Request for Information-SECURE 2.0 Section 319-Effectiveness of Reporting and Disclosure Requirements, 4215-4221 [2024-01077]

Agencies

• Employee Benefits Security Administration
• Internal Revenue Service
• DEPARTMENT OF LABOR
• Pension Benefit Guaranty Corporation
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 89, Number 15 (Tuesday, January 23, 2024)]
[Proposed Rules]
[Pages 4215-4221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01077]



[[Page 4215]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 54, and 301

RIN 1545-BQ98

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Parts 2510, 2520, and 2550

RIN 1210-AC09

PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4000, 4007, 4010, 4041, 4041A, 4043, 4050, 4062, 4063, 
4204, 4211, 4219, 4231, 4245, 4262, and 4281

RIN 1212-AB58


Request for Information--SECURE 2.0 Section 319--Effectiveness of 
Reporting and Disclosure Requirements

AGENCY: Internal Revenue Service, U.S. Department of the Treasury; 
Employee Benefits Security Administration, U.S. Department of Labor; 
Pension Benefit Guaranty Corporation.

ACTION: Request for information.

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

SUMMARY: The Department of the Treasury (Treasury Department), the 
Employee Benefits Security Administration (EBSA) of the U.S. Department 
of Labor (Labor Department), and the Pension Benefit Guaranty 
Corporation (PBGC) are publishing this Request for Information to 
develop a public record for purposes of the directive in the SECURE 2.0 
Act of 2022 (SECURE 2.0). Specifically, this Request for Information 
addresses section 319 of SECURE 2.0, requiring that these agencies 
review the existing reporting and disclosure requirements for certain 
retirement plans under the Employee Retirement Income Security Act of 
1974, as amended (ERISA) and the Internal Revenue Code (Code) that are 
applicable to each agency. Following this review, the agencies are to 
report to Congress, no later than December 29, 2025, concerning the 
effectiveness of the reporting and disclosure requirements. The report 
will include recommendations on consolidating, simplifying, 
standardizing, and improving such requirements with the dual goals of 
reducing compliance burdens and ensuring plan participants' and 
beneficiaries' timely receipt and better understanding of the 
information they need to monitor their plans, prepare for retirement, 
and get the benefits they have earned. The report will also consider 
how participants and beneficiaries are providing preferred contact 
information, the methods by which plan sponsors and plans are 
furnishing disclosures, and the rate at which participants and 
beneficiaries are receiving, accessing, understanding, and retaining 
disclosures. Consistent with the directive in section 319 of SECURE 
2.0, this Request for Information focuses generally on the overall 
effectiveness of the reporting and disclosure frameworks in ERISA and 
the Code. Responses to this Request for Information will inform the 
agencies in preparation of the required report to Congress and in any 
future action taken by the agencies to enhance the effectiveness of 
existing requirements.

DATES: To be assured consideration, comments must be received at one of 
the following addresses no later than April 22, 2024.

ADDRESSES: Written comments, identified by RIN 1210-AC09, may be 
submitted to one of the addresses specified below. Any comment that is 
submitted will be shared with the Department of the Treasury, the 
Internal Revenue Service (IRS), and the Pension Benefit Guaranty 
Corporation. Please do not submit duplicates.
     Federal eRulemaking Portal: www.regulations.gov. Follow 
the instructions for submitting comments.
     Mail: Please address to ``Attention: Request for 
Information--SECURE 2.0 Section 319--Effectiveness of Reporting and 
Disclosure Requirements.'' Office of Regulations and Interpretations, 
Employee Benefits Security Administration, U.S. Department of Labor, 
Room N-5655, U.S. Department of Labor, 200 Constitution Avenue NW, 
Washington, DC 20210.
    Instructions: Persons submitting comments electronically are 
encouraged not to submit paper copies. Comments will be available to 
the public, without charge, at www.regulations.gov, on the Department 
of Labor's website at www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments, and at the Public Disclosure 
Room, EBSA, U.S. Department of Labor, Suite N-1515, 200 Constitution 
Avenue NW, Washington, DC 20210. Comments may also be accessed from 
PBGC's website at www.pbgc.gov.
    Warning: Do not include any personally identifiable or confidential 
business information that you do not want publicly disclosed. Comments 
are public records and can be retrieved by most internet search 
engines.

FOR FURTHER INFORMATION CONTACT: Rebecca Davis, Office of Regulations 
and Interpretations, EBSA, Labor Department, (202) 693-8500. Jamie 
Dvoretzky, Office of Associate Chief Counsel (Employee Benefits, Exempt 
Organizations, and Employment Taxes (CC:EEE)), IRS, Treasury 
Department, at (202) 317-4102. David Simonetti, Legal Policy Division, 
Office of the General Counsel, PBGC, (202) 229-4362.

SUPPLEMENTARY INFORMATION:

I. Background

    SECURE 2.0 includes provisions amending ERISA and the Code and 
requiring the Labor Department, the Treasury Department, and PBGC (each 
an Agency and, together, the Agencies) to undertake specified 
statutory, regulatory, and review requirements and, in some cases, to 
report to Congress based on their findings.\1\ A number of these 
provisions relate to the reporting and disclosure requirements of ERISA 
and the Code. For example, on August 11, 2023, the Labor Department 
published a separate request for information focusing on ten specific 
sections of SECURE 2.0 that amend ERISA or otherwise impact, directly 
or indirectly, ERISA's reporting and disclosure requirements.\2\ At 
that time, the Labor Department stated its intention to move forward in 
the short term with a separate initiative, in coordination with the 
Treasury Department and PBGC, to formally solicit input from 
stakeholders in response to section 319 of SECURE 2.0.
---------------------------------------------------------------------------

