Revision of Annual Information Return/Reports, 73976-73984 [2021-27764]

Download as PDF 73976 Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations DEPARTMENT OF LABOR Employee Benefits Security Administration 29 CFR Part 2520 RIN 1210–AB97 Revision of Annual Information Return/ Reports Employee Benefits Security Administration, Labor. ACTION: Final forms revisions. AGENCY: This document contains final revisions to the instructions for the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 5500– SF Short Form Annual Return/Report of Small Employee Benefit Plan effective for plan years beginning on or after January 1, 2021. These final revisions to the instructions were included in a broader proposal of form and instruction changes published on September 15, 2021. The limited number of instruction changes in this document implement annual reporting changes for multiple-employer plans (including pooled employer plans) that result from statutory provisions in section 101 of the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). The other changes to the Form 5500 Annual Return/Report included in the September 2021 proposal will be the subject of one or more separate and later final notices. DATES: The final instruction revisions in this document are effective for plan years beginning on or after January 1, 2021. The Form 5500 Annual Return/ Report for the 2021 plan year generally is not required to be filed until seven months after the end of the 2021 plan year, e.g., July 2022 for calendar year plans, and a 21⁄2-month extension is available. SUMMARY: khammond on DSKJM1Z7X2PROD with RULES FOR FURTHER INFORMATION CONTACT: Janet Song or Florence Novellino, Office of Regulations and Interpretations, Employee Benefits Security Administration, U.S. Department of Labor, (202) 693–8500, (this is not a tollfree number). Customer service information: Individuals interested in obtaining information from the DOL concerning Title I of Employee Retirement Income Security Act of 1974 (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: VerDate Sep<11>2014 16:59 Dec 28, 2021 Jkt 256001 I. Background Titles I and IV of Employee Retirement Income Security Act of 1974 (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 plans. 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. 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. The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), included various provisions designed to improve the private employer-based retirement system that either directly changed or necessitated changes to the annual reporting requirements under ERISA and the Code.2 On September 15, 2021, the DOL, the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) (collectively ‘‘the Agencies’’) published a notice of proposed forms revisions (NPFR) to amend the Form 5500 Annual Return/ Report to implement the SECURE Act and related reporting changes with a limited number of proposed forms revisions beginning with the 2021 reporting year; with most of the proposed revisions not applying until the 2022 reporting year. 86 FR 51488 (Sept. 15, 2021). The DOL simultaneously published a proposed rulemaking (NPRM) required to implement the proposed forms revisions. 86 FR 51284 (Sept. 15, 2021). The Agencies received 114 comments on the NPFR and NPRM. The comments, which were all posted on the Department’s website, generally focus on the proposed changes for the 2022 plan year forms. This document is limited to the changes for the 2021 plan year forms. Specifically, the reporting changes are revisions to the instructions that: (1) Implement the SECURE Act amendment to ERISA section 103(g) by requiring multiple employer defined contribution pension plans to include aggregate account balance information by employer on their existing Form 5500 attachment on participating employer information; and (2) noting that a pooled employer plan is a multiple employer plan that files a single Form 5500 Annual Return/ Report, and requiring such plans to indicate in an attachment to their Form 5500 (i) whether the plan’s pooled plan provider complied with the Form PR registration requirements for pooled plan providers; and (ii) if the answer is yes, to provide the AckID number for the pooled plan provider’s latest Form PR filing.3 Although not a change to the instructions, in response to comments raising the issue, this document also advises filers that the Department is continuing the current requirement that welfare plans that file a Form 5500 must include participating employer information notwithstanding that the SECURE Act amended ERISA section 103(g) to limit that specific section to retirement plans. No changes to the DOL’s implementing regulations are required for these instruction changes. The Agencies intend to address the other changes to the Form 5500 and related regulations proposed in the September 2021 NPFR and NPRM in one or more other separate and later Notices of Adoption of Final Forms Revisions and Notices of Final Rulemaking. The instruction changes 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. 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. 2 The SECURE Act was enacted on December 20, 2019, as Division O of the Further Consolidated Appropriations Act, 2020 (Pub. L. 116–94). 3 These requirements for pooled employer plans are limited to the Form 5500 because the Form 5500–SF instructions provide, consistent with the proposal, that pooled employer plans are not eligible to file the Form–SF. The proposal would also have required that all multiple employer plans file the Form 5500 regardless of whether they would otherwise be eligible to file the Form 5500– SF. The Department is not adopting that change for all MEPs in the 2021 forms but intends to address that proposed change in a separate and later Notice. PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 E:\FR\FM\29DER1.SGM 29DER1 Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES being added beginning with the 2021 reporting year are discussed below. II. 2021 Form 5500 Annual Return/ Report Changes for MEPs and Pooled Empoyer Plans SECURE Act section 101 amended ERISA section 3(2) and added ERISA sections 3(43) and 3(44) to allow for a new type of ERISA-covered multiple employer pension plan (MEP) for plan years beginning on or after January 1, 2021—a defined contribution pension plan called a ‘‘pooled employer plan’’ operated by a ‘‘pooled plan provider.’’ Pooled employer plans allow multiple unrelated employers to participate without the need for any common interest among the participating employers (other than having adopted the plan). Under section 3(2) of ERISA, as amended by the SECURE Act, a pooled employer plan is treated for purposes of ERISA as a single plan that is a multiple employer plan. New section 3(44) of ERISA establishes requirements for pooled plan providers, including a requirement to register with the DOL before beginning operations as a pooled plan provider. A parallel requirement to file a registration statement with the Secretary of Treasury is in section 413(e)(3)(A)(ii) of the Code. On November 16, 2020, the DOL published a notice of final rulemaking establishing the registration requirement for pooled plan providers. 85 FR 72934 (Nov. 16, 2020). The Treasury Department and the IRS have advised that filing the Form PR with the DOL will satisfy the requirement to register with the Secretary of the Treasury. The instructions to the Form PR (Pooled Plan Provider Registration) (Form PR) advised registrants to use the same identifying information on the Forms 5500 Annual Return/Report filed by the pooled employer plans, particularly name; EIN for the pooled plan provider; any identified affiliates providing services; trustees; and plan name and number for each pooled employer plan. Section 101 of the SECURE Act also amended ERISA section 103(g), effective for plan years beginning on or after January 1, 2021. Section 103(g) was added to ERISA by the Cooperative and Small Employer Charity Pension Flexibility Act (CSEC Act) in 2014.4 Prior to the SECURE Act amendment, section 103(g) required multiple employer plans to include with their annual reports ‘‘a list of participating employers’’ and, with respect to each participating employer, ‘‘a good faith estimate of the percentage of total contributions made by such 4 Public Law 113–97 (Apr. 7, 2014). VerDate Sep<11>2014 16:59 Dec 28, 2021 Jkt 256001 participating employer during the plan year.’’ In response to the CSEC Act, the Form 5500 instructions for 2014 and later were amended to provide for all multiple employer plans to include the section 103(g) information as a nonstandard attachment.5 SECURE Act section 101(d) amended ERISA section 103(g) by providing that annual reports for ‘‘any plan to which [ERISA] section 210(a) applies (including a pooled employer plan)’’ also must include two additional pieces of information: (1) The aggregate account balances attributable to each employer in the plan (determined as the sum of the account balances of the employees of such employer and the beneficiaries of such employees), and (2) with respect to a pooled employer plan, identifying information for the person designated under the terms of the plan as the pooled plan provider. As discussed in the NPFR, the statutory establishment of pooled employer plans as a type of multiple employer plan under Title I of ERISA requires some adjustments to the Form 5500 Annual Return/Report to acknowledge the existence of this new type of plan and to confirm that pooled employer plans must file a Form 5500 Annual Return/Report in accordance with the requirements that apply to other MEPs that file the Form 5500. The adjustments to accommodate pooled employer plan reporting on the Form 5500 were presented in the NPFR largely in the form of a new proposed Schedule MEP and its instructions that would be a required part of the Form 5500 Annual Return/Report for various types of MEPs, including pooled employer plans. As proposed, however, the Schedule MEP would not be effective until plan years beginning on or after January 1, 2022, but under the SECURE Act, pooled employer plans could begin operating for plan years beginning on or after January 1, 2021. In order to implement core elements of the SECURE Act section 101(d) reporting requirements on a timely basis, the NPFR included proposed amendments to the instructions for the 2021 Form 5500 and Form 5500–SF, specifically for the multiple-employer plan check box that is currently on Part I, line A of the Form 5500 and Form 5500–SF. Upon review of the public comments, the Department continues to believe that amending those instructions is an efficient and appropriate way to provide for the reporting of ERISA section 103(g) information for the 2021 reporting year. 5 79 PO 00000 FR 66617 (Nov. 10, 2014). Frm 00031 Fmt 4700 Sfmt 4700 73977 Specifically, the instructions to the 2021 Form 5500 6 for Part I, Line A (the multiple-employer plan checkbox) are being amended to note that (1) a pooled employer plan operated by a pooled plan provider that meets the definition under ERISA section 3(43) is a multiple employer plan, and (2) like other ERISA-covered pension MEPs, a single Form 5500 Annual Return/Report is required to be filed for a pooled employer plan.7 The 2021 instructions to the Form 5500 and Form 5500–SF for the multiple-employer plan check box are being further amended to require MEPs to include a new data element on the currently required 2021 nonstandard attachment, specifically the ‘‘Aggregate Account Balances Attributable to Participating Employer’’ (element 4). The instructions to the multiple-employer plan check box currently provide that the Annual Return/Report filed for a multipleemployer plan (MEPs and multiple employer welfare plans) must include a non-standard attachment that identifies the participating employers in the plan by name and employer identification number (EIN) and include for each participating employer an estimate of 6 As noted above, pooled employer plans are not eligible to file the Form 5500–SF so the instructions describing the pooled employer plan’s status as a MEP are not being added to the Form 5500–SF instructions. 7 A commenter presenting itself as representing accounting industry interests asked for clarification regarding audit requirements for pooled employer plans. To some extent, however, the comment incorrectly assumed that a pooled employer plan operates as an aggregation of many plans, rather than as a single ERISA-covered plan. For example, the commenter asked ‘‘If a pooled employer plan is comprised of hundreds of plans, will each plan be required to be audited annually?’’ The commenter also asked ‘‘If the DOL permits rotation of audit procedures for plans participating in a pooled employer plan, how will that be determined?’’ The commenter also asked ‘‘Will the DOL provide guidance for the auditor if there are one or more plans within the pooled employer plan that are not compliant with the plan document or with ERISA?’’ A pooled employer plan, like other MEPs, is a single plan covering the employees of multiple employers. It is not comprised of multiple separate plans, as would be true of the proposed new direct filing entity the ‘‘DCG.’’ The Department notes that nothing in the SECURE Act changed the ERISA independent qualified public accountant (IQPA) audit requirements as they apply to pooled employer plans. Rather, under ERISA, pooled employer plans are subject to the Form 5500 Annual Return/Report requirements that apply generally to employee pension benefit plans, including the audit requirements under ERISA that apply to employee pension benefit plans generally. As such, the audit must be performed in accordance with Generally Accepted Auditing Standards (GAAS), which are established by the accounting industry not the Department. How GAAS applies to pooled employer plans, including any differences in audit procedures that may be required under GAAS, are issues that are beyond the scope of these forms revisions. E:\FR\FM\29DER1.SGM 29DER1 73978 Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES the percentage of total contributions for the plan year made by each employer.8 Some commenters asked that the Department interpret the SECURE Act’s requirement to report employer-level aggregate account balances as applying only to defined contribution MEPs. The commenters noted that neither the operative language of the SECURE ACT nor its legislative history support applying this requirement to defined benefit pension plans that do not maintain ‘‘account balances’’ for each employee. Two of these commenters noted that this requirement is particularly inappropriate for defined benefit MEPs established before 1989 that determine their minimum funding requirements as if all participants were employed by a single employer and, therefore, did not elect ‘‘employer-byemployer’’ treatment under the Technical and Miscellaneous Revenue Act of 1988 (TAMRA). One of the commenters also noted that participants already receive annual funding notices on their defined benefit pension plan, so reporting of an artificial ‘‘account balance’’ could give the false impression that, in these MEPs, specific assets are set aside to provide benefits for employees of each employer when, in fact, all of the assets of a defined benefit MEP (like any other defined benefit pension plan) are available to pay all of the benefits of all of the participants in that MEP, regardless of where the participants are employed. The Department agrees that the SECURE Act’s requirement to report employer-level aggregate account balances should not apply to defined benefit pension MEPs. The SECURE Act expressly states that the aggregate account balances attributable to each employer in the plan is to be determined ‘‘as the sum of the account balances of the employees of such employer (and the beneficiaries of such employees).’’ Although the SECURE Act amended ERISA section 103(g) to provide that it applies to plans subject to ERISA section 210(a), and there may be a relatively small number of defined benefit MEPs that are subject to ERISA section 210(a), in the Department’s view, it would not be a reasonable reading of the statutory text to conclude that Congress intended by the reference to ERISA section 210(a) to mandate that aggregate account balance information 8 The instruction further provides that unfunded, fully insured, or combination unfunded/insured multiple employer welfare plans that are exempt under 29 CFR 2520.104–44 from filing financial statements with their annual report must attach a list of participating employers, but do not have to include an estimated amount of contributions from each employer. VerDate Sep<11>2014 16:59 Dec 28, 2021 Jkt 256001 be reported by defined benefit plans that do not maintain account balances for covered participants. Accordingly, the final instructions for the 2021 reporting year provide that only defined contribution MEPs must report the new SECURE Act required employer-level aggregate account balances. One commenter requested clarification of the requirement to report the ‘‘Percentage of Total Contributions for the Plan Year’’ (element 3 for the 2021 non-standard attachment). Specifically, the commenter asked whether the total of all participating employers must equal 100 percent, and whether it will cause red flags with the DOL/IRS if it does not. They also asked whether filers should round the percentage entry for each employer to decimal places, and if so, how many. The Department read these commenter’s questions as primarily directed at issues that may arise when in the context of a standardized Schedule MEP structure for reporting this information. The Agencies will take into account such questions in designing the form and developing appropriate instructions and edit tests. For the 2021 reporting year, as noted above, the instructions will continue to allow filers to use a nonstandard attachment to report the required information. The Department also notes that this is not a new reporting requirement. It has been part of the Form 5500 since it was added in 2014 in response to the CSEC Act addition of section 103(g) to Title I of ERISA. Nonetheless, for the 2021 reporting year, it would be acceptable for filers to round to the nearest whole number similar to rounding conventions that apply to the Form 5500 financial statements and schedules. To the extent the filer’s concern is whether rounding could result in the total reported percentage either slightly above or slightly below 100 percent, the filer can indicate that on the non-standard attachment as part of its filing. A commenter asked for guidance on the asset values that should be used for the ‘‘Aggregate Account Balances Attributable to Participating Employer’’ (element 4 for the 2021 non-standard attachment) and, in particular, whether the end of year net value may be used based on the values reported on the Schedules H and I. The SECURE Act expressly states that the aggregate account balances information should be determined as the sum of the account balances of the employees of such employer and the beneficiaries of such employees. In the Department’s view, an end of year valuation is an appropriate reporting requirement as it will provide the most up to date value for the plan PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 year covered by the Form 5500 report. The final instructions include directions to that effect. Further, rounding to the nearest dollar, as with the financial reporting on other parts of the Form 5500 and schedules, would be appropriate. The final instructions have been revised to provide this clarification as well.9 With respect to the additional ERISA section 103(g) information regarding pooled employer plans that must be included for the 2021 reporting year, the Department had proposed that the substance of the proposed Schedule MEP changes would apply to the 2021 reporting year requirements except that the information could be filed as a nonstandard attachment. The Department received comments opposing or expressing concern about some elements of the proposed Schedule MEP. Since the Department intends to address those comments and resolve the Schedule MEP content requirement in a later final rule, the Department agrees that it would be premature to impose the requirements wholesale to the 2021 Form 5500 Annual Return/Reports. Rather, for the 2021 reporting year, in addition to the participating employer information required for all MEPs, pooled employer plans only will be required to indicate, on a non-standard attachment, whether they are in compliance with the Form PR registration requirements and provide the AckID number for their latest Form PR filing.10 Some commenters complained that pooled employer plans should not be required to provide the AckID number, claiming that this requirement was unnecessary because the Department already has the Form PR and issued the AckID number. Some commenters suggested that asking any questions about the pooled plan provider was duplicative of the Form PR and that the ‘‘AckID’’ could be found by a separate 9 The Department understands from some comments on the proposal that, depending on the treatment of receivables and forfeitures by the plan, the sum of the account balances of the employees of each employer and the beneficiaries of such employees may not match the net asset value reported on Schedule H or I. The Department believes that the aggregate account balance information should be calculated and reported in accordance with the statutory direction in the SECURE Act. Filers can add an explanatory statement to the extent they wish to explain any difference between that sum and other total asset values reported on the Form 5500. 10 AckID is the acknowledgement code generated by the system in response to a completed filing for the most recent Form PR submitted. The instructions to the Form PR advise the pooled plan provider that it must keep, under ERISA section 107, the electronic receipt for the Form PR filing as part of the records of the pooled employer plans operated by the pooled plan provider. E:\FR\FM\29DER1.SGM 29DER1 khammond on DSKJM1Z7X2PROD with RULES Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations internet search. A few commenters also argued that pooled employer plans should not be subject to special reporting standard and that subjecting pooled employer plans to heightened scrutiny, when other plans treated as single plans are not, is arbitrary and unsupported by statute. A commenter further argued that the question regarding whether the pooled plan provider is currently in compliance with the Form PR (Pooled Plan Provider Registration Statement) requirements is ambiguous and unclear, given the lack of guidance and pending agency rulemakings (e.g., IRS’ one bad apple guidance). The Department disagrees with the commenters opposing the collection of information regarding the Form PR. In the preamble to the final regulation establishing the Form PR, the DOL specifically noted that it would add new questions on the Form 5500 that would ask whether a pooled plan provider filed its registration statement with the Secretary, including any required updates, and to report the electronic confirmation number provided to the pooled plan provider at the time that the registration was received. Further, as explained in the preamble to the proposal to add this information collection item for pooled employer plans, the questions related to the Form PR are intended to provide the Department, the Treasury Department, the IRS, participating employers, and other stakeholders with information that would allow them to connect the Form PR registration with the Form 5500 for all pooled employer plans operated by the registrant. 85 FR 72934, 72946 (Nov. 16, 2020). In fact, one commenter representing retirees and plan participants specifically indicated its support for requesting the ‘‘AckID’’ to help workers and retirees keep track of their assets and the plan, especially with the anticipated limited involvement of their employer in the design of pooled employer plans. Also, as discussed above, SECURE Act section 101(d) specifically requires the annual report of pooled employer plans to include identifying information for the person designated under the terms of the plan as the pooled plan provider. Thus, the requirement is neither arbitrary nor unsupported by the statute. The AckID requirement is also similar to the questions currently on the Form 5500 that require multiple employer group health plans to report about their compliance with registration and reporting requirements on the Form M– 1 (Report for Multiple Employer Welfare Arrangements (MEWAs) and Certain VerDate Sep<11>2014 16:59 Dec 28, 2021 Jkt 256001 Entities Claiming Exception (ECEs)). The Department also does not agree that the filing requirements are ambiguous, that there is a lack of guidance regarding the filing requirement, or that it is unfair to require pooled employer plans to report on the registration status of their pooled plan providers. Unlike other ERISA-covered multiple employer plans, the SECURE Act expressly sets forth roles and responsibilities for pooled plan providers. One of those clear requirements is that the pooled plan provider must register with the Department and with the IRS. The Form PR was adopted after public notice and comment to implement a specific registration requirement added to ERISA by the SECURE Act. The Form PR also includes instructions for completing the form, which also were developed as part of the notice and comment rulemaking process. The Form 5500 is signed by the plan administrator stating that the administrator has reviewed the filing and that ‘‘to the best of my knowledge and belief, it is true, correct, and complete.’’ In the case of a pooled employer plan, the pooled plan provider is the administrator. Pooled plan providers should be able to say whether they believe the Form PR filing requirements have been met. In the Department’s view, it does not impose any meaningful burden on the pooled plan provider acting as the plan administrator to acknowledge on the plan’s Form 5500 annual report that it believes to the best of the pooled plan provider’s knowledge and belief that it has fulfilled its statutory registration obligation. Further, the DOL continues to believe that linking the Form PR filed by a pooled plan provider to the Forms 5500 is a reasonable method to help make sure that workers, retirees, and the agencies charged with oversight have the information they need to be sure that the Form PR information is consistent and up to date. For example, having the AckID number on the plan’s Form 5500 will assist plan participants and participating employers in finding the relevant Form PR on the Department’s website. The requirement to report Form PR compliance information on the Form 5500 will also help the Department ensure compliance with those registration requirements. While there is no explicit civil penalty for failing to file a Form PR, there is a civil penalty for failing to file a complete and accurate Form 5500. See ERISA section 502(c)(2); 29 CFR 2560.502(c)(2) and the Federal Civil Penalties Inflation Adjustment Act of 1990. PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 73979 Finally, with respect to the requirement that multiple employer welfare plans file the participating employer information as a non-standard attachment to the 2021 Form 5500 Annual Return/Report, one commenter representing retirees and plan participants specifically indicated its support for continuing to require multiple employer welfare plans to provide participating employer information. Two commenters argued to the contrary that the DOL could no longer ask multiple employer welfare plans to report any participating employer information because Congress, by amending ERISA section 103(g) to add a reference to plans subject to ERISA section 210(a), was explicitly saying that welfare plans should no longer report such information. One of the commenters noted that DOL had cited ERISA section 103(c)(2) as separate authority for DOL to require welfare plans to report such information, but argued that section 103(c)(2) was not applicable because the DOL is not establishing this reporting requirement to obtain ‘‘the name and address of each fiduciary’’ but rather to reinstate a reporting requirement that was repealed by the SECURE Act. Although the DOL agrees that ERISA section 103(g) technically is not applicable to welfare plans as a result of the SECURE Act amendment, the DOL does not agree the SECURE Act amendment precludes its continued collection of participating employer information on the Form 5500 from multiple employer welfare plans.11 Rather, DOL continues to believes that the addition of the reference to ERISA section 210(a) was meant to emphasize that defined contribution MEPs, including association retirement plans, professional employer organization plans (PEOs), and the newly created pooled employer plan, are required to comply with the participating employer reporting requirements. The DOL does not believe that the amendment was intended to preclude the Department from relying on other annual reporting authorities to collect participating employer information about multiple employer welfare arrangements (MEWAs). In the DOL’s view, receiving participating employer information from MEWAs, including multiple employer welfare plans, is important for oversight 11 This final rule does not address comments on the proposal in the NPFR to move the participating employer questions to the Form M–1 for MEWA plans and arrangements that provide medical benefits. As noted above, the proposals relating to changes for the 2022 reporting year will be addressed in a later, separate Federal Register notice. E:\FR\FM\29DER1.SGM 29DER1 73980 Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations khammond on DSKJM1Z7X2PROD with RULES of such arrangements by the Department and monitoring such arrangements by employers and plan participants and beneficiaries. This transparency about participating employers is supported by congressional findings in ERISA section 2 (Congressional Findings and Declaration of Policy), which provides, in relevant part, that ‘‘[i]t is hereby declared to be in the policy of this Act 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. . . .’’ In addition, the Committee Report on ERISA provided that ‘‘[t]he Subcommittee intended that Congress provide for greater legislative protection for beneficiaries of pension plans through detailed public disclosure of the administration and operation of private pension plans.’’ S. Rep. 93–127 (Apr. 18, 1973). DOL is also continuing to rely on ERISA section 103(c)(2) and its general regulatory authority under ERISA section 505 as authority for requiring multiple employer welfare plans to continue reporting the participating employer information for the 2021 plan year filing.12 As discussed in the NPFR, in the DOL’s view, each participating employer is acting as a fiduciary with respect to its decision to join the MEWA and provide ERISA-covered benefits through a MEWA, and has ongoing fiduciary obligations to monitor the plan and confirm that continued participation in the plan is prudent and in the best interests of its employees who are covered participants in the plan.13 Nothing in ERISA section 12 ERISA section 103(c)(2) states that the administrator shall furnish as a part of a plan’s annual report ‘‘(2) The name and address of each fiduciary.’’ ERISA section 505 provides the Department with general authority, subject to certain limits not relevant here, to ‘‘prescribe such regulations as he finds necessary or appropriate to carry out the provisions of this subchapter.’’ 13 See also Advisory Opinion 2007–06A (Aug. 16, 2007) (‘‘decisions regarding the method through which benefits are to be paid under an employee welfare benefit plan, including the selection of an insurer and the negotiation of the terms of any contractual arrangement obligating the plan, are matters that generally are subject to the fiduciary responsibility provisions of Title I of ERISA’’.); Information Letter to Diana Ceresi (Feb. 2, 1998) (‘‘when the selection of a health care provider involves the disposition of employee benefit plan assets, such selection is an exercise of authority or control with respect to the management and disposition of the plan’s assets within the meaning of section 3(21) of ERISA, and thus constitutes a fiduciary act . . .’’); Advisory Opinion 2018–01A (Nov. 5, 2018) (In the context of a pension plan rollover service provider, not covered by Title 1 of ERISA, ‘‘When plan sponsors or other responsible fiduciaries choose to have a plan participate in the RCH Program, they are acting in a fiduciary VerDate Sep<11>2014 16:59 Dec 28, 2021 Jkt 256001 103(c)(2) precludes the Department from relying on that authority to collect information about a particular class or group of fiduciaries as opposed to requiring the identification of all plan fiduciaries in general. See also ERISA section 104(a)(3) (authority to exempt welfare benefit plans from all or part of Title I reporting and disclosure requirements). With respect to its general regulatory authority under ERISA section 505, the Department explained in the preamble to the proposal that the participating employer information has proven useful to the DOL for its oversight functions for both MEPs and those MEWAs that file the Form 5500, regardless of the types of benefits provided by the MEWA. 86 FR at 51498. This reporting requirement is also relevant to the Department’s enforcement of the criminal penalties added by the Affordable Care Act under ERISA section 519 for any person who knowingly submits false statements or false representations of fact in connection with a MEWA’s financial condition (including a plan MEWA), the benefits it provides, or its regulatory status as a MEWA. In light of the fact that participating employers in a MEWA would likely be the recipients of such false statements or representations, having data regarding the participating employers in a MEWA plan would be useful in policing whether such false statements or representations are being made to participating employers. Two commenters argued that reporting of employer names and EINs (and the health plan to which they are linked) on a publicly available document exposes plan participants and beneficiaries and their employers to potential cybersecurity fraud. They also argued that the list of participating employers and contribution percentage information is proprietary information and contended that making the information publicly available would negatively impact businesses and their employees. The commenters did not offer empirical evidence or other data to support their assertions about consequences to plan participants and beneficiaries or the participating employers’ businesses. This reporting requirement has been in place since the 2014 plan year and the Department is not aware of any such consequences resulting from the disclosure requirement. In fact, the more powerful argument here is likely that employers have the freedom to choose to change capacity, and would be subject to the general fiduciary standards and prohibited transaction provisions of ERISA in selecting and monitoring the RCH Program.’’) PO 00000 Frm 00034 Fmt 4700 Sfmt 4700 plans or plan service providers, are undoubtedly receiving marketing solicitations about these matters now, and that transparency about which employers participate in a plan MEWA may well generate competitive pressures to offer better services at lower fees. The DOL also has addressed similar arguments on several prior occasions in the context of the ERISA section 103(g) requirement for multiple employer plans to include participating employer information as part of the Form 5500 Annual Return/Report. For example, in a 2019 Field Assistance Bulletin, the DOL noted that it had received and considered similar objections in connection with the Paperwork Reduction Act (PRA) notice associated with the publication of the interim final rule on ERISA section 103(g) that implemented the CSEC Act requirement. See Proposed Extension of Information Collection Request Submitted for Public Comment; Revisions to Annual Return/Report— Multiple-Employer Plans, 79 FR 66741 (Nov. 10, 2014) (available at www.govinfo.gov/content/pkg/FR-201411-10/pdf/2014-26499.pdf). The DOL also pointed out, in its 2016 Federal Register notice regarding proposed modernization of the Form 5500, that DOL addressed this issue when it explained its decision at that time not to propose changes to the ERISA section 103(g) reporting requirements. See Form 5500 Improvement and Modernization Proposal—Proposed Revision of Annual Information Return/Reports, 81 FR 47534, 47564–47565 (July 21, 2016) (available at www.govinfo.gov/content/ pkg/FR-2016-07-21/pdf/201614893.pdf). In the SECURE Act itself Congress reaffirmed and in fact expanded the requirements for reporting participating employer information on the Form 5500. The Department does not believe that a different conclusion regarding these arguments is warranted just because they are now being presented separately for welfare plans. Although, as noted above, after the SECURE Act amendment the specific reporting requirement in ERISA section 103(g) technically is not applicable to welfare plans, the Department does not view the SECURE Act amendment as an acknowledgement that the cybersecurity and confidential information arguments being pressed by these commenters somehow now has merit with respect to just welfare plans notwithstanding the fact that multiple employer welfare plans have been required to file the participating employer information since the 2014 reporting year. The Department also continues to be of the E:\FR\FM\29DER1.SGM 29DER1 Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations view that an employer’s sponsorship or participation in an ERISA-covered plan is not confidential information.14 Employers that sponsor single employer plans are identified on the plan’s Form 5500, and we do not see the identity of a sponsoring employer in a multiple employer plan as somehow different for annual reporting and disclosure purposes. Similarly, the purported cybersecurity issues noted by the comments (e.g., ‘‘spoofing’’ of either the MEWA itself, or the MEWA’s health insurer, in order to generate a phishing attack) are not different for an employer (including small employers) identified on a single-employer Form 5500 compared to a participating employer identified on a multiple employer Form 5500. In the Department’s view, Form 5500 reporting of participating employer information is just as important for multiple employer welfare plans as retirement plans because it provides important information for oversight of such arrangements by the Department and monitoring such arrangements by employers and plan participants and beneficiaries. Accordingly, multiple employer welfare plans will continue to be required to file the participating employer information as a non-standard attachment to the 2021 Form 5500 Annual Return/Report, as they have been required to do since the 2014 plan year filing. III. Regulatory Impact Analysis khammond on DSKJM1Z7X2PROD with RULES 1. Executive Order 12866 This Final Rule does not constitute a ‘‘significant regulatory action’’ for purposes of Executive Order 12866. The changes are minor additions to existing reporting requirements that in large part 14 Prior guidance issued by the Department has generally rejected allegations of possible harm due to disclosure of reporting information in favor of the policy reasons in favor of public disclosure. See, e.g., Aug. 14, 1994, letter to David Mintz (noting ERISA policy of public disclosure and rejecting concerns raised that the Form 5500 series is available to organizations that compile and sell to the public a directory of employee benefit plan information); April 7, 1978, letter to Congressman Harley O. Staggers (concluding nothing in section 110 supported changing the requirement, in response to claims that because personal financial information possibly could be calculated from 103(b)(3)(B) requirement for plans to include in their annual report a statement of receipts and disbursements during the preceding twelve-month period aggregated by general sources and applications, and thus should be treated as confidential information); July 23, 1981, letter to Mr. T.C. Heyward, Jr. (contested information did not fit within 106(b) exception from public disclosure and nothing in section 110 warranted omission from the annual report required information on distribution of benefits and payments directly to participants or their beneficiaries and total annual contribution of the sponsoring organization on the grounds that the information constitutes an invasion of privacy). VerDate Sep<11>2014 16:59 Dec 28, 2021 Jkt 256001 merely adopt requirements set forth in statutory amendments to the annual reporting requirements that apply under ERISA and the Code. Therefore, this action has not been reviewed by OMB pursuant to the Executive Order. Pursuant to the Congressional Review Act, OMB has determined that this final rule is not a ‘‘major rule,’’ as defined by 5 U.S.C. 804(2). 2. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3506(c)(2)(A)), the Department solicited comments concerning the information collection request (ICR) included in the revision of the Form 5500 Annual Return/Report. At the same time, the Department also submitted an information collection request (ICR) to the Office of Management and Budget (OMB), in accordance with 44 U.S.C. 3507(d). The Department did not received comments that specifically addressed the paperwork burden analysis of the information collection requirement contained in the proposed rule. In connection with publication of this final rule, the Department is submitting an ICR to OMB requesting a revision of the collection of information under OMB Control Number 1210–0110 reflecting the instruction changes being finalized in this document. The Department will notify the public when OMB approves the ICR. A copy of the ICR may be obtained by contacting the PRA addressee shown below or at www.RegInfo.gov. PRA ADDRESSEE: Address requests for copies of the ICRs to James Butikofer, Office of Research and Analysis, 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: ebsa.opr@dol.gov. These are not toll-free numbers. ICRs submitted to OMB also are available at http://www.RegInfo.gov. The burden analysis is based on data from the 2019 Form 5500 filings (the latest year for which complete data are available). The burden analysis includes the burden of the current information collection and adjusts it for changes made by the final rule. Burden estimates take into account the changes in plan counts due to the creation of pooled employer plans, with an increase in multiple-employer plans and a small decrease in single employer plans, reflecting some single employer plans moving to pooled employer plans. The agencies estimated that there are 4,538 defined contribution multiple- PO 00000 Frm 00035 Fmt 4700 Sfmt 4700 73981 employer pension plans and that 75 pooled employer plans will be formed. Reporting the information about participating employers required by the changes being finalized in this document should not be burdensome for defined contribution multiple-employer plan administrators as current requirements under ERISA already require them to maintain a list of participating employers and records of the contributions made by each employer. Although likely an overestimate of the actual time required, to ensure that we are not underestimating the potential burden, the Department is using an estimate of on average 30 minutes to comply with the new question for defined contribution MEPs regarding aggregate account balances on the currently required attachment to the Form 5500 Annual Return/Report containing the list of participating employers, their EINs, and their percentage of total plan contributions. The Department estimates that the anticipated 75 pooled employer plans would take an additional five minutes to indicate whether they are in compliance with the Form PR registration requirements and provide the AckID number for their latest Form PR filing. The Agencies’ burden estimation methodology excludes certain activities from the calculation of ‘‘burden.’’ If the activity is performed for any reason other than compliance with the applicable federal tax administration system or the Title I annual reporting requirements, it was not counted as part of the paperwork burden. For example, most businesses or financial entities maintain, in the ordinary course of business, detailed accounts of assets and liabilities, and income and expenses for the purposes of operating the business or entity. These recordkeeping activities were not included in the calculation of burden because prudent business or financial entities normally have that information available for reasons other than federal tax or Title I annual reporting. Only time for gathering and processing information associated with the tax return/annual reporting systems, and learning about the law, was included. In addition, an activity is counted as a burden only once if performed for both tax and Title I purposes. The Agencies also have designed the instruction package for the Form 5500 Annual Return/Report so that filers generally will be able to complete the Form 5500 Annual Return/ Report by reading the instructions without needing to refer to the statutes or regulations. The Agencies, therefore, have considered in their PRA E:\FR\FM\29DER1.SGM 29DER1 73982 Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations calculations the burden of reading the instructions and find there is no recordkeeping burden attributable to the Form 5500 Annual Return/Report. This PRA calculation does not include any burden related to Form M– 1 changes related to reporting of participating employer information by plans and non-plan MEWAs that are required to file the Form M–1 because those changes are not included in this document. Rather, for the 2021 Form 5500 reporting year, plan MEWAs, including those that offer or provide coverage for medical care, will continue to be required to provide participating employer information as a nonstandard attachment to the 2021 Form 5500 Annual Return/Report in substantially the same manner as has been required since the 2014 forms. Note that to reflect OMB’s preference that burden incurred by service providers be reported as hour burden instead of cost burden, burden that has historically been included as cost burden has been included here as hour burden. This change led to an increase in reported hour burden and an offsetting decrease in cost burden. A summary of paperwork burden estimates follows. As noted above, these estimates include the burden of the overall Form 5500 information collection and makes adjustments for the final instructions revisions included in this document. Type of Review: Revision of existing collection. Title: Annual Information Return/ Report of Employee Benefit Plan. Affected Public: Individuals or households; Private Sector—Business or other for-profit; Not-for-profit institutions. Forms: Form 5500 and Schedules. Total Respondents: 840,923. Total Responses: 840,923. Frequency of Response: Annually. Estimated Total Burden Hours: 3,031,649. Estimated Total Annualized Costs: $0. The aggregate hour burden for the Form 5500 Annual Return/Report (including schedules and short form) is estimated to be 4.5 million hours annually shared between the DOL, IRS, and the PBGC. The hour burden reflects filing activities carried out directly by filers. Presented below is a chart showing the total hour and cost burden of the revised Form 5500 Annual Return/ Report allocated to the DOL, including the changes to the DOL burden by these 2021 SECURE Act revisions. DOL hours Pension ....................................................................................... Large Plans ................................................................................ Small Plans ................................................................................. Large Plans ................................................................................ Small Plans ................................................................................. Large Plans ................................................................................ Small Plans ................................................................................. 895,570 931,031 1,064,998 64,616 1,960,568 995,647 DFEs ............................................................................................................................................................................................. January 2013 Revision ................................................................................................................................................................. 2014 CSEC Revision .................................................................................................................................................................... 2021 SECURE Act Revision ........................................................................................................................................................ 70,103 646 2,371 2,313 Total ....................................................................................................................................................................................... 3,031,649 Welfare ....................................................................................... Total ..................................................................................... khammond on DSKJM1Z7X2PROD with RULES 3. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) 15 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 16 and are likely to have a significant economic impact on a substantial number of small entities. Unless the head of an agency certifies that a final rule is not likely to have a significant economic impact on a substantial number of small entities, section 604 of the RFA requires the agency to present a final regulatory flexibility analysis of the final rule.17 The Department prepared an Initial Regulatory Flexibility Analysis at the proposed rule stage. However, this final rule is focused only on a subset of the requirements proposed. The Department certifies that this final rule will not have a significant impact on a substantial number of small entities. Therefore, the 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.18 For purposes of the Unfunded Mandates Reform Act, as well as Executive Order 12875,19 this final rule 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. U.S.C. 1501 et seq. (1995). the Intergovernmental Partnership, 58 FR 58093 (Oct. 28, 1993). U.S.C. 601 et seq. (1980). U.S.C. 551 et seq. (1946). 17 5 U.S.C. 604 (1980). 16 5 16:59 Dec 28, 2021 4. Unfunded Mandates Reform Act 18 2 15 5 VerDate Sep<11>2014 Department has not prepared a Final Regulatory Flexibility Analysis. 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.20 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 final rule. In the DOL’s view, this final rule 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 19 Enhancing Jkt 256001 PO 00000 Frm 00036 Fmt 4700 Sfmt 4700 20 Federalism, E:\FR\FM\29DER1.SGM 29DER1 supra note 6. Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations To implement the SECURE Act section 101 changes, the current instructions including the graphic, in the Form 5500 and Form 5500–SF instructions, as applicable, for Part I, Line A ‘‘Box for Multiple Employer Plan’’ and graphic entitled ‘‘MultipleEmployer Plan Participating Employer Information,’’ are replaced with instructions below and two separate graphics. The second graphic, which will appear only in the Form 5500 instructions shows information pooled employer plans must provide in addition to the participating employer information. It may be attached as part of the ‘‘Multiple-Employer Plan Participating Employer Information’’ attachment or as a separate attachment entitled ‘‘Pooled Employer Plan Information.’’ Line A—Box for Multiple-Employer Plan. Check this box if the [Form 5500 or Form 5500–SF] is being filed for a multiple-employer plan. A multipleemployer plan is a plan that is maintained by more than one employer and is not one of the plans already described. A multiple-employer plan can be collectively bargained and collectively funded, but if covered by PBGC termination insurance, must have properly elected before September 27, 1981, not to be treated as a multiemployer plan under Code section 414(f)(5) or ERISA sections 3(37)(E) and 4001(a)(3), and have not revoked that election or made an election to be treated as a multiemployer plan under Code section 414(f)(6) or ERISA section 3(37)(G). A single [Insert either Form 5500 or Form 5500–SF] Annual Return/ Report is filed for the multiple-employer plan; participating employers do not file individually for this type of plan. [Following sentence is for Form 5500 Instructions only] A pooled employer plan as defined in ERISA section 3(44) operated by a ‘‘pooled plan provider’’ that meets the definition under ERISA section 3(43) is a multiple-employer plan.21 Note. Do not check this box if all of the employers maintaining the plan are members of the same controlled group or affiliated service group under Code sections 414(b), (c), or (m). Participating Employer Information. [Insert for Form 5500 ‘‘Except as provided below, multiple-employer pension plans and multiple-employer welfare plans required to file a Form 5500’’ or Insert for Form 5500–SF ‘‘Eligible multiple-employer pension plans that file a Form 5500–SF’’] must include an attachment using the format below. The attachment must be properly identified at the top with the label ‘‘Multiple-Employer Plan Participating Employer Information,’’ and the name of the plan, EIN, and plan number (PN) as found on the plan’s [Insert Form 5500 or Form 5500–SF]. Complete as many entries as needed to report the required information for all participating employers in the plan. • All multiple-employer pension plans must complete elements 1–3 of the ‘‘Multiple-Employer Plan Participating Employer Information’’ attachment. For element 3, enter a good faith estimate of each employer’s percentage of the total contributions (including employer and participant contributions) made by all participating employers during the year. The percentage may be rounded to be nearest whole percentage. To the extent the rounding results in the total reported percentage being either slightly above or slightly below 100 percent, the filer can indicate that on the attachment. Any employer who was obligated to make contributions to the plan for the plan year, made contributions to the plan for the plan year, or whose employees were covered under the plan is a ‘‘participating employer’’ for this purpose. If a participating employer made no contributions, enter ‘‘–0–’’ in element 3. • Multiple-employer pension plans that are defined contribution plans must also complete element 4 of the ‘‘Multiple-Employer Plan Participating Employer Information’’ attachment to report the aggregate account balances for each participating employer determined as the sum of the account balances of the employees of such employer (and the beneficiaries of such employees). For element 4, the aggregate account balance attributable to each employer is the sum of the account balances of the employees of such employer and their beneficiaries at the end of the year. Consistent with the information on the schedules of assets for the plan as a whole, use the end of year valuation to calculate the amount of assets by employer. The amounts can be rounded to the nearest dollar, consistent with other asset reporting on the forms and schedules. • [For Form 5500 Instructions Only] Multiple-employer welfare plans that are unfunded, fully insured, or a combination of unfunded/insured and exempt under 29 CFR 2520.104–44 from the obligation to file financial statements with their annual report are required to complete elements 1 and 2 only of the ‘‘Multiple-Employer Plan Participating Employer Information’’ attachment.22 • [For Form 5500 Instructions Only] Multiple-employer pension plans that are pooled employer plans must also complete the ‘‘Pooled Employer Plan Information’’ attachment. The attachment may be attached as part of the ‘‘Multiple-Employer Plan Participating Employer Information’’ attachment or as a separate attachment entitled ‘‘Pooled Employer Plan Information.’’ For element 1b, AckID is the acknowledgement code generated by the system in response to a completed Form PR submitted. The instructions to the Form PR advise the pooled plan provider that it must keep, under ERISA section 107, the electronic receipt for the Form PR filing as part of the records of the pooled employer plans operated by the pooled plan provider.23 21 Pooled employer plans are not eligible to file the Form 5500–SF so the instructions describing the pooled employer plan’s status as a MEP are not being added to the Form 5500–SF instructions. 22 This paragraph only applies to multiple employer welfare plans that file the Form 5500, and thus is not needed in the Form 5500–SF instructions. 23 As noted above, because pooled employer plans are not eligible to file the Form 5500–SF, this language describing the pooled employer plan attachment is only being added to the Form 5500 instructions. power and responsibilities among various levels of government. This final rule does 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 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. IV. Final Revisions to the Form 5500 and Form 5500–SF Instructions for the 2021 Reporting Year khammond on DSKJM1Z7X2PROD with RULES 73983 VerDate Sep<11>2014 16:59 Dec 28, 2021 Jkt 256001 PO 00000 Frm 00037 Fmt 4700 Sfmt 4700 E:\FR\FM\29DER1.SGM 29DER1 73984 Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations Multiple-Employer Plan Participating Employer Information (Insert Name of Plan and EIN/PN as shown on the [Insert Form 5500 or Form 5500-SF as applicable]) 1. Name of participating employer 2. EIN 3. Percent of Total Contributions for Plan Year 4. Aggregate Account Balances at End of Year Attributable to Participating Employer 1. Name of participating employer 2. EIN 3. Percent of Total Contributions for Plan Year 4. Aggregate Account Balances at End of Year Attributable to Participating Employer 1. Name of participating employer 2. EIN 3. Percent of Total Contributions for Plan Year 4. Aggregate Account Balances at End of Year Attributable to Participating Employer 1. Name of participating employer 2. EIN 3. Percent of Total Contributions for the Plan Year 4. Aggregate Account Balances at End of Year Attributable to Participating Employer 1. Name of participating employer 2. EIN 3. Percent of Total Contributions for the Plan Year 4. Aggregate Account Balances at End of Year Attributable to Participating Employer Complete as many rows as needed to report the required information for all participating employers in the plan. [For Form 5500 Instructions only] Pooled Employer Plan/Pooled Plan Provider Information (Insert Name of Plan and EIN/PN as shown on the Form 5500) Only pooled employer plans complete. 1a. Is the pooled plan provider currently in compliance with the requirements for filing the Form PR (Pooled Plan Provider Registration Statement)? (See Form PR Instructions and 29 CFR 2510.3-44.) [] Yes [] No 1b. If "Yes" is checked in line 1a, enter the AcklD for the most recent Form PR that was required to be filed under the Form PR filing requirements. (Failure to enter a valid AcklD will subject the Form 5500 filing subject to rejection as incomplete.) The following revisions are being made to the Form 5500–SF instructions: • In the first paragraph of the ‘‘General Instruction’’ section, add a seventh bulleted paragraph that reads ‘‘Not be a pooled employer plan. See ERISA section 3(43).’’ • In the ‘‘General Instruction’’ section, under the heading ‘‘Who May File Form 5500–SF,’’ add a new paragraph number 7 before the Note that reads: ‘‘7. The plan is not a pooled VerDate Sep<11>2014 19:06 Dec 28, 2021 Jkt 256001 employer plan. See ERISA section 3(43).’’ • In the ‘‘Specific Line-By-Line Instructions (Form 5500–SF)’’ in instructions for Part II, Line 6, add a new paragraph number 7 that reads: ‘‘7. The plan is not a pooled employer plan. See ERISA section 3(43).’’ Statutory Authority Accordingly, pursuant to the authority in sections 101, 103, 104, 109, PO 00000 Frm 00038 Fmt 4700 Sfmt 4700 110, the Form 5500 Annual Return/ Report and the Form 5500–SF Short Form Annual Return/Report are amended as set forth herein. Signed at Washington, DC, this 17th day of December, 2021. Ali Khawar, Acting Assistant Secretary, Employee Benefits Security Administration, U.S. Department of Labor. [FR Doc. 2021–27764 Filed 12–28–21; 8:45 am] BILLING CODE 4510–29–C E:\FR\FM\29DER1.SGM 29DER1 ER29DE21.000</GPH> khammond on DSKJM1Z7X2PROD with RULES AcklD _ _ _ _ _ _ _ __

