[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Rules and Regulations]
[Pages 55742-55745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-23361]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4000, 4041A, and 4281

RIN 1212-AB28


Multiemployer Plans; Electronic Filing Requirements

AGENCY: Pension Benefit Guaranty Corporation.

[[Page 55743]]


ACTION: Final rule.

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SUMMARY: This final rule amends Pension Benefit Guaranty Corporation's 
(PBGC) regulations to require electronic filing of certain 
multiemployer notices. These changes make the provision of information 
to PBGC more efficient and effective.

DATES: Effective October 19, 2015. See Applicability in SUPPLEMENTARY 
INFORMATION.

FOR FURTHER INFORMATION CONTACT: Catherine B. Klion 
([email protected]), Assistant General Counsel for Regulatory 
Affairs, or Donald McCabe ([email protected]), Attorney, Office of 
the General Counsel, 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:

Executive Summary

Purpose of the Regulatory Action

    This final rule is part of PBGC's ongoing implementation of the 
Government Paperwork Elimination Act and is consistent with the Office 
of Management and Budget's directive to remove regulatory impediments 
to electronic transactions. The rule builds in flexibility to allow 
PBGC to update the electronic filing process as technology advances.
    PBGC's legal authority for this regulatory action comes from 
section 4002(b)(3) of the Employee Retirement Income Security Act of 
1974 (ERISA), which authorizes PBGC to issue regulations to carry out 
the purposes of title IV of ERISA; section 4041A(f)(2), which gives 
PBGC authority to prescribe reporting requirements for terminated 
plans; section 4245(e)(4), which authorizes PBGC to issue regulations 
on notices related to insolvency and resource benefit levels; and 
section 4281(d), which directs PBGC to prescribe by regulation the 
notice requirements to plan participants and beneficiaries in the event 
of a benefit suspension under an insolvent plan.

Major Provisions of the Regulatory Action

    This final rule requires the following notices to be filed 
electronically with PBGC: Notices of termination under part 4041A, 
notices of insolvency and of insolvency benefit level under parts 4245 
and 4281, and applications for financial assistance under part 4281.
    This final rule does not involve any conforming amendments 
reflecting the Multiemployer Pension Reform Act of 2014 (MPRA).\1\ The 
rule affects only notices to PBGC (not notices to participants or other 
parties).
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    \1\ Division O of the Consolidated and Further Continuing 
Appropriations Act, 2015, Public Law 113-235, enacted December 16, 
2014. On June 19, 2015, (at 80 FR 35220), PBGC published an interim 
final rule on Partitions of Eligible Multiemployer Plans under MPRA, 
http://www.pbgc.gov/documents/2015-14930.pdf. PBGC expects to 
publish further guidance under MPRA.
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Background

    The Pension Benefit Guaranty Corporation (PBGC) is a federal 
corporation created under the Employee Retirement Income Security Act 
of 1974 (ERISA) to guarantee the payment of pension benefits earned by 
more than 41 million American workers and retirees in nearly 24,000 
private-sector defined benefit pension plans. PBGC administers two 
insurance programs--one for single-employer defined benefit pension 
plans and a second for multiemployer defined benefit pension plans.
    The multiemployer plan program protects benefits of approximately 
10 million workers and retirees in approximately 1,400 plans. A 
multiemployer plan is a collectively bargained pension arrangement 
involving two or more unrelated employers, usually in a common industry 
such as construction or trucking, where workers move from employer to 
employer on a regular basis. Under PBGC's multiemployer program, when a 
plan becomes insolvent, PBGC provides financial assistance directly to 
the insolvent plan sufficient to pay guaranteed benefits to 
participants and beneficiaries, and the reasonable and necessary 
administrative expenses of the insolvent plan.
    ERISA section 4041A provides for two types of multiemployer plan 
terminations: mass withdrawal and plan amendment. A mass withdrawal 
termination occurs when all employers withdraw or cease to be obligated 
to contribute to the plan. A plan amendment termination occurs when the 
plan adopts an amendment that provides that participants will receive 
no credit for service with any employer after a specified date, or an 
amendment that makes it no longer a covered plan. Unlike terminated 
single-employer plans, terminated multiemployer plans generally 
continue to pay all vested benefits out of existing plan assets and 
withdrawal liability payments.

