[Federal Register Volume 70, Number 45 (Wednesday, March 9, 2005)]
[Proposed Rules]
[Pages 11592-11594]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-4536]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4000 and 4007

RIN 1212-AB02


Electronic Premium Filing

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Proposed rule.

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SUMMARY: The PBGC proposes to require electronic filing of premium 
declarations. The requirement would become effective for plans with 500 
or more participants starting with the 2006 plan year and for smaller 
plans starting with the 2007 plan year. Plans could apply to the PBGC 
for exemptions on a case-by-case basis. The PBGC has instituted an on-
line e-filing facility (``My Plan Administration Account,'' or ``My 
PAA''), and during 2005 will upgrade My PAA to accept electronic 
filings made with the use of vendor or proprietary software.

DATES: Comments must be received on or before May 9, 2005.

ADDRESSES: Comments may be mailed or delivered to the Legislative & 
Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K 
Street, NW., Washington, DC 20005-4026. Comments also may be submitted 
electronically through the PBGC's Web site at http://www.pbgc.gov/regs, 
or by fax to 202-326-4112. The PBGC will make all comments available on 
its Web site, http://www.pbgc.gov. Copies of the comments may also be 
obtained by writing to the PBGC's Communications and Public Affairs 
Department at Suite 240 at the above address or by visiting that office 
or calling 202-326-4040 during normal business hours. (TTY and TDD 
users may call the Federal relay service toll-free at 1-800-877-8339 
and ask to be connected to 202-326-4040.)

FOR FURTHER INFORMATION CONTACT: James J. Armbruster, Acting Director, 
or Deborah C. Murphy, Attorney, Legislative & Regulatory Department, 
Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, 
DC 20005-4026, 202-326-4024. (For TTY/TTD users, call the Federal relay 
service

[[Page 11593]]

toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.)

SUPPLEMENTARY INFORMATION: This proposed rule is part of an ongoing 
implementation of the Government Paperwork Elimination Act by the 
Pension Benefit Guaranty Corporation (``PBGC'') and is consistent with 
the Office of Management and Budget's directive to remove regulatory 
impediments to electronic transactions. The rule addresses electronic 
submission of premium filings required under the PBGC's regulation on 
Payment of Premiums (29 CFR Part 4007) and builds in the flexibility 
needed to allow the PBGC to update the electronic filing process as 
technology advances.
    The PBGC administers the pension insurance programs under Title IV 
of the Employee Retirement Income Security Act of 1974 (``ERISA''). 
Pension plans covered by Title IV must pay annual premiums to the PBGC. 
Premium filings must include information to identify the plans for 
which premiums are paid and to demonstrate that the amounts paid are 
correct.
    The PBGC has been processing premium filings for 30 years. The 
volume of filings processed annually is in the tens of thousands. 
Processing methods have become progressively more automated, and the 
PBGC now uses specially designed premium forms that can be read by 
optical character recognition (``OCR'') devices. Even with OCR, 
however, the PBGC has found that the capture of data from paper premium 
forms and its translation into electronic data files is an imperfect 
process that inevitably gives rise to errors that can be difficult and 
burdensome to detect and correct. These errors cause problems for both 
the PBGC and premium filers, because they can lead to the issuance of 
improper bills for premiums that have in fact been paid, to delays in 
the processing of refund requests, to erroneous filing histories, etc.
    Consistent with the Government Paperwork Elimination Act, and with 
a view to reducing problems of this kind, the PBGC introduced optional 
electronic premium filing for plan years beginning in 2004 using a 
facility on its Web site (www.pbgc.gov) called ``My Plan Administration 
Account'' (``My PAA''). To make a premium filing using My PAA, a plan 
administrator or other pension practitioner logs onto a secure account 
on the PBGC's Web site and enters necessary information in on-line 
forms screens. My PAA enables practitioners to route premium filings 
among themselves electronically for the addition of information and for 
electronic certification and to submit completed filings to the PBGC 
with the click of a mouse. The information submitted can be loaded 
directly into the PBGC's data processing systems, thus eliminating the 
errors inherent in the OCR data capture process. Premium payments are 
also made on line as part of the filing process.
    My PAA streamlines the premium filing process for users, and it 
makes the PBGC's processing of premium filings faster and more 
accurate. Thus it has the potential to reduce the number of erroneous 
bills, to speed up refund processing, and in general to improve 
significantly the PBGC's ability to perform its premium collection 
functions while enhancing service to premium payers.
    The PBGC is now engaged in a project to create another premium e-
filing method, to be operational in mid-2005, to accommodate pension 
practitioners who may prefer to continue using private sector 
software--either purchased annually from a commercial developer or 
developed ``in-house''--for preparing premium filings. The PBGC will 
issue standards for structuring a computer file containing premium 
filing information; by incorporating those standards into their 
software, developers will give software users the ability to create 
premium data files that they will be able to upload to the PBGC through 
the PBGC's web site (probably through the existing My PAA portal). 
Using this new method, practitioners will be able to prepare premium 
filing information using their own software and then put the 
information into files that meet PBGC formatting standards and 
electronically transmit them to the PBGC. The PBGC expects to continue 
accepting premium payments from such filers in the same way it does 
now, by paper check, wire transfer, or Automated Clearing House.
    Against this background, the PBGC is proposing to eliminate paper 
premium forms and to require electronic filing of annual premium 
information submissions for large plans (those with 500 or more 
participants) for plan years beginning after 2005 and for all plans for 
plan years beginning after 2006. The PBGC would grant case-by-case 
exemptions to the electronic filing requirement in appropriate 
circumstances for filers that demonstrated good cause for exemption. 
(The submission of information specially requested by the PBGC in 
connection with a premium compliance review would not be affected by 
this change, nor would there be a requirement for payment to be made 
electronically.)
    The PBGC invites public comment on this proposal, including the 
500-participant cutoff that is used to determine whether a plan is 
required to begin e-filing in 2006 or 2007 (and is also used to 
determine whether a plan must pay the flat-rate premium early under 29 
CFR 4007.11(a)(2), whether contributions may or must be included in 
assets under 29 CFR 4006.4(b)(2)(iv) in determining the variable-rate 
premium, whether significant events must be taken into account under 29 
CFR 4006.4(d) when using the alternative calculation method for the 
variable-rate premium, whether a fully funded plan qualifies for a 
variable-rate premium exemption under 29 CFR 4006.5(a)(1), and whether 
a plan may base its variable-rate premium on accrued rather than vested 
benefits under 29 CFR 4006.5(b)).