    \1\ The SECURE 2.0 Act of 2022, Division T of the Consolidated 
Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459 (2022) 
(SECURE 2.0).
    \2\ 88 FR 54511 (Aug. 11, 2023). Not all of the SECURE 2.0 
provisions that affect ERISA's reporting and disclosure framework 
are covered in this RFI. For example, the changes to ERISA's audit 
requirements made by section 345 of SECURE 2.0 were implemented 
through a rulemaking relating to annual reporting requirements under 
ERISA. 88 FR 11793 (Feb. 24, 2023).
---------------------------------------------------------------------------

    Section 319 of SECURE 2.0 includes a wide-ranging directive to the 
Agencies to review each Agency's existing reporting and disclosure 
requirements under the Code and ERISA for retirement plans specified in 
section 319 of SECURE 2.0.\3\ After this review,

[[Page 4216]]

and in consultation with a balanced group of participant and employer 
representatives, the Agencies are to report to Congress on the 
effectiveness of these reporting and disclosure requirements, including 
recommendations to consolidate, simplify, standardize, and improve such 
requirements. This review is to be expansive in scope. In the Agencies' 
view, the review calls for generalized questions about how plans can 
(a) efficiently furnish valuable information to the Agencies, and (b) 
best communicate information to workers and former employees, who have 
widely varying backgrounds and expertise, that would enable them to 
effectively obtain, understand, and use information about their plans 
and to plan for retirement. The overarching theme of ``effectiveness'' 
will be explored in the context of both the reporting and disclosure 
requirements under the jurisdiction of the three Agencies. The public 
is directed to www.irs.gov/retirement-plans/irc-notice-and-reporting-requirements-affecting-retirement-plans (Treasury Department), 
www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/publications/reporting-and-disclosure-guide-for-employee-benefit-plans.pdf (Labor Department), and www.pbgc.gov (PBGC) to review 
the principal requirements of each Agency relating to reporting and 
disclosure under ERISA or the Code with respect to retirement plans.
---------------------------------------------------------------------------

    \3\ Section 319(a)(1)-(2) of SECURE 2.0 excludes health and 
welfare plans from the scope of the Agencies' review (directing 
agency heads to review the reporting and disclosure requirements of 
pension plans (as defined in ERISA section 3(2)) covered by title I 
of ERISA and applicable qualified retirement plans (as defined in 
Code section 4974(c), without regard to Code section 4974(c)(4) and 
(5), including a plan described in Code section 401(a) which 
includes a trust exempt from tax under Code section 501(a), an 
annuity plan described in Code section 403(a), and an annuity 
contract described in section Code section 403(b), but excluding 
plans described in Code section 408(a) or (b) and eligible plans 
described in Code section 457(b)).
---------------------------------------------------------------------------

    ERISA and the Code require that plans furnish information to 
participants and beneficiaries, in some cases on a regular and 
recurring basis (e.g., pension benefit statements,\4\ Code section 
401(k)(12) safe harbor notices,\5\ and annual funding notices \6\) and 
in other cases when triggered by plan or participant actions (e.g., 
black-out notices,\7\ Code section 402(f) notices,\8\ and notices of 
intent to terminate \9\). For purposes of this Request for Information 
(RFI), the term ``disclosure'' includes notices, statements, and other 
documents and refers generally to the furnishing of information to 
participants and beneficiaries of retirement plans as required by ERISA 
or the Code or regulations issued by the Agencies thereunder.
---------------------------------------------------------------------------

    \4\ ERISA section 105; 29 U.S.C. 1025.
    \5\ Code section 401(k)(12); 26 U.S.C. 401(k)(12); 26 CFR 
1.401(k)-3(d).
    \6\ ERISA section 101(f); 29 U.S.C. 1021(f); 29 CFR 2520.101-5.
    \7\ ERISA section 101(i); 29 U.S.C. 1021(i); 29 CFR 2520.101-3.
    \8\ Code section 402(f); 26 U.S.C. 402(f); 26 CFR 1.402(f)-1.
    \9\ ERISA section 4041(a)(2); 29 U.S.C. 1341; 29 CFR 4041.23.
---------------------------------------------------------------------------