Agencies

[Federal Register Volume 86, Number 247 (Wednesday, December 29, 2021)]
[Rules and Regulations]
[Pages 73976-73984]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-27764]



[[Page 73976]]

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2520

RIN 1210-AB97


Revision of Annual Information Return/Reports

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Final forms revisions.

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SUMMARY: This document contains final revisions to the instructions for 
the Form 5500 Annual Return/Report of Employee Benefit Plan and Form 
5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan 
effective for plan years beginning on or after January 1, 2021. These 
final revisions to the instructions were included in a broader proposal 
of form and instruction changes published on September 15, 2021. The 
limited number of instruction changes in this document implement annual 
reporting changes for multiple-employer plans (including pooled 
employer plans) that result from statutory provisions in section 101 of 
the Setting Every Community Up for Retirement Enhancement Act of 2019 
(SECURE Act). The other changes to the Form 5500 Annual Return/Report 
included in the September 2021 proposal will be the subject of one or 
more separate and later final notices.

DATES: The final instruction revisions in this document are effective 
for plan years beginning on or after January 1, 2021. The Form 5500 
Annual Return/Report for the 2021 plan year generally is not required 
to be filed until seven months after the end of the 2021 plan year, 
e.g., July 2022 for calendar year plans, and a 2\1/2\-month extension 
is available.

FOR FURTHER INFORMATION CONTACT: Janet Song or Florence Novellino, 
Office of Regulations and Interpretations, Employee Benefits Security 
Administration, U.S. Department of Labor, (202) 693-8500, (this is not 
a toll-free number).
    Customer service information: Individuals interested in obtaining 
information from the DOL concerning Title I of Employee Retirement 
Income Security Act of 1974 (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:

I. Background

    Titles I and IV of Employee Retirement Income Security Act of 1974 
(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 plans. 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. 
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.
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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. 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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    The Setting Every Community Up for Retirement Enhancement Act of 
2019 (SECURE Act), included various provisions designed to improve the 
private employer-based retirement system that either directly changed 
or necessitated changes to the annual reporting requirements under 
ERISA and the Code.\2\ On September 15, 2021, the DOL, the Internal 
Revenue Service (IRS), and the Pension Benefit Guaranty Corporation 
(PBGC) (collectively ``the Agencies'') published a notice of proposed 
forms revisions (NPFR) to amend the Form 5500 Annual Return/Report to 
implement the SECURE Act and related reporting changes with a limited 
number of proposed forms revisions beginning with the 2021 reporting 
year; with most of the proposed revisions not applying until the 2022 
reporting year. 86 FR 51488 (Sept. 15, 2021). The DOL simultaneously 
published a proposed rulemaking (NPRM) required to implement the 
proposed forms revisions. 86 FR 51284 (Sept. 15, 2021). The Agencies 
received 114 comments on the NPFR and NPRM. The comments, which were 
all posted on the Department's website, generally focus on the proposed 
changes for the 2022 plan year forms. This document is limited to the 
changes for the 2021 plan year forms. Specifically, the reporting 
changes are revisions to the instructions that: (1) Implement the 
SECURE Act amendment to ERISA section 103(g) by requiring multiple 
employer defined contribution pension plans to include aggregate 
account balance information by employer on their existing Form 5500 
attachment on participating employer information; and (2) noting that a 
pooled employer plan is a multiple employer plan that files a single 
Form 5500 Annual Return/Report, and requiring such plans to indicate in 
an attachment to their Form 5500 (i) whether the plan's pooled plan 
provider complied with the Form PR registration requirements for pooled 
plan providers; and (ii) if the answer is yes, to provide the AckID 
number for the pooled plan provider's latest Form PR filing.\3\ 
Although not a change to the instructions, in response to comments 
raising the issue, this document also advises filers that the 
Department is continuing the current requirement that welfare plans 
that file a Form 5500 must include participating employer information 
notwithstanding that the SECURE Act amended ERISA section 103(g) to 
limit that specific section to retirement plans. No changes to the 
DOL's implementing regulations are required for these instruction 
changes. The Agencies intend to address the other changes to the Form 
5500 and related regulations proposed in the September 2021 NPFR and 
NPRM in one or more other separate and later Notices of Adoption of 
Final Forms Revisions and Notices of Final Rulemaking. The instruction 
changes

[[Page 73977]]

being added beginning with the 2021 reporting year are discussed below.
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    \2\ The SECURE Act was enacted on December 20, 2019, as Division 
O of the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-
94).
    \3\ These requirements for pooled employer plans are limited to 
the Form 5500 because the Form 5500-SF instructions provide, 
consistent with the proposal, that pooled employer plans are not 
eligible to file the Form-SF. The proposal would also have required 
that all multiple employer plans file the Form 5500 regardless of 
whether they would otherwise be eligible to file the Form 5500-SF. 
The Department is not adopting that change for all MEPs in the 2021 
forms but intends to address that proposed change in a separate and 
later Notice.
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II. 2021 Form 5500 Annual Return/Report Changes for MEPs and Pooled 
Empoyer Plans

    SECURE Act section 101 amended ERISA section 3(2) and added ERISA 
sections 3(43) and 3(44) to allow for a new type of ERISA-covered 
multiple employer pension plan (MEP) for plan years beginning on or 
after January 1, 2021--a defined contribution pension plan called a 
``pooled employer plan'' operated by a ``pooled plan provider.'' Pooled 
employer plans allow multiple unrelated employers to participate 
without the need for any common interest among the participating 
employers (other than having adopted the plan). Under section 3(2) of 
ERISA, as amended by the SECURE Act, a pooled employer plan is treated 
for purposes of ERISA as a single plan that is a multiple employer 
plan. New section 3(44) of ERISA establishes requirements for pooled 
plan providers, including a requirement to register with the DOL before 
beginning operations as a pooled plan provider. A parallel requirement 
to file a registration statement with the Secretary of Treasury is in 
section 413(e)(3)(A)(ii) of the Code. On November 16, 2020, the DOL 
published a notice of final rulemaking establishing the registration 
requirement for pooled plan providers. 85 FR 72934 (Nov. 16, 2020). The 
Treasury Department and the IRS have advised that filing the Form PR 
with the DOL will satisfy the requirement to register with the 
Secretary of the Treasury. The instructions to the Form PR (Pooled Plan 
Provider Registration) (Form PR) advised registrants to use the same 
identifying information on the Forms 5500 Annual Return/Report filed by 
the pooled employer plans, particularly name; EIN for the pooled plan 
provider; any identified affiliates providing services; trustees; and 
plan name and number for each pooled employer plan.
    Section 101 of the SECURE Act also amended ERISA section 103(g), 
effective for plan years beginning on or after January 1, 2021. Section 
103(g) was added to ERISA by the Cooperative and Small Employer Charity 
Pension Flexibility Act (CSEC Act) in 2014.\4\ Prior to the SECURE Act 
amendment, section 103(g) required multiple employer plans to include 
with their annual reports ``a list of participating employers'' and, 
with respect to each participating employer, ``a good faith estimate of 
the percentage of total contributions made by such participating 
employer during the plan year.'' In response to the CSEC Act, the Form 
5500 instructions for 2014 and later were amended to provide for all 
multiple employer plans to include the section 103(g) information as a 
nonstandard attachment.\5\ SECURE Act section 101(d) amended ERISA 
section 103(g) by providing that annual reports for ``any plan to which 
[ERISA] section 210(a) applies (including a pooled employer plan)'' 
also must include two additional pieces of information: (1) The 
aggregate account balances attributable to each employer in the plan 
(determined as the sum of the account balances of the employees of such 
employer and the beneficiaries of such employees), and (2) with respect 
to a pooled employer plan, identifying information for the person 
designated under the terms of the plan as the pooled plan provider.
---------------------------------------------------------------------------

    \4\ Public Law 113-97 (Apr. 7, 2014).
    \5\ 79 FR 66617 (Nov. 10, 2014).
---------------------------------------------------------------------------

    As discussed in the NPFR, the statutory establishment of pooled 
employer plans as a type of multiple employer plan under Title I of 
ERISA requires some adjustments to the Form 5500 Annual Return/Report 
to acknowledge the existence of this new type of plan and to confirm 
that pooled employer plans must file a Form 5500 Annual Return/Report 
in accordance with the requirements that apply to other MEPs that file 
the Form 5500. The adjustments to accommodate pooled employer plan 
reporting on the Form 5500 were presented in the NPFR largely in the 
form of a new proposed Schedule MEP and its instructions that would be 
a required part of the Form 5500 Annual Return/Report for various types 
of MEPs, including pooled employer plans. As proposed, however, the 
Schedule MEP would not be effective until plan years beginning on or 
after January 1, 2022, but under the SECURE Act, pooled employer plans 
could begin operating for plan years beginning on or after January 1, 
2021. In order to implement core elements of the SECURE Act section 
101(d) reporting requirements on a timely basis, the NPFR included 
proposed amendments to the instructions for the 2021 Form 5500 and Form 
5500-SF, specifically for the multiple-employer plan check box that is 
currently on Part I, line A of the Form 5500 and Form 5500-SF. Upon 
review of the public comments, the Department continues to believe that 
amending those instructions is an efficient and appropriate way to 
provide for the reporting of ERISA section 103(g) information for the 
2021 reporting year.
    Specifically, the instructions to the 2021 Form 5500 \6\ for Part 
I, Line A (the multiple-employer plan checkbox) are being amended to 
note that (1) a pooled employer plan operated by a pooled plan provider 
that meets the definition under ERISA section 3(43) is a multiple 
employer plan, and (2) like other ERISA-covered pension MEPs, a single 
Form 5500 Annual Return/Report is required to be filed for a pooled 
employer plan.\7\ The 2021 instructions to the Form 5500 and Form 5500-
SF for the multiple-employer plan check box are being further amended 
to require MEPs to include a new data element on the currently required 
2021 non-standard attachment, specifically the ``Aggregate Account 
Balances Attributable to Participating Employer'' (element 4). The 
instructions to the multiple-employer plan check box currently provide 
that the Annual Return/Report filed for a multiple-employer plan (MEPs 
and multiple employer welfare plans) must include a non-standard 
attachment that identifies the participating employers in the plan by 
name and employer identification number (EIN) and include for each 
participating employer an estimate of

[[Page 73978]]

the percentage of total contributions for the plan year made by each 
employer.\8\
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    \6\ As noted above, pooled employer plans are not eligible to 
file the Form 5500-SF so the instructions describing the pooled 
employer plan's status as a MEP are not being added to the Form 
5500-SF instructions.
    \7\ A commenter presenting itself as representing accounting 
industry interests asked for clarification regarding audit 
requirements for pooled employer plans. To some extent, however, the 
comment incorrectly assumed that a pooled employer plan operates as 
an aggregation of many plans, rather than as a single ERISA-covered 
plan. For example, the commenter asked ``If a pooled employer plan 
is comprised of hundreds of plans, will each plan be required to be 
audited annually?'' The commenter also asked ``If the DOL permits 
rotation of audit procedures for plans participating in a pooled 
employer plan, how will that be determined?'' The commenter also 
asked ``Will the DOL provide guidance for the auditor if there are 
one or more plans within the pooled employer plan that are not 
compliant with the plan document or with ERISA?'' A pooled employer 
plan, like other MEPs, is a single plan covering the employees of 
multiple employers. It is not comprised of multiple separate plans, 
as would be true of the proposed new direct filing entity the 
``DCG.'' The Department notes that nothing in the SECURE Act changed 
the ERISA independent qualified public accountant (IQPA) audit 
requirements as they apply to pooled employer plans. Rather, under 
ERISA, pooled employer plans are subject to the Form 5500 Annual 
Return/Report requirements that apply generally to employee pension 
benefit plans, including the audit requirements under ERISA that 
apply to employee pension benefit plans generally. As such, the 
audit must be performed in accordance with Generally Accepted 
Auditing Standards (GAAS), which are established by the accounting 
industry not the Department. How GAAS applies to pooled employer 
plans, including any differences in audit procedures that may be 
required under GAAS, are issues that are beyond the scope of these 
forms revisions.
    \8\ The instruction further provides that unfunded, fully 
insured, or combination unfunded/insured multiple employer welfare 
plans that are exempt under 29 CFR 2520.104-44 from filing financial 
statements with their annual report must attach a list of 
participating employers, but do not have to include an estimated 
amount of contributions from each employer.
---------------------------------------------------------------------------

