Annual Reporting and Disclosure, 51284-51310 [2021-19713]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 86, Number 176 (Wednesday, September 15, 2021)]
[Proposed Rules]
[Pages 51284-51310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19713]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2520

RIN 1210-AB97


Annual Reporting and Disclosure

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Proposed rule.

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SUMMARY: This document contains proposed amendments to Department of 
Labor (DOL) regulations relating to annual reporting requirements under 
Title I of the Employee Retirement Income Security Act of 1974, as 
amended (ERISA). The proposed amendments contained in this document 
would conform these DOL reporting regulations to proposed revisions 
under Title I of ERISA and the Internal Revenue Code (Code) to the Form 
5500 Annual Return/Report of Employee Benefit Plan and Form 5500-SF 
Short Form Annual Return/Report of Small Employee Benefit Plan being 
published in this issue of the Federal Register in a separate Notice of 
Proposed Forms Revisions (NPFR) prepared jointly by DOL, the Internal 
Revenue Service (IRS), and the Pension

[[Page 51285]]

Benefit Guaranty Corporation (PBGC) (collectively ``Agencies''). Those 
proposed form changes and these proposed regulatory amendments 
primarily implement statutory changes enacted as part of the Setting 
Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). 
Conforming changes also are being proposed to the requirements for the 
summary annual report. The proposed regulatory amendments would affect 
employee pension and welfare benefit plans, plan sponsors, 
administrators, and service providers to plans subject to annual 
reporting requirements under ERISA and the Code.

DATES: 
    Comment due date: Comments are due on or before November 1, 2021.
    Proposed applicability dates: If adopted, the proposed regulatory 
amendments to implement the SECURE Act's amendment of section 103(g) 
would apply to 2021 plan year reporting. All other proposed regulatory 
amendments would apply to reporting for plan years beginning on or 
after January 1, 2022.

ADDRESSES: You may submit written comments, identified by RIN 1210-
AB97, by one of the following methods:
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for submitting comments.
    Mail: Office of Regulations and Interpretations, Employee Benefits 
Security Administration, Room N-5655, U.S. Department of Labor, 200 
Constitution Ave. NW, Washington, DC 20210, Attention: Proposed 
Revision of Annual Information Return/Reports RIN 1210-AB97.
    Instructions: All submissions must include the agency name and 
Regulatory Identifier Number (RIN) for this rulemaking. The DOL will 
share any comment submitted in response to this regulatory proposal 
with the IRS and the PBGC. To avoid unnecessary duplication of effort, 
the Agencies also will treat public comments submitted in response to 
this notice of proposed rulemaking as public comments on the Notice of 
Proposed Forms Revisions to the extent they include information 
relevant to the proposed regulatory amendments. If you submit comments 
electronically, do not submit paper copies. Comments will be available 
to the public, without charge, online at https://www.regulations.gov and 
https://www.dol.gov/agencies/ebsa and at the Public Disclosure Room, 
Employee Benefits Security Administration, Suite N-1513, 200 
Constitution Ave. NW, Washington, DC 20210.
    Warning: Do not include any personally identifiable or confidential 
business information that you do not want publicly disclosed. Comments 
are public records posted on the internet as received and can be 
retrieved by most internet search engines.

FOR FURTHER INFORMATION CONTACT: Janet Song or Colleen Brisport 
Sequeda, Office of Regulations and Interpretations, Employee Benefits 
Security Administration, U.S. Department of Labor, (202) 693-8500 (this 
is not a toll-free number), for questions related to these proposed 
amendments to the DOL regulations.
    Customer service information: Individuals interested in obtaining 
information from the DOL concerning Title I of ERISA may call the EBSA 
Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the DOL's website 
(www.dol.gov/agencies/ebsa).

SUPPLEMENTARY INFORMATION:

A. Legislative and Regulatory Reporting Framework

    Titles I and IV of ERISA and the Internal Revenue Code (Code), 
generally require pension and other employee benefit plans to file 
annual returns/reports concerning, among other things, the financial 
condition and operations of the plan. Filing a Form 5500 Annual Return/
Report of Employee Benefit Plan (Form 5500) or, if eligible, a Form 
5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan 
(Form 5500-SF), together with any required schedules and attachments 
(together ``the Form 5500 Annual Return/Report''),\1\ in accordance 
with their instructions, generally satisfies these annual reporting 
requirements.
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    \1\ References to the ``Form 5500 Annual Return/Report'' may 
include depending on the context, the Form 5500, the Form 5500-SF, 
and the Form 5500-EZ, Annual Return of One Participant (Owners and 
Their Spouses) Retirement Plan (Form 5500-EZ). The Form 5500-EZ is a 
return that is required only to satisfy the Code. Form 5500-EZ 
filers are not subject to Title I of ERISA.
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    ERISA section 103 broadly sets out annual financial reporting 
requirements for employee benefit plans under Title I of ERISA. The 
Form 5500 Annual Return/Report for Title I purposes is promulgated 
pursuant to DOL regulations under the ERISA provisions authorizing 
limited exemptions and simplified reporting and disclosure for welfare 
plans under ERISA section 104(a)(3), simplified annual reports under 
ERISA section 104(a)(2)(A) for pension plans that cover fewer than 100 
participants, and alternative methods of compliance for all pension 
plans under ERISA section 110. The Form 5500 Annual Return/Report, and 
related instructions and regulations, are also promulgated under the 
DOL's general regulatory authority in ERISA sections 109 and 505.
    In addition to being an important disclosure document for plan 
participants and beneficiaries, the Form 5500 Annual Return/Report is a 
critical enforcement, compliance, and research tool for the DOL, the 
Internal Revenue Service (IRS), and the Pension Benefit Guaranty 
Corporation (PBGC) (together ``Agencies''). The Form 5500 Annual 
Return/Report is also an important source of information and data for 
use by other Federal agencies, Congress, and the private sector in 
assessing employee benefit, tax, and economic trends and policies. In 
the United States, there are an estimated 2.5 million health plans, an 
estimated 885,000 other welfare plans, and nearly 772,000 private 
pension plans. These plans cover roughly 154 million private sector 
workers, retirees, and dependents, and have estimated assets of $12.2 
trillion. The Form 5500 Annual Return/Report serves as the principal 
source of information and data available to the Agencies concerning the 
operations, funding, and investments of approximately 843,000 pension 
and welfare benefit plans that file.\2\ Accordingly, the Form 5500 
Annual Return/Report is essential to each Agency's enforcement, 
research, and policy formulation programs, as well for the regulated 
community, which makes increasing use of the information as more 
capabilities develop to interact with the data electronically. The data 
is also an important source of information and data for use by other 
Federal agencies, Congress, and the private sector in assessing 
employee benefit, tax, and economic trends and policies. The Form 5500 
Annual Return/Report also serves as the primary means for monitoring 
the operations of plans by participating employers in multiple employer 
plans and other group arrangements, plan participants and 
beneficiaries, and by the public.
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    \2\ Estimates are based on 2019 Form 5500 filings. DOL notes 
that welfare plans with less than 100 participants that are unfunded 
or insured (do not hold assets in trust) are generally exempt from 
filing a Form 5500. Therefore, while DOL estimates there are 2.5 
million health plans and 885,000 non-health welfare plans, 
respectively only 69,000 and 91,000 of these plans filed a 2019 Form 
5500.
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    The forms, schedules, and instructions, also serve to help the DOL 
carry out its statutory directives under sections 506 and 513 of ERISA. 
Specifically, section 506(a) of ERISA authorizes the Secretary of Labor 
to coordinate with other Agencies to avoid unnecessary expense and 
duplication of functions among Government agencies. The Agencies 
designed the Form 5500

[[Page 51286]]

Annual Return/Report so that it could be used simultaneously to satisfy 
annual return/report requirements to the Agencies, and to help the 
Agencies more effectively and efficiently (from both the public's and 
the Agencies' perspectives) provide oversight, assist with compliance, 
and enforce the provisions of ERISA and the Code. Section 506(b) gives 
the DOL responsibility for detecting and investigating civil and 
criminal violations of Title I of ERISA. The Form 5500 Annual Return/
Report is one of the important tools the DOL uses to carry out its 
responsibility to detect and investigate such violations. Section 
513(b)(2) of ERISA specifically directs DOL to undertake research 
studies relating to pension plans, including but not limited to (A) the 
effects of this subchapter upon the provisions and costs of pension 
plans, (B) the role of private pensions in meeting the economic 
security needs of the nation, and (C) the operation of private pension 
plans including types and levels of benefits, degree of reciprocity or 
portability, and financial and actuarial characteristics and practices, 
and methods of encouraging the growth of the private pension system.
    Recent legislative and regulatory changes affecting multiple 
employer pension plans (MEPs) and similar arrangements are spurring the 
current need to update the Form 5500 Annual Return/Report and related 
regulations. Specifically, as discussed in more detail in the NPFR, the 
Setting Every Community Up for Retirement Enhancement Act of 2019 
(SECURE Act),\3\ included various provisions designed to improve the 
private employer-based retirement system. Among other things, the 
SECURE Act included changes designed to simplify retirement plan 
administration for certain eligible defined contribution plans and 
added provisions to the Code relating to MEPs, including MEPs with 
pooled plan providers, and adopted provisions under Title I of ERISA 
that designated these MEPs with pooled plan providers as pooled 
employer plans.
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    \3\ The SECURE Act was enacted on December 20, 2019, as Division 
O of the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-
94).
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    The NPFR published concurrently in this issue of the Federal 
Register sets forth a discussion of form and instruction changes that 
relate to these proposed regulations. These proposed revisions to the 
DOL's reporting regulations are needed for the DOL to implement the 
forms revisions proposed in the three-agency (DOL, IRS, and PBGC) 
Notice of Proposed Forms Revisions (NPFR).

B. Discussion of the Proposed Revisions to 29 CFR Part 2520

1. Section 2520.103-1(a)(2)

    Section 2520.103-1 generally describes the content of the Form 5500 
Annual Return/Report as a limited exemption and alternative method of 
compliance for ERISA-covered employee benefit plans to satisfy annual 
reporting requirements under Title I. The proposal adds a reference to 
``section 202 of the SECURE Act'' to paragraph (a)(2) of Sec.  
2520.103-1 to set forth the authority for prescribing a consolidated 
report alternative method of compliance for certain groups of defined 
contribution retirement plans under proposed Sec. Sec.  2520.103-14 and 
2520.104-51, discussed below, relating to defined contribution group 
(DCG) reporting arrangements.

2. Sections 2520.103-1(b)(1) and 2520.103-1(c)(1)

    Paragraphs (b) and (c) of Sec.  2520.103-1 generally describes the 
contents of the annual report for large plans (generally those with 100 
or more participants) and small plans (generally those with fewer than 
100 participants). The proposal would amend Sec.  2520.103-1(b)(1) to 
add a proposed multiple employer plan (MEP) schedule (titled Schedule 
MEP) to the list of schedules and attachments required to be included 
with the Form 5500 for large MEPs. A parallel update is being proposed 
to Sec.  2520.103-1(c)(1) to add the Schedule MEP as a schedule that 
small MEPs must include with the Form 5500.\4\
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    \4\ See NPFR for detailed discussion of the proposed Schedule 
MEP and Schedule DCG.
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2. Section 2520.103-1(c)(2)(ii)

    Paragraph (c) of Sec.  2520.103-1 describes the conditions under 
which an eligible small plan (generally with fewer than 100 
participants) may file the Form 5500-SF. The proposal would add Sec.  
2520.103-1(c)(2)(ii)(F) to state that MEPs, which include pooled 
employer plans, as well as MEPs described in the DOL's regulation at 
Sec.  2510.3-55 (association retirement plans and professional employer 
organization (PEO) MEPs), are not permitted to use the Form 5500-SF 
regardless of whether the plan meets the size and other requirements 
for filing a Form 5500-SF. A similar prohibition applies under the 
current regulation to MEWA plans required to file the Form M-1 and to 
multiemployer plans. The proposal would also add a new Sec.  2520.103-
1(c)(2)(ii)(G) to provide a similar prohibition on filing the Form 
5500-SF for DCG reporting arrangements. As described below in proposed 
Sec. Sec.  2510.103-14 and 104-51, DCG reporting arrangements must file 
the aggregated annual report for participating plans using the Form 
5500, including the schedules and attachments that are generally 
required for large retirement plans and Direct Filing Entities (DFEs) 
as well as a Schedule DCG (Individual Plan Information) for each plan 
whose reporting obligation is being satisfied by the DCG filing.

3. Amendments to Sec.  2520.103-10

    Section 2520.103-10 identifies financial schedules that are 
required to be included as part of the Form 5500 Annual Return/Report 
depending on the characteristics and operations of the plan. The listed 
schedules include the ``Schedule of Assets Held for Investment'' and 
``Schedule of Assets Acquired and Disposed within the Plan Year.'' 
Paragraph (b) of Sec.  2520.103-10 sets forth the content requirements 
for these schedules. The NPFR being published concurrently with this 
NPRM includes proposed additions and clarifications to the content of 
the ``Schedules of Assets Held for Investment'' and the ``Schedule of 
Assets Acquired and Disposed within the Plan Year'' that are designed 
to improve the consistency, transparency, and usability of the 
information reported regarding plan investments. The proposed changes 
to the contents and format of the schedule are described in detail in 
the NPFR and also set forth in the proposed amendment to the regulatory 
text in paragraph (b)(1)(i) of Sec.  2520.103-10. Currently, filers 
typically file the schedule as a PDF. Of particular note, the proposal 
specifies that the schedules would have to be filed electronically 
through the ERISA Filing Acceptance System II (EFAST2) electronic 
filing system in a structured format in accordance with the EFAST2 
requirements and the Form 5500's instructions.

4. New Sec. Sec.  2520.103-14, 2520.104-51 and 2520.104a-9--
Consolidated Form 5500 as an Alternative Method of Compliance for Plans 
Participating in a DCG Reporting Arrangement

    The proposal would amend the ERISA annual reporting regulations to 
implement the SECURE Act section 202 directive to the Secretary of 
Labor to jointly with the Secretary of the Treasury provide for a 
single, aggregated Form 5500 option that would satisfy the annual 
reporting obligations for the defined contribution pension plans

[[Page 51287]]

participating in the group. Under the proposal, several conditions 
relating to the DCG reporting arrangement, the participating plans, and 
the content of the Form 5500 filing would have to be satisfied before 
the aggregated filing would satisfy the annual reporting requirements 
of the separate participating plans. The NPFR describes those 
conditions in detail. The conditions also are set forth in a proposed 
new 29 CFR 2520.103-14 and 2520.104-51.\5\
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    \5\ The proposal is modeled to some extent on the existing 
annual reporting rules for fully insured welfare benefit plans that 
participate in a group insurance arrangement (GIA) and for 
investment entities that file as a Direct Filing Entity. See 29 CFR 
2520.103-2, 2520.103-12, 2520.104-21, and 2520.104-43.
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    With respect to the content requirements for a DCG consolidated 
Form 5500 filing, proposed paragraph (b) of Sec.  2520.103-14 provides 
that the consolidated DCG report would be required to include a Form 
5500 ``Annual Return/Report of Employee Benefit Plan'' and various 
statements or schedules based on the characteristics and operations of 
the participating plans, including Schedule A (Insurance Information), 
Schedule C (Service Provider Information), Schedule D (DFE/
Participating Plan Information), Schedule G (Financial Transaction 
Schedules), Schedule H (Financial Information), Schedule R (Retirement 
Plan Information), Schedule DCG (Individual Plan Information),\6\ 
supplemental schedules referred to in 29 CFR 2520.103-10 with 
information aggregated for all the participating plans, the report and 
opinion of an independent qualified public accountant (IQPA) for the 
DCG trust, and an IQPA report and opinion for any individual 
participating plans with 100 or more participants that would be subject 
to the audit requirement if filing a separate Form 5500. This would 
include separate financial statements, if such financial statements are 
prepared in order for the independent qualified public accountant to 
form the required opinions on the DCG trust required under the proposal 
and the individual participating large plans required by section 
103(a)(3)(A) of the Act and Sec.  2520.103-2(b)(5).\7\
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    \6\ See NPFR for detailed description of the proposed Schedule 
DCG. A separate Schedule DCG would be required for each individual 
participating plan. In the case of an existing plan that joins a DCG 
filing arrangement, the identifying information regarding the plan 
and employer/plan sponsor that was used in prior filings for the 
plan must be used to identify the plan and the employer/plan sponsor 
on the Schedule DCG for the plan.
    \7\ See NPFR for a more detailed discussion of the content 
requirements for DCG Form 5500.
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    Proposed paragraph (d) would make clear that the DCG reporting 
arrangement must comply with the electronic filing requirements that 
apply to all plan filers and direct filing entities (DFE). See Sec.  
2520.104a-2 and the instructions for the Form 5500 Annual Return/Report 
for electronic filing requirements. In addition, the proposed paragraph 
emphasizes that the common plan administrator of all the participating 
plans that is filing the consolidated Form 5500 must maintain an 
original copy, with all required signatures, as part of its records 
(which also would be treated as records of each of the participating 
plans).
    The proposed new Sec.  2520.104-51 would authorize the DCG 
consolidated report as an alternative method of compliance under ERISA 
section 110 for defined contribution pension plans that participate in 
DCG reporting arrangements. Specifically, filing of a complete and 
accurate consolidated Form 5500 for the DCG reporting arrangement would 
relieve the administrator of each individual participating defined 
contribution pension plan that meets the requirements of paragraph (b) 
of Sec.  2520.104-51 of the obligation to file an individual annual 
report under Title I of ERISA. This alternative method of compliance 
would be available only for a defined contribution pension plan in a 
plan year in which (i) such plan participates in a DCG reporting 
arrangement that meets the conditions of paragraph (c) of this proposed 
Sec.  2520.104-51; and (ii) the DCG reporting arrangement has filed 
with the Secretary of Labor in accordance with proposed Sec.  
2520.104a-9, a complete and accurate consolidated annual report that 
meets the content requirements under proposed Sec.  2520.103-14. To 
make clear that the DCG reporting arrangement is a direct filing entity 
(DFE) that is submitting the aggregated Form 5500 on behalf of the 
participating plans, proposed Sec.  2520.104-51(b)(2) provides that 
that the term ``DCG reporting arrangement'' shall be used in place of 
the term ``plan'' where it appears in Sec. Sec.  2520.103-3, 2520.103-
4, 2520.103-6, 2520.103-8, 2520.103-9, and 2520.103-10 and elsewhere in 
subparts C and D of 29 CFR part 2520, as applicable.
    Proposed Sec.  2520.104-51 would also provide that the reporting 
relief for individual plans would apply only if all plans participating 
in the DCG reporting arrangement (i) are individual account plans or 
defined contribution plans; (ii) have--(A) the same trustee (``common 
trustee'') and same trust holding the assets of the participating plans 
(``common trust''); (B) the same one or more named fiduciaries, except 
the proposal would allow for the employer/plan sponsor to be a named 
fiduciary of each employer's own plan provided that the other named 
fiduciaries under the plans are the same and common to all plans 
(``common named fiduciaries''); (C) a designated administrator that is 
the same plan administrator for all the participating plans (``common 
plan administrator''); (D) plan years beginning on the same date 
(``common plan year''); (iii) provide the same investments or 
investment options to participants and beneficiaries (``common 
investments or investment options''); (iv) have the investment assets 
held in a single trust of the DCG reporting arrangement; (v) not hold 
any employer securities; (vi) be 100% invested in certain secure, easy 
to value assets that meet the definition of ``eligible plan assets'' 
(see the instructions for line 6a of the Form 5500-SF), such as mutual 
fund shares, investment contracts with insurance companies and banks 
valued at least annually, publicly traded securities held by a 
registered broker dealer, cash and cash equivalents, and plan loans to 
participants; (vii) be audited by an IQPA or be eligible for the waiver 
of the annual examination and report of an IQPA under 29 CFR 2520.104-
46, but not by reason of enhanced bonding; and (viii) may not be a 
multiemployer plan or a MEP (including association retirement plans, 
pooled employer plans and professional employer organization plans (PEO 
plans)).
    Proposed Sec.  2520.104-51 would also expressly state that the 
alternative method of complying with the Title I annual reporting 
requirements would not relieve the administrator of the individual 
participating plans from any other requirement of Title I of the Act, 
including, for example, the provisions that require that plan 
administrators furnish copies of the summary plan description to 
participants and beneficiaries (ERISA section 104(b)(1)), furnish 
certain documents to the Secretary of Labor upon request (ERISA section 
104(a)(6)), and furnish a copy of a Summary Annual Report (SAR) to 
participants and beneficiaries of the plan (ERISA section 104(b)(3)). 
Proposed Sec.  2520.104-51(c)(2)(iii) provides that all plans 
participating in a DCG reporting arrangement must have a designated 
common plan administrator that is the same plan administrator for all 
the participating plans. The SECURE Act was not explicit on whether 
this was intended to require the same person to be the plan 
administrator under ERISA section

