[Federal Register Volume 84, Number 116 (Monday, June 17, 2019)]
[Rules and Regulations]
[Pages 27952-27955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12653]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2520

RIN 1210-AB62


Electronic Filing of Notices for Apprenticeship and Training 
Plans and Statements for Pension Plans for Certain Select Employees

AGENCY: Employee Benefits Security Administration, Department of Labor.

ACTION: Final rule.

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SUMMARY: This document contains final regulations that revise the 
procedures for filing apprenticeship and training plan notices and 
``top hat'' plan statements with the Secretary of Labor. The final 
regulations require electronic submission of these notices and 
statements, as opposed to paper filings. The final regulations will 
make filing these notices and statements easier and lower regulatory 
burdens on these plans. The final regulations also will enable the 
Department of Labor to make reported data more readily available to 
participants and beneficiaries and other

[[Page 27953]]

interested members of the public than in the past.

DATES: The final rule is effective August 16, 2019.

FOR FURTHER INFORMATION CONTACT: Marjorie M. Kress or Thomas M. 
Hindmarch, Office of Regulations and Interpretations, Employee Benefits 
Security Administration, Department of Labor, at (202) 693-8500.

SUPPLEMENTARY INFORMATION: 

A. Background

    Part 1 of Title I of the Employee Retirement Income Security Act of 
1974, as amended (ERISA), contains reporting and disclosure 
requirements applicable to plans covered by ERISA. For instance, 
sections 103 and 104 of ERISA establish requirements for the 
publication and filing of annual reports, while sections 102 and 104 of 
ERISA require plan administrators to furnish summary plan descriptions 
and summaries of material modifications or changes to participants and 
beneficiaries.
    Section 104(a)(3) of ERISA, however, authorizes the Secretary to 
exempt any welfare benefit plan from all or part of the reporting and 
disclosure obligations, or to provide simplified reporting and 
disclosure, if the Secretary finds that the requirements are 
inappropriate for these plans. Under this authority, the Secretary, in 
1980, issued 29 CFR 2520.104-22, which provides an exemption from the 
reporting and disclosure provisions of Part 1 of Title I of ERISA for 
employee welfare benefit plans that provide only apprenticeship or 
training benefits, or both, if certain conditions are met.\1\ Under 
this regulation, a welfare plan that provides only these benefits is 
not required to meet the requirements of Part 1 of Title I if the 
administrator files with the Secretary a notice as described in Sec.  
2520.104-22 by mail or personal delivery, takes steps reasonably 
designed to ensure that the information required to be contained in the 
notice is disclosed to employees of employers contributing to the plan 
who may be eligible to enroll, and makes the notice available to these 
employees upon request.
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    \1\ 40 FR 34526, 34529-34530, 34536 (Aug. 15, 1975); 45 FR 15527 
(Mar. 11, 1980).
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    Similarly, section 110(a) of ERISA permits the Secretary to specify 
an alternative form of compliance with the reporting and disclosure 
obligations of Part 1 of Title I for any pension plan or class of 
pension plans subject to ERISA if certain findings are made. Under the 
authority of section 110(a), in 1975 the Department issued 29 CFR 
2520.104-23 to provide an alternative method of compliance with the 
reporting and disclosure requirements of Part 1 of Title I for unfunded 
or insured pension plans established for a select group of management 
or highly compensated employees (``top hat'' plans).\2\ Under the 
alternative method of compliance, the administrator of a top hat plan 
satisfies the requirements for the reporting and disclosure provisions 
of Part 1 of Title I by filing a statement with the Secretary by mail 
or personal delivery to the address specified in the regulation, and by 
providing plan documents, if any, to the Secretary upon request. The 
statement must include the information listed in the regulation.
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    \2\ 40 FR 34526, 34530, 34536 (Aug. 15, 1975).
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    On September 30, 2014, the Department published in the Federal 
Register a proposed rule that would revise the procedures for filing 
apprenticeship and training plan notices under Sec.  2520.104-22 and 
top hat plan statements under Sec.  2520.104-23 to require electronic 
submission of these notices and statements.\3\ On the same date, the 
Department also made available a new web-based filing system for these 
notices and statements.\4\ Use of this web-based filing system was 
voluntary until the adoption of this final rule. Approximately 65% of 
the apprenticeship and training plan notices and approximately 54% of 
the top hat plan statements have been filed electronically since 
then.\5\
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    \3\ 79 FR 58720.
    \4\ Available at https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/e-file/tophat-plan-filing-instructions (for top hat plans) 
and https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/e-file/apprenticeship-and-training-plan-filing-instructions (for 
apprenticeship and training plan notices).
    \5\ During the three year period from January 1, 2015, to 
December 31, 2017, 112 of the 171 apprenticeship and training plan 
notices and 2,964 of the 5,444 top hat plan statements filed with 
the Department were submitted electronically using the Department's 
web-based filing system.
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    In the proposal, the Department solicited comments on the 
electronic filing mandate as well as on the design and operation of its 
web-based filing system.\6\ The Department received one written 
comment, a copy of which is available under the ``public comments'' 
section of the Department's website at https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-AB62. Although this commenter applauded the Department for recognizing 
the benefits of electronic filing of these notices and statements, the 
comment letter focused primarily on the need (in this commenters' view) 
for the Department to update its regulation pertaining to the use of 
electronic media by plan administrators to furnish disclosures to 
participants and beneficiaries. After careful consideration of the 
comment, the final rule amends 29 CFR 2520.104-22(c) (i.e., 
apprenticeship and training plan notices) and 29 CFR 2520.104-23(c) 
(i.e., top hat plan statements), as proposed.
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    \6\ In the preamble to the proposal, the Department stated that 
notices and statements will be posted on EBSA's website and 
explicitly requested public comment as to whether there are any 
concerns with making information in the notices and statements 
publicly accessible online. EBSA received no comments in response to 
this request.
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B. Final Regulation

