
that alternative due date.
* * * * *
    (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 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.

    (a) Aggregate funding shortfall not in excess of $15 million 
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, 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, as determined under paragraphs (a)(1) and (2) 
of this section.
    (1) 4010 funding shortfall; in general. A plan's 4010 funding 
shortfall for a plan year equals the funding shortfall for the plan 
year as provided under ERISA section 303(c)(4) and Code section 
430(c)(4), with the following exceptions:
    (i) The funding target used to calculate the 4010 funding shortfall 
is determined without regard to the interest rate stabilization 
provisions of ERISA section 303(h)(2)(C)(iv) and Code section 
430(h)(2)(C)(iv).
    (ii) The value of plan assets used to calculate the 4010 funding 
shortfall 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.
    (b) Smaller plans waiver--(1) General. Unless reporting is required 
by Sec.  4010.4(a)(2) or (a)(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, 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.
    (2) Multiple employer plans. For purposes of this paragraph (b), 
the aggregate number of participants in all plans maintained by a 
person's controlled group includes any participants covered by a 
multiple employer plan in which the person participates (including 
participants covered by the multiple employer plan who are not or were 
not employed by the person).
    (c) 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 applications for minimum funding waivers (as 
applicable) were reported to PBGC under part 4043 of this chapter by 
the due date for the 4010 filing.
    (d) 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 March, 2016.
W. Thomas Reeder,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2016-06470 Filed 3-22-16; 8:45 am]
BILLING CODE 7709-02-P