[[Page 51288]]

3(16)(A) for the purpose of meeting the annual reporting requirements 
for each participating plan or was intended to require that the same 
person be the plan administrator of each participating plan for all 
purposes under ERISA. The proposal requires that the same person sign 
the DCG filing as the plan administrator for each participating plan. 
The Department solicits comments on whether the final rule should 
address whether individual plans participating in a DCG may have a 
separate statutory administrator responsible for other duties ERISA 
assigns to the plan administrator (e.g., distribution of summary plan 
descriptions).
    Finally, proposed new Sec.  2520.104a-9 provides that, as would be 
the case for all of the participating plans in the DCG reporting 
arrangement if they were filing individually, the aggregated Form 5500 
for the DCG is due no later than the end of the 7th month after the end 
of the common plan year that all the plans must have in order to 
participate in a DCG reporting arrangement pursuant to the requirement 
in section 202 of the SECURE Act and the proposed regulation at Sec.  
2520.104-51. Because the DCG filing is an alternative to each 
participating plan filing its own Form 5500, that would mean that each 
plan would have to submit its own IRS Form 5558 to extend the plan's 
due date, and, as a consequence, extend the due date for the DCG 
filing. A plan that did not submit a timely Form 5558 and that 
participated in a DCG filing that was submitted after the 7th month 
normal due date would be treated as having filed late. Public comments 
are specifically solicited on how the filing extension process should 
be structured for DCGs, including whether DCG reporting arrangements 
should be able to file a single Form 5558 to obtain an extension for 
filing the DCG consolidated report on behalf of the participating plans 
as an alternative to having each individual plan file a Form 5558 for 
there to be an extension for the reporting group as a whole.\8\
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    \8\ Under the somewhat similar consolidated reporting provisions 
applicable to GIAs, the GIA is permitted to use the IRS Form 5558 to 
apply for an extension of time the GIA consolidated report on behalf 
of the plans participating in the GIA.
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    As noted above, section 110 of ERISA permits the DOL to prescribe 
for pension plans alternative methods of complying with any of the 
reporting and disclosure requirements if the Secretary finds that: (1) 
The use of the alternative method is consistent with the purposes of 
ERISA and it provides adequate disclosure to plan participants and 
beneficiaries, and adequate reporting to the Secretary; (2) application 
of the statutory reporting and disclosure requirements would increase 
costs to the plan or impose unreasonable administrative burdens with 
respect to the operation of the plan; and (3) the application of the 
statutory reporting and disclosure requirements would be adverse to the 
interests of plan participants in the aggregate. The DOL believes that 
the proposal on DCG reporting arrangements meets those conditions, 
especially given the statutory direction in the SECURE Act to create 
such a reporting option, but also specifically solicits comments on the 
required findings under section 110.
    As also discussed in the NPFR, the DOL expects that cost savings 
for plans relying on a DCG filing compared to plans filing separately 
will generally require the DCG to collectively exceed an aggregate 
participant count of 100 participants. In other words, the DOL does not 
expect a DCG filing to provide meaningful cost savings for plans 
compared to filing their own annual report in the case of DCG 
arrangements with an aggregate participant count of under 100 
participants. Rather, we expect in such cases that the individual plans 
would likely qualify for filing the Form 5500-SF and that they will 
likely find it more cost effective to file their own separate Form 
5500-SF. Accordingly, this proposal does not include an option under 
which such a ``small'' DCG could file as a small plan. Nonetheless, the 
DOL solicits comments regarding the merit of those expectations and 
assumption and whether the rules should provide a simplified reporting 
option for ``small'' DCG reporting arrangements.

5. Section 2520.104b-10

    Section 2520.104b-10 sets forth the requirements for the Summary 
Annual Report (SAR) appendix and prescribes formats for such reports. 
The DOL proposes updating this section to reflect the new filing option 
for DCG reporting arrangements and the addition of the new Schedule MEP 
and Schedule DCG to the 5500 Annual Report/Return. The proposal 
includes adding to the existing model language in the DOL's regulation 
new text that plans would use to provide a brief description of the 
plan based on the plan characteristic codes listed for the plan on the 
Form 5500, including whether it is a defined contribution or defined 
benefit plan, and whether the plan is a pooled employer plan, another 
type of multiple employer plan, a single employer plan, or a plan 
participating in a DCG reporting arrangement, respectively. The 
proposed new regulatory language also includes text for plans to use 
that states a copy of the Schedule DCG and the Schedule MEP are 
available on request, as applicable. For plans participating in a DCG 
reporting arrangement, the new language advises that a statement of the 
aggregate assets and liabilities of all the plans in the DCG reporting 
arrangement and accompanying notes, a statement of aggregate income and 
expenses of the DCG reporting arrangement and accompanying notes, and a 
copy of the audit report filed for the trust of the DCG reporting 
arrangement are available on request. Finally, the new SAR language 
would state that a copy of the Form 5500 annual report filed for the 
plan or DCG is available online from EBSA via a DOL website at 
www.efast.dol.gov.

C. Applicability Dates

    If adopted, the proposed amendments to implement the SECURE Act's 
amendment of section 103(g) would apply to reporting for plan years 
beginning on or after January 1, 2021. The other proposed rules, 
including those under section 202 of the SECURE Act and structuring the 
schedules of assets held for investment, generally would apply to 
reporting for plan years beginning on or after January 1, 2022. The 
NPFR published concurrently in this issue of the Federal Register sets 
forth a comprehensive discussion of form and instruction changes that 
relate to these proposed regulations.

D. Regulatory Impact Analysis

    The following is a discussion of the DOL's examination of the 
effects of this rule as required by Executive Order 12866,\9\ Executive 
Order 13563,\10\ the Paperwork Reduction Act of 1995,\11\ the 
Regulatory Flexibility Act,\12\ section 202 of the Unfunded Mandates 
Reform Act of 1995,\13\ Executive Order 13132,\14\ and the 
Congressional Review Act.\15\
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    \9\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
    \10\ Improving Regulation and Regulatory Review, 76 FR 3821 
(Jan. 18, 2011).
    \11\ 44 U.S.C. 3506(c)(2)(A) (1995).
    \12\ 5 U.S.C. 601 et seq. (1980).
    \13\ 2 U.S.C. 1501 et seq. (1995).
    \14\ Federalism, 64 FR 153 (Aug. 4, 1999).
    \15\ 5 U.S.C. 804(2) (1996).
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1.1. Executive Orders

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, 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

[[Page 51289]]

importance of quantifying costs and benefits, reducing costs, 
harmonizing rules, and promoting flexibility.
    Under Executive Order 12866, ``significant'' regulatory actions are 
subject to review by the Office of Management and Budget (OMB).\16\ 
Section 3(f) of the Executive order defines a ``significant regulatory 
action'' as an action that is likely to result in a rule (1) having an 
annual effect on the economy of $100 million or more, or adversely and 
materially affecting a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or state, 
local, or tribal governments or communities (also referred to as 
``economically significant''); (2) creating a serious inconsistency or 
otherwise interfering with an action taken or planned by another 
agency; (3) materially altering the budgetary impacts of entitlement 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or (4) raising novel legal or policy issues arising 
out of legal mandates, the President's priorities, or the principles 
set forth in the Executive order.
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    \16\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
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    A full regulatory impact analysis must be prepared for major rules 
with economically significant effects (for example, $100 million or 
more in any 1 year), and the Office of Management and Budget (OMB) 
reviews ``significant'' regulatory actions. It has been determined that 
this rule is not economically significant within the meaning of section 
3(f)(1) of the Executive order. Pursuant to the terms of the Executive 
order, OMB has determined, however, that this action is ``significant'' 
within the meaning of section 3(f)(4) of the Executive order. 
Therefore, the DOL has provided an assessment of the potential costs, 
benefits, and transfers associated with this proposed rule. In 
accordance with the provisions of Executive Order 12866, this proposed 
rule was reviewed by OMB. Pursuant to the Congressional Review Act, OMB 
has designated this proposed rule as not a ``major rule,'' as defined 
by 5 U.S.C. 804(2).

1.2. Introduction and Need for Regulation

    The Form 5500 Annual Return/Report is the principal source of 
information and data available to the Agencies concerning the 
operations, funding, and investments of pension and welfare benefit 
plans covered by ERISA and the Code. Accordingly, the Form 5500 Annual 
Return/Report is essential to each Agency's enforcement, research, and 
policy formulation programs and is a source of information and data for 
use by other Federal agencies, Congress, and the private sector in 
assessing employee benefit, tax, and economic trends and policies. The 
Form 5500 Annual Return/Report also serves as the primary means by 
which the operations of plans can be monitored by plan participants and 
beneficiaries and the general public.
    As discussed earlier in this document and the related NPFR 
publishing concurrently with this proposal, the SECURE Act included 
various provisions designed to improve the private employer-based 
retirement system by seeking to make it easier for businesses to offer 
retirement plans, and for individuals to save for retirement, through 
the creation of new plan structure and reporting options. These new 
structures will require new annual reporting, which has resulted in the 
need to update the Form 5500 Annual Return/Report and related 
regulations.
    Pooled Employer Plans and Other MEPs: The SECURE Act amended ERISA 
and the Code to address certain MEPs administered by pooled plan 
providers. Under section 3(43) of ERISA such plans are called pooled 
employer plans. The proposed regulation would add a new Schedule MEP to 
the Form 5500 annual report to collect information on employers 
participating in MEPs and to gather compliance information on pooled 
employer plans. Some of the information on the proposed Schedule MEP is 
currently reported on the Form 5500 Annual Return/Report by MEPs, but 
it is reported on a nonstandard attachment. Only an image or picture of 
the attachment is available through the EFAST2 public disclosure 
function. Making the information data-capturable by including it on the 
proposed Schedule MEP would improve the uniformity and accuracy of the 
data and increase its usability.
    ``Defined Contribution Group (DCG) Reporting Arrangement'': Section 
202 of the SECURE Act directs the Secretary of the Treasury and the 
Secretary of Labor (together ``Secretaries'') to modify the returns 
required under section 6058 of the Code and the reports required by 
section 104 of the ERISA, respectively, so that all members of a group 
of defined contribution individual account plans that meet certain 
conditions may file a single aggregated annual return/report satisfying 
the requirements of both such sections. The SECURE Act provides that to 
constitute an eligible group of plans, all of the plans in the group 
must be either individual account plans or defined contribution plans, 
must have the same trustee, the same named fiduciaries, the same 
administrator, plans years beginning on the same date, and must provide 
the same investments or investment options to participants and 
beneficiaries. The proposed rule would establish the conditions, 
including the SECURE Act conditions, under which filing a single, 
aggregated Form 5500 Annual Return/Report by a ``defined contribution 
group (DCG) reporting arrangement'' would satisfy the individual, 
annual reporting obligations for each of the plans participating in the 
group. As discussed in more detail in the NPFR, the proposed rule also 
includes adding a new Schedule DCG (Individual Plan Information) to 
provide individual plan-level information for plans covered by a DCG 
consolidated Form 5500 filing.
    In addition, although not directly implementing SECURE Act changes, 
some of the changes being proposed in this document are intended to 
ensure that annual reporting by pooled employer plans, other MEPs, and 
DCGs provides appropriate financial and operational transparency and 
accountability. Certain proposed changes would benefit workers in plans 
other than pooled employer plans and DCGs would apply more broadly, 
e.g., improving the quality of financial reporting. Other changes being 
proposed relate to efforts to improve compliance and oversight with 
respect to the Code issues and defined benefit plans subject to the 
PBGC insurance program under Title IV of ERISA.
    Schedule H, Schedule of Assets Held for Investment, and Schedule of 
Assets Acquired and Disposed of Within the Year: As discussed in the 
NPFR, the Agencies are proposing structural, data element, and 
instruction changes to the current Schedule H, Line 4i Schedules of 
Assets. Current Line 4i would be broken into two items to identify the 
existing schedules separately: Line 4i(1) would identify the Schedule 
of Assets Held for Investment at End of Year, and Line 4i(2) would 
identify the Schedule of Assets Acquired and Disposed of Within Year 
(together ``Schedules of Assets''). The current regulations and 
instructions require most large plans and DFEs to attach the Schedules 
of Assets to the Form 5500, Schedule H.\17\

[[Page 51290]]

They are the only place on the Form 5500 Annual Return/Report where 
plans are required to list individual plan investments identified by 
major characteristics, such as issue, maturity date, interest rate, 
cost and current value. As such, they are the only part of the Form 
5500 Annual Return/Report useful to evaluate the year-to-year 
performance, liquidity, and risk characteristics of a plan's individual 
investments.
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    \17\ In 2019, the plans required to file the Form 5500 included 
any benefit plan or a welfare benefit plan that covered 100 or more 
participants as of the beginning of the plan year and a Form 5500 
filed for a master trust investment account (MTIA), common/
collective trust (CCT), pooled separate account (PSA), 103-12 
investment entity (103-12 IE), or GIA. However, fully insured, 
unfunded, or a combination of unfunded/insured welfare plans and 
fully insured pension plans that meet the requirements of 29 CFR 
2520.104-44 are exempt. If a Schedule I was filed for the plan for 
the 2018 plan year or a Form 5500-SF and the plan covered fewer than 
121 participants as of the beginning of the 2019 plan year, the 
Schedule I may be completed instead of a Schedule H. Plans that file 
a Form 5500-SF for the 2019 plan year are not required to file a 
Schedule H for that year.
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    The current reported information suffers from several shortcomings. 
First, filers currently submit this information as non-standard 
attachments to filers' electronic Form 5500 Annual Return/Report 
filings, so only an image or picture of the attachments is available 
through the EFAST2 public disclosure function. A survey panel of plan 
sponsors, service providers, representatives of plan participants, and 
researchers was conducted in 2014 as part of a Government 
Accountability Office (GAO) report; 11 of 31 respondents indicated that 
having no standard reporting format was a very or extremely significant 
challenge. GAO reported that attachments to the form may be as long as 
400 pages, making it particularly difficult for users to find 
information.\18\ Second, filers do not always provide the Line 4i 
Schedules of Assets in the same place in each annual return/report. For 
example, the Line 4i Schedules of Assets are often incorporated in the 
larger audit report of the plan's IQPA that itself is filed as a 
nonstandard attachment to the Form 5500 Annual Return/Report. Third, 
the schedules do not require a standardized method for identifying and 
describing assets on the Line 4i Schedules. Different filings may 
identify the same stock or mutual fund with various different names or 
abbreviations. In the aforementioned GAO survey, most researchers 
indicated that a lack of a standard reporting format or unique 
identifier for plan assets was a major challenge, while representatives 
of plan sponsors and service providers did not.\19\
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    \18\ Private Pensions: Targeted Revisions Could Improve 
Usefulness of Form 5500 Information, at 17.
    \19\ Id.
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    Data capturability of the Line 4i Schedules of Assets would make it 
much easier and more efficient to monitor plan holdings as computer 
programs can read and analyze the data much more efficiently. 
Currently, entities expend considerable resources collecting the data 
and presenting it in a usable format, to which they then sell access. 
Making the information data capturable at the submission stage of the 
process would be more cost effective as it removes the need for a 
second entity to gather the information, and allow more entities access 
to the data at a lower overall cost. The DOL's Office of Inspector 
General (``DOL-OIG'') and the GAO have both recommended that EBSA 
implement changes to create more detailed and structured Schedules of 
Assets.\20\ It would also allow the Agencies and the interested public, 
including the participants and beneficiaries in impacted plans, to 
better monitor a larger number of pension plans and their asset 
allocations. A number of private entities have been using the 
information reported on Line 4i Schedule of Assets Held for Investment 
in larger pension plan Form 5500 Annual Return/Report filings into 
data-capturable information and have been using it to compare plan 
investment menus and investment allocations. The DOL believes this 
development is evidence that plans sponsors and their service providers 
are interested in having access to these data. For example, one company 
that uses the Schedules of Assets data sent a letter to DOL stating 
that they believe that the information on the Form 5500 Annual Return/
Report is very useful in ``helping the agency understand the 
performance and design of retirement plans in the market place'' and 
that the data availability fosters ``third party data collection and 
evaluation efforts that in turn help protect retirement plan 
participants.'' \21\ Plan sponsors can use this information to see 
better how their investment menus compare to similarly situated plans 
and service providers use this information to identify plans with 
underperforming investments in order to attract new business. This can 
lead to more competition and improved plan performance, which would 
ultimately benefit plan participants and beneficiaries.
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    \20\ See EBSA Needs to Provide Additional Guidance and Oversight 
to ERISA Plans Holding Hard-to-Value Alternative Investments at 17, 
September 30, 2013. https://www.oig.dol.gov/public/reports/oa/2013/09-13-001-12-121.pdf; Private Pensions: Targeted Revisions Could 
Improve Usefulness of Form 5500 Information, at 37. June 5, 2014. 
https://www.gao.gov/products/gao-14-441.
    \21\ See August 23, 2010 Comment Letter from Ryan Alfred, 
President, BrightScope, Inc. Re: Proposed Extension of Information 
Collection, Form 5500 https://www.reginfo.gov/public/do/PRAViewDocument?ref_nbr=201009-1210-002).
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    Defined Benefit Pension Plan/ERISA Title IV Additions: The Form 
5500 collects information from defined benefit pension plans in 
Schedules MB, SB, and R. The PBGC has determined that it needs more 
detail in these schedules accurately to project defined benefit pension 
plan and PBGC insurance program liabilities. The PBGC's proposed 
changes to the information required to be reported by PBGC-insured 
defined benefit plans would remedy the deficiencies of the current Form 
5500 filings and better protect participants. There are 23,371 single 
employer defined benefit plans and 1,373 multiemployer defined benefit 
plans that are covered by the PBGC and would be impacted by these 
changes.\22\
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    \22\ PGBC 2018 Pension Insurance Data Tables. https://www.pbgc.gov/sites/default/files/2018_pension_data_tables.pdf.
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    Internal Revenue Code Compliance Additions: Prior to 2009, Schedule 
E, ESOP Annual Information, Schedule P, Annual Return of Fiduciary of 
Employee Benefit Trust, and Schedule T, Qualified Pension Plan Coverage 
Information, were required as part of the annual return under section 
6058(a) of the Code and associated regulations, but they were not 
information collections of the DOL or the PBGC. Beginning in 2009, DOL 
mandated electronic filing of Form 5500, Annual Return/Report of 
Employee Benefit Plan, and Form 5500-SF, Short Form Annual Return/
Report of Small Employee Benefit Plan. At that time limitations on the 
IRS' authority to require electronic filing of annual returns resulted 
in the removal of the ``IRS-only'' schedules from the Form 5500 filing 
requirements. The lack of information from these schedules has 
negatively impacted the IRS's ability to focus effectively on specific 
factors of noncompliance when selecting retirement plans for 
examination. Rather than reinstating the Schedules E, P, and T, the IRS 
is proposing to add new questions to the 2022 Form 5500 designed to 
assist the IRS in identifying plans that are non-compliant relating to 
Code section 410(b) coverage, Code section 401(a)(4) non-
discrimination, and Code section 401(k) non-discrimination testing. 
Additionally, IRS is proposing to add a question that would help it 
identify whether adopters of pre-approved plans have been updated 
timely for changes in the law.
Affected Entities
    Major portions of this proposal relate to SECURE Act statutory 
changes that

