Federal Register, Volume 87 Issue 99 (Monday, May 23, 2022)

[Federal Register Volume 87, Number 99 (Monday, May 23, 2022)]
[Rules and Regulations]
[Pages 31133-31164]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10658]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2520

PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4065

RIN 1210-AB97

Annual Information Return/Reports

AGENCY: Internal Revenue Service, Treasury; Employee Benefits Security
Administration, Labor; Pension Benefit Guaranty Corporation.

ACTION: Final forms revisions.

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SUMMARY: This document contains final forms and instructions revisions
for the Form 5500 Annual Return/Report of Employee Benefit Plan and
Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit
Plan, effective for plan years beginning on or after January 1, 2022.
The changes to the forms and instructions in this document primarily
implement annual reporting changes for defined benefit plans included
in that proposal. A limited number of instruction changes focus on
reporting for multiple-employer pension plans (including pooled
employer plans). The remaining changes are technical changes that are
part of the annual rollover of the Form 5500 and Form 5500-SF forms and
instructions.

DATES: The final forms and instructions revisions in this document are
effective for plan years beginning on or after January 1, 2022.

FOR FURTHER INFORMATION CONTACT: Janet Song, Florence Novellino, or
Colleen Brisport Sequeda, Office of Regulations and Interpretations,
Employee Benefits Security Administration, U.S. Department of Labor
(DOL), (202) 693-8500 for questions related to reporting requirements
under Title I of ERISA. For information related to the IRS reporting
requirements under the Internal Revenue Code, contact Cathy Greenwood,
Employee Plans Program Management Office, Tax Exempt and Government
Entities, (470) 639-2503. For information related to PBGC reporting and
changes in this document, including proposed changes to the actuarial
schedules, contact Karen Levin, Regulatory Affairs Division, Office of
the General Counsel, Pension Benefit Guaranty Corporation, (202) 229-
3559.
Customer service information: Individuals interested in obtaining
general information from the DOL concerning Title I of ERISA may call
the EBSA Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the DOL's
website (www.dol.gov/agencies/ebsa).

SUPPLEMENTARY INFORMATION:

I. Background

Titles I and IV of the Employee Retirement Income Security Act of
1974 (ERISA) and the Internal Revenue Code (Code), generally require
pension and other employee benefit plans to file annual returns/reports
concerning, among other things, the financial condition and operations
of the plans.\1\ Filing a Form 5500 Annual Return/Report of Employee
Benefit Plan (Form 5500) or, if eligible, a Form 5500-SF Short Form
Annual Return/Report of Small Employee Benefit Plan (Form 5500-SF),
together with any required schedules and attachments (together ``the
Form 5500 Annual Return/Report''),\2\ in accordance with related
instructions, generally satisfies these annual reporting requirements.
ERISA section 103 broadly sets out annual financial reporting
requirements for employee benefit plans under Title I of ERISA. The
Form 5500 Annual Return/Report, and related instructions and
regulations, are also promulgated under the DOL's general regulatory
authority in ERISA sections 109 and 505.
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\1\ Sections 101 and 104 of Title I and section 4065 of Title IV
of ERISA and sections 6057(b), 6058(a), and 6059(a) of the Code, and
related regulations, impose annual reporting and filing obligations
on pension and welfare benefit plans, as well as on certain other
entities. Plan administrators, employers, and others generally
satisfy these annual reporting obligations by filing the Form 5500
or Form 5500-SF.
\2\ References to the ``Form 5500 Annual Return/Report'' may
include, depending on the context, the Form 5500, the Form 5500-SF,
and the Form 5500-EZ, Annual Return of One Participant (Owners/
Partners and Their Spouses) Retirement Plan or a Foreign Plan (Form
5500-EZ). The Form 5500-EZ is a return that is required to satisfy
section 6058(a) of the Code only. Form 5500-EZ filers are not
subject to Title I of ERISA.
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The Form 5500 Annual Return/Report serves as the principal source
of information and data available to the Department of Labor (DOL or
the Department), the Internal Revenue Service (IRS), and the Pension
Benefit Guaranty Corporation (PBGC) (collectively the ``Agencies'')
concerning the operations, funding, and investments of approximately
844,000 pension and welfare benefit plans that file.\3\ ERISA plans
cover roughly 158 million workers, retirees, and dependents of private
sector pension and welfare plans \4\ with estimated assets of $12.9
trillion.\5\ Accordingly, the Form 5500 Annual Return/Report is
essential to each Agency's enforcement, research, and policy
formulation programs, as well as for the regulated community, which
makes increasing use of the information as more capabilities develop to
interact with the data electronically. The data is also an important
source of information for use by other Federal agencies, Congress, and
the private sector in assessing employee benefits, tax, and economic
trends and policies. The Form 5500 Annual Return/Report also serves as
a primary means by which the operations of plans can be monitored by
participating employers in multiple-employer plans and other group
arrangements, by plan participants and beneficiaries, and by the
general public.
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\3\ Estimates are based on 2019 Form 5500 filings. DOL notes
that single employer welfare plans with under 100 participants that
are unfunded or insured (generally don't hold assets in trust) are
exempt from filing a Form 5500 under 29 CFR 2520.104-29. Therefore,
while DOL estimates there are 2.0 million health plans and 662,000
non-health welfare plans, respectively, only 69,000 and 91,000 of
these plans filed a 2019 Form 5500.
\4\ Source: DOL/EBSA calculations using the Auxiliary Data for
the March 2020 Annual Social and Economic Supplement to the Current
Population Survey.
\5\ EBSA based these estimates on the 2019 Form 5500 Annual
Return/Report filings, reported SIMPLE assets from the Investment
Company Institute (ICI) Report: The U.S. Retirement Market, First
Quarter 2021, and the Federal Reserve Board's Financial Accounts of
the United States Z.1 December 9, 2021.
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On September 15, 2021, the Agencies published a notice of proposed
forms revisions (NPFR) to amend the Form 5500 Annual Return/Report
primarily to implement annual reporting changes related to legislative
provisions in the Setting Every Community Up for Retirement Enhancement
Act of 2019 (SECURE Act) focused on multiple-employer pension plans
(MEPs) and defined contribution reporting groups (DCGs). The NPFR also
set forth additional proposed changes intended to improve reporting on
multiemployer and single-employer defined benefit pension plans,
updated reporting on Form 5500 Annual Return/Report to

[[Page 31134]]