Multiemployer Plan Notices

    PBGC's regulation on Termination of Multiemployer Plans (29 CFR 
part 4041A) implements these provisions, among other things by 
requiring the plan sponsor of a terminated multiemployer plan to file 
with PBGC a notice of termination containing basic information 
necessary to alert PBGC to possible demands on the multiemployer 
insurance program.
    ERISA section 4245(e) requires two types of notices:
     Notice of insolvency, which states a plan sponsor's 
determination that the plan is or may become insolvent.
     Notice of insolvency benefit level, which states the level 
of benefits that will be paid during an insolvency year.
    Section 4245(e)(4) provides that these notices are to be given in 
accordance with rules promulgated by PBGC. PBGC's regulation on Notice 
of Insolvency, 29 CFR part 4245, establishes the procedure for 
complying with these notice requirements. The regulation allows a 
single notice of insolvency to cover more than one plan year, thereby 
generally permitting plan sponsors to file only a single notice (a 
notice of insolvency benefit level) for any future year. The regulation 
also prescribes, among other things, the manner in which the notices 
must be given. The recipients of these notices include PBGC, in 
addition to other parties.
    PBGC's regulation on Duties of Plan Sponsor Following Mass 
Withdrawal (29 CFR part 4281) implements the requirements of ERISA 
section 4281. The regulation prescribes rules under which plan sponsors 
must:
     Provide notices to PBGC and to participants and 
beneficiaries that a plan is, or will be, insolvent (Sec. Sec.  4281.43 
and 4281.44).
     Provide notices of insolvency benefit level to PBGC and to 
participants and beneficiaries who are in pay status or may reasonably 
be expected to enter pay status during the year (Sec. Sec.  4281.45 and 
4281.46).
     Submit an application to PBGC for financial assistance if 
a plan is, or will be, unable to pay guaranteed benefits when due 
(Sec.  4281.47).

Mandatory Electronic Filing; Current Requirements

    Section 4000.3 of PBGC's regulation on Filing, Issuance, 
Computation of Time, and Record Retention (29 CFR part 4000) requires 
electronic filing of premium declarations under part 4007 (Payment of 
Premiums) and information required under part 4010 (Annual Financial 
and Actuarial Information Reporting).

[[Page 55744]]

Regulatory Review

    On January 18, 2011, the President issued Executive Order 13563 
``Improving Regulation and Regulatory Review,'' to ensure that Federal 
regulations seek more affordable, less intrusive means to achieve 
policy goals, and that agencies give careful consideration to the 
benefits and costs of those regulations. PBGC's Plan for Regulatory 
Review,\2\ identifies several regulatory areas for review, including 
the multiemployer regulations referred to above. PBGC will continue to 
review its regulations with a view to developing more ideas for 
improvement.
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    \2\ http://www.pbgc.gov/documents/plan-for-regulatory-review.pdf.
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Proposed Rule

    On April 3, 2015 (at 80 FR 18172), PBGC published a proposed rule 
to amend parts 4000, 4041A, and 4281 to require electronic filing of 
certain multiemployer notices.\3\ PBGC received no comments on the 
proposed rule. The final regulation is unchanged from the proposed 
regulation.
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    \3\ http://www.gpo.gov/fdsys/pkg/FR-2015-04-03/pdf/2015-07602.pdf.
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Regulatory Changes

    The final regulation requires electronic filing with PBGC of the 
following multiemployer plan filings:
     Notices of termination under part 4041A.
     Notices of insolvency and of insolvency benefit level 
under part 4245.
     Notices of insolvency and of insolvency benefit level 
under part 4281 (following mass withdrawal).
     Applications for financial assistance under part 4281 
(following mass withdrawal).
    PBGC will grant case-by-case exemptions to the electronic filing 
requirement in appropriate circumstances for filers that demonstrate 
good cause for exemption. PBGC believes that requiring electronic 
filing for these notices will result in benefits for both the public 
and the government.
    Electronic filing will simplify the filing process for the public 
by building in all required and optional fields and including readily 
accessible guidance in the application. Electronic filing is expected 
to reduce the need to contact PBGC for assistance. PBGC estimates that 
the amendments in the rule will result in a total savings in 
administrative burdens for the public of 25 percent (about 22 hours and 
$99,000 annually).
    Electronic filing will also result in greater efficiencies for the 
government. Up to now, documents submitted by filers needed to be 
manually uploaded to electronic depositories. With electronic filing, 
those documents will be automatically uploaded. Electronic filing will 
also save the government time by reducing the need to provide 
assistance to filers. It will also improve the government's 
recordkeeping, records retrieval, and records archiving process by 
eliminating the possibility of missing or lost paper files due to human 
error.
    Moreover, the PBGC expects electronic filing will improve the 
government's ability to protect potential personally identifiable 
information (PII), or otherwise sensitive information, since only pre-
approved personnel will have access to PBGC's electronic records 
systems, and limited access will be approved for officials of pension 
plans.
    PBGC did not propose to require electronic filing of notices of 
benefit reduction and of restoration of benefits under part 4281. PBGC 
may in the future require that other multiemployer filings also be made 
electronically.