[[Page 51291]]

(1) recognized a new type of multiple employer plan under Title I of 
ERISA called pooled employer plans; and (2) called for the Secretaries 
to establish a new consolidated annual report for certain groups of 
defined contribution pension plans (herein called DCG reporting 
arrangements). The SECURE Act amendments first authorized pooled 
employer plans to begin operating beginning on January 1, 2021; even 
early adopted pooled employer plans generally will not file a Form 5500 
before July 2022. Similarly, DCG reporting arrangements are a new 
filing option starting with the 2022 plan year; such consolidated 
filings will not begin until July 2023. Thus, there is no historical 
Form 5500 information that the DOL can use reliably to evaluate the 
number of affected entities. As a result, there is significant 
uncertainty regarding the DOL's ability to measure costs and benefits 
that may result from this proposal. The DOL nonetheless is presenting 
below an overview of potentially affected entities and an approach to 
evaluating the possible impacts of this proposal. In evaluating costs 
and benefits, the DOL took account of the fact that various types of 
plans could be affected by more than one proposed revision. DOL is also 
soliciting data relevant to an evaluation of costs and benefits and 
comments on alternative methodologies and assumptions for evaluating 
the costs and benefits.
    Defined Contribution Pension Plans: In 2018, there were 675,007 
defined contribution plans with 105.8 million total participants and 
83.4 million active participants. Plans with fewer than 100 total 
participants (small plans) account for 87.4 percent of plans.\23\
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    \23\ Employee Benefits Security Administration. ``Private 
Pension Plan Bulletin, Abstract of 2018 Form 5500 Annual Report.'' 
(2020). The 2018 Form 5500 data set is the most recent available 
because Form 5500 filings for the 2018 reporting year generally are 
not required to be filed for calendar year plans until July through 
October of 2019, and the deadline for fiscal year plans may extend 
well into 2020. The User Guide for the 2018 Form 5500 Private 
Pension Plan Research File includes a discussion of the creation of 
the annual data set and timing of data extraction. See www.dol.gov/sites/dolgov/files/EBSA/researchers/data/retirement/pension-user-guide-2018.pdf (Accessed July 21, 2021).
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    Defined Contribution Group (DCG) Reporting Arrangement: As this is 
a new type of annual reporting method, the DOL does not have data on 
how many DCGs would be created nor the number of plans that would 
choose to satisfy their individual filing obligations by meeting the 
requirements for being part of a DCG, including the filing of a 
consolidated Form 5500 Annual Return/Report by the common plan 
administrator. We note that in 2018 there were 499,234 small defined 
contribution plans that reported the plan characteristic code 3D in 
their Form 5500-SF to indicate that they are intended to operate as 
pre-approved plans under sections 401, 403(a), and 4975(e)(7) of the 
Code. The DOL assumes that a DCG reporting option may suit their 
existing plan and business models and that, therefore, some fraction of 
these plans may find it advantageous to join a DCG for filing purposes.
    Defined Benefit Pension Plans: In 2018, there were 46,869 defined 
benefit plans with 34.0 million total participants and 13.1 million 
active participants. There were 45,275 single-employer defined benefit 
plans and 1,388 multiemployer defined benefit plans.\24\
---------------------------------------------------------------------------

    \24\ Id.
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    Multiple Employer Pension Plans: A MEP, for Form 5500 reporting 
purposes, generally is a retirement plan maintained by two or more 
employers that are not members of the same controlled group or 
affiliated service group under Code section 414(b), (c), or (m), and 
which is not a multiemployer plan.\25\ In 2018, there were 4,730 MEPs 
filing a Form 5500, of which 207 were defined benefit pension plans and 
4,523 were defined contribution pension plans. There were 6.9 million 
participants reported as covered by these plans.\26\ The proposal, if 
finalized, would establish a new Schedule MEP to report information 
specific to pension MEPs. While the new Schedule MEP would retain ERISA 
section 103(g) participating employer information that MEPs must 
currently file as a non-standardized attachment, it also would add the 
SECURE Act requirement for pension MEPS to report aggregate account 
balances information for each participating employer in the MEP. 
Schedule MEP would also include questions intended to focus on SECURE 
Act issues and compliance for pooled employer plans.
---------------------------------------------------------------------------

    \25\ See, e.g., 2020 Form 5500 instructions at 14.
    \26\ Employee Benefits Security Administration. ``Private 
Pension Plan Bulletin, Abstract of 2018 Form 5500 Annual Reports.'' 
(June 2020).
---------------------------------------------------------------------------

    Association Retirement Plan. An association retirement plan is a 
defined contribution MEP, sponsored by a bona fide group or association 
of employers that meets the conditions under 29 CFR 2510.3-55(b). The 
DOL does not have information on how many reporting MEPs are 
association retirement plans or otherwise to estimate the number of 
association retirement plans (a sub-class of MEPs) that currently 
exist.
    Professional Employer Organizations (PEOs) Plan: A PEO MEP is a 
defined contribution pension plan sponsored by a bona fide PEO that 
meets the conditions under 29 CFR 2510.3-55(c). According to the 
National Association of Professional Employer Organizations, there are 
487 PEOs in the United States.\27\ The DOL does not have information on 
how many PEOs currently meet the conditions under 29 CFR 2510.3-55(c) 
to sponsor defined contribution MEPs for their clients, but assumes a 
substantial percentage of PEOs do sponsor MEPs, including defined 
contribution MEPs.
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    \27\ National Association of Professional Employee 
Organizations, Industry Statistics (Accessed 6/28/2021), https://www.napeo.org/what-is-a-peo/about-the-peo-industry/industry-statistics. NAPEO had previously reported 904 PEOs but revised its 
methodology. An explanation of the revision is included on the NAPEO 
website. See The PEO Industry Footprint 2021, Laurie Bassi and Dan 
McMurrer, McBassi & Company at page 4 (May 2021) (available at 
www.napeo.org/docs/default-source/white-papers/2021-white-paper-final.pdf?sfvrsn=6dde35d4_2.
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    Pooled Employer Plans. The SECURE Act amended section 3(2) of ERISA 
and added section 3(43) to ERISA to authorize a new type of ERISA 
covered defined contribution MEP referred to as a ``pooled employer 
plan'' to be operated by a ``pooled plan provider.'' In its 2020 final 
rule on Registration Requirements for Pooled Plan Providers, the DOL 
noted the uncertainty surrounding the number of pooled employer plans 
that could be created based on the final rule, the number of employers 
that would participate in such plans, and the number of participants 
and beneficiaries that would be covered by them.\28\ Approximately 50 
pooled plan providers have filed an initial Form PR Pooled Plan 
Provider Registration (Form PR) and registered with the DOL.\29\
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    \28\ 85 FR 72934, 72949 (Nov. 16, 2016).
    \29\ Department of Labor. Form PR. https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-pr.
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    The DOL does not have comprehensive data on how many employers are 
participating in pooled employer plans or the number of participants 
covered by the plans until the pooled employer plans file their first 
Forms 5500 in 2022 for their 2021 reporting year. The DOL attempted to 
review available public information on pooled employer plans by looking 
at information included in the filed Forms PR, and by examining news 
articles and statements on the pooled plan provider's websites. That 
review indicated that that there are a variety of approaches in how 
pooled employer plans are offered, and a variation in the

[[Page 51292]]

number of employers that have joined a pooled employer plan. While 
pooled plan providers are required to update the Form PR to advise the 
DOL and the IRS about the establishment and offering of new pooled 
employer plans, the Form PR does not collect information on the number 
of employers participating in their pooled employer plans or the number 
of employees covered by each plan. One pooled plan provider was 
reported in another source as having 2,000 employers joined their 
pooled employer plan, whereas other providers reported five to 10 
employers had joined their pooled employer plans. As part of the 
request for comments, the DOL is seeking information on the number of 
employers that have already joined a pooled employer plan and the 
number of employees covered by the plan in total and broken down by 
employer.
    Pre-approved Pension Plans: These are plans that reported plan 
characteristics code 3D when filing the Form 5500 Annual Return/Report. 
The code 3D indicates ``A pre-approved plan under sections 401, 403(a), 
and 4975(e)(7) of the Code that is subject to a favorable opinion 
letter from the IRS.'' A pre-approved retirement plan is a plan offered 
to employers by financial institutions and others that are authorized 
to sponsor pre-approved plans. The pre-approved plan provider then 
makes the IRS-approved plan available to adopting employers. Providers 
must make reasonable and diligent efforts to ensure that adopting 
employers of the plan have actually received and are aware of all plan 
amendments and that such employers complete and sign new plans when 
necessary.\30\ Of the 611,568 defined contribution pension plans that 
reported code 3D, 544,090 are reported as small plans, as they report 
having fewer than 100 participants each. Of these small defined 
contribution plans, 499,234 file the Form 5500-SF, cover approximately 
10.0 million participants, and hold approximately $0.6 trillion in 
assets. The DOL expects that Form 5500-SF small pension plan filers are 
the most likely candidates to join a DCG or a pooled employer plan. The 
DOL lacks information on the number of plans, whether or not currently 
Form 5500-SF eligible filers, that would join a DCG or a pooled 
employer plan. The DOL is seeking comment on this issue.
---------------------------------------------------------------------------

    \30\ IRS website at https://www.irs.gov/retirement-plans/pre-approved-retirement-plans (last updated Apr 2, 2021).
---------------------------------------------------------------------------

    Multiple Employer Welfare Arrangement (MEWA): A MEWA is defined in 
ERISA section 3(40)(B) generally as an employee welfare benefit plan or 
any other arrangement, which is established or maintained for the 
purpose of offering or providing welfare benefits to the employees of 
two or more employers, or to their beneficiaries. For purposes of this 
definition, two or more trades or businesses, whether or not 
incorporated, are deemed a single employer if such trades or businesses 
are under common control. Section 3(40) excludes from the definition of 
the term MEWA any plan or arrangement established or maintained under 
or pursuant to a collective bargaining agreement, or by a rural 
electric cooperative or rural telephone cooperative association. MEWAs 
that offer or provide coverage for medical benefits are generally 
required to file the Form M-1. In the 2018 calendar year, there were 
640 total plan MEWAs that filed a Form M-1 with 2.0 million total 
participants. There were 47 non-plan MEWAs based on Form M-1 
filings.\31\
---------------------------------------------------------------------------

    \31\ These figures are based on calculations from 2018 Form M-1 
filing data.
---------------------------------------------------------------------------

    Plans affected by change in participant-count methodology for 
determining large plan versus small plan status and related filing 
requirements. As discussed in the NPFR, the Agencies are proposing a 
change in the methodology for defined contribution pension plans to 
determine whether the plan is a ``large plan'' (generally covers 100 or 
more participants) for purposes of Form 5500 annual reporting 
requirements, including the requirement to include an IQPA report and 
other schedules generally applicable to large pension plans. The plan 
size measure for this annual reporting distinction is based on the 
total number of participants at the beginning of the plan year and 
expressly includes employees eligible to participate in a Code section 
401(k) plan (``401(k) plan'') even if the employees has not elected to 
participate and does not have an account balance. The proposed change 
would use a participant count based on the number of participants at 
the beginning of the year with an account balance. Current Form 5500 
filings collect the number of participants at the end of the year with 
a balance, and does not currently collect such a figure for the 
beginning of the plan year. Accordingly, we used the end of year number 
of participants with a balance to estimate the number of plans impacted 
by this change. The actual number of plans effected could be higher or 
lower, depending on a plan's dynamics, but for plans that are growing, 
using the end of year number as a proxy for the beginning of year 
number could lead to an overestimate of the number of affected plans. 
Using the current definitions of large and small plans, there are 
84,754 large defined contribution plans and 590,254 small defined 
contribution plans. Using the number of participants at the end of the 
year with an account balance as a proxy for the new proposed 
methodology, there are 65,312 large defined contribution plans and 
609,695 small defined contribution plans. This would result in an 
estimated 19,442 defined contribution plans that, if the regulations 
are finalized as proposed, would be able to file as small plans instead 
of large ones and would experience cost savings, including due to being 
able to satisfy the conditions for being exempt from the IQPA report 
and from including the Schedules of Assets as part of their annual 
report.
Benefits
    Benefits of Changes for Pooled Employer Plans. The SECURE Act 
established a new type of ERISA-covered defined contribution pension 
plan, the pooled employer plan, that is established and maintained by a 
pooled plan provider that meets the conditions of the statute. By 
creating the pooled employer plan structure, the SECURE Act permitted 
multiple unrelated employers to participate without the need for any 
common interest among the employers (other than having adopted the 
plan). As discussed above, pooled employer plans need to provide ERISA 
section 103(g) participating employer information, as well as certain 
basic information regarding the pooled plan provider. Potentially 
increased reporting costs for those employers choosing to offer 
retirement benefits to their employees through participating in a 
pooled employer plan would be offset by other cost reductions or 
business benefits relative to not having administer an individual plan 
as further discussed below.
    By participating in a pooled employer plan, employers could 
minimize their fiduciary responsibilities for ongoing administration 
and operation of the plan. Employers could benefit from reduced risk 
and liability because the pooled plan provider would bear most of the 
administrative and fiduciary responsibility for operating the pooled 
employer plan, including hiring and monitoring the 3(38) investment 
manager. Similarly, because the pooled plan provider handles the 
administrative tasks such as participant communications, plan 
recordkeeping, submitting the Form 5500 and complying with plan audits, 
this could increase the operating efficiency for participating 
employers. Also, as they

[[Page 51293]]

are expected to be professional plan providers, it is anticipated that 
a pooled plan provider, relative to a small employer, would ensure that 
more accurate and complete data is reported to the DOL on the Form 
5500. Further, as discussed in the regulatory impact analysis to the 
regulation establishing the Form PR, pooled employer plans generally 
would benefit from scale advantages, including the ability to obtain 
lower fees for investment options.\32\ The marginal costs for pooled 
employer plans would diminish and pooled plan providers would spread 
fixed costs over a larger pool of member employers and employee 
participants, creating direct economic efficiencies. Szapiro's research 
finds that the per-employer cost of a large MEP can be lower than the 
cost of a small single employer plan.\33\ Specifically, the study finds 
that a MEP with $125 million and 80 participating companies cost 78 
basis points, whereas a single-employer plan with $1.5 million cost 111 
basis points. Thus, compared to single-employer plans, MEPS can be a 
more cost-efficient option for small employers. The increased economic 
efficiency may result in small businesses being able to compete more 
easily with larger companies in recruiting and retaining workers due to 
a competitive employee benefit package. Finally, pooled employer plans 
may enable participants to achieve better retirement outcomes. 
VanDerhei's research finds that the adoption of a MEP in which the 
members do not need to share a common interest, other than 
participating in the same plan, with a 25 percent opt-out rate among 
employees, results in an overall 1.4 percent reduction in the 
retirement savings deficit, compared to when a MEP is not adopted.\34\ 
The study also finds a 3.1 percent reduction in the retirement savings 
deficit for individuals working for employers with fewer than 100 
employees and 3.3 percent reduction in the retirement savings deficit 
for individuals working for employers with 100 to 500 employees.
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    \32\ 85 FR at 72949-72950.
    \33\ Szapiro, Aron, ``Pooled Employer Plans: Paperwork or 
Panacea.'' Accessible at https://www.morningstar.com/lp/paperwork_or_panacea.
    \34\ VanDerhei, Jack. ``How Much More Secure Does the SECURE Act 
Make American Workers: Evidence from EBRI's Retirement Security 
Projection Mode.'' EBRI Issue Brief. No 501 (2020). VanDerhei refers 
to MEPs in which the members do not need to share a common interest 
as ``Open MEPs.'' (Available at https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_501_secure-20feb20.pdf?sfvrsn=db6f3d2f_4 (Accessed July 21, 2021.)).
---------------------------------------------------------------------------

    Benefits of Establishing the Proposed Schedule MEP. A benefit of 
the proposed Schedule MEP would provide a unified vehicle to report 
information related to new SECURE Act provisions, including information 
unique to MEPs. The participating employer information collected 
pursuant to section 103(g) of ERISA would also be data capturable and 
available at publicly viewable website containing images of the Form 
5500 and related data sets. That public data would help protect plan 
participants and beneficiaries by allowing for improved analysis for 
oversight and research purposes by the government, the regulated 
community, and other interested stakeholders.
    Benefits of DCGs. The proposal would update Form 5500 annual 
reporting requirements to establish requirements pursuant to section 
202 of the SECURE Act for a consolidated return/report to provide 
eligible individual account plans with an alternative method of 
compliance with annual reporting requirements that would otherwise 
mandate a separate annual report for each plan. The consolidated 
reporting option for defined contribution pension plans also allows for 
more choice and flexibility in the reporting of information to the 
government. Eligible plans can choose, based on benefits and 
preferences, if they want to continue with the plan filing as 
individual plan or as part of a DCG. Plans whose individual reporting 
obligations would be satisfied by a DCG annual return/report filing may 
see a reduction in reporting costs depending on their circumstances.
    The proposal includes the proposed Schedule DCG to provide 
individual plan-level information for those defined contribution 
pension plans whose annual reporting requirement would be satisfied by 
a DCG's consolidated filing. The uniformity of the DCG arrangement 
structure and the benefits of consolidated reporting may reduce the 
complexity and administrative burden of plans. Also, by having a common 
plan administrator who is expected to be a professional service 
provider filing on behalf of a group, it may increase the likelihood 
that more accurate and complete data is reported to the DOL. As a 
result, there may be an increase in annual reporting compliance and 
compliance with applicable ERISA requirements in general. Additionally, 
the Schedule DCG would help the Agency compare individual plan 
participation and aggregate asset and liability information from year-
to-year. The Schedule DCG would include many of the questions that are 
currently required on the Form 5500-SF, and for large plans, the 
Schedule H questions regarding the report of an IQPA, as well as an 
IQPA report. While this requirement reduces the cost saving of filing 
as a DCG, the DOL and the IRS (collectively ``Departments'') believe 
the information requested is consistent with the SECURE Act provision 
permitting the Departments to collect whatever plan level information 
is needed to perform adequate oversight and vital to provide to 
participants, beneficiaries, and the Departments information needed to 
adequately monitor the plans and keep track of their assets from year 
to year.
    In light of changes in the financial environment and increasing 
concern about investments in hard-to-value assets and alternative 
investments, the proposed requirement that plans participating in DCGs 
must have investments that meet the currently applicable ``eligible 
plan investment'' criteria for filing a Form 5500 is important for 
regulatory, enforcement, and disclosure purposes. The proposal would 
also add trust questions to the Form 5500, the Form 5500-SF, and, the 
IRS Form 5500-EZ, regarding the name of the plan's trust, the trust's 
employer identification number (EIN), the name of the trustee or 
custodian, and the trustee's or custodian's telephone number. This 
information will enable the Agencies to focus more efficiently on 
compliance concerns for retirement plan trusts, including those for 
pooled employer plans and DCG reporting arrangements.
    Changes to Method of Determining Small Plan Status for Certain 
Filing Exemptions and Requirements: As described in the NPFR, the 
proposal would change the current method of counting covered 
participants for purposes of determining when a defined contribution 
plan may file as a small plan and whether the plan may be exempt from 
the IQPA audit requirements generally applicable to large defined 
contribution pension plans. Under the proposal, defined contribution 
pension plans, including 401(k) plans and 403(b) plans, would determine 
whether they have to file as a large plan and whether they have to 
attach an IQPA report based on the number of participants with account 
balances as of the beginning of the plan year. Currently, the IQPA 
requirement includes the total number of eligible participants at the 
beginning of the plan year, even if the participant is not making 
contributions, receiving employer contributions, or maintaining an 
account in the plan. Further, some stakeholders have suggested that 
section 112 of the SECURE Act could make it even more likely that a 
plan with a small number of active participants