make the financial information collected on the Form 5500 Annual
Return/Report more useful and usable, enhanced the reporting of certain
tax qualification and other compliance information by retirement plans,
and transferred to the DOL Form M-1 (Report for Multiple Employer
Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception
(ECEs)) (Form M-1) participating employer information for multiple-
employer welfare arrangements that are required to file the Form M-
1.\6\ 86 FR 51488 (Sept. 15, 2021). The DOL simultaneously published a
proposed rulemaking (NPRM) required to implement the proposed forms
revisions. 86 FR 51284 (Sept. 15, 2021). The NPFR and the NPRM are
collectively referred to as the September 2021 proposal.
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\6\ The SECURE Act was enacted on December 20, 2019, as Division
O of the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-
94).
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The Agencies received 114 comments on the September 2021 proposal.
The comments, which were all posted on the Department's website,
generally focused on the proposed changes for the 2022 plan year forms
and on future rulemakings. In December 2021, the Department published a
final forms revisions rulemaking (2021 Final Forms Revisions) that set
forth a narrow set of changes to the instructions for the Form 5500 and
Form 5500-SF, effective for plan years beginning on or after January 1,
2021. 86 FR 73976 (Dec. 29, 2021). Those instruction changes generally
implemented annual reporting changes for MEPs, including pooled
employer plans (PEPs).\7\ The Department noted in that publication that
other changes to the Form 5500 Annual Return/Report would be the
subject of one or more separate and later final notices to address
other elements of the September 2021 proposal.
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\7\ Specifically, the 2021 Final Forms Revisions adopted
revisions to the instructions for the 2021 Form 5500 Annual Return/
Report that: (1) Note that a pooled employer plan operated by a
pooled plan provider that meets the definition under ERISA section
3(43) is a multiple-employer plan that files a single Form 5500
Annual Return/Report; (2) require defined contribution multiple-
employer pension plans, including pooled employer plans, to report
aggregate account balance information by employer in addition to
existing ERISA section 103(g) reporting requirements on
participating employer information; and (3) require ``pooled
employer plans'' to indicate whether they are in compliance with the
Form PR registration requirements and provide the AckID number for
their latest Form PR filing.
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This document sets forth a limited number of annual reporting
changes that would apply beginning with the 2022 plan year Form 5500
Annual Return/Report. These changes focus mainly on finalizing the
improvements in annual reporting for defined benefit pension plans that
were included in the September 2021 proposal, but also include some
further annual reporting changes for MEPs.\8\ Specifically, the annual
reporting changes for 2022 being adopted in this document are revisions
to Schedules MB, SB, and R and their respective instructions to improve
reporting by defined benefit plans subject to Title IV of ERISA and
additions to the plan characteristics codes reportable on line 8 of
Form 5500 and line 9 of Form 5500-SF that require defined contribution
MEPs (including PEPs) to be identified as such. No changes to the DOL's
implementing regulations are required for these forms and instructions
changes.
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\8\ A Form 5500 Annual Return/Report for the 2022 plan year
generally is not required to be filed until seven months after the
end of the 2022 plan year, e.g., July 31, 2023, for calendar year
plans, and a 2\1/2\-month extension is available by filing IRS Form
5558, Application for Extension of Time to File Certain Employee
Plan Returns, on or before the normal due date.
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In this document, the Agencies are not adopting final annual
reporting changes based on other proposals included in the September
2021 proposal because of the need to coordinate the careful
consideration of public comments and other regulatory processes for
adopting final changes to the Form 5500 Annual Return/Report with a
separate contractual development schedule for integrating forms and
instructions changes into the wholly-electronic EFAST2 filing system
that receives and displays Form 5500 Annual Return/Report filings.
ERISA section 103 broadly sets out annual reporting requirements
for employee benefit plans. The Form 5500 Annual Return/Report and the
DOL's implementing regulations are promulgated through notice and
comment rulemaking under general ERISA regulatory authority and
specific ERISA provisions authorizing limited exemptions to these
requirements and simplified reporting and disclosure for welfare plans
under ERISA section 104(a)(3), simplified annual reports under ERISA
section 104(a)(2)(A) for pension plans that cover fewer than 100
participants, and alternative methods of compliance for all pension
plans under ERISA section 110. The Form 5500 Annual Return/Report
filings are also information collections for the Agencies, subject to a
separate clearance process under the Paperwork Reduction Act (PRA).
EFAST2, on the other hand, is operated by a private sector government
contractor on behalf of the Agencies. Each year the EFAST2 system is
rolled over for the coming year's annual return/report filings; for
example, the system must be updated to reflect changes from the 2021
plan year return/report filings to the 2022 plan year return/report
filings. That rollover process is governed by a contractual development
schedule that sets deadlines designed to ensure that forms and
instructions changes are smoothly integrated into the EFAST2 system and
the products developed by private software developers to provide filing
services to employee benefit plans. Integration of the regulatory and
EFAST2 processes is less complicated in years that do not involve
material changes to the forms or instructions. These processes,
however, are considerably more challenging when the Agencies propose
substantial changes to the forms and instructions.
As noted above, the Agencies received 114 public comments on the
September 2021 proposal. The comments were from a wide range of
stakeholders. Some commenters were generally supportive of the proposed
changes while others objected to some aspects of the proposal.
Objections include those based on an alleged lack of legal authority or
conflicts with legislative intent, challenges to the value of some of
the proposed information collections, and concerns about administrative
costs and burdens of some of the proposed annual reporting requirements
that would purportedly create disincentives for employers to establish
or continue to offer employee benefit plans to their employees. Some
public commenters also suggested alternative approaches for some of the
proposed annual reporting changes, and a range of commenters argued for
delayed applicability dates for some proposed changes if they were
adopted as final revisions to the forms and instructions.
The Agencies are still evaluating public comments on elements of
the September 2021 proposal not included in these final forms
revisions, including DCG reporting and related audit issues,\9\

[[Page 31135]]

Schedule MEP and related reporting requirements regarding MEPs,
financial statement improvements to the Schedule H and Schedules of
Assets, changes in participant counting methodology for Independent
Qualified Public Accountant (IQPA) purposes, changes regarding
reporting on participating employers for MEWAs that file the Form M-1,
and additional questions on pension plan compliance with certain Code
requirements. These were areas in which a number of commenters
suggested a delay in implementation, substantial revisions, or re-
proposals. The Agencies agree that sufficient lead time for programming
and systems changes, as well as time to develop contracts and other
communications among plans and service providers is needed to properly
implement these significant changes to annual reporting requirements.
The Agencies also believe that, in light of the public comments on
these aspects of the September 2021 proposal, employee benefit plan
stakeholders are best served by the Agencies taking additional time to
consider the range of public comments on these proposals and develop
final rules that are cost-effective and improve the annual report data
in a way that is protective of the retirement security interests of
participants and beneficiaries. Accordingly, rather than rush
consideration of issues and decision-making on these important annual
reporting issues, the Agencies have decided that any changes to the
Form 5500 Annual Return/Report in connection with the above listed
elements of the September 2021 proposal will be addressed either in a
further final forms revisions notice based on the September 2021
proposal, or re-proposed with modifications in a separate proposal that
would focus on a broader range of improvements to the annual reporting
requirements. As the Department noted in the September 2021 proposal,
the Department added an additional regulatory project to its semi-
annual agenda as part of a separate project with the IRS and PBGC to:
(i) Modernize the financial and other annual reporting requirements on
the Form 5500 Annual Return/Report; (ii) continue an ongoing effort to
make investment and other information on the Form 5500 Annual Return/
Report more data mineable; and (iii) consider potential changes to
group health plan annual reporting requirements, among other
improvements that would enhance the Agencies' ability to collect
employee benefit plan data in a way that best meets the needs of
compliance projects, programs, and activities. See www.reginfo.gov for
more information. In the Agencies' view, this approach is the best way
to allow for appropriate consideration of relevant public comments and
facilitate a smooth and efficient process for integrating any new
schedules or other annual reporting changes into the EFAST2 annual
rollover process for Form 5500 Annual Return/Report filings.
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\9\ The SECURE Act directed DOL and Treasury to develop a
consolidated reporting option for certain groups of defined
contribution or individual account plans. Section 202 of the SECURE
Act provides that the Secretaries, shall, in cooperation, modify
annual return/report so that all members of a group of defined
contribution or individual account plans described in section 202(c)
may file a single aggregated annual return/report satisfying the
requirements of both section 6058 of the Code and section 104 of
ERISA. The SECURE Act further provides that, in developing the
consolidated return/report, the Secretaries may require any
information regarding each plan in the group as such Secretaries
determine is necessary or appropriate for the enforcement and
administration of the Code and ERISA. The SECURE Act also requires
that the consolidated return/report include such information as will
enable participants in any plan using a consolidated return/report
to identify the consolidated return/report filed with respect to
their plan.
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Discussed below are final forms revisions on specific elements of
the September 2021 proposal with respect to which the Agencies
completed review of the public comments and reached conclusions on
final forms and instructions changes in time to coordinate those
changes into the EFAST2 development cycle for the 2022 plan year Form
5500 Annual Return/Report.\10\
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\10\ Consistent with the Agencies' annual updates to the Form
5500 Annual Return/Report, the final versions of the 2022 plan year
forms and instructions may include minor technical edits or
corrections that do not require notice and comment under the PRA, or
the APA, or review under any relevant Executive Order.
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II. 2022 Form 5500 Annual Return/Report Changes

