[Federal Register Volume 60, Number 61 (Thursday, March 30, 1995)]
[Notices]
[Pages 16504-16507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7742]



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[[Page 16505]]

DEPARTMENT OF LABOR

Office of the Secretary


Delinquent Filer Voluntary Compliance Program

AGENCY: Office of the Secretary, Labor.

ACTION: Expedited review of the information collected pursuant to the 
Delinquent Filer Voluntary Compliance Program under the Paperwork 
Reduction Act.

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SUMMARY: The Pension and Welfare Benefits Administration, Department of 
Labor, in carrying out its responsibilities under the Paperwork 
Reduction Act (44 U.S.C. Chapter 35, 5 CFR 1320 (53 FR 16618, May 10, 
1988)), is submitting the information collection required under the 
Delinquent Filer Voluntary Compliance Program (Program) for review. The 
information collected is required to be reported by pension and welfare 
benefit plan administrators under Title I of the Employee Retirement 
Income Security Act of 1974. Plan administrators who choose to 
participate in this Program, which offers a substantial reduction in 
penalties, are required to submit minimal documentation along with 
payment to verify plan information and facilitate Federal record 
keeping.

DATES: Pension and Welfare Benefits Administration has requested an 
expedited review of this submission under the Paperwork Reduction Act 
due to the time-sensitive nature of the collection and the penalties 
that accumulate daily due to late filing or failure to file annual 
reports; this Office of Management and Budget (OMB) review has been 
requested to be completed by April 14, 1995.

FOR FURTHER INFORMATION CONTACT:
Comments and questions regarding the Delinquent Filer Voluntary 
Compliance Program should be directed to Mr. Kenneth A. Mills, 
Departmental Clearance Officer, Office of Information Resource 
Management Policy, U.S. Department of Labor, 200 Constitution Avenue, 
N.W., Room N-1301, Washington, D.C. 20210, 202 219-5095. Comments 
should also be sent to OMB, Office of Information and Regulatory 
Affairs, Attn: OMB Desk Officer for PWBA, NEOB Room 10235, Washington, 
D.C. 20503, 202 395-7316.
    Any member of the public who wants to comment on the information 
collection request which has been submitted to OMB should advise Mr. 
Mills of this intent at the earliest possible date.

Average Burden Hours/Minutes Per Response: 21 minutes
Frequency of Response: Annual
Number of Respondents: 10,000 (year 1); 7,000 in following years
Total Annual Burden Hours: 3,500
Total Annual Responses: 10,000
Affected Public: Business and other for-profit; Not-for-profit 
institutions
Respondents Obligation to Reply: Voluntary.

    Signed at Washington, D.C. this 24th day of March 1995.
Kenneth A. Mills,
Departmental Clearance Officer.