[[Page 51294]]

might be required to bear the cost of an audit based on eligible, but 
not participating employees being counted toward the audit threshold. 
Specifically, because section 112 provides that, beginning January 1, 
2024, long-term, part time workers that have reached the plan's minimum 
age requirement and have worked at least 500 hours in each of three 
consecutive 12-months period must be permitted to make elective 
contributions to a section 401(k) qualified cash or deferred 
arrangement, there could be more employees eligible to participate that 
would elect not to do so. This change in counting methodology would 
result in not counting, for this annual reporting purpose, those long-
term, part time workers who are eligible to make elective contributions 
to a 401(k) plan, but have not in fact elected to participate in the 
plan. The DOL expects that excluding from the participant count 
participants who are eligible to participate but do not have an account 
balance at any time during the plan year will reduce expenses of 
establishing and maintaining a retirement plan, and as a consequence, 
encourage more employers to offer workplace-based retirement savings 
plans to their employees.
    Improving Consistency and Enhancing Usability of Data Filed on the 
Schedules of Assets. The financial information reported on the Form 
5500 Annual Return/Report, particularly the asset/liability statement, 
contained in the current Schedule H (Large Plan Financial Information), 
Schedule I (Small Plan Financial Information), as well as the more 
recently established Form 5500-SF, is based on data elements that have 
remained largely unchanged since the Form 5500 Annual Return/Report was 
established in 1975. Many investments in alternative and hard-to-value 
assets and held in collective investment funds do not fit squarely into 
any of the existing reporting categories on data captured financial 
schedules filed with the Form 5500 (Schedule H for large plans and 
Schedule I for small plans). The GAO has expressed concerns that many 
investments with widely varying risk, return, and disclosure 
considerations are often reported in the catchall ``other plan asset'' 
category.\35\ GAO also noted that the plan asset categories on the 
Schedule H are not representative of current plan investments, and 
provide little insight into the investments themselves, the level of 
associated risk, or structures of the investments.\36\ The DOL-OIG have 
also recommended that the Agencies revise the Form 5500 Annual Return/
Report to improve reporting of hard-to-value assets and alternative 
investments.\37\ As part of their overall evaluation of how best to 
structure financial reporting for pooled employer plans, MEPs, and DCG 
reporting arrangements to maximize usable data while limiting burden 
increases, the Agencies decided, as discussed in detail earlier in this 
document and the Notice of Proposed Forms Revisions published 
simultaneously, to propose format, data element and instruction changes 
to the Schedule H, Line 4i Schedule of Assets Held for Investment and 
the Schedule of Assets Acquired and Disposed of Within the Plan Year. 
Although driven by an interest in ensuring transparency and financial 
accountability for pooled employer plans, MEPs, and DCG reporting 
arrangements, the rationales for the changes applied more generally to 
large pension and retirement savings plans. These changes apply to 
large plans required to file the Schedules of Assets and would not 
increase the annual reporting burden for small plans. The proposed 
changes to the Schedule H Line 4i Schedules of Assets, in addition to 
better meeting the needs of the Agencies, other government users, and 
other end users of the data, should serve to address the shortcomings 
identified in these reports. The basic objective of general financial 
reporting is to provide information about the reporting entity for the 
Agencies' enforcement, research, and policy formulation programs, for 
other Federal agencies, Congress, and the private sector in assessing 
employee benefit, tax, and economic trends and policies; and for plan 
participants and beneficiaries and the general public in monitoring 
employee benefit plans. Making consistent the financial reporting 
instruments would bring greater transparency to plan transactions, 
which would enhance the efficiency of the Agencies' enforcement 
efforts. Specifically, the Agencies would be better able to focus their 
enforcement efforts, which will reduce the number of investigations 
involving plans that are not engaging in problematic activities. 
Additionally, ERISA Section 513(a) authorizes and directs the Secretary 
of Labor and EBSA to conduct a research program on employee benefits. 
The Form 5500 Annual Return/Report is one of the leading sources of 
data used in this research program. Making uniform and receiving in a 
data searchable way the financial information reported on the Form 5500 
Annual Return/Report would improve the quality of the research 
conducted by internal and external researchers. This improved research, 
in turn, would improve the quality of policy decisions made by DOL and 
other governmental policymakers that rely on the Form 5500 Annual 
Return/Report data.
---------------------------------------------------------------------------

    \35\ GAO Targeted Revisions Could Improve Usefulness of Form 
5500 Information, at 12.
    \36\ Id.
    \37\ EBSA Needs to Provide Additional Guidance and Oversight to 
ERISA Plans Holding Hard-To-Value Alternative Investments, 
Department of Labor Office of Inspector General Report Number: 09-
13-001-12-121 at 4, 18, and 19.
---------------------------------------------------------------------------

    Benefits of Maintaining Participating Employer Information for 
MEWAs and Expanding It to Non-Plan MEWAs that Provide Medical Benefits. 
The proposal, as described in the NPFR, would add new questions to the 
Form M-1 and instructions to require MEWAs (plan and non-plan) that 
offer or provide coverage for medical benefits to provide multiple 
employer participating employer information on the Form M-1 and not as 
an attachment to the Form 5500 Annual Return/Report. Plan MEWAs that 
provide other benefits and thus are not required to file a Form M-1 
(i.e., life and disability benefits) would continue to report the 
participating employer information as an attachment to the Form 5500 
Annual Return/Report.
    The proposal would also change which MEWAs are required to report 
the participating employer information. The current Form 5500 
requirement for MEPs to report participating employer information 
applies to plan MEWAs only. Non-plan MEWAs providing health benefits 
would now have to provide the information. Based on 2018 Form M-1 
filings, there were 640 plan MEWAs and 47 were non-plan MEWAs.\38\ The 
proposal, by transferring the participating employer information from 
the Form 5500 Annual Return/Report to the Form M-1 for MEWAs that offer 
or provide coverage for medical benefits and continuing to require 
reporting of participating employer information on the Form 5500 Annual 
Return/Report for plan MEWAs that provide other benefits, would enable 
the Agencies to receive participating employer information from both 
plan and non-plan MEWAs, regardless of how they are funded or 
structured. This would help the Agencies better monitor activities of 
MEWAs and protect plan beneficiaries.
---------------------------------------------------------------------------

    \38\ These calculations are based on internal Department 
calculations based on 2018 Form M-1 filings. See the affected 
entities section for more information.

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

[[Page 51295]]

    Internal Revenue Code-Based Questions for the 2022 Form 5500s. In 
the NPFR, several questions are being proposed to be added to the 2022 
Form 5500s to help identify plans that are more likely to experience 
compliance issues, and help the IRS more effectively conduct 
investigations. Section III.F of the preamble to the NPFR provides a 
description of these proposed Code-based questions. The proposal, as 
set forth in the NPFR, would add a nondiscrimination and coverage test 
question to Form 5500 and Form 5500-SF that was on the Schedule T 
before it was eliminated. The question asks if the employer aggregated 
plans in testing whether the plan satisfied the nondiscrimination and 
coverage tests of Code sections 401(a)(4) and 410(b). Adding this 
question will allow EP to identify these plans for examination. This 
question is also helpful when performing pre-audit analysis and allows 
the IRS to narrow any inquiries for information that is requested from 
the plan sponsor. The restoration of this question also reflects the 
elimination of optional coverage and nondiscrimination demonstrations 
in the IRS determination letter process. See Rev. Proc. 2012-6, 2012-1 
I.R.B. 235 and Announcement 2011-82, 2011-52 I.R.B. 1052.
    The proposal, as described in the NPFR, would add a question to 
Form 5500 and Form 5500-SF, for 401(k) plans asking whether the plan 
sponsor used the design-based safe harbor rules or the ``prior year'' 
ADP, or ``current year'' ADP test, or if it is not applicable. A plan 
that performs ``prior year'' or ``current year'' ADP testing is more 
likely to have compliance issues than a plan with a ``designed-based 
safe harbor.'' Adding this question, would allow EP to identify 401(k) 
plans that use ADP testing for examination over plans that have 
designed-based safe harbors. This question would also help the IRS 
perform pre-audit analysis and for design-based safe harbor plans allow 
us to verify whether allocations of required safe harbor contributions 
comply with the terms of the plan; and whether proper notice 
requirement is satisfied on an annual basis.
    Finally, the proposal, as indicated in the NPFR, would add a 
question to Form 5500 and the Form 5500-SF asking whether the employer 
is an adopter of a pre-approved plan that received a favorable IRS 
Opinion Letter, the date of the favorable Opinion Letter, and the 
Opinion Letter serial number.\39\ This question would help the IRS 
identify whether a plan sponsor has adopted a pre-approved plan and to 
determine whether the plan was adopted timely in accordance with the 
Code section 401(b) remedial amendment period. This question would also 
assist IRS in determining whether to select a plan for examination as a 
late amender for changes in the law.
---------------------------------------------------------------------------

    \39\ IRS is proposing to make a parallel update to the Form 
5500-EZ, which is solely in the jurisdiction of the IRS.
---------------------------------------------------------------------------

    Defined Benefit Plan/Title IV Questions for the 2022 Form 5500s: 
The proposed changes to the Form 5500 Schedules MB, SB, and R would 
help remedy data and information inadequacies, increasing plans' 
transparency, enable Agencies to project more precisely defined benefit 
pension plans' and insurance programs' liabilities, and help the PBGC 
more effectively conduct investigations and better protect plan 
participants and beneficiaries.
    Schedule MB collects actuarial information on multiemployer defined 
benefit plans and certain money purchase plans. By revising line 6 and 
clarifying the expense load percentage calculation, the Agencies would 
be able to easily identify the expense load and more accurately project 
plan liabilities to model the impact of additional employers 
withdrawing from the plan in the future. The proposed changes to the 
schedule would provide greater transparency in the actuarial status and 
the actuarial assumptions of the plans. Based on reviewing previously 
filed Schedules MB responses to line 4f, it appears to the Agencies 
that there is some confusion as to how to fill out line 4f of Schedule 
MB correctly, as some of the responses do not make sense. Clarification 
of the instructions and line language is intended to remove potential 
confusion and provide more consistent and correct responses.
    Schedule SB collects actuarial information on single-employer 
defined benefit plans. The proposed changes would better align filing 
requirements for single-employer defined benefit plans with the more 
detailed requirements for PBGC-insured multiemployer plans. As with the 
proposed changes to the Schedule MB, these proposed changes would allow 
for greater transparency in the actuarial status and the actuarial 
assumptions of the plans.
    Schedule R collects information on retirement plans. Previously, 
multiemployer defined-benefit pension plans were required to report 
identifying information about any employer whose contributions to the 
plan exceeded five percent of total annual contribution. The regulation 
proposes, instead, to require plans to report identifying information 
on any employer who (1) contributed more than five percent of the 
plan's total contributions or (2) was one of the top ten highest 
contributors. This would provide greater transparency on contributors 
and ensure that reported data represents a reasonable sampling of 
contributors.
    The proposed regulation also proposes changes in format for certain 
attachments. EFAST2 filers currently file some Form 5500 attachments as 
PDF and plain text files. Due to the nature of the attachments, they 
often include many numbers that are difficult to extract from these 
file types. There is consideration being given to steps that could be 
taken to allow more integration of common tabular formats (spreadsheet) 
such as Comma Separate Value(s) (CSV). As this is not being considered 
as a requirement at this point, plans would not incur an additional 
cost if such functionality were made available. Rather, the Agencies 
expect this option may simplify the process for preparing and filing 
attachments.

1.3. Cost Estimates and Savings

    The DOL anticipates that the costs for plans to satisfy their 
annual reporting obligations would on average decrease under these 
proposed regulations relative to the current regime.\40\ As shown in 
Table 1 below, the aggregate annual cost of such reporting under the 
current regulations and forms is estimated to be $514.8 million 
annually, shared across the 822,100 filers subject to the filing 
requirement.
---------------------------------------------------------------------------

    \40\ The DOL believes that the annual cost burden on filers 
would be higher still in the absence of the regulations enabling use 
of the Form 5500 Annual Return/Report in lieu of the statutory 
requirements. Without the Form 5500 Annual Return/Report, filers 
would not have the benefits of any regulatory exceptions, simplified 
reporting, or alternative methods of compliance, and standardized 
and electronic filing methods.
---------------------------------------------------------------------------

    The DOL estimates that the regulations and forms revisions in this 
proposed rule would impose an annual burden of $514.1 million on 
804,100 filers, for a total decrease of $64.6 million annually, $63.9 
million annually in audit cost savings and $0.7 million annually in 
other reporting costs. This proposal makes important changes to the 
requirements currently in effect while also allowing for the number of 
small plans and large plans to change for annual reporting purposes. 
The DOL estimates that a total of 17,601 small plans and 563 large 
plans would opt to join either a DCG or a pooled employer plan, and 
therefore have their filing requirement fulfilled by these

[[Page 51296]]

entities. The DOL also estimates that 19,442 large plans would be re-
defined and file as small plans as a result of the change in the 
current threshold for determining when a defined contribution plan may 
file as a small plan.

                                Table 1--Estimated Burden Change by Type of Filer
                                              All Proposed Changes
----------------------------------------------------------------------------------------------------------------
                                     Number of       Number of
                                   filers under    filers under   Aggregate cost  Aggregate cost  Aggregate cost
          Type of plan                current        proposed      under current  under proposed      change
                                    (thousands)     (thousands)     (millions)      (millions)      (millions)
----------------------------------------------------------------------------------------------------------------
Large Plans.....................           146.8           126.9          $268.8          $260.3           -$8.4
Small Plans.....................           666.1           667.9           234.7           235.2             0.5
DFEs............................             9.3             9.4            11.4            18.6             7.2
                                 -------------------------------------------------------------------------------
    All Plans...................           822.1           804.1           514.8           514.1            -0.7
----------------------------------------------------------------------------------------------------------------
                                           Audit Cost                                                      -63.9
----------------------------------------------------------------------------------------------------------------
                                          Overall Total                                                    -64.6
----------------------------------------------------------------------------------------------------------------
Note: Some displayed numbers do not sum up to the totals due to rounding.
Large plans--100 participants or more.
Small plans--generally fewer than 100 participants.

    To estimate the net change in cost burden, as a result of the 
interaction of the proposed changes, the DOL has also analyzed the cost 
impact of the individual revisions on classes of filers. In doing so, 
the DOL took account of the fact that various types of plans would be 
affected by more than one revision and that the sequence of multiple 
revisions would create an interaction in the cumulative burden on those 
plans. The total changes in Table 1 show the accumulated changes. The 
other tables below show only the impact of a single change at a time 
from the status quo; therefore, the tables cannot be added to arrive at 
the estimates in Table 1.
    Schedule MEP and Pooled Employer Plans. The proposed new Schedule 
MEP would be filed by all MEPs, including pooled employer plans, and 
includes participating employer information already filed as an 
attachment, as well as limited specific reporting requirements for 
pooled employer plans. The information on participating employers would 
then be data-readable, whereas currently it is only included as a 
nonstandard attachment. As discussed in the affected entities section, 
estimates are available for MEPs that have filed a Form 5500 
previously, but not for the newly created pooled employer plans that 
have yet to file a Form 5500. The impacts of the DOL recent rulemaking 
on association retirement plans and PEO MEPs also carries some 
uncertainty regarding the number of MEPs that may be affected. 
Approximately 50 entities have filed the Form PR to register as pooled 
plan providers. Therefore, for purposes of this analysis, the DOL 
assumes there would be a total of 75 pooled employer plans. As it is 
the case with MEPs, joining a pooled employer plan translates into less 
plan maintenance expenditures given that MEPs can take advantage of 
economies of scale. Additionally, in the DOL's view, the information 
requested on the Schedule MEP should already be available to plans, so 
the burden is primarily entering the information onto the form. The 
burden to file the Schedule MEP is estimated to average 10 minutes for 
MEPs and 14 minutes for pooled employer plans, with variation depending 
on the number of participating employers.
    Although the DOL does not know for certain how many plans would 
decide to offer benefits through a pooled employer plan, it is assumed 
that the current average number of participating employers in a MEP is 
indicative of the average number of employers that would eventually be 
in any particular pooled employer plan that may be established in the 
future. The DOL estimates that MEPs, on average, have nine employers 
participating in a MEP with fewer than 100 participants and two 
employers with 100 or more participants. The DOL uses these measures as 
estimates for most of the upcoming pooled employer plans, therefore 
assuming that, for most pooled employer plans, on average there would 
be nine small participating plans and two large participating plans per 
pooled employer plan. Combined with one pooled plan provider registrant 
that has already listed 2000 participating employers, it is estimated 
that a total of 2,251 small participating plans and 563 large 
participating plans would provide benefits through pooled employer 
plans.\41\ The DOL assumes this would result in a direct decrease of 
2,251 defined contribution Form 5500-SF filers and a decrease of 563 
Form defined contribution 5500 filers. As Table 2 shows this would 
result in a reporting cost reduction of $1.5 million (not including the 
audit cost reduction in Table 1) and a total reduction of filers from 
822,100 to 819,400 filers. Such a reduction in filers would be 
partially offset by an increase in pooled employer plan filings. We are 
not, however, able to explicitly measure the net impact on filings 
because of the uncertainty

[[Page 51297]]

regarding the number of pooled employer plans and the resulting 
increase in pooled employer plan filings. The DOL requests comments on 
these estimates.
---------------------------------------------------------------------------

    \41\ For the calculation of the total number of participating 
employers in pooled employer plans, it is first assumed that 80 
percent of all the employers who would participate in a pooled 
employer plan are currently providing benefits through small plans, 
and that the remaining 20 percent through large plans. This 
distribution would apply to the registrant that has already 
exceptionally listed 2000 employers (which would then be divided in 
1600 small participating plans and 400 large participating plans) 
and to the other 74 pooled plan providers assumed to be created. It 
is also assumed that each one of these other 74 pooled plan 
providers would be servicing in total 11 employers. Therefore, the 
total number of small participating plans in a pooled employer plan 
is calculated as: 1,600 + (74 * 11 * 0.8) = 2,251 (rounded). 
Similarly, the total number of large participating plans is 
calculated as 400 + (74 * 11 * 0.2) = 563 (rounded).