    Some commenters asked that the Department interpret the SECURE 
Act's requirement to report employer-level aggregate account balances 
as applying only to defined contribution MEPs. The commenters noted 
that neither the operative language of the SECURE ACT nor its 
legislative history support applying this requirement to defined 
benefit pension plans that do not maintain ``account balances'' for 
each employee. Two of these commenters noted that this requirement is 
particularly inappropriate for defined benefit MEPs established before 
1989 that determine their minimum funding requirements as if all 
participants were employed by a single employer and, therefore, did not 
elect ``employer-by-employer'' treatment under the Technical and 
Miscellaneous Revenue Act of 1988 (TAMRA). One of the commenters also 
noted that participants already receive annual funding notices on their 
defined benefit pension plan, so reporting of an artificial ``account 
balance'' could give the false impression that, in these MEPs, specific 
assets are set aside to provide benefits for employees of each employer 
when, in fact, all of the assets of a defined benefit MEP (like any 
other defined benefit pension plan) are available to pay all of the 
benefits of all of the participants in that MEP, regardless of where 
the participants are employed.
    The Department agrees that the SECURE Act's requirement to report 
employer-level aggregate account balances should not apply to defined 
benefit pension MEPs. The SECURE Act expressly states that the 
aggregate account balances attributable to each employer in the plan is 
to be determined ``as the sum of the account balances of the employees 
of such employer (and the beneficiaries of such employees).'' Although 
the SECURE Act amended ERISA section 103(g) to provide that it applies 
to plans subject to ERISA section 210(a), and there may be a relatively 
small number of defined benefit MEPs that are subject to ERISA section 
210(a), in the Department's view, it would not be a reasonable reading 
of the statutory text to conclude that Congress intended by the 
reference to ERISA section 210(a) to mandate that aggregate account 
balance information be reported by defined benefit plans that do not 
maintain account balances for covered participants. Accordingly, the 
final instructions for the 2021 reporting year provide that only 
defined contribution MEPs must report the new SECURE Act required 
employer-level aggregate account balances.
    One commenter requested clarification of the requirement to report 
the ``Percentage of Total Contributions for the Plan Year'' (element 3 
for the 2021 non-standard attachment). Specifically, the commenter 
asked whether the total of all participating employers must equal 100 
percent, and whether it will cause red flags with the DOL/IRS if it 
does not. They also asked whether filers should round the percentage 
entry for each employer to decimal places, and if so, how many. The 
Department read these commenter's questions as primarily directed at 
issues that may arise when in the context of a standardized Schedule 
MEP structure for reporting this information. The Agencies will take 
into account such questions in designing the form and developing 
appropriate instructions and edit tests. For the 2021 reporting year, 
as noted above, the instructions will continue to allow filers to use a 
non-standard attachment to report the required information. The 
Department also notes that this is not a new reporting requirement. It 
has been part of the Form 5500 since it was added in 2014 in response 
to the CSEC Act addition of section 103(g) to Title I of ERISA. 
Nonetheless, for the 2021 reporting year, it would be acceptable for 
filers to round to the nearest whole number similar to rounding 
conventions that apply to the Form 5500 financial statements and 
schedules. To the extent the filer's concern is whether rounding could 
result in the total reported percentage either slightly above or 
slightly below 100 percent, the filer can indicate that on the non-
standard attachment as part of its filing.
    A commenter asked for guidance on the asset values that should be 
used for the ``Aggregate Account Balances Attributable to Participating 
Employer'' (element 4 for the 2021 non-standard attachment) and, in 
particular, whether the end of year net value may be used based on the 
values reported on the Schedules H and I. The SECURE Act expressly 
states that the aggregate account balances information should be 
determined as the sum of the account balances of the employees of such 
employer and the beneficiaries of such employees. In the Department's 
view, an end of year valuation is an appropriate reporting requirement 
as it will provide the most up to date value for the plan year covered 
by the Form 5500 report. The final instructions include directions to 
that effect. Further, rounding to the nearest dollar, as with the 
financial reporting on other parts of the Form 5500 and schedules, 
would be appropriate. The final instructions have been revised to 
provide this clarification as well.\9\
---------------------------------------------------------------------------

    \9\ The Department understands from some comments on the 
proposal that, depending on the treatment of receivables and 
forfeitures by the plan, the sum of the account balances of the 
employees of each employer and the beneficiaries of such employees 
may not match the net asset value reported on Schedule H or I. The 
Department believes that the aggregate account balance information 
should be calculated and reported in accordance with the statutory 
direction in the SECURE Act. Filers can add an explanatory statement 
to the extent they wish to explain any difference between that sum 
and other total asset values reported on the Form 5500.
---------------------------------------------------------------------------

    With respect to the additional ERISA section 103(g) information 
regarding pooled employer plans that must be included for the 2021 
reporting year, the Department had proposed that the substance of the 
proposed Schedule MEP changes would apply to the 2021 reporting year 
requirements except that the information could be filed as a non-
standard attachment. The Department received comments opposing or 
expressing concern about some elements of the proposed Schedule MEP. 
Since the Department intends to address those comments and resolve the 
Schedule MEP content requirement in a later final rule, the Department 
agrees that it would be premature to impose the requirements wholesale 
to the 2021 Form 5500 Annual Return/Reports. Rather, for the 2021 
reporting year, in addition to the participating employer information 
required for all MEPs, pooled employer plans only will be required to 
indicate, on a non-standard attachment, whether they are in compliance 
with the Form PR registration requirements and provide the AckID number 
for their latest Form PR filing.\10\
---------------------------------------------------------------------------

    \10\ AckID is the acknowledgement code generated by the system 
in response to a completed filing for the most recent Form PR 
submitted. The instructions to the Form PR advise the pooled plan 
provider that it must keep, under ERISA section 107, the electronic 
receipt for the Form PR filing as part of the records of the pooled 
employer plans operated by the pooled plan provider.
---------------------------------------------------------------------------

    Some commenters complained that pooled employer plans should not be 
required to provide the AckID number, claiming that this requirement 
was unnecessary because the Department already has the Form PR and 
issued the AckID number. Some commenters suggested that asking any 
questions about the pooled plan provider was duplicative of the Form PR 
and that the ``AckID'' could be found by a separate

[[Page 73979]]

internet search. A few commenters also argued that pooled employer 
plans should not be subject to special reporting standard and that 
subjecting pooled employer plans to heightened scrutiny, when other 
plans treated as single plans are not, is arbitrary and unsupported by 
statute. A commenter further argued that the question regarding whether 
the pooled plan provider is currently in compliance with the Form PR 
(Pooled Plan Provider Registration Statement) requirements is ambiguous 
and unclear, given the lack of guidance and pending agency rulemakings 
(e.g., IRS' one bad apple guidance).
    The Department disagrees with the commenters opposing the 
collection of information regarding the Form PR. In the preamble to the 
final regulation establishing the Form PR, the DOL specifically noted 
that it would add new questions on the Form 5500 that would ask whether 
a pooled plan provider filed its registration statement with the 
Secretary, including any required updates, and to report the electronic 
confirmation number provided to the pooled plan provider at the time 
that the registration was received. Further, as explained in the 
preamble to the proposal to add this information collection item for 
pooled employer plans, the questions related to the Form PR are 
intended to provide the Department, the Treasury Department, the IRS, 
participating employers, and other stakeholders with information that 
would allow them to connect the Form PR registration with the Form 5500 
for all pooled employer plans operated by the registrant. 85 FR 72934, 
72946 (Nov. 16, 2020). In fact, one commenter representing retirees and 
plan participants specifically indicated its support for requesting the 
``AckID'' to help workers and retirees keep track of their assets and 
the plan, especially with the anticipated limited involvement of their 
employer in the design of pooled employer plans. Also, as discussed 
above, SECURE Act section 101(d) specifically requires the annual 
report of pooled employer plans to include identifying information for 
the person designated under the terms of the plan as the pooled plan 
provider. Thus, the requirement is neither arbitrary nor unsupported by 
the statute. The AckID requirement is also similar to the questions 
currently on the Form 5500 that require multiple employer group health 
plans to report about their compliance with registration and reporting 
requirements on the Form M- 1 (Report for Multiple Employer Welfare 
Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs)). 
The Department also does not agree that the filing requirements are 
ambiguous, that there is a lack of guidance regarding the filing 
requirement, or that it is unfair to require pooled employer plans to 
report on the registration status of their pooled plan providers. 
Unlike other ERISA-covered multiple employer plans, the SECURE Act 
expressly sets forth roles and responsibilities for pooled plan 
providers. One of those clear requirements is that the pooled plan 
provider must register with the Department and with the IRS. The Form 
PR was adopted after public notice and comment to implement a specific 
registration requirement added to ERISA by the SECURE Act. The Form PR 
also includes instructions for completing the form, which also were 
developed as part of the notice and comment rulemaking process. The 
Form 5500 is signed by the plan administrator stating that the 
administrator has reviewed the filing and that ``to the best of my 
knowledge and belief, it is true, correct, and complete.'' In the case 
of a pooled employer plan, the pooled plan provider is the 
administrator. Pooled plan providers should be able to say whether they 
believe the Form PR filing requirements have been met. In the 
Department's view, it does not impose any meaningful burden on the 
pooled plan provider acting as the plan administrator to acknowledge on 
the plan's Form 5500 annual report that it believes to the best of the 
pooled plan provider's knowledge and belief that it has fulfilled its 
statutory registration obligation. Further, the DOL continues to 
believe that linking the Form PR filed by a pooled plan provider to the 
Forms 5500 is a reasonable method to help make sure that workers, 
retirees, and the agencies charged with oversight have the information 
they need to be sure that the Form PR information is consistent and up 
to date. For example, having the AckID number on the plan's Form 5500 
will assist plan participants and participating employers in finding 
the relevant Form PR on the Department's website. The requirement to 
report Form PR compliance information on the Form 5500 will also help 
the Department ensure compliance with those registration requirements. 
While there is no explicit civil penalty for failing to file a Form PR, 
there is a civil penalty for failing to file a complete and accurate 
Form 5500. See ERISA section 502(c)(2); 29 CFR 2560.502(c)(2) and the 
Federal Civil Penalties Inflation Adjustment Act of 1990.
    Finally, with respect to the requirement that multiple employer 
welfare plans file the participating employer information as a non-
standard attachment to the 2021 Form 5500 Annual Return/Report, one 
commenter representing retirees and plan participants specifically 
indicated its support for continuing to require multiple employer 
welfare plans to provide participating employer information. Two 
commenters argued to the contrary that the DOL could no longer ask 
multiple employer welfare plans to report any participating employer 
information because Congress, by amending ERISA section 103(g) to add a 
reference to plans subject to ERISA section 210(a), was explicitly 
saying that welfare plans should no longer report such information. One 
of the commenters noted that DOL had cited ERISA section 103(c)(2) as 
separate authority for DOL to require welfare plans to report such 
information, but argued that section 103(c)(2) was not applicable 
because the DOL is not establishing this reporting requirement to 
obtain ``the name and address of each fiduciary'' but rather to 
reinstate a reporting requirement that was repealed by the SECURE Act.
    Although the DOL agrees that ERISA section 103(g) technically is 
not applicable to welfare plans as a result of the SECURE Act 
amendment, the DOL does not agree the SECURE Act amendment precludes 
its continued collection of participating employer information on the 
Form 5500 from multiple employer welfare plans.\11\ Rather, DOL 
continues to believes that the addition of the reference to ERISA 
section 210(a) was meant to emphasize that defined contribution MEPs, 
including association retirement plans, professional employer 
organization plans (PEOs), and the newly created pooled employer plan, 
are required to comply with the participating employer reporting 
requirements. The DOL does not believe that the amendment was intended 
to preclude the Department from relying on other annual reporting 
authorities to collect participating employer information about 
multiple employer welfare arrangements (MEWAs). In the DOL's view, 
receiving participating employer information from MEWAs, including 
multiple employer welfare plans, is important for oversight