A. Schedules MB, SB, and R--Modifications and Additions to Information
Reported

As described more fully below, the Agencies are adding new
questions and revising existing questions to the Form 5500 Annual
Return/Report Schedule MB (Multiemployer Defined Benefit Plan and
Certain Money Purchase Plan Actuarial Information), Schedule SB
(Single-Employer Defined Benefit Plan Actuarial Information), and
Schedule R (Retirement Plan Information), and modifying the
contribution and benefit attachment requirements to enable the Agencies
to more easily access defined benefit pension plans' information and
project more precisely insurance programs' liabilities. For both
single-employer and multiemployer defined benefit pension plans, the
Agencies are providing plans with the option to provide certain
required attachments in a spreadsheet file (CSV format).
1. Schedule MB Modifications
In summary, and as described in more detail below, the changes to
Schedule MB and its instructions include the following: (1) Modify
Schedule MB, line 3 instructions to require that additional information
be included in the currently required attachment that shows the date
and amount of each withdrawal liability amount paid to the plan (i.e.,
a breakdown between lump sum amounts and amounts that are part of a
schedule of periodic payments); (2) modify Schedule MB by clarifying
the line 4f instructions and Schedule MB language concerning when or if
plans in critical status or critical and declining status are projected
to either emerge or become insolvent; (3) modify Schedule MB by adding
a new requirement in a new line 6f to report information about the
interest assumption used to determine the present value of vested
benefits for withdrawal liability determinations; (4) modify Schedule
MB for the questions related to the line 6 ``expense load'' to better
align with the various ways multiemployer plans incorporate expense
loads into their calculations; (5) modify Schedule MB, line 8 by
requiring additional information about benefits and contributions for
plans with 1,000 or more total participants at the beginning of the
plan year; and (6) modify Schedule MB by changing the benefit
information required to be included in the ``age/service'' scatter
attachment (required for PBGC-insured multiemployer plans with active
participants).
a. Line 3--Contributions Made to the Plan for the Plan Year
Currently, line 3 of Schedule MB requires that if any of the
employer contributions reported in line 3 include amounts owed for
withdrawal liability, an attachment must be provided listing the total
withdrawal liability amounts and the dates such amounts were
contributed. In the NPFR, the Agencies proposed to modify the
instructions to line 3 to require that the total withdrawal liability
amounts reported on the attachment be broken down between periodic
withdrawal liability amounts and lump sum withdrawal liability amounts.
The Agencies received several comments on proposed changes to the
withdrawal liability attachment. Two commenters expressed opposite
views about whether the additional information should be reported. One
expressed support because the additional detail will result in more
transparency. The other expressed concern because, in the commenter's
opinion, that additional level of details could be misinterpreted by
bankers and creditors. Because the only additional detail being added
to the attachment relates to type of payment (i.e., whether a payment
is part of a series of periodic payments or a lump sum), the Agencies
do not share that concern and are therefore requiring the breakdown, as
proposed. Two commenters asked the Agencies to clarify when a
withdrawal liability

[[Page 31136]]

payment should be considered a periodic payment and when it should be
considered a lump sum payment in situations where it is not clear which
payment type applies (e.g., where an employer making annual periodic
payments settles the remaining obligation with a lump sum payment or
makes a lump sum payment to cover delinquent periodic payments). The
Agencies agree that clarification for such situations would be helpful
and are revising the instructions to line 3 accordingly. One commenter
noted that information about withdrawal liability payments is not
maintained by a plan's actuary and requested that, rather than
expanding the information that is reported on the Schedule MB
attachment, all of the detailed information about withdrawal liability
payments (i.e., date, amount and type of payment) be reported as an
attachment to a part of the Form 5500 Annual Return/Report that someone
other than the actuary (e.g., the plan sponsor or auditor) is
responsible for completing (e.g., Schedule R). The Agencies acknowledge
that the plan's actuary does not have direct access to information
about withdrawal liability payments but the same is true of the other
information that is reported on Schedule MB (e.g., date and amount of
contributions) and, to date, this does not appear to have posed a
problem. The Agencies continue to believe that the withdrawal liability
information should be provided on an attachment to Schedule MB because
Schedule MB is where information about contributions to the plan,
including withdrawal liability payments, is reported. Accordingly, no
changes are being made in response to this comment.
b. Line 4f--Rehabilitation Plan Projected To Emerge From Critical or
Critical and Declining Status
Currently, line 4f of Schedule MB requires completion by a plan
that is in critical or critical and declining status. The year the plan
is projected to emerge from critical status or become insolvent is
reported on Schedule MB, and an illustration of year-by-year cash flow
projections is provided in a required attachment to line 4f. The
Agencies' review of filers' previous responses to line 4f suggested
that the instructions on how to fill out this line correctly might have
been unclear to filers. In the NPFR, the Agencies proposed to modify
the instructions to line 4f and to clarify the time period for the
year-by-year cash flow projection and the basis for the projections.
Two commenters wrote that the instructions needed further
clarification, especially with respect to how the instructions describe
the first and last year to be included in the projection. One of those
commenters questioned whether the required projection period would
necessitate doing additional projections (as opposed to reporting
projections that had to be done to determine the year of emergence/
insolvency). In response, the Agencies are clarifying in the final
forms revisions both the time period and basis for projection in line
4f. The Agencies believe the revised instructions will make clear that
the projections to be reported in the attachments are projections that
have already been done.
c. Line 6--Checklist for Actuarial Assumptions
Currently, line 6 of Schedule MB is where filers provide
information about the actuarial assumptions used to determine plan
liabilities. The Agencies proposed in the NPFR to add a new item to
line 6 (line 6f) regarding the interest rate used to determine the
present value of vested benefits for withdrawal liability
determinations. With respect to plans that do not use a single interest
rate for this purpose, the proposed instructions required the reporting
of the single equivalent interest rate that produces the same present
value of vested benefits. Two commenters expressed concerns about the
extra work it would take to determine the single equivalent interest
rate noted above. The same commenters also requested clarification as
to which withdrawal liability calculations should be considered when
determining the equivalent single interest rate that produced the same
result (i.e., is it based on when the withdrawal liability amount is
assessed or when the employer withdrew). In response, the Agencies are
revising this question and instructions in these final forms revisions.
As revised, the instructions provide that the filer will check a box in
a new line, 6f(1), to report whether the interest assumption for this
purpose is a single interest rate, ERISA section 4044 interest rates,
or something else (i.e., ``Other''). If the ``single rate'' box is
checked, the single interest rate is reported in a new line, 6f(2). If
the ``Other'' box is checked, the filer must provide an attachment
describing the interest rate assumption. Lastly, if this question
doesn't apply (i.e., if no employers withdrew and were assessed
withdrawal liability during the plan year), the filer will check an
``N/A'' box. One of the commenters asked whether the definition of
``withdrawal'' is limited to complete withdrawals (i.e., whether
amounts assessed with respect to partial withdrawals are included when
determining the single rate that produced the same result). That
commenter noted that in Schedule R the definition of withdrawal is
limited to complete withdrawals, but that it is not clear that that
this definition carries over to Schedule MB. In response, PBGC has
clarified the instructions accordingly.
In addition, the Agencies proposed to modify the questions related
to the line 6 ``expense load'' to better align with the various ways
multiemployer plans incorporate expense loads into their calculations.
Filers would be required to indicate if an expense load is included in
normal cost and, if so, whether it is determined as a percentage of
normal cost, a dollar amount that varies from year to year, or
something else. In addition, the Agencies proposed moving the expense
load item from line 6e to a new line 6i and the salary scale item from
6f to 6e and revising the instructions accordingly so that the expense
load assumptions that may differ between pre-retirement and post-
retirement are grouped together. No revisions are being made to these
proposed changes.
d. Line 8--Miscellaneous Information
Currently, line 8 of Schedule MB requires filers to report
miscellaneous information about demographics, benefits, and
contributions. The Agencies proposed in the NPFR to modify line 8 by
requiring additional information about demographics, benefits, and
contributions, as described below. After considering the public
comments, the Agencies have decided to adopt the changes to line 8
described below. As is currently required under line 8, the additional
requirements would apply only to PBGC-insured multiemployer plans with
500 or more total participants as of the beginning of the plan year.
Benefit Projections--Currently, plans are required to
attach a projection of benefits expected to be paid in each of the next
ten years (see line 8b(1)).\11\ The Agencies proposed in the NPFR to
modify the format of the attachment to show the benefit projection
broken down into three categories based on the participant's or
beneficiary's status on