                                Table 2--Estimated Burden Change by Type of Filer
                          Introduction of Pooled Employer Plans and Schedule MEP Filing
----------------------------------------------------------------------------------------------------------------
                                                                     Aggregate       Aggregate
                                     Number of       Number of    reporting cost  reporting cost  Aggregate cost
          Type of plan             filers under    filers under    under current  under proposed      change
                                   current rules  proposed rules       rules           rules        (millions)
                                    (thousands)     (thousands)     (millions)      (millions)
----------------------------------------------------------------------------------------------------------------
Large Plans.....................           146.8           146.3          $268.8          $267.9           -$0.9
Small Plans.....................           666.1           663.8           234.7           234.0            -0.7
DFEs............................             9.3             9.3            11.4            11.4             0.0
                                 -------------------------------------------------------------------------------
    Overall Total...............           822.1           819.4           514.8           513.3            -1.5
----------------------------------------------------------------------------------------------------------------
Note: Some displayed numbers do not sum up to the totals due to rounding.
Large plans--100 participants or more.
Small plans--generally fewer than 100 participants.

    DCG filings. As discussed above, a DCG filing for a group of plans 
has the potential to reduce reporting burden as only one Form 5500 is 
filed and signed by a common plan administrator so signatures from 
separate administrators of the participating plans are not needed. 
Offsetting these cost savings would be the burden from the consolidated 
Form 5500 filed by the DCG, including the Schedule DCG to report 
individual plan information for each participating plans. There are 
499,234 small defined contribution plans that file the Form 5500-SF and 
report the plan characteristic code 3D; the DOL assumes this type of 
plan may find it advantageous to adopt this new structure of providing 
benefits and therefore a fraction of them will join a DCG. The DOL 
seeks comments on these assumptions.\42\
---------------------------------------------------------------------------

    \42\ The DOL acknowledges that there could be other employers 
whose plans are outside the category of small defined contribution 
type, which currently file the Form 5500-SF and report plan 
characteristic 3D, that might also find an advantage in joining a 
DCG and therefore start providing benefits this way.
---------------------------------------------------------------------------

    The change in burden from allowing a DCG to file on behalf of plans 
is estimated in the following manner. Apart from the 499,234 small 
defined contribution mentioned above, there are 1,813 pre-approved 
plans.\43\ While the DOL does not know if all 1,813 pre-approved plans 
actually would file on behalf of these 499,234 plans, if they did there 
would be an average of 275 plans per pre-approved filer. These pre-
approved filers are the likeliest entities to file as a DCG. Although 
DOL lacks sufficient information to confidently estimate how many DCGs 
will form, the 50 entities that have filed the Form PR to register as a 
pooled plan provider, so far, may be suggestive of the number of 
entities currently seeking to take advantage of new structures to 
reduce plan administrative costs. Potential DCGs may be better 
positioned than pooled plan providers to commence operations as they 
already have client plans that could benefit from the savings and do 
not have to switch plans. Therefore, the DOL assumes that twice the 
number of DCGs (100) would form in the first year as the number of 
pooled plan providers (50). With the availability of DCGs as an option, 
some service providers may discontinue their provision of individual 
Form 5500 filing services, and only offer to file as DCGs. Some plans 
that contract with such service providers may choose to be moved into 
DCG filings, while others may seek out new service providers because 
they don't wish to comply with the additional filing obligations placed 
on DCG filers. For purposes of this analysis, we assume that 
approximately half of the plans currently associated with a pre-
approved plan provider would be offered the opportunity and would agree 
to comply with the DCG requirements to stay with the same provider. The 
DOL then uses these results to assume 100 DCGs with a total of 15,350 
small plans whose annual return/report filing obligation would be 
satisfied by the filing of a DCG Form 5500.
---------------------------------------------------------------------------

    \43\ https://www.irs.gov/retirement-plans/pre-approved-retirement-plans.
---------------------------------------------------------------------------

    As described above, the consolidated return/report that would need 
to be filed by the DCG to satisfy the annual reporting requirements of 
participating plans would have to include a Schedule DCG for each 
participating plan. The cost calculation must therefore take into 
account cost of this schedule per plan participating in a DCG. The DOL 
believes that once individual plans join a DCG, the average cost of 
filing a Schedule DCG, which would be done for each one of the 
estimated 15,350 participating plans, would be lower than the cost of 
filing a Form 5500-SF separately, which cost was incurred by a small 
plan before joining a DCG. Although the DOL does not know how much 
lower this new cost would be, it estimates that completing a schedule 
DCG as part of the DCG's Form 5500 annual return/report would take 
about 40 percent less time than completing a Form 5500-SF for each 
individual plan.
    As Table 3 shows, assuming the number of DCGs and plans per DCG as 
described above, along with the estimated cost of filing schedule DCG, 
the DOL expects an overall cost reduction of $1.6 million. This cost 
reduction assumes, as baseline, the current definition of large and 
small plans, and would be the result of a decrease in the number of 
Form 5500-SF filers, from 666,100 to 650,700. Such a reduction in 
filers would be partially offset by an increase in DFE filings, which 
reflects the introduction of DCGs as filing entities.

[[Page 51298]]



                                Table 3--Estimated Burden Change by Type of Filer
                                  Introduction of DCGs and Schedule DCG Filing
----------------------------------------------------------------------------------------------------------------
                                                                     Aggregate       Aggregate
                                     Number of       Number of    reporting cost  reporting cost  Aggregate cost
          Type of plan             filers under    filers under    under current  under proposed      change
                                   current rules  proposed rules       rules           rules        (millions)
                                    (thousands)     (thousands)     (millions)      (millions)
----------------------------------------------------------------------------------------------------------------
Large Plans.....................           146.8           146.8          $268.8          $268.8            $0.0
Small Plans.....................           666.1           650.7           234.7           230.1            -4.6
DFEs............................             9.3             9.4            11.4            14.3             2.9
                                 -------------------------------------------------------------------------------
    Overall Total...............           822.1           806.9           514.8           513.1            -1.6
----------------------------------------------------------------------------------------------------------------
Note: Some displayed numbers do not sum up to the totals due to rounding.
Large plans--100 participants or more.
[ssquf] Small plans--generally fewer than 100 participants.

    As noted above, there is substantial uncertainty regarding these 
estimates. The DOL specifically seeks comments on estimates of the 
number of DCGs, the number of plans joining those DCGs, and the cost of 
filing a schedule DCG compared to filing a Form 5500-SF, and the 
overall cost burden savings due to plans joining a DCG.
    Revised financial reporting on the Schedule H: Revising the 
Schedule H Line 4i Schedules of Assets to make it data-capturable to 
increase the accessibility to this information, including information 
regarding hard-to-value assets, would increase costs. Without altering 
the current definition of large and small plans, the DOL estimates that 
the effect of this change would be to increase the total burden by 
370,253 hours, which reflects the increase in burden that large plans 
and DFEs, both as typical filers of Schedule H, would face. As Table 4 
shows, in total this change would translate into an increase of filing 
costs of $41 million (which represents an estimated cost of 
approximately $260 per large plan/DFE potentially required to file the 
Schedules of Assets). The Department seeks comments on the increase in 
burden for entities filing the Schedule H, and if that burden will 
decrease over time.

                                Table 4--Estimated Burden Change by Type of Filer
                                  Revised Financial Reporting on the Schedule H
----------------------------------------------------------------------------------------------------------------
                                                                     Aggregate       Aggregate
                                     Number of       Number of    reporting cost  reporting cost  Aggregate cost
          Type of plan             filers under    filers under    under current  under proposed      change
                                   current rules  proposed rules       rules           rules        (millions)
                                    (thousands)     (thousands)     (millions)      (millions)
----------------------------------------------------------------------------------------------------------------
Large Plans.....................           146.8           146.8          $268.8          $305.4           $36.7
Small Plans.....................           666.1           666.1           234.7           234.7             0.0
DFEs............................             9.3             9.3            11.4            15.6             4.3
                                 -------------------------------------------------------------------------------
    Overall Total...............           822.1           822.1           514.8           555.7            41.0
----------------------------------------------------------------------------------------------------------------
Note: Some displayed numbers do not sum up to the totals due to rounding.
Large plans--100 participants or more.
Small plans--generally fewer than 100 participants.

    Changes to Methodology for Determining Small Plan Status for 
Purposes of Annual Report Filing Requirements: The proposal would adopt 
the change described in the NPFR to the current method of counting 
participants for purposes of determining when a defined contribution 
plan may file as a small plan and whether the plan may be exempt from 
the IQPA audit requirement. Specifically, the proposal would allow 
plans to count just the number of participants/beneficiaries with 
account balances as of the beginning of the plan year, as compared to 
the current rule that counts all the employees eligible to participant 
in the plan by adding to the Form 5500 and Form 5500-SF a new question, 
for defined contribution pension plans only, asking for the number of 
participants with account balances at the beginning of the plan year.
    This change would reduce costs for plans. The additional question 
imposes little burden as the end-of year number is already tracked and 
reported, but to plans who now qualify as small instead of large, 
savings could be significant. EBSA estimates that the typical reporting 
burden of all required schedules for a small pension plan is $348. In 
contrast, the typical reporting burden of all required schedules for a 
large pension plan is currently estimated by EBSA to be $1,903. While 
there would be a cost reduction, these plans and their participants 
would no longer have the protections provided by the audit, which could 
result in an increased risk of errors and fraud, but there are 
conditions for small plans to be eligible for the audit waiver that are 
designed to address those potential risks. In the case of small pension 
plans, to be eligible for the audit waiver small pension plans must 
meet conditions related to investment assets, financial institutions 
holding plan assets, disclosures to participants and beneficiaries, and 
enhanced fidelity bonding for persons who handle certain assets. In the 
case of welfare plans, both large and small plans, the plan must be 
fully insured or unfunded to be eligible for the audit waiver. 
Consistent with the Department's goal of encouraging pension plan 
establishment and maintenance, particularly in the small business 
community, the Department

[[Page 51299]]

concluded that engaging an accountant should not be the only means by 
which the security of small plan assets can be adequately protected. 
Rather, in developing the proposed regulation, consistent with the 
existing regulatory conditions for the small plan audit waiver, the 
Department attempted to balance the interest in providing secure 
retirement savings for participants and beneficiaries with the interest 
in minimizing costs and burdens on small pension plans and the sponsors 
of those plans.
    The DOL estimates that there could be a reduction of 20,005 large 
plans filing under the proposed regulations, 19,442 defined 
contribution plans due to the changing definition of who can file as a 
small plan, and 563 large participating plans that could provide 
benefits through pooled employer plans. An estimated 11,362 of these 
plans currently provide the IQPA report and audited financial 
statements and would therefore save in audit costs.\44\ The Department 
estimates that there could be an audit cost reduction of $7,500 for 
each one of these 11,362 plans. Plans may still conduct an audit, even 
if there is no requirement. It is estimated that 25 percent of plans 
could still conduct an audit.\45\ Data on the cost of an audit for 
these plans is not known and will vary based on plan size and 
complexity. An estimate of $7,500 is used to estimate the cost 
savings.\46\ The Department seeks comment on the size of the costs 
savings. Cost savings of $63.91 million annually is estimated for the 
8,522 plans (11,362 * 0.75) that will no longer be required to conduct 
an audit. These cost-savings are reported in Table 1 above.
---------------------------------------------------------------------------

    \44\ To estimate the number of large plans currently providing 
the IQPA report and audited financial statements the DOL identified 
those large plans that would be most likely to be re-defined as 
small plans and to have filed the Schedule H in 2018, as estimated 
on the 2018 Form 5500 Pension Research Files. Note that the 80 to 
120 participant transition provision at 29 CFR 2520.103-1(d) allows 
a plan that covers fewer than 100 participants to continue taking 
advantage of the simplified option or exemption, as applicable, 
until they reach 121 participants, therefore not all plans with 100 
or more participants will file a plan in a given year.
    \45\ See https://Mathematica.org/publications/estimates-of-the-burden-for-filing-form-5500-the-change-in-burden-from-the-1997-to-the-1999-forms.
    \46\ A report by Mathematica suggests audit costs of between 
$3,000 and $30,000. Adjusted for inflation this would be about 
$5,000 to $50,000 in 2021 dollars. https://mathematica.org/publications/estimates-of-the-burden-for-filing-form-5500-the-change-in-burden-from-the-1997-to-the-1999-forms. See also 
www.paychex.com/retirement-services/pooled-employer-plans (accessed 
July 21, 2021) which suggest $10,000 to $20,000. Additionally 
conversations with stake holders suggest a range similar to the 
$10,000 to $20,000. As the affected plans are expected to be small, 
the low estimates are averaged ($5,000 and $10,000) to arrive at 
$7,500.
---------------------------------------------------------------------------

    As discussed above there are an estimated 19,442 defined 
contribution plans that would now be able to file as a small plan. 
Other reporting cost savings for these plans are based on their filing 
the Form 5500-SF instead of the Form 5500 and the correspondent 
schedules. As shown in Table 5, the DOL estimates that this 
redefinition of small and large alone would translate into a decrease 
of filing costs of $29.4 million, with a reduction from 146,800 to 
127,400 in large plan filers. The DOL requests comments on this 
estimate.

                                Table --Estimated Burden Change by Type of Filer
                          Changes to Filing Exemptions and Requirements for Small Plans
----------------------------------------------------------------------------------------------------------------
                                                                     Aggregate       Aggregate
                                     Number of       Number of    reporting cost  reporting cost  Aggregate cost
          Type of plan             filers under    filers under    under current  under proposed      change
                                   current rules  proposed rules       rules           rules        (millions)
                                    (thousands)     (thousands)     (millions)      (millions)
----------------------------------------------------------------------------------------------------------------
Large Plans.....................           146.8           127.4          $268.8          $233.6          -$35.2
Small Plans.....................           666.1           685.5           234.7           240.4             5.8
DFEs............................             9.3             9.3            11.4            11.4             0.0
                                 -------------------------------------------------------------------------------
    Overall Total...............           822.1           822.1           514.8           485.4           -29.4
----------------------------------------------------------------------------------------------------------------
Note: Some displayed numbers do not sum up to the totals due to rounding.
Large plans--100 participants or more.
Small plans--generally fewer than 100 participants.

    Changes for MEWAs that file the Form M-1. As set forth in the NPFR, 
the proposal would update the Form M-1, transferring the multiple 
employer participating employer information questions from the Form 
5500 to the Form M-1 for MEWAs (plan and non-plan) that offer or 
provide coverage for medical benefits and continued reporting of 
participating employer information on the Form 5500 Annual as an 
attachment for plan MEWAs that provide other benefits. The current Form 
5500 requirement for MEPs to report participating employer information 
applies to plan MEWAs offering all types of benefits--not just those 
that provide group health plans. The DOL estimates that the change in 
burden would be de minimis for these plans.
    However, non-plan MEWAs providing health benefits would now have 
the added burden of providing the participating employer information. 
The DOL assumes that non-plan MEWAs already have access to this 
information, and reporting it would not add a substantive burden to 
these entities' reporting costs.
    Internal Revenue Code and ERISA Title IV Proposed Changes. As 
described the NPFR, the proposal includes changes related to Internal 
Revenue Code requirements and reporting requirements for defined 
benefit pensions subject to filing Schedules MB, SB, and R. The 
Agencies' believe the additional questions reflect information plans 
should know and expect that reporting this information would result in 
a de minimis marginal burden.
    Assumptions, Methodology, and Uncertainty: The cost and burden 
associated with the annual reporting requirement for any given plan 
depend upon the specific information that must be provided, given the 
plan's characteristics, practices, operations, and other factors. For 
example, a small, single-employer defined contribution pension plan 
eligible to file the Form 5500-SF should incur far lower costs than a 
large, multiemployer defined benefit pension plan that holds multiple 
insurance contracts, engages in reportable transactions, and has many 
service providers that each received over $5,000 in compensation. The 
DOL separately considered the cost to different types of plans in 
arriving at its aggregate cost estimates. The DOL's basis for these 
estimates follows.

[[Page 51300]]

    Assumptions Underlying this Analysis: The DOL's analysis assumes 
that all benefits and costs would be realized in the first year of the 
reporting cycle to which the changes apply and within each year 
thereafter. This assumption is premised on the requirement that each 
plan will be required to file the Form 5500 Annual Return/Report. The 
DOL has used a ``status quo'' baseline for this analysis, assuming that 
the world in the future, absent the proposed regulations, will resemble 
the present. The DOL does not anticipate that there will be material 
one-time transition cost for learning or updating systems during the 
first year in which the reporting changes apply. The proposal would 
largely apply requirements currently in effect for large MEPs to pooled 
employer plans and DCGs. The financial services providers and 
recordkeepers that be sponsoring such plans and DCGs generally are 
already providing Form 5500 filings services for the employee benefit 
plans they service so we do not anticipate material start-up costs for 
them to file Form 5500s on behalf of pooled employer plans or DCGs. We 
also do not anticipate that individual plans that participate in a DCG 
reporting arrangement would expend more time to supply information to 
DCG reporting arrangements during the first year than what they 
currently incur to supply annual reporting data to service provides 
that prepare their annual reports (and may in fact incur less time even 
during the first year). Similarly, the creation of the Schedule MEP 
mostly reorganizes the way annual reporting data is provided by 
affected plans, rather than adding significant additional information 
collection. Similarly, the changes to the content of the Schedules of 
Assets are calling for reporting of a very limited number of data 
elements that plans should already have as part of the ordinary 
business records. The DOL also expects that the formatting changes 
being proposed to make the Schedules of Assets more usable will match 
formatting that filers already use to file various other schedules, 
and, accordingly, they would not involve material costs for learning or 
system adjustments. Moreover, the DOL is proposing to permit (but not 
require) certain attachments to Schedule MB and SB to be provided in a 
tabular format (spreadsheet) rather than PDF or TXT formats. The DOL 
solicits comments on whether filers would want a similar option for the 
Schedules of Assets and whether they believe such an option would 
reduce reporting burdens, including any potential transition cost. 
Further, with respect to the limited number of additional questions for 
defined benefit pension plans and Code-related questions for pension 
plans relate to existing compliance obligations, those questions should 
not entail material start-up or learning costs. We also do not 
anticipate material transition costs related to the proposed changes 
related to reporting participating employer information which largely 
apply existing requirements in the context of a new schedule for some 
filers and as an attachment to current filings for others. Nonetheless, 
the DOL specifically solicits comments on whether plans or groups of 
plans anticipate a material increase in such transition costs during 
the first year.
    Methodology: Mathematica Policy Research, Inc. (MPR) developed the 
underlying cost data, which has been used by the Agencies in estimating 
burden related to the Form 5500 Annual Return/Report since 1999. See 65 
FR 21068, 21077-78 (Apr. 19, 2000); Borden, William S., Estimates of 
the Burden for Filing Form 5500: The Change in Burden from the 1997 to 
the 1999 Forms, Mathematica Policy Research, submitted to DOL May 25, 
1999.\47\ The cost information was derived from surveys of filers and 
their service providers, as modified due to comments, which were used 
to measure the unit cost burden of providing various types of 
information. The DOL has adjusted these unit costs since 1999 to 
account for changes to the forms and schedules and increases in the 
cost of labor and service providers since MPR developed the initial 
data.
---------------------------------------------------------------------------

    \47\ The MPR report can be accessed at https://mathematica.org/publications/estimates-of-the-burden-for-filing-form-5500-the-change-in-burden-from-the-1997-to-the-1999-forms. See also Technical 
Appendix: Documentation of Form 5500 Revision Burden Model at 
www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/technical-appendices.
---------------------------------------------------------------------------