    The term ``reporting'' is used in this RFI to refer to the 
furnishing of information, or ``reports,'' by plans to the Agencies, as 
required by ERISA or the Code, or regulations issued by the Agencies 
thereunder. The Agencies do not consider information that is submitted 
to the Agencies in connection with an audit, examination, 
investigation, or enforcement action to be ``reports'' for purposes of 
section 319. The Agencies also do not consider information that is 
furnished on a voluntary basis to an Agency to obtain favorable 
treatment, or information relating to financial transactions that is 
not retirement-plan-specific information to be ``reports'' for purposes 
of section 319. Examples of information not considered to be 
``reports'' include:
    [ssquf] Information that is submitted as a condition of an 
individual exemption under ERISA section 408(a).
    [ssquf] Information that is submitted to the Agencies to receive 
financial assistance or benefits.
    [ssquf] Information that is submitted to the Agencies in connection 
with requests for determination or opinion letters, advisory opinions, 
information letters, private letter rulings, closing agreements, 
voluntary compliance statements under the Employee Plans Compliance 
Resolution System, or relief pursuant to the Voluntary Fiduciary 
Correction Program or the Delinquent Filer Voluntary Compliance 
Program.
    [ssquf] Information that is submitted to the Agencies and that is 
not specific to retirement plans, such as reporting that may be 
required of financial institutions holding foreign investments.
    The Agencies recognize that a key component of retirement plans' 
reporting to the Agencies is the Form 5500 Annual Report. However, for 
purposes of this RFI, the Agencies are primarily focusing, and 
requesting comments, on reporting requirements other than the Form 5500 
Annual Report. Apart from the context of SECURE 2.0 section 319, the 
Agencies have an annual process for soliciting feedback from the public 
on the Form 5500 Annual Report and reviewing and improving the 
effectiveness of that form in response to such feedback. The Agencies 
therefore pursue the overarching goal of the review required by section 
319--improving the effectiveness of reporting on the Form 5500 Annual 
Report--every year. The Agencies urge commenters, when responding to 
this RFI, to focus on information and analyses that look beyond the 
requirements of the Form 5500 Annual Report.
    In addition to information received and points of view expressed by 
public commenters in response to this RFI, the Agencies' review for 
purposes of the report to Congress may include feedback from the public 
provided as part of prior efforts of the Agencies and others to assess 
and improve the effectiveness of the reporting and disclosure 
requirements of the Code and ERISA. The Labor Department, for example, 
as recently as 2019, published a request for information (the DOL 2019 
RFI), which solicited information, data, and ideas from the public on 
measures that the Labor Department could take to improve the 
effectiveness of plan disclosures, especially for the design and 
content of ERISA disclosures.\10\ Similarly PBGC, in 2017, published a 
request for information (the PBGC 2017 RFI), which, in part, solicited 
information and suggestions from the public for improving reporting 
requirements.\11\
---------------------------------------------------------------------------

    \10\ 84 FR 56894, 56908 (Oct. 23, 2019).
    \11\ 82 FR 34619, 34620 (July 26, 2017).
---------------------------------------------------------------------------

    Parties external to the Agencies also have studied whether and how 
the reporting and disclosure frameworks of ERISA and the Code may be 
improved. The U.S. Government Accountability Office (GAO) has issued a 
number of reports in recent years on this topic, working with the 
Agencies to review reporting and disclosure requirements in different 
contexts.\12\ The Labor Department's ERISA Advisory Council has also 
analyzed reporting- and disclosure-related topics in certain years, in 
some cases providing testimony and recommendations to assist the Labor 
Department's efforts.\13\ In addition, the Internal Revenue

[[Page 4217]]

Service Advisory Council (IRSAC) provides recommendations to the IRS on 
reporting issues. The Agencies are confident that use of these 
resources, together with feedback from public commenters pursuant to 
this RFI, will facilitate the preparation of a comprehensive, 
insightful, and instructive report to Congress on the effectiveness of 
reporting and disclosure requirements.
---------------------------------------------------------------------------

    \12\ GAO-14-92, Private Pensions: Clarity of Required Reports 
and Disclosures Could Be Improved (Nov. 2013); GAO-21-357, 401(k) 
Retirement Plans: Many Participants Do Not Understand Fee 
Information, but DOL Could Take Additional Steps to Help Them (July 
2021); GAO-20-541, Retirement Security: DOL Could Better Inform 
Divorcing Parties About Dividing Savings (July 2020); GAO-19-179, 
Retirement Savings: Additional Data and Analysis Could Provide 
Insight into Early Withdrawals (Mar. 2019); GAO-18-111SP, The 
Nation's Retirement System: A Comprehensive Re-evaluation is Needed 
to Better Promote Future Retirement Security (Oct. 2017).
    \13\ The ERISA Advisory Council (established under ERISA section 
512) is comprised of 15 members of the public representing employee 
organizations, employers, and the general public. The Council holds 
public meetings, advises the Secretary of Labor, and submits annual 
reports detailing their recommendations to the Labor Department, 
including on the topic of reporting and disclosure. See, e.g., ERISA 
Advisory Council Report, Mandated Disclosure for Retirement Plans--
Enhancing Effectiveness for Participants and Sponsors (Nov. 2017); 
ERISA Advisory Council Report, Successful Plan Communications for 
Various Population Segments (Nov. 2013).
---------------------------------------------------------------------------

II. Request for Information--SECURE 2.0 Section 319--Effectiveness of 
Reporting and Disclosure Requirements

    The purpose of this RFI, as explained in Part I, is to obtain input 
from the public on the effectiveness of the reporting and disclosure 
requirements of ERISA and the Code that the Agencies can consider in 
preparing the required report to Congress. Responses to this RFI also 
may be used as part of the public record for any future action taken by 
the Agencies to enhance such effectiveness. The Agencies invite 
comments and relevant data from all interested stakeholders. Commenters 
need not answer every question, but are encouraged to identify, by 
number, each question addressed. The Agencies request comments no later 
than 90 days from the date of publication of this document in the 
Federal Register, a timeframe that the Agencies believe is adequate for 
commenters to review the RFI and provide considered and timely 
responses.