Compliance With Rulemaking Guidelines

    The PBGC has determined, in consultation with the Office of 
Management and Budget (``OMB''), that this proposed rule is a 
``significant regulatory action'' under Executive Order 12866. OMB has 
therefore reviewed this proposed rule under Executive Order 12866.
    The PBGC certifies under section 605(b) of the Regulatory 
Flexibility Act that the amendments in this rule would not have a 
significant economic impact on a substantial number of small entities. 
The PBGC expects electronic premium filing to be no more burdensome 
than paper filing for filers generally and will grant exemptions from 
the electronic filing requirement for good cause in appropriate 
circumstances. Accordingly, as provided in section 605 of the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.), sections 603 and 604 
do not apply.
    The PBGC is submitting the information requirements contained in 
this proposed rule to OMB for review and approval under the Paperwork 
Reduction Act. Copies of the PBGC's request may be obtained free of 
charge by contacting the PBGC Communications and Public Affairs 
Department, suite 240, 1200 K Street, NW., Washington, DC 20005, 202-
326-4040. This proposed rule would modify paperwork collections under 
both part 4000 (OMB control number 1212-0059) and part 4007 (OMB 
control number 1212-0009).
    The PBGC needs the information required to be submitted under part 
4007 to identify the plans for which

[[Page 11594]]

premiums are paid and to determine whether the amounts paid are 
correct.
    The PBGC estimates that it will receive premium filings annually 
from about 28,900 plan administrators and that the total annual burden 
of the collection of information will be about 3,478 hours and 
$18,172,550. (These estimates include paper and electronic filings.)
    Comments on the paperwork provisions under this proposed rule 
should be mailed to the Office of Information and Regulatory Affairs, 
Office of Management and Budget, Attention: Desk Officer for the 
Pension Benefit Guaranty Corporation, Washington, DC 20503. Although 
comments may be submitted through May 9, 2005, the Office of Management 
and Budget requests that comments be received on or before April 8, 
2005 to ensure their consideration. Comments may address (among other 
things)--
     Whether the proposed collection of information is needed 
for the proper performance of the PBGC's functions and will have 
practical utility;
     The accuracy of the PBGC's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used;
     Enhancement of the quality, utility, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.