    For this forms revision, the DOL used the adjusted MPR unit cost 
data for pension and non-health welfare plans. The DOL developed the 
unit cost data for group health plans using the best available data. To 
develop unit costs for DFEs, the DOL created weighted averages of the 
unit costs for plans.
    To obtain filer counts for pension plans, welfare plans, and DFEs, 
the DOL used historical counts of Form 5500 Annual Return/Report filers 
tabulated by type and reported characteristics.
    The DOL modeled its approach to calculating burden on the approach 
used during the 2009 forms revision and the 2016 modernization 
proposal.\48\ Aggregate burden estimates were produced in both 
revisions by multiplying the unit cost measures by the filer count 
estimates. The methodology is described in broad terms below.
---------------------------------------------------------------------------

    \48\ See 72 FR 64731 (Nov. 16, 2007) and 81 FR 47496 (July 16, 
2016).
---------------------------------------------------------------------------

    To estimate aggregate burdens, types of plans with similar 
reporting requirements were grouped together in various groups and 
subgroups. Calculations of aggregate cost were prepared for each of the 
various subgroups both under requirements in effect prior to this 
action and under the forms as revised. The universe of filers was 
divided into four basic types: Defined benefit pension plans, defined 
contribution pension plans, welfare plans, and DFEs. For the plans, 
each of these major plan types was further subdivided into 
multiemployer and single-employer plans.\49\ Since the filing 
requirements differ substantially for small and large plans, the plan 
types were also divided by plan size. For large plans (100 or more 
participants), the defined benefit plans were further divided between 
very large (1,000 or more participants) and other large plans (at least 
100 participants, but fewer than 1,000 participants). Small plans (less 
than 100 participants) were divided similarly, except that they were 
divided into Form 5500-SF eligible and Form 5500-SF ineligible plans, 
as applicable. Welfare plans were divided into group health plans and 
plans that do not provide any group health benefits, while plans that 
provide group health benefits and have fewer than 100 participants were 
divided into fully insured group health plans and unfunded, combination 
unfunded/fully insured plans, or funded with a trust group health 
plans. DFEs were divided into Master Trusts/MTIAs, CCTs, PSAs, 103-12 
IEs, GIAs, and DCGs. For each of these sets of respondents, burden 
hours per respondent were estimated for the Form 5500 Annual Return/
Report itself and up to seven schedules or the Form 5500-SF (and the 
Schedule SB, for Form 5500-SF eligible defined benefit pension plans).
---------------------------------------------------------------------------

    \49\ For purposes of this analysis, multiple employer plans were 
treated as single employer plans.
---------------------------------------------------------------------------

    We also separately estimated the costs for each of the forms and 
schedules that are part of the Form 5500 Annual Return/Report. When 
items on a schedule are required by more than one Agency, the estimated 
burden associated with that schedule is allocated among the Agencies. 
This allocation is based on how many items are required by each agency. 
The burden associated with reading the instructions

[[Page 51301]]

for each item also is tallied and allocated accordingly.
    The reporting burden for each type of plan is estimated in light of 
the circumstances that are known to apply or that are generally 
expected to apply to such plans, including plan size, funding method, 
usual investment structures, and the specific items and schedules such 
plans ordinarily complete. For example, a large single-employer defined 
benefit pension plan that is intended to be tax-qualified that has 
insurance products among its investments and whose service providers 
received compensation above the Schedule C reporting thresholds would 
be required to submit an annual report completing almost all the line 
items of the Form 5500, plus Schedule A (Insurance Information), 
Schedule SB (Single Employer Defined Benefit Plan Actuarial 
Information), Schedule C (Service Provider Information), possibly the 
Schedule G (Financial Transaction Schedules), Schedule H (Financial 
Information), and Schedule R (Retirement Plan Information), and would 
be required to submit an IQPA report. In this way, the Agencies intend 
meaningfully to estimate the relative burdens placed on different 
categories of filers.
    Burden estimates were adjusted for the proposed revisions to each 
schedule, including items added or deleted in each schedule and items 
moved from one schedule to another.
    The DOL has not attributed a recordkeeping burden to the 5500 Forms 
in this analysis or in the Paperwork Reduction Act analysis because it 
believes that plan administrators' practice of keeping financial 
records necessary to complete the 5500 Forms arises from usual and 
customary management practices that would be used by any financial 
entity and does not result from ERISA or Code annual reporting and 
filing requirements.
    The aggregate baseline burden is the sum of the burden per form and 
schedule as filed prior to this action multiplied by the estimated 
aggregate number of forms and schedules filed.\50\ The DOL estimated 
the burden impact of changes in the numbers of filings and of changes 
made to the form and the various schedules. The burden estimates use 
data from the Form 5500 Annual Return/Report for plan year 2018, which 
is the most recent year for which complete data is available.
---------------------------------------------------------------------------

    \50\ Some filers are eligible to file the Form 5500-SF, but 
choose to file a Form 5500 and attach Schedule I and/or other 
schedules because they find it less burdensome to do so in their 
particular situation. Counts of these filings are adjusted to 
reflect what they would have filed if they had chosen to file the 
Form 5500-SF.
---------------------------------------------------------------------------

1.4. Uncertainty

    The SECURE Act created pooled employer plans and directed the 
Departments to make available consolidated reporting for defined 
contribution pension plans that meet certain requirements. Due to these 
proposed rules designed to implement the SECURE Act, as well as the 
DOL's final rules with respect to association retirement plans and PEO-
sponsored plans, the DOL assumes that these types of entities will file 
a Form 5500 and report the number of participating employers, numbers 
of covered participants, and amount of assets in the future. However, 
until they file, the Departments face significant uncertainty about the 
number of each type of entity and whether they are merely providing 
coverage in a different manner than was already provided by employers 
to their employees through single employer plans or already existing 
MEPs (including association retirement plans and PEOs) or whether with 
the availability of additional commercial arrangements and plans, more 
employers will establish plans for their employees.
    While pooled plan providers have filed a Form PR and list plans 
they are forming, they do not report the number of participating 
employers. The DOL has identified 611,568 defined contribution plans 
that reported code 3D, of which 499,234 are considered small defined 
contribution plans filing the Form 5500-SF as possible plans that could 
join a DCG or a pooled employer plan. However, the decision depends not 
only on cost savings, and administrative ease, but also on employers' 
preferences and perceptions about the advantages and disadvantages of 
joining either group or neither.
    The Departments request information that will help improve its 
current estimates of the numbers of affected entities, employers and 
the burdens they will experience due to these proposed rules.

1.5. Alternatives

    As described above, the DOL proposed changes to Title I annual 
reporting requirements primarily are designed to implement statutory 
changes enacted as part of the SECURE Act. The DOL considered several 
alternative approaches to address these statutory changes, including:
     Not requiring an audit for large plans that are part of a 
DCG reporting arrangement, and instead requiring just an audit of the 
DCG's trust. Including more or fewer questions on the Schedule DCG and 
the Schedule MEP.
     Including more or fewer questions for defined benefit 
plans on issues under Title IV of ERISA or questions for retirement 
plans on Internal Revenue Code compliance issues.
     Not adding new content elements to the Schedules of Assets 
and not requiring the Schedules of Assets to be filed in a data-
capturable format.
     Not changing the methodology for participant count for 
determining whether a defined contribution retirement plan is subject 
to the annual reporting requirements applicable to large plans versus 
small plans.
     Allowing a DCG with under 100 total participants to file 
as a small plan rather than requiring all DCGs to generally follow the 
annual reporting requirements applicable to large plans--i.e., Form 
5500, Schedule A (if applicable), Schedule I, Schedule R (if 
applicable)--no IQPA audit, and no detailed supplemental schedules.
     Not requiring non-plan MEWAs and/or non-group health MEWA 
plans report the participating plan information on the Form M-1 and 
Form 5500, respectively.

While slightly less burdensome than the proposed rule's requirements, 
requiring fewer data elements or less transparent and usable data 
filing requirements would provide substantially less information to the 
DOL, which would impede its ability to fulfill its critical oversight 
role of protecting participants and plan assets. Employers in DCGs and 
MEPs also would receive less information to survey the market when 
choosing a DCG or pooled plan provider or deciding whether to continue 
to rely on an existing provider. Less information and less usable data 
filing requirements would also not have as effectively served the 
interests of other users of Form 5500 data, including the IRS, PBGC, 
other Federal agencies, Congress, and the private sector who use the 
Form 5500 filings as an important source of information and data in 
assessing employee benefit, tax, and economic trends and policies.\51\
---------------------------------------------------------------------------

    \51\ Section 1 of ERISA states the ``Congressional findings and 
declaration of policy.'' Of relevance to our consideration of these 
alternatives, section (b) states, in relevant part: ``It is hereby 
declared to be the policy of this chapter to protect interstate 
commerce and the interests of participants in employee benefit plans 
and their beneficiaries, by requiring the disclosure and reporting 
to participants and beneficiaries of financial and other information 
with respect thereto . . . .'' 29 U.S.C. 1001(b).
---------------------------------------------------------------------------

2. Paperwork Reduction Act Statement

    As part of its continuing effort to reduce paperwork and respondent

[[Page 51302]]

burden, the DOL conducts a preclearance consultation program to allow 
the general public and Federal agencies to comment on proposed and 
continuing collections of information in accordance with the Paperwork 
Reduction Act of 1995 (PRA).\52\ This helps to ensure that requested 
data will be provided in the desired format, reporting burden (time and 
financial resources) will be minimized, collection instruments will be 
clearly understood, and the impact of collection requirements on 
respondents is properly assessed. Currently, the DOL is soliciting 
comments concerning the proposed revision of the Form 5500 Annual 
Return/Report, which is an information collection request (ICR) subject 
to the PRA. The accompanying Notice of Proposed Forms Revisions 
includes a separate PRA discussion that includes tables breaking out 
the average time for filing the Form 5500, Form 5500-SF, and each 
schedule, broken down by pension plans (sub-grouped by large plans 
filing the Form 5500, small plan filing the Form 5500, small plan 
filing the Form 5500-SF), welfare plans that include health benefits 
(sub-grouped by large plans and small, unfunded, combination unfunded/
fully insured, or funded with a trust 5500-SF), welfare plans that do 
not include health benefits (sub-grouped by large plans filing the Form 
5500, small plan filing the Form 5500, small plan filing the Form 5500-
SF), and DFEs (sub-grouped by master trusts, CCTs, PSAs, 103-1IEs, 
GIAs, and DCGs). The discussion also includes a table with the 
estimated PRA burdens attributable the Form 5500 Annual Return/Report 
broken down by the portions allocated to the DOL and the IRS. The DOL 
is also submitting revisions to the Form M-1 and Summary Annual Report 
ICRs. A copy of the ICRs may be obtained by contacting the person 
listed in the PRA Addressee section below. The DOL has submitted a copy 
of the proposed revisions to the Office of Management and Budget (OMB) 
in accordance with 44 U.S.C. 3507(d) for its review of the DOL's 
information collection. The DOL and OMB are particularly interested in 
comments that:
---------------------------------------------------------------------------

    \52\ 44 U.S.C. 3506(c)(2)(A) (1995).
---------------------------------------------------------------------------

     Evaluate whether the collection of information is 
necessary for the functions of the agency, including whether the 
information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize 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 
electronically delivered responses).
    Comments should be sent to the Office of Information and Regulatory 
Affairs, Office of Management and Budget, Room 10235, New Executive 
Office Building, Washington, DC 20503 and marked ``Attention: Desk 
Officer for the Employee Benefits Security Administration.'' Comments 
can also be submitted by Fax: 202-395-5806 (this is not a toll-free 
number), or by email: [email protected]. OMB requests that 
comments be received by October 15, 2021, which is 30 days from 
publication of the proposed rule to ensure their consideration.
    PRA Addressee: Address requests for copies of the ICRs to James 
Butikofer, Office of Regulations and Interpretations, U.S. Department 
of Labor, Employee Benefits Security Administration, 200 Constitution 
Avenue NW, Room N-5655, Washington, DC 20210. Telephone: (202) 693-
8410; Fax: (202) 219-4745; Email: [email protected]. These are not toll-
free numbers. ICRs submitted to OMB also are available at https://www.RegInfo.gov.

3. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \53\ imposes certain 
requirements with respect to Federal rules that are subject to the 
notice and comment requirements of section 553(b) of the Administrative 
Procedure Act \54\ and are likely to have a significant economic impact 
on a substantial number of small entities. Unless an agency determines 
that a proposal is not likely to have a significant economic impact on 
a substantial number of small entities, section 603 of the RFA requires 
the agency to present an initial regulatory flexibility analysis (IRFA) 
of the proposed rule. The DOL has determined that this proposed rule is 
likely to have a significant impact on a substantial number of small 
entities. Therefore, the DOL provides its IRFA of the proposed rule, 
below.
---------------------------------------------------------------------------

    \53\ 5 U.S.C. 601 et seq. (1980).
    \54\ 5 U.S.C. 551 et seq. (1946).
---------------------------------------------------------------------------

    For purposes of this IRFA, an entity is considered a small entity 
if it is an employee benefit plan with fewer than 100 participants.\55\ 
The definition of small entity considered appropriate for this purpose 
differs, however, from a definition of small business that is based on 
size standards promulgated by the Small Business Administration (SBA) 
(13 CFR 121.201) pursuant to the Small Business Act (15 U.S.C. 631 et 
seq.). The basis of EBSA's definition of a small entity for this IRFA 
is found in section 104(a)(2) of ERISA, which permits the Secretary to 
prescribe simplified annual reports for pension plans that cover fewer 
than 100 participants. The DOL has consulted with the SBA Office of 
Advocacy concerning use of this participant count standard for RFA 
purposes.\56\ The DOL seeks comment on the appropriateness of 
continuing to use this size standard.
---------------------------------------------------------------------------

    \55\ While some large employers may have small plans, in 
general, small employers maintain most small plans. The Form 5500 
Annual Return/Report impacts any employer in any private sector 
industry who chooses to sponsor a plan. The DOL is unable to locate 
any data linking employer revenue to plans to determine the 
relationship between small plans and small employers in industries 
whose SBA size standard is revenue-based. For a separate project, 
the DOL purchased data on ESOPs that file the Form 5500 and on 
defined contribution pension plans that file the Form 5500-SF from 
Experian Information Solutions, Inc. The Experian dataset provides 
the number of employees for the plan sponsor. By merging these data 
with internal DOL data sources, the DOL determined the relationship 
between small plans and small employers in industries whose SBA size 
standard is based on a threshold number of employees that varies 
from 100 to 1,500 employees. Based on these data, the DOL estimates 
that over 97 percent of small retirement plans and over 80 percent 
of small health plans are sponsored by employers with fewer than 100 
employees. The DOL estimates that over 99 percent of small 
retirement plans and over 97 percent of small health plans are 
sponsored by employers with fewer than 1,500 employees. Thus, the 
DOL believes that assessing the impact of these proposed rules on 
small plans is an appropriate substitute for evaluating the effect 
on small entities.
    \56\ Memorandum received from the U.S. Small Business 
Administration, Office of Advocacy on July 10, 2020.
---------------------------------------------------------------------------

    The following subsections address specific components of an IRFA, 
as required by the RFA.

3.1. Need for and Objectives of the Rule

    This proposal would amend the DOL's reporting regulations relating 
to the annual reporting and disclosure requirements to implement the 
forms changes that are set forth in the NPFR published concurrently 
with this notice of proposed rulemaking. DOL strives to tailor 
reporting requirements to minimize reporting costs, while ensuring that 
the information necessary to secure ERISA rights is adequately 
available. The optimal design for reporting requirements changes over 
time. In addition, the technologies available to manage and transmit 
information continually advance.

[[Page 51303]]

Therefore, it is incumbent on the Agencies to revise their reporting 
requirements from time to time to keep pace with such changes. The 
proposed forms revisions, and associated DOL regulatory amendments in 
the proposal, are intended to implement the reporting requirements 
required by the SECURE Act, taking into account certain recent changes 
in markets, other law, and technology, many of which are referred to 
above in this document.

3.2. Affected Small Entities

    The proposal would change the current method of counting covered 
participants for purposes of determining when a defined contribution 
plan may file as a small plan and whether the plan may be exempt from 
the audit requirement from the current requirement. Specifically, the 
proposal would allow plans to count just the number of participants/
beneficiaries with account balances as of the beginning of the plan 
year, as compared to the current rule that counts all the employees 
eligible to participant in the plan. This change would allow an 
estimated 19,442 large defined contribution plans to be re-defined and 
file as small defined contribution plans. The estimated distribution of 
these plans by amount of assets is shown in Table 6.

