[Federal Register Volume 77, Number 73 (Monday, April 16, 2012)]
[Rules and Regulations]
[Pages 22488-22489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9095]



29 CFR Part 4003

RIN 1212-AB04

Rules for Administrative Review of Agency Decisions; Section 4071 
Penalty Assessments

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.


SUMMARY: This final rule amends the Pension Benefit Guaranty 
Corporation's administrative review regulation to make it applicable to 
assessments of

[[Page 22489]]

penalties for failure to timely provide certain notices or other 
material information. Under the rule, such assessments will be subject 
to reconsideration in accordance with the provisions of the regulation.

DATES: Effective May 16, 2012 and applicable to determinations made on 
or after that date.

([email protected]), Manager, or Deborah C. Murphy 
([email protected]), Attorney, Regulatory and Policy Division, 
Legislative and Regulatory Department, Pension Benefit Guaranty 
Corporation, 1200 K Street NW., Washington, DC 20005-4026; 202-326-
4024. (TTY/TDD users may call the Federal relay service toll free at 1-
800-877-8339 and ask to be connected to 202-326-4024.)

SUPPLEMENTARY INFORMATION: The Pension Benefit Guaranty Corporation 
(PBGC) administers the pension plan termination insurance program under 
title IV of the Employee Retirement Income Security Act of 1974 
(ERISA). PBGC's regulation on Rules for Administrative Review of Agency 
Decisions (29 CFR Part 4003) provides rules governing the issuance of 
initial determinations by PBGC involving the matters set forth in the 
regulation and procedures for requesting and obtaining PBGC review of 
those determinations, either by appeal (a more formal proceeding) or by 
request for reconsideration (a less formal process), depending on the 
type of matter. A person that fails to exhaust administrative remedies 
under the regulation with respect to a determination may not be able to 
raise in court some legal defenses against enforcement of the 
determination that might otherwise have been available.
    Section 4071 of ERISA authorizes PBGC to assess a penalty for 
failure to timely provide any notice or other material information 
required under ERISA sections 4001-4071 or 303(k)(4) or regulations 
thereunder. PBGC published policy guidance on its assessment and review 
of section 4071 penalties on March 3, 1992 (at 57 FR 7605), and July 
18, 1995 (at 60 FR 36837).\1\ On January 12, 2001 (at 66 FR 2857), PBGC 
published a proposed rule on Assessment of and Relief from Penalties 
under both ERISA section 4007 (dealing with payment of premiums) and 
ERISA section 4071.\2\ Among the proposed actions was amendment of the 
administrative review regulation to make determinations with respect to 
penalties under section 4071 subject to that regulation, in the class 
of matters reviewable by reconsideration.\3\ No comments were received 
on the proposal.\4\

    \1\ The 1995 policy statement generally replaced the 1992 
    \2\ Although it was published as a proposal with an invitation 
for public comment, the 2001 penalty policy proposed rule was (as 
its preamble stated) not subject to notice and comment rulemaking 
requirements under section 553 of the Administrative Procedure Act 
because it dealt only with general statements of PBGC policy and 
with PBGC procedural rules. On November 17, 2006 (at 71 FR 66867), 
PBGC published a final rule adding a penalty policy appendix, drawn 
from the 2001 proposed rule, to its regulation on Payment of 
    \3\ Premium penalties under ERISA section 4007 are already 
covered by the administrative review regulation. Premium penalty 
determinations are in the class of matters for which reconsideration 
is provided.
    \4\ On May 7, 2004 (at 69 FR 25797), PBGC proposed a new penalty 
policy for failures to issue Participant Notices as required under 
ERISA section 4011 and PBGC's regulation on Disclosure to 
Participants (29 CFR part 4011), the provisions of which are 
inapplicable to plan years starting after 2006. Comments received on 
that proposal were relevant to some aspects of the 2001 proposal, 
but not to the administrative review provisions.

    This final rule amends the administrative review regulation 
consistent with the 2001 proposal. This change will promote uniformity 
in PBGC's procedures for making and reviewing determinations. The 
provisions of the administrative review regulation will supersede any 
inconsistent provisions of the 1992 and 1995 penalty policy statements; 
in other respects, those policy statements will be unaffected.


    The amendment made by this rule applies to determinations under 
section 4071 made on or after May 16, 2012.

Compliance With Rulemaking Guidelines

    PBGC has determined that this action is not a ``significant 
regulatory action'' under the criteria set forth in Executive Order 
    This rule is not subject to notice and comment rulemaking 
requirements under section 553 of the Administrative Procedure Act 
because it deals only with PBGC procedural rules. Because no general 
notice of proposed rulemaking is required, the Regulatory Flexibility 
Act does not apply. See 5 U.S.C. 601(2), 603, 604.
    This action is associated with retrospective review and analysis in 
PBGC's Plan for Regulatory Review \5\ issued in accordance with 
Executive Order 13563 on ``Improving Regulation and Regulatory 

    \5\ See www.pbgc.gov/documents/plan-for-regulatory-review.pdf.

List of Subjects in 29 CFR Part 4003

    Administrative practice and procedure, Organization and functions 
(Government agencies), Pension insurance, Pensions.

    For the reasons given above, PBGC is amending 29 CFR part 4003 as 


1. The authority citation for part 4003 continues to read as follows:

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

2. In Sec.  4003.1, paragraph (a) is amended by removing the words 
``(b)(1) through (b)(4)'' and adding in their place the words ``(b)(1) 
through (b)(5)'' and by removing the words ``(b)(5) through (b)(10)'' 
and adding in their place the words ``(b)(6) through (b)(11)''; 
paragraphs (b)(5) through (b)(10) are redesignated as paragraphs (b)(6) 
through (b)(11); and a new paragraph (b)(5) is added to read as 

Sec.  4003.1  Purpose and scope.

* * * * *
    (b) Scope. * * *
    (5) Determinations with respect to penalties under section 4071 of 
* * * * *

    Issued in Washington, DC, this 6th day of April 2012.
Joshua Gotbaum,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2012-9095 Filed 4-13-12; 8:45 am]