[[Page 31137]]

the valuation date (i.e., active, terminated vested, or in pay status).
In addition, the projection period was extended from 10 to 50 years.
Three commenters stated that the line 8b(1) proposal would be costly
and burdensome. These commenters also stated that the projection would
unlikely produce meaningful, reliable, and useful information because
future benefit accruals are not reflected. The Agencies are not
persuaded that this change to line 8 would be unduly costly or
burdensome. Rather, as noted in the NPFR, based on the Agencies'
experience with the valuation software generally in use by affected DB
pension plans, the incremental cost of expanding a projection from 10
to 50 years is nominal. In addition, the Agencies paired these line 8
changes with a provision that allows filers to attach a spreadsheet
file (CSV format) instead of a PDF file. The ability to use generally
available spreadsheet software to produce the required data will allow
the Agencies to more easily access defined benefit plans' information
and to project more precisely insurance programs' liabilities. However,
after considering the comments received, the Agencies decided to reduce
the number of plans required to provide the benefit projection
attachment (from plans with 500 or more participants to plans with
1,000 or more participants).\12\ Also, although a projection may
provide more meaningful results if additional accruals were reflected
and/or if the projection were done stochastically, the Agencies did not
add such a requirement or requirements as part of these final forms
revisions because of the potentially more significant compliance costs
involved. The Agencies believe that by increasing the projection period
from 10 to 50 years, this will provide valuable information and enable
the Agencies to better estimate anticipated future benefit payments
from pension plans.
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\11\ The current instructions provide that the line 8b(1)
attachment is required for plans with 500 or more participants as of
the valuation date, not as of the beginning of the plan year. The
Agencies proposed changing that to ``the beginning of the plan
year'' because the only participant count reported on Schedule MB is
the count at the beginning of the plan year (i.e., line 2b(3)(c),
column 1) and because doing so is consistent with another Schedule
MB requirement, See instructions for line 8b(2).
\12\ In addition, the Agencies added the 50-year benefit
projection attachment to Schedule SB (for single-employer plans).
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Contribution Projections--The Agencies also proposed in
the NPFR to add a new requirement that plans provide, as an attachment,
a 10-year projection of employer contributions and withdrawal liability
payments. A new line, line 8b(3), would be added to Schedule MB where
the filer would report whether the projection is required. As is the
case with the benefit projection attachments, the instructions would
provide the required format for the attachment. In addition, although
the Agencies did not receive any substantive comments concerning this
new requirement, to be consistent with the modification to line 8b(1)
noted above, the final forms revisions provides that this 10-year
projection of employer contributions and withdrawal liability payments
is required only for plans with 1,000 or more participants as of the
beginning of the plan year.
Average age/benefit--The Agencies additionally proposed in
the NPFR to require plans to report the average age and average monthly
benefit separately for (1) terminated vested participants and (2)
retired participants and beneficiaries receiving payments. Under the
proposal, this information would be provided directly on Schedule MB,
in new line 8b(4). Two commenters provided comments on the new line
8b(4) requirement. Although one supported the proposal, the other
commented that the additional data was both unnecessary and costly. In
an effort to minimize the burden on plans, the Agencies have decided
not to move forward with this part of the proposal. Accordingly, this
final forms revision does not include a new line 8b(4).
Age/service scatter--The Agencies proposed in the NPFR a
change to the existing ``age/service'' attachment for line 8b(2), which
is required for PBGC-insured multiemployer plans with active
participants, regardless of the number of participants. Currently, the
scatter shows, for each ``attained age'' and ``years of credited
service'' grouping of active participants, the number of active
participants, and, if the total number of active participants at the
beginning of the plan year is 1,000 or more, (1) for plans that use
compensation to determine benefits, the average compensation, and (2)
for cash balance plans, the average cash balance account (see line
8b(2)). These latter two requirements do not apply for any age/service
grouping of fewer than 20 participants. Because there are few, if any,
multiemployer cash balance plans, the Agencies proposed modifying the
additional reporting requirement for multiemployer plans with 1,000 or
more active participants by replacing the required information related
to cash balance plans with a requirement to report average accrued
monthly benefits as of the valuation date for each grouping. Two
commenters provided comments on the proposed change to the age/service
scatter. One suggested that the Schedule MB instructions be modified to
specify that plans that do not use compensation to determine benefits
should enter ``N/A'' in each age/service grouping. The Agencies do not
believe such modification is needed because the existing instructions
for line 8b(2) state that only plans ``using compensation to determine
benefits'' need to provide average compensation data. There is no need
to enter ``N/A'' because it is implied. The other commenter asked
whether the cash balance information will also be removed from the
Schedule SB (for single-employer plans). The Agencies believe that it
was clear from the NPFR that no changes were proposed with respect to
the age/service scatter on Schedule SB (for single-employer plans).
2. Modifications to Schedule SB
In the NPFR, the Agencies proposed adding two new reporting
requirements for PBGC-insured single-employer plans with 500 or more
total participants to better align requirements for single-employer
defined benefit plans with the more detailed requirements for PBGC-
insured multiemployer plans. The new reporting requirements proposed in
the NPFR were:
A 50-year benefit payment projection broken down into
three categories based on the participant's or beneficiary's status on
the valuation date (i.e., active, terminated vested, in pay status),
and
The average age and average monthly benefit separately for
(1) terminated vested participants and (2) retired participants and
beneficiaries receiving payments (similar to the information required
to be reported in line 8b(4) of Schedule MB).
For the most part, the Agencies proposed that these two new
reporting requirements would be similar to the Schedule MB requirements
for multiemployer plans (lines 8b(1) and 8b(4), respectively). However,
because the only participant count information for single-employer
plans on Schedule SB is as of the valuation date, to determine whether
a plan has 500 or more participants (and is thus required to provide
information for these two new reporting requirements) the Agencies
proposed that participants be counted as of the valuation date instead
of as of the beginning of the plan year (the ``count'' date for
multiemployer plans). To facilitate these changes, the Agencies
proposed rearranging Schedule SB line 26. Currently, line 26 relates
only to the ``age/service'' scatter of active participant data required
to be attached to Schedule SB for single-employer plans covered by
Title IV of ERISA with active participants. The Agencies proposed
changing line 26 into a three-part question (26a, 26b, and 26c).
Current line 26 would become new line 26a. The benefit projection
question would become new line 26b, and the

[[Page 31138]]

average age/benefit question would become new line 26c.
The Agencies received several comments about the benefit projection
attachment. One commenter supported the change. Two commenters
expressed concern that the benefit projection attachment would impose
substantial additional costs and burdens on plans without any apparent
benefit. As discussed above in the Agencies' responses to comments
received on Schedule MB and in the NPFR, it is the Agencies'
understanding that these projections are done as part of the valuation,
so the only additional work would be to capture those projected amounts
in an accessible or downloadable file. Accordingly, we are not
convinced that the additional burden is significant. However, after
considering the comments received, the Agencies have decided to reduce
the number of plans required to provide the benefit projection
attachment from plans with 500 or more participants to plans with 1,000
or more participants. In addition, and consistent with the Schedule MB
change from the proposal with respect to multiemployer plans, the
Agencies are not moving forward with the proposal to require reporting
average age and benefit information for retirees and terminated vested
participants (i.e., there will not be a new line 26c(2)).
One commenter expressed concern about the application of line 26b
to MEPs because they believe attaching a benefit projection would
impose substantial additional costs and burden without any apparent
benefit. The same commenter requested that, at a minimum, cooperative
and small employer charity (CSEC) pension plans (almost all of which
are MEPs) be exempt from this requirement. The Agencies see no
compelling reason to treat PBGC-insured MEPs differently from other
single-employer plans with respect to this requirement. However, it
should be noted that it was never the intent to have CSEC plans provide
this information. The current instructions state that CSEC plans are
not required to complete Part VI--Miscellaneous Items (the section
which includes line 26). As noted above, the proposal called for
breaking down line 26 into new lines 26a, 26b, and 26c. Since all three
of those lines are part of line 26 (and in Part VI), the proposal
exempted CSEC plans from the proposed new reporting requirements.
The Agencies received one comment on line 26c(2) to clarify what
should be shown as the average benefit for terminated vested
participants in cash balance plans. As noted above, the Agencies have
decided not to move forward with that part of the proposal (i.e., line
26c(2) will not be added to the Schedule SB). Accordingly, the question
asked by the commenter is moot.
Finally, the Agencies proposed modifying Part IX of Schedule SB,
and its instructions, so that it relates to elective amortization
funding relief provided under the American Rescue Plan (ARP) Act of
2021 instead of elective funding relief provided under the Pension
Relief Act of 2010 (PRA 2010). The NPFR explained that the PRA 2010
information is no longer needed because ARP reduces to zero all
shortfall amortization bases, including amortization bases established
pursuant to the PRA 2010 elective funding relief. As modified, plan
sponsors of single-employer defined benefit plans that elect to have
the ARP extended amortization rule apply before the 2022 plan year
would be required to report the first plan year to which the extended
amortization rule applies. The proposal would require such a plan to
check a box to indicate the first plan year for which the plan elected
to have ARP amortization funding relief. One commenter opposed the
change as unnecessary because Schedule SB attachments would indicate
when an election was made. The Agencies agree that they could obtain
this information from attachments, but information reported on
attachments cannot be accessed electronically. In addition, because
this is only a check box for which the answer will not change from
year-to-year, there is virtually no burden associated with it.
Accordingly, the Agencies are adopting this requirement as part of the
final forms revisions.
3. Modification to Schedule R Reporting Requirement
Currently, Schedule R's Part V, line 13 requirement requires
multiemployer defined benefit pension plans subject to minimum funding
standards to report identifying information about any participating
employer whose contributions to the plan account for more than five
percent of the total contributions for the year. The NPFR proposed to
change this requirement to require plans to report identifying
information about any participating employer that either (1)
contributed more than five percent of the plan's total contributions or
(2) was one of the top ten highest contributors. The Agencies received
no comments on this proposal and have incorporated this modification in
the final forms revisions.
4. Change in Format for Certain Schedule MB and SB Attachments
EFAST2 filers currently file Form 5500 Annual Return/Report
attachments as PDF and plain text (TXT) files. A PDF file is required
only if the attachment must be signed. TXT attachments are rarely
provided. Many attachments include a lot of numbers (e.g., benefit
projections, age/service scatters) that are reported in tables. These
numbers have to be extracted out of PDF tables and entered into
databases or spreadsheets before the Agencies can use the information
for various projects, studies, etc. This is costly and inefficient. In
the NPFR, the Agencies proposed to modify the instructions to allow and
suggest (but not require) that certain attachments be provided in a
spreadsheet file (such as CSV format), rather than PDF or TXT formats.
The Agencies did not receive any comments on this proposed modification
of the instructions and have incorporated this change in the final
forms revisions.
Thus, the instructions for the Schedules MB and SB are being
modified to permit (but not require) certain attachments to Schedule MB
and SB to be provided in a spreadsheet file (CSV format) rather than
PDF or TXT formats. The following chart lists the Schedule MB and
Schedule SB attachments that are affected by the formatting change:

------------------------------------------------------------------------
Attachment Schedule MB Schedule SB
------------------------------------------------------------------------
Schedule of Projection of Line 8b(1)..... Line 26b.
Expected Benefit Payments.
Schedule of Active Line 8b(2)..... Line 26a.
Participant Data (i.e., Age/
service scatter).
Withdrawal Liability Amounts Line 3......... N/A.
Schedule of Projection of Line 8b(3)..... N/A.
Employer Contributions and
Withdrawal Liability.
------------------------------------------------------------------------

[[Page 31139]]

B. Reporting Changes for Multiple-Employer Plans

The final forms revisions include a limited number of changes to
the instructions for the Form 5500 Annual Return/Report that are
intended to clarify and improve annual reporting for ERISA-covered
defined contribution MEPs, including those that meet the definition of
``pooled employer plan.'' New plan characteristics codes are being
added to the Form 5500 and Form 5500-SF instructions for filers to use
to identify different types of defined contribution MEPs on Form 5500
and Form 5500-SF, Part II, lines 8 and 9, respectively. The Form 5500
and Form 5500-SF instructions are also being updated to clarify which
entities should report as plan sponsors on line 2a and as plan
administrators on line 3a, with respect to certain types of defined
contribution MEPs. For 2022 filings, these revisions include other
minor amplifying and clarifying changes to instructions for 2022 forms.
With respect to the new plan characteristics codes, the final forms
revisions add new defined contribution MEP characteristics codes for
the List of Plan Characteristics Codes for Form 5500 and Form 5500-SF,
Part II, lines 8 and 9, respectively. The addition of identifying codes
will help the Agencies, participants and beneficiaries, and the public
identify and distinguish between different types of defined
contribution MEPs, including new plan types like PEPs and existing plan
types like association retirement plans and professional employer
organization MEPs. The new defined contribution pension feature codes
are:
For both Form 5500 and Form 5500-SF--Code 2U--Multiple-
employer pension plan sponsored by a bona fide group or association of
employers that is an Association Retirement Plan that meets all the
conditions under 29 CFR 2510.3-55(b).
For both Form 5500 and Form 5500-SF--Code 2V--Multiple-
employer pension plan that is a Professional Employer Organization Plan
(PEO Plan) that meets all the conditions under 29 CFR 2510.3-55(c).
For Form 5500 Only--Code 2W--Multiple-employer pension
plan that is a pooled employer plan that meets the definition under
ERISA section 3(43).\13\
---------------------------------------------------------------------------

\13\ 29 U.S.C. 1002(43). The term pooled employer plan does not
include a multiemployer plan as defined in ERISA section 3(37) and
also does not include a plan established before the date the SECURE
Act was enacted unless the plan administrator elects to have the
plan treated as a pooled employer plan and the plan meets the ERISA
requirements applicable to a pooled employer plan established on or
after such date. It also does not include a plan maintained by
employers that have a common interest other than having adopted the
plan.
---------------------------------------------------------------------------

For both Form 5500 and Form 5500-SF--Code 2X--Multiple-
employer defined contribution pension plan that does not fall under
characteristics code 2U, 2V or 2W (Form 5500) or, for Form 5500-SF, is
eligible to file the Form 5500-SF and does not fall under
characteristics code 2U or 2V (Form 5500-SF).
Thus, for both Form 5500 and Form 5500-SF, a filer would enter Code
2U for a defined contribution MEP that is an Association Retirement
Plan under applicable conditions in 29 CFR 2510.3-55(b). For both Form
5500 and Form 5500-SF, a filer would enter Code 2V for a defined
contribution MEP that is a PEO Plan under applicable conditions in 29
CFR 29 CFR 2510.3-55(c). For the Form 5500, a filer would enter Code 2W
for a defined contribution MEP that is a pooled employer plan as
defined in ERISA section 3(43). All other defined contribution MEPs
would enter Code 2X on their Form 5500 and Form 5500-SF filing as
applicable. Note that Code 2W is being added to the Form 5500
instructions but was intentionally skipped in the Form 5500-SF
instructions because PEPs are not eligible to file the Form 5500-SF
and, therefore, Code 2W is not an eligible code for Form 5500-SF
filers.
One of the several commenters expressing broad support for the part
of the Agencies' proposal dealing specifically with MEP reporting
provided a number of more specific comments. First, the commenter
observed that while the pooling of employers and capital in the
provision of retirement benefits has the potential to improve access to
workplace retirement plans in the United States, multiple-employer
plans raise novel governance and oversight challenges. The commenter
specifically noted that the lack of an identifier for particular kinds
of multiple-employer plans hampers comparisons across plan types,
especially those relating to fees. That commenter also pointed out that
the Agencies' September 2021 proposal would have filers specifically
identify different types of MEPs: Association retirement plans within
the meaning of 29 CFR 2510.3-55(b); PEO Plans within the meaning of 29
CFR 2510.3-55(c); PEPs within the meaning of ERISA Section 3(43); and
other MEPs covering the employees of two or more employers that are not
single or multiemployer plans for annual reporting purposes. In that
regard, the commenter cited as a key benefit of the proposal an ability
to systematically track and evaluate the new plan types that have been
established in recent years. As noted above, however, there were a
range of other commenters who objected to parts of proposed Schedule
MEP or otherwise raised concerns with the proposal's new requirements
for MEP reporting. These commenters generally focused their concerns on
Parts II and III of the proposed Schedule MEP, and their comments
largely related to requesting delay, removal, and reconsideration,
rather than opposing providing identifying information proposed on Part
I.
Although finalizing proposed Schedule MEP would provide more public
information and provide more information in a more usable data
capturable form and serve the interests of users of Form 5500 Annual
Return/Report data, including the DOL, IRS, PBGC, other Federal
agencies, Congress, and the private sector that use the Form 5500
Annual Return/Report as an important source of information and data in
assessing employee benefit, tax, and economic trends and policies,\14\
as discussed above, the Agencies have concluded that more time should
be spent considering issues and alternatives presented by the public
comments before deciding whether and, if so, how to finalize the
proposed Schedule MEP as a vehicle for annual reporting of information
on MEPs. The Agencies believe, nonetheless, that MEPs, especially
defined contribution MEPs such as PEPs and PEOs, can present added
complexity and related challenges to the Agencies when performing
oversight and enforcement functions, and that participants and
beneficiaries of such plans should be able to easily find and identify
Form 5500 Annual Return/Report information for MEPs providing them with
employee benefits, including those that may be sponsored by PEOs. The
Agencies also believe that the information proposed for Part I of
Schedule MEP is important for tracking and evaluating new MEP types,
and for providing needed transparency for participants and
beneficiaries of MEPs, and that such disclosures should be made for
existing MEPs and newly established type of plans like PEPs. The
Agencies also