 Table 6--Distribution of Large DC Pension Plans To Be Redefined as Small Filers, by Type of Plan and Amount of
                                                  Assets, 2018
----------------------------------------------------------------------------------------------------------------
                                                                   Single-       Multiemployer       Multiple-
               Amount of assets                     Total      employer plans        plans        employer plans
----------------------------------------------------------------------------------------------------------------
Total Plans..................................          19,442          18,974                134             334
None or not reported.........................              50              50  .................  ..............
$1-24K.......................................             221             220  .................               1
25-49K.......................................             183             182  .................               1
50-99K.......................................             312             306                  2               4
100-249K.....................................             816             800                  3              13
250-499k.....................................           1,276           1,260                  2              14
500-999K.....................................           2,561           2,522                  4              34
1-2.49M......................................           6,158           6,049                  3             106
2.5-4.9M.....................................           4,790           4,683                  7             100
5-9.9M.......................................           2,316           2,259                 10              48
10-24.9M.....................................             592             556                 27              10
25-49.9M.....................................              80              53                 25               2
50-74.9M.....................................              26              12                 14  ..............
75-99.9M.....................................              12               6                  6  ..............
100-149.9M...................................               9               6                  3  ..............
150-199.9M...................................              13               4                  9  ..............
200-249.9M...................................               8               3                  5  ..............
250-499.9M...................................              12               1                 11  ..............
500-999.9M...................................               4               3                  1  ..............
1-2.49B......................................               2               1                  1  ..............
----------------------------------------------------------------------------------------------------------------

    As described in the regulatory impact analysis, above, the DOL 
estimates that 100 DCGs will form in the first year, filing for 15,350 
small plans. These plans would no longer need to file a Form 5500 or 
Form 5500-SF; their DCG filing a complete Form 5500 Annual Return/
Report in accordance with its instructions, including the requirement 
to include the proposed Schedule DCG for each individual participating 
plan, would satisfy the reporting requirements for those plans. There 
also may be some cases in which sponsors of small plans decide to 
instead participate in the pooled employer plan, which would also 
result in a number of small plans either being terminated or possibly 
merged into the pooled employer plan and no longer filing a Form 5500 
or Form 5500-SF. As discussed above, the DOL is estimating that 2,251 
small employers/plans will join a pooled employer plan.\57\
---------------------------------------------------------------------------

    \57\ For the calculation of the total number of employers in 
pooled employer plans it is first assumed that 80 percent of all the 
employers who would participate in a pooled employer plan are 
currently providing benefits through small plans, and the remaining 
20 percent through large plans. This distribution would apply to the 
registrant that has already exceptionally listed 2000 employers 
(which would then be divided in 1600 small participating plans and 
400 large participating plans) and to the other 74 pooled plan 
providers assumed to be created. As explained, it is also assumed 
that each one of these other 74 pooled plan providers would be 
servicing in total 11 employers. Therefore, the total number of 
small participating plans in a pooled employer plan is calculated 
as: 1,600 + (74 * 11 * 0.8) = 2,251 (rounded).
---------------------------------------------------------------------------

    Due to the change in the requirements to be considered a small plan 
on the basis of account balance, in total, approximately 609,695 
defined contribution pension plans covering fewer than 100 participants 
with account balances would be eligible to comply with annual reporting 
requirements applicable to small plans, where previously approximately 
590,254 defined contribution plans were filing as small plans. In this 
regard, in total there would be now 648,837 small plans where 
previously were 629,397. Estimates of the number of small pension plans 
are based on 2018 Form 5500 filing data.
    Additionally, the proposed changes in annual reporting requirements 
would affect MEWAs. In the 2018 calendar year, there were 143 plan 
MEWAs and six non-plan MEWAs with fewer than 100 participants that 
filed a Form M-1.\58\
---------------------------------------------------------------------------

    \58\ These calculations are based on internal DOL calculations 
based on 2018 Form M-1 filings. In 2018, of the 640 total plan 
MEWAs, 143 reported having fewer than 100 participants, of which 69 
had zero participants. Of the 47 non-plan MEWAs, six reported having 
fewer than 100 participants all of which had zero participants.
---------------------------------------------------------------------------

3.3. Impact of the Rule

    While many small plans could experience a reduced burden as a 
result of the proposed changes, it is the 20,005 large plans filing 
under the proposed regulations, that we estimate would experience a 
significant impact. Specifically, 19,442 defined contribution plans due 
to the change in the definition of who can file as a small plan and be 
eligible for an audit waiver,

[[Page 51304]]

and 563 large participating plans that could provide benefits through 
pooled employer plans and be covered by the pooled employer plan single 
audit rather than a separate audit if they sponsored their own single 
employer plan. An estimated 11,362 of those affected large plans 
currently provide the IQPA report and audited financial statements that 
would save in audit costs under the proposal.\59\ There is variation in 
filing requirements based on the characteristics of a plan and types of 
assets held. However, these plans would no longer need to attach the 
IQPA report (audit) and other schedules required of large plans with 
its annual return/report. As described earlier in this document,\60\ 
the Department estimates that there could be an audit cost reduction of 
$7,500 for each one of these 11,362 plans. Plans may still conduct an 
audit, even if there is no requirement. It is estimated that 25 percent 
of plans could still conduct an audit. Data on the cost of an audit for 
these plans is not known and will vary based on plan size and 
complexity. An estimate of $7,500 is used to estimate the cost savings 
per year. These plans also would no longer be required to file the 
Schedule H, but would need to file the Schedule I. The difference in 
burden between filing Schedule H and Schedule I is estimated to be $770 
per year.\61\
---------------------------------------------------------------------------

    \59\ To estimate the number of large plans currently providing 
the IQPA report and audited financial statements the DOL identified 
those large plans are most likely to be re-defined as small plans 
and have filed Schedule H in 2018, as estimated on the 2018 Form 
5500 Pension Research Files. Note that an 80 to 120 participant 
transition provision allows a plan that covers fewer than 100 
participants to continue taking advantage of the simplified option 
or exemption, as applicable, until they reach 121 participants, 
therefore not all plans with 100 or more participants will file a 
plan in a given year.
    \60\ See fns. 47-49 supra.
    \61\ The methodology DOL uses results in estimates that it will 
take a small pension plan approximately 12 hours to file a Schedule 
H, compared to two hours and six minutes to file a Schedule I. See 
``Methodology'' section starting, supra, at page 56 for a discussion 
of the burden estimating methodology.
---------------------------------------------------------------------------

    Table 6 above shows that number of plans by the amount of assets in 
the plans. This shows an estimate of 5,369 plans (those with less than 
$1 million in assets) that would see a costs savings of about one 
percent of plan assets.\62\
---------------------------------------------------------------------------

    \62\ Plan asset data reflects data reported on 2018 Form 5500 
filings.
---------------------------------------------------------------------------

    The establishment of DCGs, the use of Schedules DCG ($178 per 
plan), Schedule MEP ($20 for most MEPs and $26 per pooled employer 
plan), and the other changes could impact a substantial number of small 
plans, as discussed above, but the impacts per plan are small in 
magnitude and do not meet the qualifications for a significant impact 
for this analysis.

3.4. Duplicate, Overlapping, or Relevant Federal Rules

    The DOL is unaware of any relevant Federal rules for small plans 
that duplicate, overlap, or conflict with these regulations.

3.5. Description of Steps Taken To Minimize the Impact on Small 
Entities

    These proposed regulations and related changes to the Form 5500 
Annual Return/Report generally implement or otherwise relate to SECURE 
Act changes to ERISA and the Code, and do not include significant 
modifications to existing small plan simplified reporting options other 
than expanding the number of plans that will be eligible for simplified 
reporting options by reason of the proposed change in the method of 
counting participants for determining small plans versus large plan 
status. Small pension plans that are invested in ``eligible'' plan 
assets and otherwise meet certain requirements are able to use a 
simplified reporting option of filing Form 5500-SF, which was 
established by regulation in part to comply with provisions of the 
Pension Protection Act requiring a simplified form of reporting for 
plans with fewer than 25 participants. In light of the fact that the 
majority of small plans required to file an ERISA annual report cover 
fewer than 25 participants, the simplified reporting option also 
constitutes the Department's efforts to further reduce the information 
collection burden for small business concerns with fewer than 25 
employees, pursuant to the Small Business Paperwork Relief Act of 2002, 
Public Law 107-198, see 44 U.S.C. 3506 (c)(4). The Department, in 
developing the proposed regulatory changes for Form 5500 filings by 
DCGs, carried forward an audit waiver for small plans participating in 
a DCG consolidated Form 5500 filing. We also, in developing the 
Schedule MEP filing requirements for pooled employer plans and other 
MEPs, did not expand small plan reporting requirements. We generally 
limited the information collection to consolidating information onto 
the Schedule MEP information that is already reported elsewhere by MEPs 
on the current Form 5500, as discussed elsewhere in this preamble and 
in the NPFR. Overall, the DOL believes that the proposed changes to the 
reporting requirements reduce the burden on small plans, while allowing 
the DOL to collect sufficient information for it to fulfill its 
statutory responsibilities.

4. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 requires each 
Federal agency to prepare a written statement assessing the effects of 
any Federal mandate in a proposed or final agency rule that may result 
in an expenditure of $100 million or more (adjusted annually for 
inflation with the base year 1995) in any one year by State, local, and 
tribal governments, in the aggregate, or by the private sector.\63\ For 
purposes of the Unfunded Mandates Reform Act, as well as Executive 
Order 12875,\64\ this proposal does not include any Federal mandate 
that the DOL expects would result in such expenditures by State, local, 
or tribal governments, or the private sector.
---------------------------------------------------------------------------

    \63\ 2 U.S.C. 1501 et seq. (1995).
    \64\ Enhancing the Intergovernmental Partnership, 58 FR 58093 
(Oct. 28, 1993).
---------------------------------------------------------------------------

5. Federalism Statement

    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by Federal 
agencies in the process of their formulation and implementation of 
policies that have ``substantial direct effects'' on the States, the 
relationship between the National Government and States, or on the 
distribution of power and responsibilities among the various levels of 
government.\65\ Federal agencies promulgating regulations that have 
federalism implications must consult with State and local officials and 
describe the extent of their consultation and the nature of the 
concerns of State and local officials in the preamble to the rule.
---------------------------------------------------------------------------

    \65\ Federalism, supra note 6.
---------------------------------------------------------------------------

    In the DOL's view, these proposed regulations would not have 
federalism implications because they would not have direct effects on 
the States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among 
various levels of government. These proposed rules do not have 
federalism implications because they would have no substantial direct 
effect on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Section 514 of 
ERISA provides, with certain exceptions specifically enumerated, that 
the provisions of Titles I and IV of ERISA supersede any and all laws 
of the States as they relate to any employee benefit plan covered under 
ERISA. The requirements proposed to be

[[Page 51305]]

implemented in these rules do not alter the fundamental provisions of 
the statute with respect to employee benefit plans, and as such would 
have no implications for the States or the relationship or distribution 
of power between the National Government and the States. The DOL 
welcomes input from affected States regarding this assessment.

List of Subjects in 29 CFR Part 2520

    Accounting, Employee benefit plans, Freedom of information, 
Pensions, Public assistance programs, Reporting and recordkeeping 
requirements.

    For the reasons discussed in the preamble, 29 CFR part 2520 is 
proposed to be amended as follows:

PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE

0
1. The authority citation for part 2520 is revised to read as follows:

    Authority: 29 U.S.C. 1002(44), 1021-1025, 1027, 1029-31, 1059, 
1134, and 1135; and Secretary of Labor's Order 1-2011, 77 FR 1088. 
Sec. 2520.101-2 also issued under 29 U.S.C. 1132, 1181-1183, 1181 
note, 1185, 1185a-b, 1191, and 1191a-c. Sec. 2520.101-5 also issued 
under 29 U.S.C. 1021 note; sec. 501, Pub. L. 109-280, 120 Stat. 780; 
sec. 105(a), Pub. L. 110-458, 122 Stat. 5092. Secs. 2520.102-3, 
2520.104b-1, and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-
1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.104b-1 
and 2520.107 also issued under 26 U.S.C. 401 note; sec. 1510, Pub. 
L. 105-34, 111 Stat. 1068.

0
2. In Sec.  2520.103-1, revise paragraphs (a)(2), (b) introductory 
text, (b)(1), (c)(1), (c)(2)(i), and (c)(2)(ii)(D) and (E) and add 
paragraphs (c)(2)(ii)(F) and (G) to read as follows:


Sec.  2520.103-1  Contents of the annual report.

    (a) * * *
    (2) Under the authority of subsections 104(a)(2), 104(a)(3), and 
110 of the Act, section 1103(b) of the Pension Protection Act of 2006, 
and section 202 of the SECURE Act, a simplified report, limited 
exemption, or alternative method of compliance is prescribed for 
employee welfare and pension benefit plans, as applicable. A plan 
filing a simplified report or electing the limited exemption or 
alternative method of compliance shall file an annual report containing 
the information prescribed in paragraph (b) or (c) of this section, as 
applicable, and shall furnish a summary annual report as prescribed in 
Sec.  2520.104b-10.
    (b) Contents of the annual report for plans with 100 or more 
participants electing the limited exemption or alternative method of 
compliance. Except as provided in paragraphs (d) and (f) of this 
section and in Sec. Sec.  2520.103-2, 2520.103-14, and 2520.104-44, the 
annual report of an employee benefit plan covering 100 or more 
participants at the beginning of the plan year which elects the limited 
exemption or alternative method of compliance described in paragraph 
(a)(2) of this section shall include:
    (1) A Form 5500 ``Annual Return/Report of Employee Benefit Plan'' 
and any statements or schedules required to be attached to the form, 
completed in accordance with the instructions for the form, including 
Schedule A (Insurance Information), Schedule C (Service Provider 
Information), Schedule D (DFE/Participating Plan Information), Schedule 
G (Financial Transaction Schedules), Schedule H (Financial 
Information), Schedule SB (Single-Employer Defined Benefit Plan 
Actuarial Information), Schedule MB (Multiemployer Defined Benefit Plan 
and Certain Money Purchase Plan Actuarial Information), Schedule MEP 
(Multiple Employer Plan), Schedule R (Retirement Plan Information), and 
other financial schedules described in Sec.  2520.103-10. See the 
instructions for this form.
* * * * *
    (c) * * *
    (1) Except as provided in paragraphs (c)(2), (d), (e), and (f) of 
this section, and in Sec. Sec.  2520.103-14, 2520.104-51, 2520.104-43, 
2520.104-44, 2520.104a-6, and 2520.104a-9, the annual report of an 
employee benefit plan that covers fewer than 100 participants at the 
beginning of the plan year shall include a Form 5500 ``Annual Return/
Report of Employee Benefit Plan'' and any statements or schedules 
required to be attached to the form, completed in accordance with the 
instructions for the form, including Schedule A (Insurance 
Information), Schedule D (DFE/Participating Plan Information), Schedule 
I (Financial Information--Small Plan), Schedule SB (Single Employer 
Defined Benefit Plan Actuarial Information), Schedule MB (Multiemployer 
Defined Benefit Plan and Certain Money Purchase Plan Actuarial 
Information), Schedule MEP (Multiple Employer Plan), and Schedule R 
(Retirement Plan Information). See the instructions for this form.
    (2)(i) The annual report of an employee pension benefit plan or 
employee welfare benefit plan and that covers fewer than 100 
participants at the beginning of the plan year and that meets the 
conditions in paragraph (c)(2)(ii) of this section with respect to a 
plan year may, as an alternative to the requirements of paragraph 
(c)(1) of this section, meet its annual reporting requirements by 
filing the Form 5500-SF ``Short Form Annual Return/Report of Small 
Employee Benefit Plan'' and any statements or schedules required to be 
attached to the form, Schedule SB (Single Employer Defined Benefit Plan 
Actuarial Information) and Schedule MB (Multiemployer Defined Benefit 
Plan and Certain Money Purchase Plan Actuarial Information), completed 
in accordance with the instructions for the form. See the instructions 
for this form.
    (ii) * * *
    (D) Is not a multiemployer plan;
    (E) Is not a plan subject to the Form M-1 requirements under Sec.  
2520.101-2;
    (F) Is not a multiple employer pension plan, including a pooled 
employer plan described in section 3(43) of the Act and a multiple 
employer defined contribution pension plan described in Sec.  2510.3-55 
of this chapter; and
    (G) Is not a DCG reporting arrangement described in Sec.  2520.104-
51.
* * * * *
0
3. In Sec.  2520.103-5, revise paragraph (a) introductory text to read 
as follows:


Sec.  2520.103-5  Transmittal and certification of information to plan 
administrator for annual reporting purposes.

    (a) General. In accordance with section 103(a)(2) of the Act, an 
insurance carrier or other organization which provides benefits under 
the plan or holds plan assets, a bank or similar institution which 
holds plan assets, or a plan sponsor shall transmit and certify such 
information as needed by the administrator to file the annual report 
under section 104(a)(1) of the Act and Sec.  2520.104a-5, Sec.  
2520.104a-6, or Sec.  2520.104a-9:
* * * * *
0
4. In Sec.  2520.103-10:
0
a. Revise paragraphs (a) and (b)(1) and (2);
0
b. Redesignate paragraph (c) as paragraph (d);
0
c. Add a new paragraph (c); and
0
d. In newly redesiganted pargraph (d), remove ``paragraphs (b)(1), 
(b)(2) or (b)(6)'' and add ``paragraph (b)(1), (2), or (6)'' in its 
place.
    The revisions and addition read as follows:


Sec.  2520.103-10  Annual report financial schedules.

    (a) General. The administrator of a plan filing an annual report 
pursuant to Sec.  2520.103-1(a)(2), the report for a group insurance 
arrangement pursuant to Sec.  2520.103-2, or the report for a defined 
contribution pension plan

[[Page 51306]]

group (DCG) reporting arrangement pursuant to Sec.  2520.103-14, shall, 
as provided in the instructions to the Form 5500 ``Annual Return/Report 
of Employee Benefit Plan,'' include as part of the report the separate 
financial schedules described in paragraph (b) of this section.
    (b) * * *
    (1) Assets held for investment. (i) A schedule of all assets held 
for investment purposes at the end of the plan year (see Sec.  
2520.103-11) with assets aggregated and identified by:
    (A) Identity of issue, borrower, lessor or similar party to the 
transaction (including a notation as to whether such party is known to 
be a party in interest);
    (B) Description of investment including maturity date, rate of 
interest, collateral, par, or maturity value; (including whether the 
investment is a hard-to-value asset);
    (C) Cost;
    (D) Current value, and, in the case of a loan, the payment 
schedule;
    (E) The asset category in which the asset was reported on the 
Schedule H;
    (F) The Central Index Key (CIK) number, Legal Entity Identifier 
(LEI) Code, or National Association of Insurance Commissioners (NAIC) 
Company Code, or other government registration or identity number for 
the investment described in paragraphs (b)(1)(i)(A) and (B) of this 
section, or if no government number is available, a market or exchange 
registration or identity number; and
    (G) In the case of individual account plans, whether the investment 
is a designated investment alternative (DIA) or a qualified default 
investment alternative (QDIA), and for each such DIA and QDIA with 
respect to which the return is not fixed, the total annual operating 
expenses on the latest 404a-5 statement provided to participants during 
the plan year.
    (ii) [Reserved]
    (2) Assets acquired and disposed within the plan year. (i) A 
schedule of all assets acquired and disposed of within the plan year 
(see Sec.  2520.103-11) with assets aggregated and identified by:
    (A) Identity of issue, borrower, issuer or similar party;
    (B) Descriptions of investment including maturity date, rate of 
interest, collateral, par, or maturity value;
    (C) Cost of acquisitions; and
    (D) Proceeds of dispositions.
    (ii) [Reserved]
* * * * *
    (c) Presentation of investment assets in commingled trusts and 
direct filing entities (DFEs). (1) Except as provided in the Form 5500 
and the instructions thereto or for filings by direct filing entities 
or DCG reporting arrangements, in the case of assets or investment 
interests of two or more plans maintained in one trust, entries on the 
schedule of assets held for investment purposes at the end of the plan 
year and the schedule of assets acquired and disposed of during the 
plan year shall be completed by including the plan's allocable portion 
of the trust.
    (2) In the case of direct filing entities and DCG reporting 
arrangements required to file a schedule of assets held for investment 
purposes at the end of the plan year and the schedule of assets 
acquired and disposed of during the plan year, the entries on the 
schedules shall be completed by including the assets held by the DFE or 
in the DCG reporting arrangement's trust and shall include the number 
of plans with an allocable interest in each listed investment.
* * * * *
0
5. Add Sec.  2520.103-14 to read as follows:


Sec.  2520.103-14  Contents of the annual report for defined 
contribution pension plan group (DCG) reporting arrangements.