[[Page 73980]]

of such arrangements by the Department and monitoring such arrangements 
by employers and plan participants and beneficiaries. This transparency 
about participating employers is supported by congressional findings in 
ERISA section 2 (Congressional Findings and Declaration of Policy), 
which provides, in relevant part, that ``[i]t is hereby declared to be 
in the policy of this Act 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. . . .'' In addition, the Committee Report on ERISA 
provided that ``[t]he Subcommittee intended that Congress provide for 
greater legislative protection for beneficiaries of pension plans 
through detailed public disclosure of the administration and operation 
of private pension plans.'' S. Rep. 93-127 (Apr. 18, 1973).
---------------------------------------------------------------------------

    \11\ This final rule does not address comments on the proposal 
in the NPFR to move the participating employer questions to the Form 
M-1 for MEWA plans and arrangements that provide medical benefits. 
As noted above, the proposals relating to changes for the 2022 
reporting year will be addressed in a later, separate Federal 
Register notice.
---------------------------------------------------------------------------

    DOL is also continuing to rely on ERISA section 103(c)(2) and its 
general regulatory authority under ERISA section 505 as authority for 
requiring multiple employer welfare plans to continue reporting the 
participating employer information for the 2021 plan year filing.\12\ 
As discussed in the NPFR, in the DOL's view, each participating 
employer is acting as a fiduciary with respect to its decision to join 
the MEWA and provide ERISA-covered benefits through a MEWA, and has 
ongoing fiduciary obligations to monitor the plan and confirm that 
continued participation in the plan is prudent and in the best 
interests of its employees who are covered participants in the 
plan.\13\ Nothing in ERISA section 103(c)(2) precludes the Department 
from relying on that authority to collect information about a 
particular class or group of fiduciaries as opposed to requiring the 
identification of all plan fiduciaries in general. See also ERISA 
section 104(a)(3) (authority to exempt welfare benefit plans from all 
or part of Title I reporting and disclosure requirements). With respect 
to its general regulatory authority under ERISA section 505, the 
Department explained in the preamble to the proposal that the 
participating employer information has proven useful to the DOL for its 
oversight functions for both MEPs and those MEWAs that file the Form 
5500, regardless of the types of benefits provided by the MEWA. 86 FR 
at 51498. This reporting requirement is also relevant to the 
Department's enforcement of the criminal penalties added by the 
Affordable Care Act under ERISA section 519 for any person who 
knowingly submits false statements or false representations of fact in 
connection with a MEWA's financial condition (including a plan MEWA), 
the benefits it provides, or its regulatory status as a MEWA. In light 
of the fact that participating employers in a MEWA would likely be the 
recipients of such false statements or representations, having data 
regarding the participating employers in a MEWA plan would be useful in 
policing whether such false statements or representations are being 
made to participating employers.
---------------------------------------------------------------------------

    \12\ ERISA section 103(c)(2) states that the administrator shall 
furnish as a part of a plan's annual report ``(2) The name and 
address of each fiduciary.'' ERISA section 505 provides the 
Department with general authority, subject to certain limits not 
relevant here, to ``prescribe such regulations as he finds necessary 
or appropriate to carry out the provisions of this subchapter.''
    \13\ See also Advisory Opinion 2007-06A (Aug. 16, 2007) 
(``decisions regarding the method through which benefits are to be 
paid under an employee welfare benefit plan, including the selection 
of an insurer and the negotiation of the terms of any contractual 
arrangement obligating the plan, are matters that generally are 
subject to the fiduciary responsibility provisions of Title I of 
ERISA''.); Information Letter to Diana Ceresi (Feb. 2, 1998) (``when 
the selection of a health care provider involves the disposition of 
employee benefit plan assets, such selection is an exercise of 
authority or control with respect to the management and disposition 
of the plan's assets within the meaning of section 3(21) of ERISA, 
and thus constitutes a fiduciary act . . .''); Advisory Opinion 
2018-01A (Nov. 5, 2018) (In the context of a pension plan rollover 
service provider, not covered by Title 1 of ERISA, ``When plan 
sponsors or other responsible fiduciaries choose to have a plan 
participate in the RCH Program, they are acting in a fiduciary 
capacity, and would be subject to the general fiduciary standards 
and prohibited transaction provisions of ERISA in selecting and 
monitoring the RCH Program.'')
---------------------------------------------------------------------------

    Two commenters argued that reporting of employer names and EINs 
(and the health plan to which they are linked) on a publicly available 
document exposes plan participants and beneficiaries and their 
employers to potential cybersecurity fraud. They also argued that the 
list of participating employers and contribution percentage information 
is proprietary information and contended that making the information 
publicly available would negatively impact businesses and their 
employees. The commenters did not offer empirical evidence or other 
data to support their assertions about consequences to plan 
participants and beneficiaries or the participating employers' 
businesses. This reporting requirement has been in place since the 2014 
plan year and the Department is not aware of any such consequences 
resulting from the disclosure requirement. In fact, the more powerful 
argument here is likely that employers have the freedom to choose to 
change plans or plan service providers, are undoubtedly receiving 
marketing solicitations about these matters now, and that transparency 
about which employers participate in a plan MEWA may well generate 
competitive pressures to offer better services at lower fees.
    The DOL also has addressed similar arguments on several prior 
occasions in the context of the ERISA section 103(g) requirement for 
multiple employer plans to include participating employer information 
as part of the Form 5500 Annual Return/Report. For example, in a 2019 
Field Assistance Bulletin, the DOL noted that it had received and 
considered similar objections in connection with the Paperwork 
Reduction Act (PRA) notice associated with the publication of the 
interim final rule on ERISA section 103(g) that implemented the CSEC 
Act requirement. See Proposed Extension of Information Collection 
Request Submitted for Public Comment; Revisions to Annual Return/
Report--Multiple-Employer Plans, 79 FR 66741 (Nov. 10, 2014) (available 
at www.govinfo.gov/content/pkg/FR-2014-11-10/pdf/2014-26499.pdf). The 
DOL also pointed out, in its 2016 Federal Register notice regarding 
proposed modernization of the Form 5500, that DOL addressed this issue 
when it explained its decision at that time not to propose changes to 
the ERISA section 103(g) reporting requirements. See Form 5500 
Improvement and Modernization Proposal--Proposed Revision of Annual 
Information Return/Reports, 81 FR 47534, 47564-47565 (July 21, 2016) 
(available at www.govinfo.gov/content/pkg/FR-2016-07-21/pdf/2016-14893.pdf). In the SECURE Act itself Congress reaffirmed and in fact 
expanded the requirements for reporting participating employer 
information on the Form 5500. The Department does not believe that a 
different conclusion regarding these arguments is warranted just 
because they are now being presented separately for welfare plans. 
Although, as noted above, after the SECURE Act amendment the specific 
reporting requirement in ERISA section 103(g) technically is not 
applicable to welfare plans, the Department does not view the SECURE 
Act amendment as an acknowledgement that the cybersecurity and 
confidential information arguments being pressed by these commenters 
somehow now has merit with respect to just welfare plans 
notwithstanding the fact that multiple employer welfare plans have been 
required to file the participating employer information since the 2014 
reporting year. The Department also continues to be of the

[[Page 73981]]

view that an employer's sponsorship or participation in an ERISA-
covered plan is not confidential information.\14\ Employers that 
sponsor single employer plans are identified on the plan's Form 5500, 
and we do not see the identity of a sponsoring employer in a multiple 
employer plan as somehow different for annual reporting and disclosure 
purposes. Similarly, the purported cybersecurity issues noted by the 
comments (e.g., ``spoofing'' of either the MEWA itself, or the MEWA's 
health insurer, in order to generate a phishing attack) are not 
different for an employer (including small employers) identified on a 
single-employer Form 5500 compared to a participating employer 
identified on a multiple employer Form 5500. In the Department's view, 
Form 5500 reporting of participating employer information is just as 
important for multiple employer welfare plans as retirement plans 
because it provides important information for oversight of such 
arrangements by the Department and monitoring such arrangements by 
employers and plan participants and beneficiaries. Accordingly, 
multiple employer welfare plans will continue to be required to file 
the participating employer information as a non-standard attachment to 
the 2021 Form 5500 Annual Return/Report, as they have been required to 
do since the 2014 plan year filing.
---------------------------------------------------------------------------

    \14\ Prior guidance issued by the Department has generally 
rejected allegations of possible harm due to disclosure of reporting 
information in favor of the policy reasons in favor of public 
disclosure. See, e.g., Aug. 14, 1994, letter to David Mintz (noting 
ERISA policy of public disclosure and rejecting concerns raised that 
the Form 5500 series is available to organizations that compile and 
sell to the public a directory of employee benefit plan 
information); April 7, 1978, letter to Congressman Harley O. 
Staggers (concluding nothing in section 110 supported changing the 
requirement, in response to claims that because personal financial 
information possibly could be calculated from 103(b)(3)(B) 
requirement for plans to include in their annual report a statement 
of receipts and disbursements during the preceding twelve-month 
period aggregated by general sources and applications, and thus 
should be treated as confidential information); July 23, 1981, 
letter to Mr. T.C. Heyward, Jr. (contested information did not fit 
within 106(b) exception from public disclosure and nothing in 
section 110 warranted omission from the annual report required 
information on distribution of benefits and payments directly to 
participants or their beneficiaries and total annual contribution of 
the sponsoring organization on the grounds that the information 
constitutes an invasion of privacy).
---------------------------------------------------------------------------

III. Regulatory Impact Analysis

1. Executive Order 12866

    This Final Rule does not constitute a ``significant regulatory 
action'' for purposes of Executive Order 12866. The changes are minor 
additions to existing reporting requirements that in large part merely 
adopt requirements set forth in statutory amendments to the annual 
reporting requirements that apply under ERISA and the Code. Therefore, 
this action has not been reviewed by OMB pursuant to the Executive 
Order. Pursuant to the Congressional Review Act, OMB has determined 
that this final rule is not a ``major rule,'' as defined by 5 U.S.C. 
804(2).

2. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 
U.S.C. 3506(c)(2)(A)), the Department solicited comments concerning the 
information collection request (ICR) included in the revision of the 
Form 5500 Annual Return/Report. At the same time, the Department also 
submitted an information collection request (ICR) to the Office of 
Management and Budget (OMB), in accordance with 44 U.S.C. 3507(d).
    The Department did not received comments that specifically 
addressed the paperwork burden analysis of the information collection 
requirement contained in the proposed rule.
    In connection with publication of this final rule, the Department 
is submitting an ICR to OMB requesting a revision of the collection of 
information under OMB Control Number 1210-0110 reflecting the 
instruction changes being finalized in this document. The Department 
will notify the public when OMB approves the ICR.
    A copy of the ICR may be obtained by contacting the PRA addressee 
shown below or at www.RegInfo.gov. PRA ADDRESSEE: Address requests for 
copies of the ICRs to James Butikofer, Office of Research and Analysis, 
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 http://www.RegInfo.gov.
    The burden analysis is based on data from the 2019 Form 5500 
filings (the latest year for which complete data are available). The 
burden analysis includes the burden of the current information 
collection and adjusts it for changes made by the final rule.
    Burden estimates take into account the changes in plan counts due 
to the creation of pooled employer plans, with an increase in multiple-
employer plans and a small decrease in single employer plans, 
reflecting some single employer plans moving to pooled employer plans. 
The agencies estimated that there are 4,538 defined contribution 
multiple-employer pension plans and that 75 pooled employer plans will 
be formed.
    Reporting the information about participating employers required by 
the changes being finalized in this document should not be burdensome 
for defined contribution multiple-employer plan administrators as 
current requirements under ERISA already require them to maintain a 
list of participating employers and records of the contributions made 
by each employer. Although likely an overestimate of the actual time 
required, to ensure that we are not underestimating the potential 
burden, the Department is using an estimate of on average 30 minutes to 
comply with the new question for defined contribution MEPs regarding 
aggregate account balances on the currently required attachment to the 
Form 5500 Annual Return/Report containing the list of participating 
employers, their EINs, and their percentage of total plan 
contributions. The Department estimates that the anticipated 75 pooled 
employer plans would take an additional five minutes to indicate 
whether they are in compliance with the Form PR registration 
requirements and provide the AckID number for their latest Form PR 
filing.
    The Agencies' burden estimation methodology excludes certain 
activities from the calculation of ``burden.'' If the activity is 
performed for any reason other than compliance with the applicable 
federal tax administration system or the Title I annual reporting 
requirements, it was not counted as part of the paperwork burden. For 
example, most businesses or financial entities maintain, in the 
ordinary course of business, detailed accounts of assets and 
liabilities, and income and expenses for the purposes of operating the 
business or entity. These recordkeeping activities were not included in 
the calculation of burden because prudent business or financial 
entities normally have that information available for reasons other 
than federal tax or Title I annual reporting. Only time for gathering 
and processing information associated with the tax return/annual 
reporting systems, and learning about the law, was included. In 
addition, an activity is counted as a burden only once if performed for 
both tax and Title I purposes. The Agencies also have designed the 
instruction package for the Form 5500 Annual Return/Report so that 
filers generally will be able to complete the Form 5500 Annual Return/
Report by reading the instructions without needing to refer to the 
statutes or regulations. The Agencies, therefore, have considered in 
their PRA