[[Page 31140]]

concluded that much of the information proposed for Part I of the
proposed Schedule MEP could be added with very limited changes to the
forms or instructions. Accordingly, in light of the importance of MEP
identifying information, the limited changes to the instructions
involved for EFAST2 development purposes, and the relatively small
burden of the additional information collection, the Agencies decided
to make the above-described changes to the Form 5500 Annual Return/
Report so that better and more useable identifying information on MEPs
is collected beginning with the 2022 plan year forms. These changes
also will help supplement the MEP reporting changes adopted beginning
with the 2021 plan year forms.\15\
---------------------------------------------------------------------------

\14\ Section 1 of ERISA states the ``Congressional findings and
declaration of policy.'' Of relevance to our consideration of these
alternatives, section (b) states, in relevant part: ``It is hereby
declared to be the policy of this chapter to protect interstate
commerce and the interests of participants in employee benefit plans
and their beneficiaries, by requiring the disclosure and reporting
to participants and beneficiaries of financial and other information
with respect thereto . . . .'' 29 U.S.C. 1001(b).
\15\ See footnote 7, supra, for a description of those changes.
---------------------------------------------------------------------------

In addition to adding plan characteristics codes that identify MEP
types, to address commenter concerns regarding how PEO plans should
file, the instructions also contain clarifying additions to Part II of
Form 5500 and Form 5500-SF that collect plan sponsor and plan
administrator information. First, for Form 5500, the instructions for
line 2a are revised so that the instructions for identifying the ``plan
sponsor'' include instructions specifically for PEPs and PEO plans.\16\
The instructions for Form 5500, line 3a are similarly revised so that
the term ``plan administrator'' includes the above two additional types
of plans, and references to the above definitions.\17\ For Form 5500-
SF, a parallel corresponding change has been made to instructions on
identifying the ``plan sponsor'' and ``plan administrator'' for lines
2a and 3a, respectively, for PEO MEPs. Since PEPs are not permitted to
file Form 5500-SF, no corresponding change to the instructions is made
for PEPs. Other minor clarifying and conforming edits are made to
instructions for lines 2a and 3a of both forms.
---------------------------------------------------------------------------

\16\ ERISA Section 3(16)(B) provides that the term ``plan
sponsor'' means--(i) the employer in the case of an employee benefit
plan established or maintained by a single employer, (ii) the
employee organization in the case of an employee benefit plan
established or maintained by an employee organization, or (ii) in
the case of a plan established or maintained by two or more
employers or jointly by one or more employers and one or more
employee organizations, the association, committee, joint board of
trustees, or similar group of representatives of the parties who
establish or maintain the plan.
\17\ ERISA Section 3(16)(A) provides that the term ``plan
administrator'' means--(i) the person specifically so designated by
the terms of the instrument under which the plan is operated; (ii)
if an administrator is not so designated, the plan sponsor; or (iii)
in the case of a plan for which an administrator is not designated
and a plan sponsor cannot be identified, such other person as the
Secretary may be regulation prescribe.
---------------------------------------------------------------------------

III. Regulatory Impact Analysis

The following is a discussion of the examination of the effects of
this rule as required by Executive Order 12866,\18\ Executive Order
13563,\19\ the Paperwork Reduction Act of 1995,\20\ the Regulatory
Flexibility Act,\21\ section 202 of the Unfunded Mandates Reform Act of
1995,\22\ Executive Order 13132,\23\ and the Congressional Review
Act.\24\ For the Department of Labor, the annual report form is a
creature of rulemaking under ERISA sections 104 and 110. As such, form
and instruction changes can involve both rulemaking under the
Administrative Procedure Act and other rulemaking standards as well as
approval under the Paperwork Reduction Act of changes to the form and
instructions as an information collection. This tri-agency document is
intended to constitute the regulatory impact analysis and Paperwork
Reduction Act statement for DOL and a Paperwork Reduction Act statement
for IRS and PBGC.\25\
---------------------------------------------------------------------------

\18\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
\19\ Improving Regulation and Regulatory Review, 76 FR 3821
(Jan. 18, 2011).
\20\ 44 U.S.C. 3506(c)(2)(A) (1995).
\21\ 5 U.S.C. 601 et seq. (1980).
\22\ 2 U.S.C. 1501 et seq. (1995).
\23\ Federalism, 64 FR. 153 (Aug. 4, 1999).
\24\ 5 U.S.C. 804(2) (1996).
\25\ The regulatory impact analysis in various places refers to
``Agencies'' because the underlying decisions regarding the form and
instructions generally are collective decisions of the DOL, IRS, and
PBGC, but they should not be read as indications that the IRS and
PBGC changes are subject to rulemaking processes, including
Executive Orders 12866 and 13563.
---------------------------------------------------------------------------

A. 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, 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 costs and benefits,
reducing costs, harmonizing rules, and promoting flexibility.
Under Executive Order 12866, ``significant'' regulatory actions are
subject to review by the Office of Management and Budget (OMB).\26\
Section 3(f) of the Executive Order 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 a 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.
---------------------------------------------------------------------------

\26\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
---------------------------------------------------------------------------

A full regulatory impact analysis must be prepared for major rules
with economically significant effects (for example, $100 million or
more in any 1 year), and the Office of Management and Budget (OMB)
reviews ``significant'' regulatory actions. It has been determined that
this rule is not economically significant within the meaning of section
3(f)(1) of the Executive Order. Pursuant to the terms of the Executive
Order, OMB has determined, however, that this action is ``significant''
within the meaning of section 3(f)(4) of the Executive Order.
Therefore, the Agencies have provided an assessment of the potential
costs, benefits, and transfers associated with the final forms
revisions. In accordance with the provisions of Executive Order 12866,
the final forms revisions were reviewed by OMB. Pursuant to the
Congressional Review Act, OMB has designated the final forms revisions
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).
1. Introduction and Need for Regulation
The Form 5500 Annual Return/Report is the principal source of
information and data available to the Agencies concerning the
operations, funding, and investments of pension and welfare benefit
plans covered by ERISA and the Code. Accordingly, the Form 5500 Annual
Return/Report is essential to each Agency's enforcement, research, and
policy formulation programs and is a source of information and data for
use by other Federal agencies, Congress, and the private sector in
assessing employee benefit, tax, and economic trends and policies. The
Form 5500 Annual Return/Report also serves as the primary means by
which the operations of plans can be monitored by plan participants and
beneficiaries and the general public.
As discussed earlier in this document, these final forms revisions
are making limited changes that would apply

[[Page 31141]]

beginning with the 2022 Form 5500 Annual Report/Return with most
changes focused on defined benefit plans and some improvements to MEP
reporting. The annual reporting changes are revisions to Schedules MB,
SB, and R, and to the respective instructions, that are designed to
improve reporting by defined benefit plans subject to Title IV of
ERISA, and to the Form 5500 and Form 5500-SF instructions that further
implement section 101 of the SECURE Act in ways that expand and improve
transparency of MEP reporting, including for pooled employer plans.
Defined Benefit Pension Plan/ERISA Title IV Additions: The Form
5500 collects information from defined benefit pension plans in
Schedules MB, SB, and R. The PBGC has determined that it needs more
detail in these schedules to accurately project defined benefit pension
plan and PBGC insurance program liabilities. The PBGC's changes to the
information required to be reported by PBGC-insured defined benefit
plans would remedy the deficiencies of the current Form 5500 filings
and better protect participants. In 2019 PBGC estimated there were
23,694 single employer defined benefit plans and 1,375 multiemployer
defined benefit plans that are covered by the PBGC and would be
impacted by these changes.\27\
---------------------------------------------------------------------------