Applicability

    The amendments in this final rule will be applicable for filings 
made on or after January 1, 2016.

Compliance With Rulemaking Requirements

Executive Order 12866 ``Regulatory Planning and Review'' and Executive 
Order 13563 ``Improving Regulation and Regulatory Review''

    PBGC has determined that this final rule is not a ``significant 
regulatory action'' under Executive Order 12866. Executive Orders 12866 
and 13563 direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public health and safety effects, distributive 
impacts, and equity). Executive Order 13563 emphasizes the importance 
of quantifying both costs and benefits, of reducing costs, of 
harmonizing rules, and of promoting flexibility.
    Under Section 3(f)(1) of Executive Order 12866, a regulatory action 
is economically significant if ``it is likely to result in a rule that 
may . . . [h]ave an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities.'' PBGC has determined that this final rule does not cross 
the $100 million threshold for economic significance and is not 
otherwise economically significant (see discussion above).

Regulatory Flexibility Act

    The Regulatory Flexibility Act imposes certain requirements with 
respect to rules that are subject to the notice and comment 
requirements of section 553(b) of the Administrative Procedure Act and 
that are likely to have a significant economic impact on a substantial 
number of small entities. Unless an agency determines that a final rule 
is not likely to have a significant economic impact on a substantial 
number of small entities, section 603 of the Regulatory Flexibility Act 
requires that the agency present a regulatory flexibility analysis at 
the time of the publication of the final rule describing the impact of 
the rule on small entities and seeking public comment on such impact. 
Small entities include small businesses, organizations and governmental 
jurisdictions.
    For purposes of the Regulatory Flexibility Act requirements with 
respect to this final rule, PBGC considers a small entity to be a plan 
with fewer than 100 participants. This is the same criterion PBGC uses 
in other aspects of its regulations involving small plans, and is 
consistent with certain requirements in Title I of ERISA and the 
Internal Revenue Code, as well as the definition of a small entity that 
the Department of Labor (DOL) has used for purposes of the Regulatory 
Flexibility Act.
    Thus, PBGC believes that assessing the impact of the rule on small 
plans is an appropriate substitute for evaluating the effect on small 
entities. The definition of small entity considered appropriate for 
this purpose differs, however, from a definition of small business 
based on size standards promulgated by the Small Business 
Administration (13 CFR 121.201) pursuant to the Small Business Act. 
Therefore, in the proposed rule, PBGC requested comments on the 
appropriateness of the size standard used in evaluating the impact on 
small entities of the amendments to the benefit payments regulation. No 
comments were received on this point.
    On the basis of its definition of small entity, PBGC certifies 
under section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.) that the amendments in this rule will not have a significant 
economic impact on a substantial number of small entities. Very few 
multiemployer plans are

[[Page 55745]]

small.\4\ And, as discussed above, the amendments will not have a 
significant economic impact on entities of any size. Accordingly, as 
provided in section 605 of the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.), sections 603 and 604 will not apply.
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    \4\ According to data from 2012 5500 filings, only 32 of 1,407 
active plans have fewer than 100 participants. Further, PBGC is not 
aware of a multiemployer plan that was established and covered by 
ERISA that was not initially a large plan. Generally it is only 
after a plan terminates and employers withdraw from the plan that a 
plan might reduce in size to fewer than 100 participants.
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Paperwork Reduction Act

    PBGC is submitting the information requirements under this final 
rule to the Office of Management and Budget (OMB) for review and 
approval under the Paperwork Reduction Act. An agency may not conduct 
or sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.
    The collection of information in part 4041A is approved under 
control number 1212-0020 (expires June 30, 2017). PBGC estimates that 
there will be 10 respondents each year and that the total annual burden 
of the collection of information will be about 17 hours and $3,850.00 
(about 2 hours and $385 per respondent).
    The collection of information in part 4245 is approved under 
control number 1212-0033 (expires June 30, 2017). PBGC estimates that 
there will be one respondent each year and that the total annual burden 
of the collection of information will be about $1,550.
    The collection of information in part 4281 is approved under 
control number 1212-0032 (expires July 31, 2017). PBGC estimates that 
there will be 324 respondents each year and that the total annual 
burden of the collection of information will be about 61 hours and 
$309,000 (about $950 per respondent).