A. Disclosure to Plan Participants and Beneficiaries

    The effectiveness of required notices and disclosures may be 
measured from different perspectives, including that of the retirement 
plan participants and beneficiaries who are the intended recipients of 
these disclosures and that of the plans and plan sponsors that provide 
disclosures. Section 319 of SECURE 2.0 acknowledges the importance of 
both perspectives by directing the Agencies to analyze ways to 
consolidate, simplify, standardize, and improve such requirements, so 
as to achieve the dual goals of ``simplify[ing] reporting for, and 
disclosure from, [retirement] plans'' and ensuring that ``participants 
and beneficiaries timely receive and better understand the information 
they need to monitor their plans, plan for retirement, and obtain the 
benefits they have earned.'' The questions in Part 1 of this Section A 
are primarily intended to elicit information about disclosures from the 
perspective of participants and beneficiaries. The questions in Part 2 
of this Section A are primarily aimed at better understanding the 
perspective of plans and plan sponsors on furnishing required 
disclosures. The Agencies understand that the distinction between these 
perspectives will not always be clear-cut, but nonetheless encourage 
commenters to consider the issues raised in this RFI from both 
perspectives when possible. Because plan officials and delegees 
(including plan fiduciaries, plan administrators, service and 
investment providers, and others) exercise important responsibilities 
in connection with plans' reporting and disclosure obligations, the 
Agencies' references in this RFI to ``plans'' include, unless otherwise 
specified, any such plan officials or delegees, to the extent they are 
responsible for, or are employed or hired to perform duties associated 
with, collecting and consolidating information and data and preparing 
and furnishing required notices and disclosures.
    ERISA and the Code require plans to furnish information to 
participants and beneficiaries about the features of their plans (e.g., 
eligibility requirements, contribution limitations, the availability of 
plan loans and distribution options) and plan benefits and rights under 
applicable law. Some disclosures are furnished on a regular and 
recurring basis, and others when triggered by plan or participant 
actions. For an individual participant or beneficiary, the number of 
disclosures that will be received depends on a number of factors, 
including the type of plan, its specific features, and whether certain 
actions are taken by the participant or beneficiary. One of the most 
significant disclosures under ERISA is the summary plan description 
(SPD). The SPD is the primary resource informing participants and 
beneficiaries about their plan and how it operates--an ``owner's 
manual'' for the plan.\14\ Other prominent disclosures under ERISA and 
the Code include pension benefit statements,\15\ ERISA's comparative 
investment chart,\16\ Code section 401(k)(12) safe harbor notices,\17\ 
defined benefit plan annual funding notices,\18\ black-out notices,\19\ 
Code section 402(f) notices,\20\ and notices of intent to 
terminate.\21\
---------------------------------------------------------------------------

    \14\ 29 CFR 2520.102-3.
    \15\ ERISA section 105; 29 U.S.C. 1025 (periodic statements of a 
participant's individual account balance or plan benefits).
    \16\ 29 CFR 2550.404a-5 (annual comparative chart of fee, 
historical return, and other information about investment options in 
a participant-directed individual account plan).
    \17\ Code section 401(k)(12); 26 U.S.C. 401(k)(12); 26 CFR 
1.401(k)-3(d) (notice describing eligible employees' rights and 
obligations under a safe harbor section 401(k) plan).
    \18\ ERISA section 101(f); 29 U.S.C. 1021(f); 29 CFR 2520.101-5 
(provides basic information about the status and financial condition 
of a defined benefit pension plan).
    \19\ ERISA section 101(i); 29 U.S.C. 1021(i); 29 CFR 2520.101-3 
(notice of a temporary suspension or restriction on the ability of 
participants to direct plan investments, obtain loans, or take 
distributions).
    \20\ Code section 402(f); 26 U.S.C. 402(f); 26 CFR 1.402(f)-1 
(written explanation provided to a recipient of an eligible rollover 
distribution).
    \21\ ERISA section 4041(a)(2); 29 U.S.C. 1341; 29 CFR 4041.23. 
In the event a defined benefit plan is terminated by a standard or 
distress termination, the plan administrator must provide 
participants, beneficiaries of deceased participants, alternate 
payees under qualified domestic relations orders, employee 
organizations representing participants, and PBGC (but only in the 
case of a distress termination), a written notice of intent to 
terminate (Form 500 for a standard termination, or Form 600 for a 
distress termination) at least 60 days, and no more than 90 days, 
before the proposed termination date.
---------------------------------------------------------------------------

1. Plan Participants and Beneficiaries--Receipt and Comprehension of 
Required Disclosures
    Question 1. Number of required disclosures.
    Is the effectiveness of required disclosures from the Agencies 
affected by the number of notices and disclosures that are furnished to 
participants and beneficiaries each plan or calendar year (e.g., annual 
notices and quarterly benefit statements) and, if so, how? Similarly, 
is the effectiveness of disclosures affected by the number of notices 
and disclosures that are triggered by certain events (e.g., individual 
statements of deferred vested benefits \22\), including when plans are 
required to furnish notices upon request from a participant or 
beneficiary? In your view, what is the relative significance of the 
required disclosures, are participants and beneficiaries able to 
recognize the significance of each notice or disclosure, and does this 
ability influence your view on how many disclosures should be required 
or whether certain disclosures are more or less effective? If you 
believe that the number of notices and disclosures is too high, what 
steps could the Agencies take to reduce the number of disclosures 
without sacrificing participants' and beneficiaries' receipt of 
important information? To the extent there are concerns with the number 
of disclosures, to what extent could these concerns be mitigated by 
combining multiple disclosures into a single mailing or delivery, or by 
consolidating information that currently must be furnished in multiple 
disclosures into a single disclosure? Are there specific disclosures, 
or specific information, that lend themselves to such a combination or 
consolidation, and, if so, why? For example, as explained in Q&A-8 of

[[Page 4218]]

Department of Labor Field Assistance Bulletin No. 2008-03, the Labor 
Department, Treasury Department, and the IRS previously coordinated to 
ensure that plan sponsors could comply with the notice requirements of 
Code sections 401(k)(13)(E) (relating to Qualified Automatic 
Contribution Arrangements) and 414(w)(4) (relating to Eligible 
Automatic Contribution Arrangements) and ERISA sections 404(c)(5) 
(relating to Qualified Default Investment Alternatives) and 514(e)(3) 
(relating to preemption for Automatic Contribution Arrangements) with a 
single, stand-alone document (although plan sponsors are not required 
to combine those notices). Further, for plan sponsors that wish to 
combine those notices, the Labor Department, Treasury Department, and 
the IRS previously provided a sample notice that may be used to help a 
plan sponsor satisfy those notice content requirements. As another 
example, see Sec.  54.4980F-1, Q&A-9(g)(3), in which a plan is treated 
as providing a section 204(h) notice if the plan administrator provides 
one of the notices listed in Sec.  54.4980F-1, Q&A-9(g)(3)(ii) and 
meets the content and timing requirements for that notice.
---------------------------------------------------------------------------