\27\ Due to differing methodologies between Agencies such as
weightings factors for delinquent filers and how plans currently
receiving financial assistance are counted, the EBSA and PBGC
estimates for the ME universe differ slightly. For purposes of this
analysis EBSA is using their estimate of 1,366. PGBC 2019 Pension
Insurance Data Tables. https://www.pbgc.gov/sites/default/files/2019_pension_data_tables.pdf.
---------------------------------------------------------------------------

MEP Reporting Improvements Additions: The final forms revisions
include new plan characteristics codes to identify pooled employer
plans, association retirement plans, and PEO plans, along with a
residual category code for all other defined contribution MEPs. These
changes are designed to continue SECURE Act section 101 implementation
by clarifying and further improving previous MEP reporting changes.
2. Affected Entities
The Agencies use historical filings of the Form 5500 to estimate
affected entities. As discussed below, there have been several changes
by statute and regulation that have created new types of MEPs. This
analysis uses as its base the 2019 Form 5500 filings then estimates
potential changes to the number of filers due to SECURE Act amendments
creating pooled employer plans. As a result, there is uncertainty
regarding the Agencies' ability to measure costs and benefits that may
result from the final forms revisions. The Agencies nonetheless are
presenting below an overview of potentially affected entities and an
approach to evaluating the possible impact of the final forms
revisions.
Defined Contribution Pension Plans: In 2019, there were 686,809
defined contribution plans with 109.1 million total participants and
85.5 million active participants. Plans with fewer than 100 total
participants (small plans) account for 87.4 percent of plans.\28\
---------------------------------------------------------------------------

\28\ Employee Benefits Security Administration. ``Private
Pension Plan Bulletin, Abstract of 2019 Form 5500 Annual Report.''
(2021). The 2019 Form 5500 data set is the most recent available
because Form 5500 filings for the 2019 reporting year generally are
not required to be filed for calendar year plans until July through
October of 2020, and the deadline for fiscal year plans may extend
well into 2021. The User Guide for the 2019 Form 5500 Private
Pension Plan Research File includes a discussion of the creation of
the annual data set and timing of data extraction. See www.dol.gov/sites/dolgov/files/EBSA/researchers/data/retirement/pension-user-guide-2019.pdf (Accessed February 9, 2022).
---------------------------------------------------------------------------

Defined Benefit Pension Plans: In 2019, there were 46,870 defined
benefit plans with 32.8 million total participants and 12.6 million
active participants. There were 45,302 single-employer defined benefit
plans and 1,366 multiemployer defined benefit plans.\29\
---------------------------------------------------------------------------

\29\ Id.
---------------------------------------------------------------------------

Multiple-Employer Pension Plans (MEP): A MEP, for Form 5500
reporting purposes, generally is a retirement plan maintained by two or
more employers that are not members of the same controlled group or
affiliated service group under Code section 414(b), (c), or (m), and
which is not a multiemployer plan.\30\ In 2019, there were 4,741 MEPs
filing a Form 5500, 202 of which were defined benefit pension plans and
4,538 were defined contribution pension plans. There were 7.5 million
participants reported as covered by these plans.\31\
---------------------------------------------------------------------------

\30\ See, e.g., 2020 Form 5500 instructions at 14.
\31\ Employee Benefits Security Administration. ``Private
Pension Plan Bulletin, Abstract of 2018 Form 5500 Annual Reports.''
(June 2020).
---------------------------------------------------------------------------

Association Retirement Plan: An association retirement plan is a
defined contribution MEP sponsored by a bona fide group or association
of employers that meets the conditions in 29 CFR 2510.3-55(b). The
Agencies do not have information on how many reporting MEPs are
association retirement plans or otherwise to estimate the number of
association retirement plans (a sub-class of MEPs) that currently
exist. These final regulations add a new code to identify association
retirement plans.
Professional Employer Organizations (PEOs) Plan: A PEO MEP is a
defined contribution MEP sponsored by a bona fide PEO that meets the
conditions under 29 CFR 2510.3-55(c). According to the National
Association of Professional Employer Organizations, there are 487 PEOs
in the United States.\32\ The Agencies do not have information on how
many PEOs currently meet the conditions under 29 CFR 2510.3-55(c) to
sponsor defined contribution MEPs for their clients, but instead assume
a substantial percentage of PEOs do sponsor MEPs, including defined
contribution MEPs. These final regulations add a new code to identify
PEO MEPs.
---------------------------------------------------------------------------

\32\ National Association of Professional Employee
Organizations, Industry Statistics (Accessed 6/28/2021), https://www.napeo.org/what-is-a-peo/about-the-peo-industry/industry-statistics. NAPEO had previously reported 904 PEOs but revised its
methodology. An explanation of the revision is included on the NAPEO
website. See The PEO Industry Footprint 2021, Laurie Bassi and Dan
McMurrer, McBassi & Company at page 4 (May 2021) (available at
www.napeo.org/docs/default-source/white-papers/2021-white-paper-final.pdf?sfvrsn=6dde35d4_2.)
---------------------------------------------------------------------------

Pooled Employer Plans: The SECURE Act amended section 3(2) of ERISA
and added section 3(43) to ERISA to authorize a new type of ERISA-
covered defined contribution MEP referred to as a ``pooled employer
plan'' sponsored by a ``pooled plan provider.'' In its 2020 final rule
on Registration Requirements for Pooled Plan Providers, the Agencies
noted the uncertainty surrounding the number of pooled employer plans
that could be created based on the final rule, the number of employers
that would participate in such plans, and the number of participants
and beneficiaries that would be covered by them.\33\ Approximately 71
pooled plan providers have filed with the DOL an initial Form PR Pooled
Plan Provider Registration (Form PR) and reported to service at least
one pooled employer plan.\34\ With these records the Agencies have
estimated there will be, on average, approximately 2.85 pooled employer
plans per registered pooled plan provider. Therefore, the Agencies
estimate a total 202 pooled employer plans will file the Form 5500 in
2022 for their 2021 reporting year.\35\ The final forms revisions add a
new code to identify pooled employer plans.
---------------------------------------------------------------------------

\33\ 85 FR 72934, 72949 (Nov. 16, 2016).
\34\ Department of Labor. Form PR. https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-pr.
\35\ The estimated total number of pooled employer plans is
calculated as follows: 2.85 pooled employer plans (average per
provider) * 71 registered pooled plan providers = 202 pooled
employer plans in total (rounded).

---------------------------------------------------------------------------

[[Page 31142]]

The Agencies do not have comprehensive data on how many employers
are participating in pooled employer plans or the number of
participants covered by the plans until the pooled employer plans file
their first Forms 5500 in 2022 for their 2021 reporting year. While
pooled plan providers are required to update the Form PR to advise the
DOL and the IRS about the establishment and offering of new pooled
employer plans, the Form PR does not collect information on the number
of employers participating in their pooled employer plans or the number
of employees covered by each plan. The Agencies attempted to review
available public information on pooled employer plans by looking at
information included in the filed Forms PR, and by examining news
articles and statements on the pooled plan provider's websites. That
review indicated that that there are a variety of approaches in how
pooled employer plans are offered, and a variation in the number of
employers that have joined a pooled employer plan.
Although the Agencies do not know for certain how many plans would
decide to offer benefits through a pooled employer plan, the Agencies
believe the current average number of participating employers in a MEP
is indicative of the average number of employers that would eventually
be in any particular pooled employer plan that may be established in
the future. The Agencies estimates that MEPs, on average, have nine
employers participating in a MEP with fewer than 100 participants and
two employers with 100 or more participants. The Agencies use these
averages to inform the estimate of the average number of participating
plans in a pooled employer plan. The final estimate does take into
account one pooled plan provider registrant that has already listed
2,000 participating employers. It is estimated that a total of 3,369
small employers (i.e., under 100 plan participants) and 842 large
employers would seek to provide benefits as participating employers in
pooled employer plans.\36\ The Agencies assume this would result in a
direct decrease of defined contribution Form 5500-SF filers and a
decrease of defined contribution Form 5500 filers, and a total
reduction of filers from 843,662 to 839,728 filers. Such a reduction in
filers would be partially offset by an increase in pooled employer plan
filings. In the proposed rule, the Agencies requested comments
regarding the number of employers that have already joined a pooled
employer plan; however, no comments were received that helped the
Agencies revise the estimates of the number of filers.
---------------------------------------------------------------------------