    The final rule revises the current procedures for filing 
apprenticeship and training plan notices under Sec.  2520.104-22 and 
top hat plan statements under Sec.  2520.104-23 with the Secretary of 
Labor to require electronic submission of these notices and statements. 
The final rule does not change the current content requirements in 
either of these regulations.\7\ The final rule requires electronic 
filing with the Secretary through EBSA's website in accordance with 
instructions published by the Department. Going forward, EBSA's web-
based filing system will be the exclusive method for filing these 
notices and statements; filings by mail or personal delivery will no 
longer be accepted. The new web-based system is designed to assist 
administrators by ensuring that all of the information required by the 
regulations is included in the notice or statement before the filing 
can be completed through the website. Upon submission of a completed 
filing, the new web-based filing system sends an electronic 
confirmation of receipt to the administrator. This confirmation is not 
available through the existing paper-based filing system. The design of 
the new filing system facilitates the requirement that plan 
administrators of apprenticeship and training plans make notices 
available to participants upon request as required under Sec.  
2520.104-22(a)(3). Filings are now available to the public on the 
Department's website at http://www.dol.gov/ebsa.
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    \7\ The new web-based filing system requires filers to input an 
email address. Although neither regulation explicitly mentions an 
email address, the Department does not view this item as a content 
requirement of the regulations. Rather, the email address is needed 
for system functionality because without it the filer would not 
receive instantaneous confirmation of the filing.

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[[Page 27954]]

C. Regulatory Impact Analysis

1. Executive Orders 12866 and 13563

    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, reducing costs, harmonizing and streamlining rules, and 
promoting flexibility.
    Under Executive Order 12866, ``significant'' regulatory actions are 
subject to the requirements of the executive order and review by the 
Office of Management and Budget (OMB). Section 3(f) of Executive Order 
12866 defines a ``significant regulatory action'' as an action that is 
likely to result in a rule (1) having an annual effect on the economy 
of $100 million or more, or adversely and materially affecting a sector 
of the economy, productivity, competition, jobs, the environment, 
public health or safety, or State, local or tribal governments or 
communities (also referred to as ``economically significant''); (2) 
creating serious inconsistency or otherwise interfering with an action 
taken or planned by another agency; (3) materially altering the 
budgetary impacts of entitlement grants, user fees, or loan programs or 
the rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.
    OMB determined that this action is not ``significant'' within the 
meaning of section 3(f)(4) of the Executive Order, and therefore the 
rule was not reviewed by OMB under Executive Order 12866. The rule 
merely replaces the paper-based filing of apprenticeship and training 
plan notices and top hat plan statements with an electronic filing 
system and does not change the content of the notices and statements. 
Therefore, as discussed below, the Department has determined that this 
regulatory action will result in small cost savings that are 
attributable to reduced material and postage costs and time savings 
resulting from a more user-friendly filing system.
    This final rule is not subject to E.O. 13771 because it is not 
significant under E.O. 12866.

2. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the 
Administrative Procedures Act (5 U.S.C. 551 et seq.) 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 604 of the RFA requires the agency to present a 
final regulatory flexibility analysis describing the rule's impact on 
small entities and explaining its decision with respect to the 
application of the rule to small entities. Pursuant to section 605(b) 
of the RFA, the Department certified that the proposed rule did not 
have a significant economic impact on a substantial number of small 
entities and provided an analysis of the rationale for that 
certification. In the preamble of the proposed rule, the Department 
requested comments regarding the certification; however no comments 
were received. Based on the rationale set out in the proposal and the 
absence of any comments, the Department hereby certifies that this 
final rule will not have a significant economic impact on a substantial 
number of small entities.
    Section 610 of the RFA requires that an agency review each rule 
that has or will have a significant economic impact on a substantial 
number of small entities within ten years of publication of a final 
rule. EBSA initiates a Section 610 review to determine if the 
provisions of a rule should be continued without change, rescinded, or 
amended to minimize adverse economic impact on small entities. The 
preamble of the proposed rule requested comments on other possible 
changes or amendments to the two regulations (Sec. Sec.  2520.104-22(c) 
and 2520.104-23(c)) that are the subject of this final rule. EBSA 
received no comments in response to this request.

3. Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (PRA) (44 U.S.C. 3506(c)(2)), the Department's proposed 
regulation, ``Electronic Filing of Notices for Apprenticeship and 
Training Plans and Statements for Pension Plans for Certain Select 
Employees'' solicited comments on the information collections included 
therein. The Department also submitted an information collection 
request (ICR) to OMB in accordance with 44 U.S.C. 3507(d), 
contemporaneously with the publication of the proposed regulation, for 
OMB's review. The Department received one comment that was supportive 
of the proposed changes to the information collections.
    In connection with publication of this final regulation, the 
Department is submitting an ICR to OMB requesting approval of a 
revision to OMB Control Number 1210-0153. The Department will notify 
the public when OMB approves the revised ICR.
    A copy of the ICR may be obtained by contacting the PRA Addressee: 
G. Christopher Cosby, Office of Policy and Research, U.S. Department of 
Labor, Employee Benefits Security Administration, 200 Constitution 
Avenue NW, Room N-5718, Washington DC 20210; telephone (202) 693-8410; 
fax: (202) 2195333. These are not toll-free numbers. ICRs submitted to 
OMB also are available at http://www.Reginfo.gov.
    As stated earlier in this preamble, Sec.  2520.104-22 provides an 
exemption to the reporting and disclosure provisions of Part 1 of Title 
I of ERISA for employee welfare benefit plans that provide only 
apprenticeship or training benefits, or both, if the plan 
administrator: (1) Files a notice with the Secretary that provides the 
name of the plan, the plan sponsor's Employer Identification Number 
(EIN), the plan administrator's name, and the name and location of an 
office or person from whom interested individuals can obtain certain 
information about courses offered by the plan; (2) takes steps 
reasonably designed to ensure that the information required to be 
contained in the notice is disclosed to employees of employers 
contributing to the plan who may be eligible to enroll in any course of 
study sponsored or established by the plan; and (3) makes the notice 
available to these employees upon request. Prior to the effective date, 
the plan administrator may file the notice with the Secretary by 
mailing or delivering it to the Department at the address in the 
regulation.
    Section 2520.104-23 provides an alternative method of compliance 
with the reporting and disclosure provisions of Title I of ERISA for 
unfunded or insured plans established for a select group of management 
or highly compensated employees (i.e., top hat plans). In order to 
satisfy the alternative method of compliance, the plan administrator 
must: (1) File a statement with the Secretary of Labor that includes 
the name and address of the employer, the employer EIN, a declaration 
that the employer maintains

[[Page 27955]]

a plan or plans primarily for the purpose of providing deferred 
compensation for a select group of management or highly compensated 
employees, and a statement of the number of such plans and the 
employees covered by each; and (2) make plan documents available to the 
Secretary upon request. Only one statement needs to be filed for each 
employer maintaining one or more of the plans. Prior to the effective 
date, the statements may be filed with the Secretary by mail or 
personal delivery.
    The final rule replaces the paper-based filing of apprenticeship 
and training plan notices and top hat plan statements with an 
electronic filing system. No substantive changes have been made to the 
notices and statements. On average, the Department annually receives 
approximately 57 apprenticeship and training plan notices and 
approximately 1,815 top hat plan statement filings. The Department 
estimates in-house human resource professionals on average will spend 
10 minutes preparing each filing on the Department's electronic filing 
system. Based on the foregoing, the total burden for filing is 9 hours 
for apprenticeship and training plan notice filings and 303 hours for 
top hat plan statement filings, resulting in an overall total of 312 
burden hours. This reflects a 250-total-hour burden reduction 
(approximately $11,000 equivalent cost) from the estimated hour burden 
associated with optional paper-based filing.
    The Department assumes that no other cost burden is associated with 
this ICR, because in-house staff will prepare and electronically file 
the notices on behalf of each plan.
    These paperwork burden estimates are summarized as follows:
    Title: Alternate Reporting Methods for Apprenticeship and Training 
Plan Notices and Top Hat Plan Statements.
    OMB Control Number: 1210-0153.
    Affected Public: Private Sector--business or other for-profit and 
not-for-profit institutions.
    Respondents: 1,872 (57 apprenticeship and training plans and 1,815 
top hat plans).
    Responses: 1,872.
    Frequency of Response: Annually.
    Estimated Total Annual Burden Hours: 312 (9 hours for 
apprenticeship and training plan notices and 303 hours for top hat plan 
statements).
    Estimated Total Annual Burden Cost: $0.