    \22\ Code section 6057(e); 26 U.S.C. 6057(e).
---------------------------------------------------------------------------

    Question 2. Timing of required disclosures.
    Do the timing requirements for when certain disclosures must be 
furnished increase or decrease the likelihood that participants will 
pay attention to them? Should changes be made to when information is 
disclosed to participants and, if so, how? For example, to what extent 
would it be beneficial for plans to harmonize timing requirements to 
specific points in time corresponding to participants' major life 
milestones or events? Explain how such changes could be implemented and 
how they would enhance the likelihood that participants would pay 
attention to the disclosure or disclosures or otherwise improve the 
disclosure experience.
    Question 3. Content of required disclosures.
    Is there duplicative, redundant, stale, or inconsistent information 
disclosed to participants under current rules promulgated under ERISA 
or the Code? If so, which information? Why do you consider that 
information duplicative, redundant, stale, or inconsistent? Do either 
ERISA or the Code, or regulations issued thereunder, currently require 
disclosure of any information that is unhelpful or outmoded, for 
example, due to the passage of time or changes in the regulatory, 
business, or technological environment? If so, what information and why 
is it unhelpful or outmoded? Is there information that should be 
disclosed instead of the unhelpful or outmoded information? If so, what 
information? How could it be improved? In analyzing the content of 
required disclosures, commenters are reminded to consider the objective 
stated in SECURE 2.0 section 319, that participants and beneficiaries 
be furnished the ``information they need to monitor their plans, plan 
for retirement, and obtain the benefits they have earned.''
    Question 4. Comprehension of information furnished in required 
disclosures.
    Section 319 of SECURE 2.0 requires that the Agencies' report to 
Congress include an analysis of ``the rate at which participants and 
beneficiaries are receiving, accessing, understanding, and retaining 
disclosures.'' As to individuals' understanding, the Agencies are 
interested in commenters' views on whether and how the length of 
specific disclosures, and the complexity of the information disclosed, 
may impact individuals' understanding of the disclosures. Besides 
length, what other factors affect comprehension of the information 
contained in notices and disclosures or, possibly, whether participants 
and beneficiaries even try to read and understand disclosures? Does 
review and comprehension of participants and beneficiaries vary among: 
(1) industries; (2) individuals of different ages, genders, education 
levels, socio-economic classes, place of living, impairments or 
disabilities, or other demographic characteristics; or (3) different 
types of disclosures? To what degree does the presentation, delivery, 
and design of disclosures (as opposed to their written content) impact 
the likelihood that participants and beneficiaries will read and 
understand the information disclosed? Are there design elements or 
tools that are particularly effective, for example, mixed media 
presentations, the use of social media, or plain language infographics? 
If so, should these presentation and design elements be required, or 
are there steps that could be taken to facilitate use of those methods? 
Are participants and beneficiaries regularly surveyed or otherwise 
assessed regarding their comprehension of information about their 
plans? How are those surveys or reviews conducted? What additional 
information should be considered in developing disclosures that are 
effective for different participants and beneficiaries? How can the 
Agencies effectively measure the extent to which participants and 
beneficiaries understand the information that is disclosed to them?
    Question 5. Plain English; foreign language-based issues; 
underserved communities.
    Information disclosed to participants and beneficiaries is often 
quite technical and complex. However, for disclosures to be useful, 
information needs to be conveyed in ``plain language''--in a way that 
is understandable to a highly demographically diverse population of 
workers and their beneficiaries. Labor Department disclosures, for 
example, generally are required to be ``written in a manner calculated 
to be understood by the average plan participant.'' \23\ Similarly, 
certain PBGC notices to affected parties must be ``readable and written 
in a manner calculated to be understood by the average plan 
participant.'' \24\ Also, the Treasury Department and the IRS require 
that notices to participants and beneficiaries be written in a manner 
calculated to be understood by the average plan participant.\25\ Are 
these standards sufficient to ensure that notices and disclosures are 
likely to be comprehensible to participants and beneficiaries and, if 
not, what additional or different standards would enhance individuals' 
understanding? Further, not all workers speak English or speak English 
only as a second (or further removed) language. Some of the Agencies' 
disclosures are subject to standards as to the use of additional 
languages. Are these standards sufficient? \26\ If not, what barriers 
to comprehension exist for non-native English-speakers, and what 
further steps could the Agencies take to reduce these barriers? Do 
plans take additional steps,

[[Page 4219]]

in addition to what is required by ERISA and the Code, to educate or 
tailor disclosures to their participant populations? Is there existing 
research, user testing, or other considerations that the Agencies 
should review or steps they could take to increase the effectiveness of 
disclosures to participants and beneficiaries in underserved 
communities?
---------------------------------------------------------------------------