Supporting Statement For Paperwork Reduction Act Submissions

Delinquent Filer Voluntary Compliance Program 1210-AA49

A. Justification
    1. Explain the circumstances that make the collection of 
information necessary. Identify any legal or administrative 
requirements that necessitate the collection.
    Attach a copy of the appropriate section of each statute and of 
each regulation mandating or authorizing the collection of information.
    The Secretary of Labor has the authority, under section 502(c)(2) 
of ERISA, to assess civil penalties of up to $1,000 a day against plan 
administrators who fail or refuse to file complete and timely annual 
reports (Form 5500 Series Annual Return/Reports) as required under 
section 101(b)(4) of ERISA and the Secretary's regulations codified in 
29 CFR part 2520. Pursuant to 29 CFR 2560.502c-2 and 2570.60 et seq. 
PWBA has maintained a program for the assessment of civil penalties for 
noncompliance with the annual reporting requirements. Under this 
program, plan administrators filing annual reports after the date on 
which the report was required to be filed may be assessed $40 per day 
for each day an annual report is filed after the date on which the 
annual report(s) was required to be filed, without regard to any 
extensions for filing. Plan administrators who fail to file an annual 
report may be assessed a penalty of $300 per day, up to $30,000 per 
year, until a compete annual report is filed. Penalties are applicable 
to each annual report required to be filed under Title I of ERISA. The 
Department may, in its discretion, waive all or part of a civil penalty 
assessed under section 502(c)(2) upon a showing by the administrator 
that there was reasonable cause for the failure to file a complete and 
timely annual report.
    The Department has determined that the possible assessment of the 
above described civil penalties may deter certain delinquent filers 
from voluntarily complying with the annual reporting requirements under 
Title I of ERISA. In an effort to encourage annual reporting 
compliance, therefore, the Department has decided to implement the 
Delinquent Filer Voluntary Compliance (DFVC) Program, under which 
administrators otherwise subject to the assessment of higher civil 
penalties will be permitted to pay reduced civil penalties for 
voluntarily complying with the annual reporting requirements under 
Title I of ERISA, referred to as the ``Program.''
    2. Indicate how, by whom, how frequently, and for what purpose the 
information is to be used. For revisions, extensions, and 
reinstatements of a currently approved collection, indicate the actual 
use the agency has made of the information received from the current 
collection.
    Under Title I of ERISA, the administrator of each welfare and each 
pension plan, unless otherwise exempt, is required to file an annual 
report with the Secretary containing the information set forth in 
Section 103 of ERISA. The statutory annual reporting requirements under 
Title I of ERISA, Title IV of ERISA, and the Internal Revenue Code are 
satisfied generally by filing, in accordance with the instructions to 
the forms and related regulations, the appropriate annual return/report 
(the Form 5500 Series). The Form 5500 Series collection has been given 
OMB control number 1210-AA16. The Form 5500 Series collection has been 
approved under the Paperwork Reduction Act on October 28, 1994.
    The DFVC Program is intended to afford eligible plan administrators 
the opportunity to avoid the assessment of civil penalties otherwise 
applicable to administrators who fail to file timely annual reports for 
plan years beginning on or after January 1, 1988. Eligible 
administrators may avail themselves of the DFVC Program by complying 
with the filing requirements and paying the specified civil penalties, 
set out in the Federal Register Notice.
    The DFVC Program is available only to a plan administrator who 
complies with each of the requirements the Notice prior to the date on 
which the administrator:
    (a) is notified in writing, pursuant to 29 CFR 2560.502c-2, of the 
Department's intention to assess a civil penalty under section 
502(c)(2) of ERISA for failure to file a timely annual report; or
    (b) is otherwise notified in writing by the Department of a failure 
to file a timely annual report under Title I of ERISA. [[Page 16506]] 
    It is anticipated that the administrator of an employee welfare or 
benefit plan would make use of the DFVC Program no more than once per 
year, and would avoid use of the Program entirely if the statutory 
filing obligation were met in a timely manner.
    The only information collection requirement in the Notice is the 
requirement of providing data necessary to identify the plan along with 
the penalty payment. This data is the only means by which each penalty 
payment will be associated with the relevant plan. With respect to most 
pension plans and welfare plans, the requirement is satisfied by 
sending, along with the penalty payment, a copy of the first page of 
the delinquent annual report, which under current procedures is sent to 
the IRS.
    Under current procedures, certain pension plans for highly 
compensated employees, commonly ``top hat'' plans, and apprenticeship 
plans may file a one-time statement in lieu of annual reports. With 
respect to such plans the information collection requirements of the 
Notice are satisfied by sending a completed first page of an annual 
report form along with the penalty payment. The one-time statements are 
required to be sent to a different address within the Department. The 
Program is designed to allow the processing of all penalty payments at 
a single location within the Department.
    3. Describe any consideration of information technology used to 
reduce burden, as well as any technical or legal obstacles to reducing 
burden.
    The Department, in conjunction with the IRS, PBGC, and OMB, is 
currently exploring means by which to enhance the Form 5500 filing 
review, processing, and data system. Until that time when an electronic 
filing alternative is available, the Department has chosen the least 
burdensome collection method for receiving notification of 
participation in the Program and correctly accounting for payment of 
penalties.
    4. Describe efforts to identify duplication. Show specifically why 
any similar information already available cannot be used or modified 
for use for the purpose(s) described in 2 above.
    The Department, IRS, and PBGC utilize a consolidation annual report 
(Form 5500 Series) which eliminates the duplicative reporting that 
would otherwise result from the separate reporting to each agency. 
However, the consolidated report does not accommodate specific 
notification of the Department of participation in the Program, nor 
does it accommodate recording of payment of penalties. Therefore, the 
minimal information collection requirements of this Program were deemed 
necessary.
    There is no similar information gathered by any state or Federal 
agency or other sources that would enable the Department of effectively 
monitor participation in the Program.
    5. If the collection of information has a significant impact on a 
substantial number of small businesses or other small entities (item 15 
of the Paperwork Reduction Act Submission form), describe the methods 
used to minimize burden.