4. Congressional Review Act

    The final rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.) and will be transmitted to Congress and the 
Comptroller General for review. The final rule is not a ``major rule'' 
as that term is defined in 5 U.S.C. 804, because it is not likely to 
result in (1) an annual effect on the economy of $100 million or more; 
(2) a major increase in costs or prices for consumers, individual 
industries, or Federal, State, or local government agencies, or 
geographic regions; or (3) significant adverse effects on competition, 
employment, investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign-based 
enterprises in domestic and export markets.

5. Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4), as well as Executive Order 12875, this final rule does not 
include any Federal mandate that may result in expenditures by State, 
local, or tribal governments in the aggregate of more than $100 
million, adjusted for inflation, or increase expenditures by the 
private sector of more than $100 million, adjusted for inflation.

6. Federalism Statement

    Executive Order 13132 (August 4, 1999) outlines fundamental 
principles of federalism, and requires the adherence to specific 
criteria by Federal agencies in the process of their formulation and 
implementation of policies that have substantial direct effects on the 
States, the relationship between the national government and States, or 
on the distribution of power and responsibilities among the various 
levels of government. This final rule does not have federalism 
implications because it has no substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Section 514 of ERISA provides, with certain 
exceptions specifically enumerated, that the provisions of Titles I and 
IV of ERISA supersede any and all laws of the States as they relate to 
any employee benefit plan covered under ERISA. The electronic filing 
requirements in this final rule do not alter the fundamental reporting 
and disclosure requirements of the statute for employee benefit plans, 
and, as such, have no implications for the States or the relationship 
or distribution of power between the national government and the 
States.

List of Subjects in 29 CFR Part 2520

    Employee benefit plans, Employee Retirement Income Security Act, 
Pension plans, Pension and welfare plans, Reporting and recordkeeping 
requirements, Welfare benefit plans.

    For the reasons discussed in the preamble, the Department amends 29 
CFR part 2520 as follows:

PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE

0
1. The authority citation for part 2520 is revised to read as follows:

    Authority:  29 U.S.C. 1021-1025, 1027, 1029-1031, 1059, 1134 and 
1135. Secretary of Labor's Order 1-2011, 77 FR 1088 (January 9, 
2012). Sec. 2520.101-2 also issued under 29 U.S.C. 1132, 1181-1183, 
1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.102-3, 
2520.104b-1 and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-
1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.104b-1 
and 2520.107 also issued under 26 U.S.C. 401 note, 111 Stat. 788. 
Sec. 2520.101-5 also issued under sec. 501 of Pub. L. 109-280, 120 
Stat. 780, and sec. 105(a), Pub. L. 110-458, 122 Stat. 5092.


0
2. Section 2520.104-22 is amended by revising paragraph (c) to read as 
follows:


Sec.  2520.104-22  Exemption from reporting and disclosure requirements 
for apprenticeship and training plans.

* * * * *
    (c) The notice referred to in paragraph (a) of this section shall 
be filed with the Secretary electronically in accordance with the 
instructions published by the Department.

0
3. Section 2520.104-23 is amended by revising paragraph (c) to read as 
follows:


Sec.  2520.104-23  Alternative method of compliance for pension plans 
for certain selected employees.

* * * * *
    (c) Electronic filing of statement. Statements referred to in 
paragraph (b) of this section shall be filed with the Secretary 
electronically in accordance with the instructions published by the 
Department.
* * * * *

    Signed this 31st day of May, 2019.
Preston Rutledge,
Assistant Secretary, Employee Benefits Security Administration, U.S. 
Department of Labor.
[FR Doc. 2019-12653 Filed 6-14-19; 8:45 am]
 BILLING CODE 4510-29-P