[[Page 73982]]

calculations the burden of reading the instructions and find there is 
no recordkeeping burden attributable to the Form 5500 Annual Return/
Report.
    This PRA calculation does not include any burden related to Form M-
1 changes related to reporting of participating employer information by 
plans and non-plan MEWAs that are required to file the Form M-1 because 
those changes are not included in this document. Rather, for the 2021 
Form 5500 reporting year, plan MEWAs, including those that offer or 
provide coverage for medical care, will continue to be required to 
provide participating employer information as a nonstandard attachment 
to the 2021 Form 5500 Annual Return/Report in substantially the same 
manner as has been required since the 2014 forms.
    Note that to reflect OMB's preference that burden incurred by 
service providers be reported as hour burden instead of cost burden, 
burden that has historically been included as cost burden has been 
included here as hour burden. This change led to an increase in 
reported hour burden and an offsetting decrease in cost burden.
    A summary of paperwork burden estimates follows. As noted above, 
these estimates include the burden of the overall Form 5500 information 
collection and makes adjustments for the final instructions revisions 
included in this document.
    Type of Review: Revision of existing collection.
    Title: Annual Information Return/Report of Employee Benefit Plan.
    Affected Public: Individuals or households; Private Sector--
Business or other for-profit; Not-for-profit institutions.
    Forms: Form 5500 and Schedules.
    Total Respondents: 840,923.
    Total Responses: 840,923.
    Frequency of Response: Annually.
    Estimated Total Burden Hours: 3,031,649.
    Estimated Total Annualized Costs: $0.
    The aggregate hour burden for the Form 5500 Annual Return/Report 
(including schedules and short form) is estimated to be 4.5 million 
hours annually shared between the DOL, IRS, and the PBGC. The hour 
burden reflects filing activities carried out directly by filers.
    Presented below is a chart showing the total hour and cost burden 
of the revised Form 5500 Annual Return/Report allocated to the DOL, 
including the changes to the DOL burden by these 2021 SECURE Act 
revisions.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                                             DOL hours
------------------------------------------------------------------------
Pension...........................  Large Plans.........         895,570
                                    Small Plans.........         931,031
Welfare...........................  Large Plans.........       1,064,998
                                    Small Plans.........          64,616
    Total.........................  Large Plans.........       1,960,568
                                    Small Plans.........         995,647
------------------------------------------------------------------------
    DFEs................................................          70,103
    January 2013 Revision...............................             646
    2014 CSEC Revision..................................           2,371
    2021 SECURE Act Revision............................           2,313
                                   -------------------------------------
        Total...........................................       3,031,649
------------------------------------------------------------------------

3. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) \15\ 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 \16\ and are likely to have a significant economic impact 
on a substantial number of small entities. Unless the head of an agency 
certifies that a final rule is not likely to have a significant 
economic impact on a substantial number of small entities, section 604 
of the RFA requires the agency to present a final regulatory 
flexibility analysis of the final rule.\17\
---------------------------------------------------------------------------

    \15\ 5 U.S.C. 601 et seq. (1980).
    \16\ 5 U.S.C. 551 et seq. (1946).
    \17\ 5 U.S.C. 604 (1980).
---------------------------------------------------------------------------

    The Department prepared an Initial Regulatory Flexibility Analysis 
at the proposed rule stage. However, this final rule is focused only on 
a subset of the requirements proposed. The Department certifies that 
this final rule will not have a significant impact on a substantial 
number of small entities. Therefore, the Department has not prepared a 
Final Regulatory Flexibility Analysis.

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.\18\ For 
purposes of the Unfunded Mandates Reform Act, as well as Executive 
Order 12875,\19\ this final rule 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.
---------------------------------------------------------------------------

    \18\ 2 U.S.C. 1501 et seq. (1995).
    \19\ 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.\20\ 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 final 
rule.
---------------------------------------------------------------------------

    \20\ Federalism, supra note 6.
---------------------------------------------------------------------------

    In the DOL's view, this final rule 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

[[Page 73983]]

power and responsibilities among various levels of government. This 
final rule does 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 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.

IV. Final Revisions to the Form 5500 and Form 5500-SF Instructions for 
the 2021 Reporting Year

    To implement the SECURE Act section 101 changes, the current 
instructions including the graphic, in the Form 5500 and Form 5500-SF 
instructions, as applicable, for Part I, Line A ``Box for Multiple 
Employer Plan'' and graphic entitled ``Multiple-Employer Plan 
Participating Employer Information,'' are replaced with instructions 
below and two separate graphics. The second graphic, which will appear 
only in the Form 5500 instructions shows information pooled employer 
plans must provide in addition to the participating employer 
information. It may be attached as part of the ``Multiple-Employer Plan 
Participating Employer Information'' attachment or as a separate 
attachment entitled ``Pooled Employer Plan Information.''
    Line A--Box for Multiple-Employer Plan. Check this box if the [Form 
5500 or Form 5500-SF] is being filed for a multiple-employer plan. A 
multiple-employer plan is a plan that is maintained by more than one 
employer and is not one of the plans already described. A multiple-
employer plan can be collectively bargained and collectively funded, 
but if covered by PBGC termination insurance, must have properly 
elected before September 27, 1981, not to be treated as a multiemployer 
plan under Code section 414(f)(5) or ERISA sections 3(37)(E) and 
4001(a)(3), and have not revoked that election or made an election to 
be treated as a multiemployer plan under Code section 414(f)(6) or 
ERISA section 3(37)(G). A single [Insert either Form 5500 or Form 5500-
SF] Annual Return/Report is filed for the multiple-employer plan; 
participating employers do not file individually for this type of plan. 
[Following sentence is for Form 5500 Instructions only] A pooled 
employer plan as defined in ERISA section 3(44) operated by a ``pooled 
plan provider'' that meets the definition under ERISA section 3(43) is 
a multiple-employer plan.\21\
---------------------------------------------------------------------------

    \21\ Pooled employer plans are not eligible to file the Form 
5500-SF so the instructions describing the pooled employer plan's 
status as a MEP are not being added to the Form 5500-SF 
instructions.
---------------------------------------------------------------------------

    Note. Do not check this box if all of the employers maintaining the 
plan are members of the same controlled group or affiliated service 
group under Code sections 414(b), (c), or (m).
    Participating Employer Information. [Insert for Form 5500 ``Except 
as provided below, multiple-employer pension plans and multiple-
employer welfare plans required to file a Form 5500'' or Insert for 
Form 5500-SF ``Eligible multiple-employer pension plans that file a 
Form 5500-SF''] must include an attachment using the format below. The 
attachment must be properly identified at the top with the label 
``Multiple-Employer Plan Participating Employer Information,'' and the 
name of the plan, EIN, and plan number (PN) as found on the plan's 
[Insert Form 5500 or Form 5500-SF]. Complete as many entries as needed 
to report the required information for all participating employers in 
the plan.
     All multiple-employer pension plans must complete elements 
1-3 of the ``Multiple-Employer Plan Participating Employer 
Information'' attachment. For element 3, enter a good faith estimate of 
each employer's percentage of the total contributions (including 
employer and participant contributions) made by all participating 
employers during the year. The percentage may be rounded to be nearest 
whole percentage. To the extent the rounding results in the total 
reported percentage being either slightly above or slightly below 100 
percent, the filer can indicate that on the attachment. Any employer 
who was obligated to make contributions to the plan for the plan year, 
made contributions to the plan for the plan year, or whose employees 
were covered under the plan is a ``participating employer'' for this 
purpose. If a participating employer made no contributions, enter ``-0-
'' in element 3.
     Multiple-employer pension plans that are defined 
contribution plans must also complete element 4 of the ``Multiple-
Employer Plan Participating Employer Information'' attachment to report 
the aggregate account balances for each participating employer 
determined as the sum of the account balances of the employees of such 
employer (and the beneficiaries of such employees). For element 4, the 
aggregate account balance attributable to each employer is the sum of 
the account balances of the employees of such employer and their 
beneficiaries at the end of the year. Consistent with the information 
on the schedules of assets for the plan as a whole, use the end of year 
valuation to calculate the amount of assets by employer. The amounts 
can be rounded to the nearest dollar, consistent with other asset 
reporting on the forms and schedules.
     [For Form 5500 Instructions Only] Multiple-employer 
welfare plans that are unfunded, fully insured, or a combination of 
unfunded/insured and exempt under 29 CFR 2520.104-44 from the 
obligation to file financial statements with their annual report are 
required to complete elements 1 and 2 only of the ``Multiple-Employer 
Plan Participating Employer Information'' attachment.\22\
---------------------------------------------------------------------------

    \22\ This paragraph only applies to multiple employer welfare 
plans that file the Form 5500, and thus is not needed in the Form 
5500-SF instructions.
---------------------------------------------------------------------------

     [For Form 5500 Instructions Only] Multiple-employer 
pension plans that are pooled employer plans must also complete the 
``Pooled Employer Plan Information'' attachment. The attachment may be 
attached as part of the ``Multiple-Employer Plan Participating Employer 
Information'' attachment or as a separate attachment entitled ``Pooled 
Employer Plan Information.'' For element 1b, AckID is the 
acknowledgement code generated by the system in response to a completed 
Form PR submitted. The instructions to the Form PR advise the pooled 
plan provider that it must keep, under ERISA section 107, the 
electronic receipt for the Form PR filing as part of the records of the 
pooled employer plans operated by the pooled plan provider.\23\
---------------------------------------------------------------------------

    \23\ As noted above, because pooled employer plans are not 
eligible to file the Form 5500-SF, this language describing the 
pooled employer plan attachment is only being added to the Form 5500 
instructions.

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

[[Page 73984]]

[GRAPHIC] [TIFF OMITTED] TR29DE21.000

    The following revisions are being made to the Form 5500-SF 
instructions:
     In the first paragraph of the ``General Instruction'' 
section, add a seventh bulleted paragraph that reads ``Not be a pooled 
employer plan. See ERISA section 3(43).''
     In the ``General Instruction'' section, under the heading 
``Who May File Form 5500-SF,'' add a new paragraph number 7 before the 
Note that reads: ``7. The plan is not a pooled employer plan. See ERISA 
section 3(43).''
     In the ``Specific Line-By-Line Instructions (Form 5500-
SF)'' in instructions for Part II, Line 6, add a new paragraph number 7 
that reads: ``7. The plan is not a pooled employer plan. See ERISA 
section 3(43).''
Statutory Authority
    Accordingly, pursuant to the authority in sections 101, 103, 104, 
109, 110, the Form 5500 Annual Return/Report and the Form 5500-SF Short 
Form Annual Return/Report are amended as set forth herein.

    Signed at Washington, DC, this 17th day of December, 2021.
Ali Khawar,
Acting Assistant Secretary, Employee Benefits Security Administration, 
U.S. Department of Labor.
[FR Doc. 2021-27764 Filed 12-28-21; 8:45 am]
BILLING CODE 4510-29-C