    Not Applicable.
    6. Describe the consequence to Federal program or policy activities 
if the collection is not conducted or is conducted less frequently.
    If the collection is not conducted, it may not be possible to 
institute the Program because the Department would be unable to 
determine whether persons seeking to take advantage of the reduced 
penalties offered under the Program had in fact complied with its 
conditions. The purpose of the Program is to encourage delinquent plan 
administrators to come forward and file delinquent reports. Lack of 
compliance with existing filing requirements impairs the administration 
and enforcement of the statute by the Department, as well as the IRS 
and the PBGC. The collection used in the Program creates a minimal 
burden on plan administrators who are already in breach of ERISA's 
filing requirements while giving them access to reduced penalties.
    7. Explain any special circumstances that require the collection to 
be conducted in a manner inconsistent with the general information 
collection guidelines in 5 CFR 1320.6 (e.g., payment to respondents, 
disclosure of proprietary information, etc.).
    There are no special circumstances that require the collection to 
be conducted in a manner inconsistent with the guidelines in 5 CFR 
1320.6.
    8. Describe efforts to consult with persons outside the agency to 
obtain their views on the availability of data, frequency of 
collection, the clarity of instructions and recordkeeping, disclosure, 
or reporting format (if any), and on the data elements to be recorded, 
disclosed, or reported.
    Consultation with representatives of those from whom information is 
to obtained or those who must compile records should occur at least 
once every 3 years--even if the collection of information activity is 
the same as in prior periods. There may be circumstances that mitigate 
against consultation in a specific situation. These circumstances 
should be explained.
    The employee benefit plan community is aware that the Department 
has been considering institution of a reduced penalty program for 
persons who voluntary file delinquent reports, and is generally 
supportive of the Program. The minimal information collection 
associated with the Program will not dissuade participation by 
delinquent play administrators.
    The Form 5500 Series was developed in coordination with the IRS and 
PBGC, and the DFVC Program has been reviewed by these agencies as well. 
In addition, PWBA regularly requests comments from the ERISA Advisory 
Council with respect to suggestions for reducing paperwork.
    9. Describe any assurance of confidentiality provided to 
respondents and the basis for the assurance in statute, regulation, or 
agency policy.
    The annual reports are required by law to be made available for 
inspection at the Department and at the offices of the plan 
administrators. Accordingly, since this collection is merely one page 
of the annual report, the Department provides no assurance of 
confidentiality to respondents.
    10. Provide additional justification for any questions of a 
sensitive nature, such as sexual behavior and attitudes, religious 
beliefs, and other matters that are commonly considered private. This 
justification should include the reasons why the agency considers the 
questions necessary, the specific uses to be made of the information, 
the explanation to be given to persons from whom the information is 
requested, and any steps to be taken to obtain their consent.
    There are no questions of a sensitive nature pertaining to sexual 
behavior and attitudes, religious beliefs, or other matters that are 
commonly considered private.
    11. Provide estimates of annualized cost to the Federal Government 
and to the respondents. Also, provide a description of the method used 
to estimate cost, which should include quantification of hours, 
operational expenses (such as equipment, overhead, printing, and 
support staff), any other expense that would not have been incurred 
without this collection of information.
    Based on expense estimates, the annual cost to the Department 
attributable to the receipt and maintenance of the Program is estimated 
to be approximately $150,000. This figure includes estimated costs to 
the Department for lockbox maintenance, computer services, and other 
[[Page 16507]] operational expenses such as equipment, overhead, and 
support staff.
    As reflected in item 12 below, the burden hours attributable to the 
collection by the universe of respondents is estimated to be 3,500 
hours. It is estimated that the cost to plans to complete the 
collection will range from $20 to $25 per hour. Therefore, the 
estimated aggregate cost to respondents is approximately $70,000 to 
$87,500 in the first year, and $49,000 to $61,250 in succeeding years.
    12. Provide estimates of the burden of the collection of 
information including both recordkeeping and reporting requirements. 
The statement should:
     Provide number of respondents, frequency of response, 
annual burden, and an explanation of how the burden was estimated. 
Unless directed to do so, agencies should not make special surveys to 
obtain information on which to base burden estimates. Consultation with 
a sample of potential respondents is desirable. If the burden on 
respondents is expected to vary widely because of differences in 
activity, size or complexity, show the range of estimated burden and 
explain the reasons for the variance.
    An estimated 10,000 delinquent employee benefit plan administrators 
are expected to file under the Program in the first year, and an 
estimated 7,000 filings are expected in subsequent years. Participation 
in the Program is voluntary, and filing under the Program would not be 
necessary more often than annually, and most participants would 
probably participate one time only. The annual burden per filing is 
estimated to be approximately 21 minutes, based on a pilot pretest of 
not more than nine people from both Federal employment and the private 
sector. The burden on respondents is not expected to vary widely 
because of differences in activity, size or complexity.
     If the request for approval is for more than one form, 
provide separate burden estimates for each form for which approval is 
sought and aggregate the burdens on the Paperwork Reduction Act 
Submission form. If only one form is submitted, you need not duplicate 
the information entered on the Paperwork Reduction Act Submission form.
    Not applicable.
    13. For amendments to existing collections, explain reasons for 
changes in burden, including the need for any increase.
    Not applicable.
    14. For collections of information whose results are planned to be 
published, outline plans for tabulation and publication. Address any 
complex analytical techniques that will be used. Provide the time 
schedule for the entire project, including beginning and ending dates 
of the collection of information, completion of report, publication 
dates, and other actions.
    The Form 5500 Series collection, and by extension, this DFVC 
Program collection, are not a collection of information for statistical 
use. Once collected, however, the information is available to the 
Department and the public, and it is used for purposes other than 
enforcement and disclosure.

[FR Doc. 95-7742 Filed 3-29-95; 8:45 am]
BILLING CODE 4510-22-M