    \23\ See, e.g., ERISA section 105(a)(2)(A)(iii); 29 U.S.C. 
1025(a)(2)(A)(iii) (applying the readability standard to pension 
benefit statements). See also 29 CFR 2520.102-2(a) (applying the 
readability standard to summary plan descriptions). The readability 
standard requires plan administrators to exercise considered 
judgment and discretion, taking into account factors such as the 
level of comprehension and education of a plan's participant 
population and the complexity of a plan's terms. Consideration of 
such factors usually compels plan administrators, for example, to 
write notices that limit or eliminate technical jargon and long, 
complex sentences, and that use clarifying examples and 
illustrations, clear cross references, and tables of contents. Id.
    \24\ 29 CFR 4041.3(c)(4).
    \25\ See, e.g., 26 CFR 54.4980F-1, Q&A-11(a)(2) (information in 
a section 204(h) notice must be written in a manner calculated to be 
understood by the average plan participant); 26 CFR 1.401(k)-
3(d)(2)(i)(B) (providing that the safe harbor notice must be written 
in a manner calculated to be understood by the average employee).
    \26\ See, e.g., 29 CFR 2520.102-2(c) (describing standards for 
summary plan descriptions furnished to plan participants literate in 
a non-English language and assistance that must be provided to non-
English speakers to inform them of their rights and obligations 
under the plan); 29 CFR 4041.3(c)(5).
---------------------------------------------------------------------------

    Question 6. Accessing required disclosures.
    As noted in Question 4, section 319 of SECURE 2.0 requires that the 
Agencies' report to Congress include an analysis of ``the rate at which 
participants and beneficiaries are receiving, accessing, understanding, 
and retaining disclosures.'' (Emphasis added.) The Agencies understand 
``access'' to refer to the extent to which participants and 
beneficiaries open and look at, review, or consult the disclosure for 
purposes of using its information, either contemporaneous with the 
receipt of the disclosure or at any point in the future. What tools, if 
any, do entities have to discern whether participants and beneficiaries 
are accessing disclosures? Do individuals commonly access disclosures 
only on receipt, at regular intervals throughout the year, or only at 
specific points in time corresponding to major life milestones (e.g., 
marriage, divorce, childbirth, adoption, retirement, or job change)? Do 
participants and beneficiaries access disclosures more or less 
frequently depending on how the disclosures are furnished, for example, 
whether they receive paper disclosures in the mail, electronic 
disclosures via email, text messages, mobile applications, or 
notifications of disclosures' availability on a continuous-access 
website? Do they access certain disclosures at higher rates than 
others? What are best practices in ensuring that participants and 
beneficiaries have ready access to relevant information at the time 
they need it, and that they know they have such access?
    Question 7. Retaining disclosures after receipt.
    As noted in Question 4, section 319 of SECURE 2.0 requires that the 
Agencies' report to Congress include an analysis of ``the rate at which 
participants and beneficiaries are receiving, accessing, understanding, 
and retaining disclosures.'' As to retention of disclosures, do plans 
collect data or conduct surveys on how often participants and 
beneficiaries download, print, save, or otherwise ``retain'' 
disclosures for future use? If so, how, and are any trends evident from 
such data? Does data exist on how often participants and beneficiaries 
request copies of disclosures, for example, do they often request paper 
disclosures to be re-mailed or electronic versions of disclosures to be 
re-sent via email, text, or mobile application, and, if so, are any 
trends evident from such data? To what extent, if any, does the ability 
of plan participants to access plan-related information online, such as 
through a continuous access secure website, impact conventional 
retention behavior? What methodologies exist, or are in development, 
for measuring retention of disclosures by participants and 
beneficiaries?
    Question 8. Participant and beneficiary engagement; decision-
making.
    Do plans collect data on participant and beneficiary levels of 
engagement in response to participant notices and disclosures and, if 
so, what data is collected, and how is ``engagement'' defined and 
determined? What impediments, if any, prevent or dissuade plans from 
collecting such data? If such data is collected, do plans act in 
response to such data and, if so, are there illustrative examples? For 
example, are there circumstances when plans act based upon evidence of 
a participant's lack of engagement? To the extent sensitive or 
confidential information may be used in efforts to enhance engagement 
with participants and beneficiaries, do best practices exist for plans 
to ensure that such information is accessible but is not 
inappropriately used or disclosed to other parties? Do plans collect 
data on the extent to which disclosures impact participant and 
beneficiary behavior and decision-making? If so, how is this impact 
assessed? Is certain information or are certain disclosures more likely 
to elicit engagement or modify individuals' behavior? If so, which 
information or disclosures, and how? Do plans and plan service 
providers have ready access to information on when or how often plan 
participants and beneficiaries visit a plan's website or open plan-
related emails or text messages? Are there any impediments to plans 
collecting and considering such information in assessing engagement and 
effectiveness? If so, what are those impediments?
2. Plans, Plan Administrators, and Plan Service Providers--Furnishing 
Required Disclosures
    Question 9. Provision of preferred contact information to plans.
    Section 319 of SECURE 2.0 requires that the Agencies' report to 
Congress include an analysis of ``how participants and beneficiaries 
are providing preferred contact information.'' Given the fact-based 
nature of this analysis, the Agencies request data, statistics, or 
other information from plans about whether, when, how, and for what 
reasons (e.g., upon hire or plan eligibility, residential move, 
physical or mental impairment, marriage or divorce) participants and 
beneficiaries communicate and update their contact information for plan 
purposes. For example, new employees or participants may indicate their 
preferred contact information in plan enrollment materials, and 
existing employees and existing participants may update their preferred 
contact information directly on a plan's website, a plan recordkeeper's 
website, a mobile application, or the plan sponsor's human resources or 
other database, or by contacting the plan sponsor directly. Likewise, 
some employees, participants, and beneficiaries may need to provide and 
update contact information on file with their employer, their unions 
(if collectively bargained), and other plans that may be administered 
by different recordkeepers or other entities. Do plans remind 
employees, participants, and beneficiaries to check the accuracy of 
their contact information and update as necessary and, if so, when, and 
how? Are there circumstances when plans check the accuracy of a 
participant's or beneficiary's contact information, and, if so, under 
what circumstances; how are such checks performed? Are there observable 
trends in this data, for example, changes in response to Agency 
regulatory or other actions or changes in the retirement plan industry?
    Question 10. Delivery--furnishing disclosures to participants and 
beneficiaries.
    Section 319 of SECURE 2.0 requires that the Agencies' report to 
Congress include an analysis of both ``the methods by which plan 
sponsors and plans are furnishing disclosures'' and ``the rate at which 
participants and beneficiaries are receiving, accessing, understanding, 
and retaining disclosures.'' (Emphasis added.) Each Agency has specific 
guidelines as to methods by which plans may furnish disclosures to 
participants and beneficiaries, including the circumstances in which 
disclosures may be furnished electronically (e.g., via email, website 
access, mobile and smartphone applications, or audio and video 
channels), rather than on paper.\27\ As information technology evolves, 
so might the standard for ``effective''