List of Subjects

29 CFR Part 4000

    Pension insurance, Pensions, Reporting and recordkeeping 
requirements.

29 CFR Parts 4041A and 4281

    Employee benefit plans, Pension insurance, Reporting and 
recordkeeping requirements.

    For the reasons given above, the PBGC is amending 29 CFR parts 
4000, 4041A, and 4281 as follows.

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

0
1. The authority citation for part 4000 continues to read as follows:

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

0
2. In Sec.  4000.3, revise paragraph (b)(3) to read as follows:


Sec.  4000.3  What methods of filing may I use?

* * * * *
    (b) * * *
    (3) When making filings to PBGC under parts 4041A, 4245, and 4281 
of this chapter (except for notices of benefit reductions and notices 
of restoration of benefits under part 4281), you must submit the 
information required under these parts electronically in accordance 
with the instructions on the PBGC's Web site, except as otherwise 
provided by the PBGC.
* * * * *

PART 4041A--TERMINATION OF MULTIEMPLOYER PLANS

0
3. The authority citation for part 4041A continues to read as follows:

    Authority: 29 U.S.C. 1302(b)(3), 1341a, 1441.

0
4. In Sec.  4041A.11, add paragraph (d) to read as follows:


Sec.  4041A.11  Requirement of notice.

* * * * *
    (d) How and where to file. Filings to PBGC under this subpart must 
be submitted in accordance with the rules in subpart A of part 4000 of 
this chapter. See Sec.  4000.4 of this chapter for information on where 
to file.


Sec.  4041A.25  [Amended]

0
5. In Sec.  4041A.25, amend paragraph (d) by removing the words ``of 
the PBGC'' and adding in their place ``to the PBGC''.

PART 4281--DUTIES OF PLAN SPONSOR FOLLOWING MASS WITHDRAWAL

0
6. The authority citation for part 4281 continues to read as follows:

    Authority: 29 U.S.C. 1302(b)(3), 1341a, 1399(c)(1)(D), and 1441.


0
7. In Sec.  4281.3, revise paragraph (b) to read as follows:


Sec.  4281.3  Filing and issuance rules.

* * * * *
    (b) Method of issuance. For rules on method of issuance to 
interested parties, see Sec.  4281.32(c) for notices of benefit 
reductions, Sec.  4281.43(e) for notices of insolvency, and Sec.  
4281.45(c) for notices of insolvency benefit level.
* * * * *

0
8. In Sec.  4281.43, revise paragraph (a) to read as follows:


Sec.  4281.43  Notices of insolvency.

    (a) Requirement of notices of insolvency. A plan sponsor that 
determines that the plan is, or is expected to be, insolvent for a plan 
year shall file with the PBGC and issue to plan participants and 
beneficiaries notices of insolvency. Once notices of insolvency have 
been filed with the PBGC and issued to plan participants and 
beneficiaries, no notice of insolvency needs to be issued for 
subsequent insolvency years. Notices shall be delivered in the manner 
and within the time prescribed in this section and shall contain the 
information described in Sec.  4281.44.
* * * * *

0
9. In Sec.  4281.47, revise paragraph (b) to read as follows:


Sec.  4281.47  Application for financial assistance.

* * * * *
    (b) When, how, and where to apply. When the plan sponsor determines 
a resource benefit level that is less than guaranteed benefits, it 
shall apply for financial assistance at the same time that it submits 
its notice of insolvency benefit level pursuant to Sec.  4281.45. When 
the plan sponsor determines an inability to pay guaranteed benefits for 
any month, it shall apply for financial assistance within 15 days after 
making that determination. Application to the PBGC for financial 
assistance shall be made in accordance with the rules in subpart A of 
part 4000 of this chapter. See Sec.  4000.4 of this chapter for 
information on where to apply.
* * * * *

    Issued in Washington, DC, this 14 day of September, 2015.
Alice C. Maroni,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2015-23361 Filed 9-16-15; 8:45 am]
BILLING CODE 7709-02-P