List of Subjects

29 CFR Part 4000

    Pension insurance, Pensions, Reporting and recordkeeping 
requirements.

29 CFR Part 4007

    Penalties, Pension insurance, Pensions, Reporting and recordkeeping 
requirements.
    For the reasons given above, the PBGC proposes to amend 29 CFR 
parts 4000 and 4007 as follows.

PART 4000--FILING, ISSUANCE, COMPUTATION OF TIME, AND RECORD 
RETENTION

    1. The authority citation for part 4000 continues to read as 
follows:

    Authority: 29 U.S.C. 1082(f), 1302(b)(3).

    2. In Sec.  4000.3, paragraph (a) is amended by removing ``You may 
file'' and adding in its place ``Except for premium declarations, you 
may file; by redesignating paragraph (b) as paragraph (c) and revising 
its heading to read ``Information on electronic filings.''; and by 
adding a new paragraph (b) to read as follows:


Sec.  4000.3  What methods of filing may I use?

* * * * *
    (b) Required electronic filings. You must file premium declarations 
electronically except to the extent that the PBGC grants an exemption 
for good cause in appropriate circumstances.
    (1) This electronic filing requirement applies to filings for--
    (i) Plan years beginning after 2005 for plans that were required to 
pay premiums for 500 or more participants for the plan year preceding 
the premium payment year and
    (ii) Plan years beginning after 2006 for all other plans.
    (2) This electronic filing requirement does not apply to 
information you file to comply with a request we make under Sec.  
4007.10(c) of this chapter (dealing with providing record information 
in connection with a premium compliance review).
    3. In Sec.  4000.4, remove the last sentence and add two new 
sentences in its place to read as follows:


Sec.  4000.4  Where do I file my submission?

    * * * You do not have to provide an address for electronic premium 
submissions made through our web site. We are responsible for ensuring 
that such submissions go to the proper place.
    4. In Sec.  4000.23, add a new sentence at the end of paragraph (a) 
and at the end of paragraph (b)(3) to read as follows:


Sec.  4000.23  When is my submission or issuance treated as filed or 
issued?

    (a) * * * A submission made through our web site is considered to 
have been sent when you perform the last act necessary to indicate that 
your submission is filed and cannot be further edited or withdrawn.
    (b) * * *
    (3) * * * A submission made through our web site is considered to 
have been received when we receive an electronic signal that you have 
performed the last act necessary to indicate that your submission is 
filed and cannot be further edited or withdrawn.
    5. In Sec.  4000.29, add three new sentences at the end of 
paragraph (a) introductory text to read as follows:


Sec.  4000.29  What if I use electronic delivery?

    (a) * * * A submission made through our web site is considered to 
have been transmitted when you perform the last act necessary to 
indicate that your submission is filed and cannot be further edited or 
withdrawn. You do not have to provide an address for electronic premium 
submissions made through our web site. We are responsible for ensuring 
that such submissions go to the proper place.
* * * * *

PART 4007--PAYMENT OF PREMIUMS

    6. The authority citation for part 4007 continues to read as 
follows:

    Authority: 29 U.S.C. 1302(b)(3), 1303(a), 1306, 1307.

    7. Section 4007.3 is revised to read as follows:


Sec.  4007.3  Filing requirement; method of filing.

    The estimation, declaration, reconciliation, and payment of 
premiums shall be made in accordance with the instructions posted on 
the PBGC's Web site (www.pbgc.gov). No later than the applicable due 
date specified in Sec.  4007.11, the plan administrator of each covered 
plan shall file in the prescribed format the prescribed information and 
any premium payments due. Information must be filed electronically 
except to the extent that the PBGC grants an exemption for good cause 
in appropriate circumstances. The requirement to file electronically 
applies to filings for plan years beginning after 2005 for plans that 
were required to pay premiums for 500 or more participants for the plan 
year preceding the premium payment year and to filings for plan years 
beginning after 2006 for all other plans. (The requirement to file 
electronically does not apply to information filed to comply with a 
PBGC request under Sec.  4007.10(c) (dealing with providing record 
information in connection with a premium compliance review).)
    8. Section 4007.4 is revised to read as follows:


Sec.  4007.4  Where to file.

    See Sec.  4000.4 of this chapter for information on where to file.

    Issued in Washington, DC, this 3rd day of March, 2005.
Bradley D. Belt,
Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 05-4536 Filed 3-8-05; 8:45 am]
BILLING CODE 7708-01-P