[[Page 4220]]

delivery of information to participants and beneficiaries. Are there 
certain disclosures that participants and beneficiaries prefer to 
receive on paper (e.g., highly individualized and complex notices, such 
as quarterly and annual benefit statements), and, if so, what explains 
this preference? Commenters are encouraged to provide data, statistics, 
or other information about which delivery methods are most commonly 
used by plans and factors that may explain participants' preferences 
for certain delivery methods. For plans that deliver disclosures 
electronically, does data exist on participant opt-in and opt-out 
rates, practices, and trends in such rates? Do plans regularly reassess 
compliance with applicable electronic delivery standards or survey plan 
participants and beneficiaries regarding their preferences for how to 
receive information from their plans? Do plans periodically evaluate 
whether disclosures are successfully received by participants and 
beneficiaries and, if so, how? What data exists about rates of receipt? 
Are there observable trends in this data, for example, in response to 
Agency regulatory or other actions, changes in participant and 
beneficiary preferences, technological advances, or changes in the 
retirement plan industry? To what extent are age, demographics, or 
residence relevant to participants' and beneficiaries' effective access 
to and use of electronic means of delivery? If these variables are 
relevant, what are best practices for addressing differential use of 
and access to electronic disclosures?
---------------------------------------------------------------------------

    \27\ 29 CFR 2520.104b-31 (the Labor Department's 2020 safe 
harbor); 29 CFR 2520.104b-1 (the Labor Department's 2002 safe 
harbor); 26 CFR 1.401(a)-21 and Sec.  54.4980F-1, Q&A-13 (Treasury 
Department guidance); 29 CFR part 4000, subpart B (PBGC issuance 
rules).
---------------------------------------------------------------------------

    Question 11. Availability of model notices or model language.
    In some cases, the Agencies offer, or are required by statute to 
provide, model notices or model language that can be used by plans or 
plan administrators to satisfy the content requirements of required 
disclosures.\28\ To what extent does the provision of models reduce the 
cost to plans for preparing required disclosures? The Agencies 
generally provide model notices or language in English; what are 
commenters' views on the Agencies' provision of model notices or 
language in one or more languages other than English and how to 
determine which languages? To what extent does the provision of such 
models impact the understanding and retention of the disclosure by a 
participant or beneficiary? Are there additional model notices or model 
language that the Agencies could provide for specific disclosures that 
would be especially helpful to plans or that would reduce the burden on 
plans to prepare such disclosures?
---------------------------------------------------------------------------

    \28\ See, e.g., 29 CFR 2520.101-3(e)(2) (model notice of 
blackout periods under individual account plans); 29 CFR 4041.23(b) 
and 4041.43(b) (model notices of intention to terminate plan); IRS 
Notice 2020-62, 2020-35 IRB 476, (model Code section 402(f) 
notices).
---------------------------------------------------------------------------

    Question 12. Participant and beneficiary feedback regarding notices 
and disclosures.
    Please describe the extent to which plans receive questions from, 
or are made aware of concerns from, individuals who receive required 
notices and disclosures regarding those communications. What procedures 
are in place to respond to such questions and concerns? Are there 
common themes in the types of issues that result in inquiries from 
participants and beneficiaries? Is there any notable difference in the 
types of questions and concerns that are raised by telephone, by email, 
or otherwise?
    Question 13. Costs of disclosure.
    What is the aggregate annual cost to defined contribution and 
defined benefit plans to make required disclosures? Are costs 
significantly higher for certain disclosures than others and, if so, 
which disclosures and why? To what extent are these disclosure costs 
paid from plan assets or from the general assets of a plan sponsor? Are 
there ways to lower disclosure costs without negatively impacting the 
comprehensiveness or effectiveness of the information that is required 
to be disclosed? Commenters are encouraged to provide any data relevant 
to these questions.