    (a) General. A defined contribution pension plan group reporting 
arrangement as described in Sec.  2520.104-51(c) (``DCG reporting 
arrangement'') that files a consolidated annual report pursuant to 
Sec.  2520.104-51 shall include in such report the items set forth in 
paragraph (b) of this section, and shall furnish a summary annual 
report as prescribed in Sec.  2520.104b-10.
    (b) Contents of the annual report for DCG reporting arrangement. 
(1) A Form 5500 ``Annual Return/Report of Employee Benefit Plan'' and 
any statements or schedules required to be attached to the form, 
completed in accordance with the instructions for the form, including 
Schedule A (Insurance Information), Schedule C (Service Provider 
Information), Schedule D (DFE/Participating Plan Information), Schedule 
G (Financial Transaction Schedules), Schedule H (Financial 
Information), Schedule DCG (Individual Plan Information), Schedule R 
(Retirement Plan Information), and the other financial schedules 
referred to in Sec.  2520.103-10, completed in accordance with the 
instructions for the form.
    (2) A report of an independent qualified public accountant for the 
DCG trust.
    (3) Separate financial statements for the DCG reporting arrangement 
trust described in Sec.  2520.104-51(c)(2)(i) (in addition to the 
information required by paragraph (b)(1) of this section), if such 
financial statements are prepared in order for the independent 
qualified public accountant to form the opinion required by section 
103(a)(3)(A) of the Act and paragraph (b)(6) of this section. These 
financial statements shall include the following:
    (i) A statement of all trust assets and liabilities at current 
value presented in comparative form for the beginning and end of the 
year. The statement of trust assets and liabilities shall include the 
assets and liabilities required to be reported on the Form 5500; 
however, the assets and liabilities may be aggregated into categories 
in a manner other than that used on Form 5500.
    (ii) Separate or combined statements of all trust income and 
expenses and changes in net assets, which includes the categories of 
income, expense, and changes in assets required to be reported on the 
Form 5500; however, the income, expense, and changes in assets may be 
aggregated into categories in a manner other than that used on Form 
5500.
    (4) Notes to the financial statements described in paragraph (b)(1) 
or (2) of this section which contain a description of the accounting 
principles and practices reflected in the financial statements and, if 
applicable, variances from generally accepted accounting principles; a 
description of the DCG reporting arrangement including any significant 
changes in the arrangement made during the period and the impact of 
such changes on benefits; a description of material lease commitments, 
other commitments, and contingent liabilities; a description of 
agreements and transactions with persons known to be parties in 
interest; a general description of priorities upon termination of the 
DCG reporting arrangement; an explanation of the differences, if any, 
between the information contained in the separate financial statements 
and the assets, liabilities, income, expenses and changes in net assets 
as required to be reported on the Form 5500; and any other matters 
necessary to fully and fairly present the financial condition of the 
DCG reporting arrangement.
    (5) In the case of a DCG reporting arrangement some or all of the 
assets of which are held in a pooled separate account maintained by an 
insurance carrier, or in a common or collective trust maintained by a 
bank, trust company or similar institution, a copy of the annual 
statement of assets and liabilities of such account or trust for the 
fiscal year of the account or trust which ends with or within the plan 
year for which the annual report is made as required to be furnished by 
such account or trust under Sec.  2520.103-5(c). See Sec. Sec.  
2520.103-3 and 2520.103-4 for

[[Page 51307]]

reporting requirements for plans some or all of the assets of which are 
held in a pooled separate account maintained by an insurance company, 
or a common or collective trust maintained by a bank or similar 
institution, and see Sec.  2520.104-51(b)(2) for when the term ``DCG 
reporting arrangement'' or ``DCG'' shall be used in place of the term 
``plan.''
    (6) In the case of a plan participating in a DCG reporting 
arrangement covering 100 or more participants at the beginning of the 
plan year, the Schedule DCG for each participating plan shall include 
the following as provided in the instructions to the Schedule DCG:
    (i) A report of an independent qualified public accountant for the 
participating plan.
    (ii) Separate financial statements and financial schedules 
described in Sec.  2520.103-10 for the plan, if such financial 
statements and schedules are prepared in order for the independent 
qualified public accountant to form the opinion required by section 
103(a)(3)(A) of the Act and paragraph (b)(6) of this section. The 
financial statement shall include the information set forth in Sec.  
2520.103-1(b)(2).
    (iii) Notes to the financial statements described in paragraph 
(b)(2)(i) of this section, which contain the information set forth in 
Sec.  2520.103-1(b)(3).
    (iv) In the case of a participating plan, some or all of the assets 
of which are held in a pooled separate account maintained by an 
insurance company, or a common or collective trust maintained by a bank 
or similar institution, the information described in Sec.  2520.103-
1(b)(4).
    (c) Technical requirements. The accountant's report required for 
the DCG trust and any participating plan subject to the requirements in 
paragraph (b)(6) of this section--
    (1) Shall be dated;
    (2) Shall be signed manually;
    (3) Shall indicate the city and state where issued;
    (4) Shall identify without detailed enumeration the financial 
statements and schedules covered by the report;
    (5) Shall state whether the audit was made in accordance with 
generally accepted auditing standards;
    (6) Shall designate any auditing procedures deemed necessary by the 
accountant under the circumstances of the particular case, which have 
been omitted, and the reasons for their omission. Authority for the 
omission of certain procedures which independent accountants might 
ordinarily employ in the course of an audit made for the purpose of 
expressing the opinions required by paragraph (b)(5)(iii) of this 
section is contained in Sec.  2520.103-8; and
    (7) Shall state clearly:
    (i) The opinion of the accountant in respect of the financial 
statements and schedules covered by the report and the accounting 
principles and practices reflected therein; and
    (ii) The opinion of the accountant as to the consistency of the 
application of the accounting principles with the application of such 
principles in the preceding year, or as to any changes in such 
principles which have a material effect on the financial statements.
    (8) Any matters to which the accountant takes exception shall be 
clearly identified, the exception thereto specifically and clearly 
stated, and, to the extent practicable, the effect of the matters to 
which the accountant takes exception on the related financial 
statements given. The matters to which the accountant takes exception 
shall be further identified as to:
    (i) Those that are the result of DOL regulations; and
    (ii) All others.
    (d) Electronic filing requirement. See Sec.  2520.104a-2 and the 
instructions for the Form 5500 ``Annual Return/Report of Employee 
Benefit Plan'' for electronic filing requirements. The common plan 
administrator for each plan whose reporting obligations are satisfied 
by a DCG filing under this section must maintain an original copy of 
the DCG filing, with all required signatures, as part of the DCG's 
records.
0
6. Add Sec.  2520.104-51 to read as follows:


Sec.  2520.104-51  Alternative method of compliance for defined 
contribution pension plan group (DCG) reporting arrangements.

    (a) General. Under the authority of section 110 of the Act and 
section 202 of the SECURE Act, the plan administrator common to each 
plan (``common plan administrator''), as described in paragraph 
(c)(2)(iii) of this section, satisfies the obligation to file an annual 
report for each of the plans participating in the DCG reporting 
arrangement described in paragraph (c) of this section if the 
participating plan meets the requirements of paragraph (b) of this 
section.
    (b) Application. (1) The alternative method of compliance set out 
in this section is available only for an individual account or defined 
contribution pension plan in a plan year in which:
    (i) Such plan participates in a defined contribution pension plan 
group (DCG) reporting arrangement described in paragraph (c) of this 
section; and
    (ii) A consolidated annual report containing the items set forth in 
Sec.  2520.103-14 has been filed with the Secretary of Labor in 
accordance with Sec.  2520.104a-9 by the common plan administrator (as 
described in paragraph (c)(2)(iii) of this section) for all of the 
plans participating in the DCG reporting arrangement (as described in 
paragraph (c) of this section).
    (2) For purposes of this section, the term ``DCG reporting 
arrangement'' or ``common plan administrator'' shall be used in place 
of the terms ``plan'' and ``plan administrator,'' in Sec. Sec.  
2520.103-3, 2520.103-4, 2520.103-6, 2520.103-8, 2520.103-9, and 
2520.103-10 and elsewhere in subpart C of this part and this subpart, 
as applicable.
    (c) Defined contribution pension plan group (DCG) reporting 
arrangement. An arrangement is only a ``DCG reporting arrangement'' if 
all plans participating in the arrangement--
    (1) Are individual account plans or defined contribution plans as 
defined in section 3(34) of the Act;
    (2) Have--
    (i) The same trustee as described in section 403(a) of the Act 
(``common trustee'') and trust(s) (``common trust'');
    (ii) The same one or more named fiduciaries as described in section 
402(a) of the Act (``common named fiduciaries''), except that nothing 
in this paragraph (c)(2)(ii) precludes an individual employer acting as 
an additional named fiduciary with respect to the individual plan it 
sponsors;
    (iii) A designated plan administrator that is the same plan 
administrator as defined in section 3(16)(A) of the Act (``common plan 
administrator''); and
    (iv) Plan years beginning on the same date (``common plan year'');
    (3) Provide the same investments or investment options (``common 
investments or investment options'') to participants and beneficiaries; 
and
    (4) Have the investment assets held in a single trust of the DCG 
reporting arrangement, and the participating plan:
    (i) Do not hold any employer securities at any time during the plan 
year;
    (ii) At all times during the plan year, are 100% invested in assets 
that have a readily determinable fair market value as described in 
Sec.  2520.103-1(c)(2)(ii)(C);
    (iii) Are either audited by an independent qualified public 
accountant (IQPA) or satisfies the audit waiver conditions in Sec.  
2520.104-46(b)(1)(i)(A)(1) and (b)(1)(i)(B) and (C);
    (iv) Are not a multiemployer plan; and
    (v) Are not a multiple employer pension plan, including a pooled 
employer plan described in section

[[Page 51308]]

3(43) of the Act and multiple employer defined contribution pension 
plans described in Sec.  2510.3-55 of this chapter.
    (d) Limitations. The alternative method of reporting set out in 
this section does not relieve the administrator of a defined 
contribution pension plan participating in a DCG reporting arrangement 
described in paragraph (c) of this section from any other requirements 
of Title I of the Act, including the provisions which require that plan 
administrators furnish copies of the summary plan description to 
participants and beneficiaries (section 104(b)(1)), furnish certain 
documents to the Secretary of Labor upon request (section 104(a)(6)), 
authorize the Secretary of Labor to collect information and data from 
employee benefit plans for research and analysis (section 513), and 
furnish a copy of a summary annual report to participants and 
beneficiaries of the plan, as required by section 104(b)(3) of the Act.
0
7. In Sec.  2520.104a-5, revise paragraph (a) introductoty text to read 
as follows:


Sec.  2520.104a-5  Annual reporting filing requirements.

    (a) Filing obligation. Except as provided in Sec. Sec.  2520.104a-6 
and 2520.104a-9, the administrator of an employee benefit plan required 
to file an annual report pursuant to section 104(a)(1) of the Act shall 
file an annual report containing the items prescribed in Sec.  
2520.103-1 within:
* * * * *
0
8. Add Sec.  2520.104a-9 to read as follows:


Sec.  2520.104a-9  Annual reporting for defined contribution pension 
plan group (DCG) reporting arrangements.

    (a) General. A defined contribution pension plan group (DCG) 
reporting arrangement described in Sec.  2520.104-51(c) that files an 
annual report in accordance with the terms of paragraphs (b) and (c) of 
this section shall be deemed to have filed such a report for purposes 
of Sec.  2520.104-51.
    (b) Date of filing. The annual report shall be filed within seven 
months after the close of the plan year of the DCG reporting 
arrangement, unless extended. See ``When to file'' instructions of the 
appropriate Annual Return/Report Form.
    (c) Where to file. The annual report prescribed in Sec.  2520.103-
14 shall be filed electronically in accordance with the instructions to 
the Annual Return/Report Form.
0
9. In Sec.  2520.104b-10:
0
a. In paragraph (d)(3):
0
i. Revise the ``Summary Annual Report for (name of plan)'';
0
ii. Add paragraphs 11 and 12 immediately following paragraph 10 under 
``Your Rights to Additional Information''; and
0
iii. Remove the last undesignated paragraph and add two undesignated 
paragraphs in its place; and
0
b. Remove the appendix to the section; and
0
c. Add table 1 at the end of the section.
    The revisions and additions read as follows:


Sec.  2520.104b-10  Summary Annual Report.

* * * * *
    (d) * * *
    (3) * * *

Summary Annual Report for (name of plan)

    This is a summary of the annual report [insert as applicable either 
Form 5500 Annual Return/Report of Employee Benefit Plan or Form 5500-SF 
Annual Return/Report of Small Employee Benefit Plan] of [insert name of 
plan and EIN/PN] for [insert period covered by this report]. The 
[insert as applicable either Form 5500 or Form 5500-SF] annual report 
has been filed with the Employee Benefits Security Administration, as 
required under the Employee Retirement Income Security Act of 1974 
(ERISA). Your plan is a [insert a brief description of the plan based 
on the plan characteristic codes listed for the plan on the Form 5500, 
including whether it is a defined contribution or defined benefit plan, 
and whether the plan is a pooled employer plan, another type of 
multiple employer plan, a single employer plan].
    [If the plan is participating in a DCG reporting arrangement]:
    Your plan participates in an annual reporting arrangement that 
files a consolidated Form 5500 Annual Report for all the separate plans 
in the arrangement. This summary includes aggregate information on all 
the participating plans from the consolidated Form 5500. The 
consolidated Form 5500 also includes a separate schedule (Schedule DCG) 
for each individual plan. As noted below regarding your rights to 
additional information, you have a right to receive a copy of the 
Schedule DCG relating to your plan on request from the plan 
administrator.]
* * * * *

Your Rights to Additional Information

* * * * *
0
11. a Schedule DCG for plans participating in a consolidated group Form 
5500 filing that includes your plan sponsor's name, EIN, total number 
of participants in your plan and basic financial information about the 
plan.
0
12. a Schedule MEP, including name and EIN of the employers 
participating in the MEP, each participating employer's percentage of 
the total contributions (employer and employee) made by all employer 
participating in the MEP and aggregate account balance for each of the 
employer participating in the MEP.
* * * * *
    [If the plan is participating in a DCG reporting arrangement]:
    You also have the legally protected right to examine the annual 
report at the main office of the plan (address), (at any other location 
where the report is available for examination), and at the U.S. 
Department of Labor in Washington, DC, or to obtain a copy from the 
U.S. Department of Labor upon payment of copying costs. Requests to the 
Department should be addressed to: Public Disclosure Room, Room N-1513, 
Employee Benefits Security Administration, U.S. Department of Labor, 
200 Constitution Avenue NW, Washington, DC 20210. The annual report is 
also available online at the Department of Labor website 
www.efast.dol.gov.
* * * * *

  Table 1 to Sec.   2520.104b-10--The Summary Annual Report (SAR) Under ERISA: A Cross-Reference to the Annual
                                                     Report
----------------------------------------------------------------------------------------------------------------
                                         Form 5500 large plan     Form 5500 small plan   Form 5500-SF filer line
               SAR item                    filer line items         filer line items              items
----------------------------------------------------------------------------------------------------------------
A. Pension Plan:
    1. Funding arrangement...........  Form 5500-9a...........  Same...................  Not applicable.
    2. Total plan expenses...........  Sch. H-2j..............  Sch. I-2j..............  Line 8h.
    3. Administrative expenses.......  Sch. H-2i(5)...........  Sch. I-2h..............  Line 8f.
    4. Benefits paid.................  Sch. H-2e(4)...........  Sch. I-2e..............  Line 8d.

[[Page 51309]]

 
    5. Other expenses................  Sch. H--Subtract the     Sch. I-2i..............  Line 8g.
                                        sum of 2e(4) & 2i(5)
                                        from 2j.
    6. Total participants............  Form 5500-6f...........  Same...................  Line 5b.
    6. Value of plan assets (net):
        a. End of plan year..........  Sch. H-1l [Col. (b)]...  Sch. I-1c [Col. (b)]...  Line 7c [Col. (b)].
        b. Beginning of plan year....  Sch. H-1l [Col. (a)]...  Sch. I-1c [Col. (a)]...  Line 7c [Col. (a)].
    8. Change in net assets..........  Sch. H--Subtract 1l      Sch. I--Subtract 1c      Line 7c--Subtract Col.
                                        [Col. (a)] from 1l       [Col. (a) from Col.      (a) from Col. (b).
                                        [Col. (b)].              (b)].
    9. Total income..................  Sch. H-2d..............  Sch. I-2d..............  Line 8c.
        a. Employer contributions....  Sch. H-2a(1)(A) & 2a(2)  Sch. I-2a(1) & 2b if     Line 8a(1) if
                                        if applicable.           applicable.              applicable.
        b. Employee contributions....  Sch. H-2a(1)(B) & 2a(2)  Sch. I-2a(2) & 2b if     Line 8a(2) & 8a(3) if
                                        if applicable.           applicable.              applicable.
        c. Participating employer's    Sch. MEP Line 2c.......  Sch. MEP Line 2c.......  Not applicable.
         percentage of the total
         contributions (employer and
         employee) made by all
         employers participating in a
         MEP.
        d. Aggregate account balance   Sch. MEP Line 2d.......  Sch. MEP Line 2d.......  Not applicable.
         of the employer
         participating in a MEP
         (determined as the sum of
         the account balances of the
         employees of such employer
         (including the beneficiaries
         of such employees).
        e. Gains (losses) from sale    Sch. H-2b(4)(C)........  Not applicable.........  Not applicable.
         of assets.
        f. Earnings from investments.  Sch. H--Subtract the     Sch. I-2c..............  Line 8b.
                                        sum of 2a(3), 2b(4)(C)
                                        and 2c from 2d.
    11. Total insurance premiums.....  Total of all Schs. A-6b  Total of all Schs. A-6b  Not applicable.
    12. Unpaid minimum required
     contribution (S-E plans) or
     Funding deficiency (ME plans):
        a. S-E Defined benefit plans.  Sch. SB-39.............  Same...................  Same.
        b. ME Defined benefit plans..  Sch. MB-10.............  Same...................  Not applicable.
        c. Defined contribution plans  Sch. R-6c, if more than  Same...................  Line 12d.
                                        zero.
    13. Individual plan information    Schedule DCG...........  Same...................  Not applicable.
     for plans participating in a DCG
     reporting arrangement.
B. Welfare Plan:
    1. Name of insurance carrier.....  All Schs. A-1(a).......  Same...................  Not applicable.
    2. Total (experience rated and     All Schs. A--Sum of      Same...................  Not applicable.
     non-experienced rated) insurance   9a(1) and 10a.
     premiums.
    3. Experience rated premiums.....  All Schs. A-9a(1)......  Same...................  Not applicable.
    4. Experience rated claims.......  All Schs. A-9b(4)......  Same...................  Not applicable.
    5. Value of plan assets (net):
        a. End of plan year..........  Sch. H-11 [Col. (b)]...  Sch. I-1c [Col. (b)]...  Line 7c [Col. (b)].
        b. Beginning of plan year....  Sch. H-11 [Col. (a)]...  Sch. I-1c [Col. (a)]...  Line 7c [Col. (a)].
    6. Change in net assets..........  Sch. H--Subtract 1       Sch. I--Subtract 1c      Line 7c--Subtract [Col.
                                        [Col. (a)] from 1        [Col. (a)] from 1c       (a)] from 7c [Col.
                                        [Col. (b)].              [Col. (b)].              (b)].
    7. Total income..................  Sch. H-2d..............  Sch. I-2d..............  Line 8c.
        a. Employer contributions....  Sch. H-2a(1)(A) & 2a(2)  Sch. I-2a(1) & 2b if     Line 8a(1) if
                                        if applicable.           applicable.              applicable.
        b. Employee contributions....  Sch. H-2a(1)(B) & 2a(2)  Sch. I-2a(2) & 2b if     Line 8a(2) if
                                        if applicable.           applicable.              applicable.
        c. Gains (losses) from sale    Sch. H-2b(4)(C)........  Not applicable.........  Not applicable.
         of assets.
        d. Earnings from investments.  Sch. H--Subtract the     Sch. I-2c..............  Line 8b.
                                        sum of 2a(3), 2b(4)(C)
                                        and 2c from 2d.
    8. Total plan expenses...........  Sch. H-2j..............  Sch. I-2j..............  Line 8h.
    9. Administrative expenses.......  Sch. H-2i(5)...........  Sch. I-2h..............  Line 8f.
    10. Benefits paid................  Sch. H-2e(4)...........  Sch. I-2e..............  Line 8d.

[[Page 51310]]

 
    11. Other expenses...............  Sch. H--Subtract the     Sch. I-2i..............  Line 8g.
                                        sum of 2e(4) & 2i(5)
                                        from 2j.
----------------------------------------------------------------------------------------------------------------


    Signed at Washington, DC, this 2nd day of September, 2021.
Ali Khawar,
Acting Assistant Secretary, Employee Benefits Security Administration, 
U.S. Department of Labor.
[FR Doc. 2021-19713 Filed 9-14-21; 8:45 am]
BILLING CODE 4510-29-P