B. Reporting to the Agencies

    As with required disclosures, the effectiveness of required 
reporting to the Agencies can be measured from different perspectives. 
Section 319 of SECURE 2.0 explicitly refers to ``simplify[ing] 
reporting for . . . plans,'' evidencing concern for plans' 
perspectives. But the effectiveness of the Code's and ERISA's reporting 
requirements also may be evaluated from the perspectives of the 
Agencies receiving required reports, the participants and beneficiaries 
of reporting plans, and third parties who may be able to aggregate and 
use reported information to inform academic, industry, participant 
advocacy, or other work. Each of these perspectives is raised below.
1. Submission of Required Reports by Plans
    Question 14. Frequency and timing of reports.
    What is your view on the number of reports that must be filed with 
the Agencies each plan or calendar year and how this number impacts a 
plan's ability to implement reporting procedures efficiently? Are the 
timing requirements of any reports in conflict or inefficient, either 
for one Agency or across the Agencies? Could the filing deadlines for 
any reports, either for ERISA or the Code or both, be modified to allow 
consolidation of more than one report without compromising the 
Agencies' timely receipt of information?
    Question 15. Content of reports.
    Please describe the extent to which any of the reports required by 
ERISA or the Code collect more, or less, information than you believe 
should be necessary for the Agencies to discharge their oversight and 
other responsibilities? If so, which reports, and how could they be 
modified to inform the Agencies more effectively? Do any challenges 
exist in obtaining information from sources subject to laws other than 
the Code and ERISA (e.g., Federal securities laws or State insurance 
laws) that is necessary, or helpful, for preparation of reports?
    Question 16. Clarity of reporting requirements.
    Are the instructions for reports clear and helpful? Are there 
particular reports for which the instructions could be simplified or 
could more accurately reflect the administration of retirement plans? 
Should the Agencies make instructions available in languages other than 
English? Should instructions be written subject to a readability 
standard, such as in a manner reasonably calculated to be understood by 
the target filers (for example large companies versus small employers)?
    Question 17. Efficacy of filing methods for reports.
    Do the filing methods for reports need updating or improvement? For 
reports that must be filed electronically, are there circumstances when 
plans would benefit from waiver procedures permitting paper filings 
and, if so, what plans, what reports, and what circumstances? 
Alternatively, are there reports that must be filed on paper that would 
be more effectively filed electronically, and, if so, as a mandate or 
as an option?
    Question 18. Improving Agency assistance with reporting 
requirements.
    Are the Agencies' customer service personnel and capabilities 
sufficient or in need of improvement for the questions about the 
content of reports, technical support for completing and filing 
reports, or otherwise? Should the Agencies monitor, track, and disclose 
user experience for any reports? If so, how should the Agencies compile 
this data and use it to inform improvements

[[Page 4221]]

to customer service protocols, including technical support?
    Question 19. Costs of reporting.
    What is the aggregate annual cost to defined contribution and 
defined benefit plans to submit reports required by ERISA and the Code? 
Are costs significantly higher for certain reports than others and, if 
so, which reports, and why? To what extent are such reporting costs 
paid from plan assets versus from the general assets of the plan 
sponsor? Commenters are encouraged to provide any data relevant to 
these questions.
2. Participants, Beneficiaries, and Third Parties--Use of Publicly 
Available Information and Data
    Question 20. Use of reports and data by participants and 
beneficiaries.
    Is there information reported to the Agencies, but not 
affirmatively required to be furnished by plans to participants and 
beneficiaries, that might be beneficial to participants and 
beneficiaries? If so, what information and to what benefit? Could such 
information be furnished in a cost-effective manner or made available 
to participants and beneficiaries? If so, please describe these methods 
and how they could be cost effective. Is there evidence that 
participants and beneficiaries request to review any reports (or 
certain information or data) that is reported?
    Question 21. Use of reports and data by other entities.
    Do any of the reports required by ERISA and the Code fail to 
collect information that data users other than the Agencies, including 
the public at large, data aggregators, and participant advocates, would 
find useful? If so, which reports and information, and how could 
reports be modified to collect this information in a cost-effective 
manner? How would this information be used and how would requesting 
this information benefit retirement plan participants and 
beneficiaries, plans, or others? What information should be publicly 
available, and, if so, how might confidentiality, security, or other 
concerns be managed (e.g., protection of return information as required 
by Code section 6103)? To what extent do plans and plan service 
providers give third parties, such as data aggregators and consultants, 
access to plan data (e.g., plan investment lineups and associated fees, 
costs, and performance data) that could facilitate the development of 
analytic tools and comparative analyses that could be used by plan 
fiduciaries, participants, or beneficiaries to improve retirement 
outcomes? Are there impediments to the disclosure of useful plan data 
to such third parties that are inappropriate or that interfere with the 
cost-effective delivery of such analytic tools or comparative analyses?

C. Additional Questions

    Question 22. Coordination of Agencies' reporting and disclosure 
requirements.
    Would participants, beneficiaries, and plans benefit from increased 
coordination between the Agencies regarding one or more reporting or 
disclosure requirements and, if so, how? What steps could the Agencies 
take to achieve such coordination, for example, which specific 
disclosures, reports, or information could be effectively harmonized by 
the Agencies and how could the Agencies do so in a cost-effective 
manner?
    Question 23. Alternative methods for information collection.
    SECURE 2.0 section 319(b)(3) explicitly provides that the Agencies 
may ``conduct appropriate surveys and data collection to obtain any 
needed information.'' If this authority were used, what data or 
information should be collected, and what are cost-effective methods 
that the Agencies could employ to collect such data or information, for 
example, by consulting with a balanced group of participant and 
employer representatives, conducting focus groups, preparing surveys, 
or holding a joint hearing?
    Question 24. Additional information.
    Is there any information or are there any suggestions that the 
Agencies should consider that are not addressed by the questions in 
this RFI and that may be important to achieve the desired effectiveness 
of reporting and disclosures as set forth in SECURE 2.0 section 319?
* * * * *

    Signed at Washington, DC.
Rachel D. Levy,
Associate Chief Counsel (Employee Benefits, Exempt Organizations, and 
Employment Taxes), Internal Revenue Service, Department of the 
Treasury.
Helen H. Morrison,
Benefits Tax Counsel, Department of the Treasury.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
Gordon Hartogensis,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2024-01077 Filed 1-22-24; 8:45 am]
BILLING CODE 4510-29-P; 4830-01-P; 7709-02-P