\36\ For the calculation of the total number of participating
employers in pooled employer plans, it is first assumed that 80
percent of all the employers who would participate in a pooled
employer plan are currently providing benefits through small plans,
and that the remaining 20 percent through large plans. This
distribution would apply to the registrant that has already
exceptionally listed 2000 employers (which would then be divided in
1600 small participating plans and 400 large participating plans)
and to the other 201 pooled employer plans assumed to be created. It
is also assumed that each one of these other 201 pooled plan
providers would be servicing in total 11 employers. Therefore, the
total number of small participating plans in a pooled employer plan
is calculated as: 1,600 + (201*11*0.8) = 3,369 (rounded). Similarly,
the total number of large participating plans is calculated as 400 +
(201*11*0.2) =842 (rounded).
---------------------------------------------------------------------------

3. Benefits
Defined Benefit Plan/Title IV Questions for the 2022 Form 5500s:
The changes to the Form 5500 Schedules MB, SB, and R would help remedy
data and information inadequacies, increasing plans' transparency,
enable Agencies to project more precisely defined benefit pension
plans' and insurance programs' liabilities, and help the PBGC more
effectively conduct research and better protect plan participants and
beneficiaries.
Schedule MB collects actuarial information on multiemployer defined
benefit plans and certain money purchase plans. Based on reviewing
previously filed Schedules MB responses to line 4f, it appears to the
Agencies that the instructions may be unclear as to how to fill out
line 4f of Schedule MB correctly. Clarification of the line 4f
instructions and line language is intended to provide more consistent
and correct responses. Revisions to line 6 and clarification of the
expense load percentage calculation is intended to allow the Agencies
to easily identify the expense load and more accurately project plan
liabilities. The changes to line 6 will provide greater transparency in
the actuarial status and the actuarial assumptions of the plans. The
expansion of line 8b to require additional projected benefit payment
and employer contribution information will allow the Agencies to
collect more information to more precisely project defined benefit
pension plans' and insurance programs' liabilities.
Schedule SB collects actuarial information on single-employer
defined benefit plans. The expansion of line 26 to require additional
projected benefit payment information and the change to Part IX will
allow the Agencies to collect more information to more precisely
project defined benefit pension plans' and insurance programs'
liabilities. It also aligns the filing requirements for single-employer
defined benefit plans with the more detailed requirements for PBGC-
insured multiemployer plans resulting from the modification of line 8
on the schedule MB.
Schedule R collects information on retirement plans. Previously,
multiemployer defined benefit pension plans were required to report
identifying information for each employer that contributed more than
five percent of total contributions to the plan during the plan year.
The final forms revisions, instead, requires plans to report
identifying information on any employer who (1) contributed more than
five percent of the plan's total contributions or (2) was one of the
top ten highest contributors. This will provide greater transparency as
related to concentrations of potential risk within participating
employers.
The final forms revisions also make changes in format for certain
attachments. EFAST2 filers currently file some Form 5500 attachments as
PDF and plain text files. Due to the nature of the attachments, they
often include many numbers that are difficult to extract from these
file types. There is consideration being given to steps that could be
taken to allow more integration of common spreadsheet files (such as
CSV formats). As this is not being considered as a requirement at this
point, plans would not incur an additional cost if such functionality
were made available. The Agencies expect this option may simplify the
process for preparing and filing attachments.
Multiple-Employer Pension Plan Reporting Improvements: The final
forms revisions add new plan characteristics codes to identify pooled
employer plans, association retirement plans, and PEO plans, along with
a residual category for all other defined contribution MEPs. This
information would help protect plan participants and beneficiaries by
allowing for improved analysis for oversight and research purposes by
the government, the regulated community, and other interested
stakeholders.
Benefits of Changes for Pooled Employer Plans. The SECURE Act
established a new type of ERISA-covered defined contribution pension
plan, the pooled employer plan, that is established and maintained by a
pooled plan provider that meets the conditions of the statute. By
creating the pooled employer plan structure, the SECURE Act permitted
multiple unrelated

[[Page 31143]]

employers to participate without the need for any common interest among
the employers (other than having adopted the plan). As discussed above,
pooled employer plans need to provide ERISA section 103(g)
participating employer information, as well as certain basic
information regarding the pooled plan provider. Potentially increased
reporting costs for those employers choosing to offer retirement
benefits to their employees through participating in a pooled employer
plan would be offset by other cost reductions or business benefits
relative to not having to administer an individual plan as further
discussed below.
By participating in a pooled employer plan, employers could
minimize their fiduciary responsibilities for ongoing administration
and operation of the plan. Employers could benefit from reduced risk
and liability because the pooled plan provider would bear most of the
administrative and fiduciary responsibility for operating the pooled
employer plan, including hiring and monitoring the 3(38) investment
manager. Similarly, because the pooled plan provider handles the
administrative tasks such as participant communications, plan
recordkeeping, submitting the Form 5500 and complying with plan audits,
this could increase the operating efficiency for participating
employers. Also, as they are expected to be professional plan
providers, it is anticipated that a pooled plan provider, relative to a
small employer, would ensure that more accurate and complete data is
reported to the Agencies on the Form 5500. Further, as discussed in the
regulatory impact analysis to the regulation establishing the Form PR,
pooled employer plans generally would benefit from scale advantages,
including the ability to obtain lower fees for investment options.\37\
The marginal costs for pooled employer plans would diminish and pooled
plan providers would spread fixed costs over a larger pool of member
employers and employee participants, creating direct economic
efficiencies. Szapiro's research finds that the per-employer cost of a
large MEP can be lower than the cost of a small single employer
plan.\38\ Specifically, the study finds that a MEP with $125 million
and 80 participating companies cost 78 basis points, whereas 80 single-
employer plan each with $1.5 million in assets would have an estimated
cost of 111 basis points per plan. Thus, compared to single-employer
plans, MEPs can be a more cost-efficient option for small employers.
The increased economic efficiency may result in small businesses being
able to compete more easily with larger companies in recruiting and
retaining workers due to a competitive employee benefit package.
Finally, pooled employer plans may enable participants to achieve
better retirement outcomes. VanDerhei's research finds that the
adoption of a MEP in which the members do not need to share a common
interest, other than participating in the same plan, with a 25 percent
opt-out rate among employees, results in an overall 1.4 percent
reduction in the retirement savings deficit, compared to when a MEP is
not adopted.\39\ The study also finds a 3.1 percent reduction in the
retirement savings deficit for individuals working for employers with
fewer than 100 employees and 3.3 percent reduction in the retirement
savings deficit for individuals working for employers with 100 to 500
employees.
---------------------------------------------------------------------------

\37\ 85 FR at 72949-72950.
\38\ Szapiro, Aron, ``Pooled Employer Plans: Paperwork or
Panacea.'' Accessible at https://www.morningstar.com/lp/paperwork_or_panacea.
\39\ VanDerhei, Jack. ``How Much More Secure Does the SECURE Act
Make American Workers: Evidence from EBRI's Retirement Security
Projection Mode.'' EBRI Issue Brief. No 501 (2020). VanDerhei refers
to MEPs in which the members do not need to share a common interest
as ``Open MEPs.'' (Available at https://www.ebri.org/docs/default-source/ebri-issue-brief/ebri_ib_501_secure-20feb20.pdf?sfvrsn=db6f3d2f_4. (Accessed July 21, 2021.))
---------------------------------------------------------------------------

4. Costs
The Agencies anticipate that the costs for plans to satisfy their
annual reporting obligations would on average stay the same for most
plans and increase slightly for some under the final forms revisions
relative to the current regime.\40\ The Agencies estimate that the
final forms revisions would impose an additional annual burden of $5.0
million with most costs falling on 25,069 defined benefit plan filers.
---------------------------------------------------------------------------

\40\ The Agencies believe that the annual cost burden on filers
would be higher still in the absence of the regulations enabling use
of the Form 5500 Annual Return/Report in lieu of the statutory
requirements. Without the Form 5500 Annual Return/Report, filers
would not have the benefits of any regulatory exceptions, simplified
reporting, or alternative methods of compliance, and standardized
and electronic filing methods.
---------------------------------------------------------------------------

Defined Benefit Plan/Title IV Questions for the 2022 Form 5500s:
The final forms revisions include changes related to reporting
requirements for defined benefit pensions subject to filing Schedules
MB, SB, and R. The Agencies believe the changes and additional
questions reflect information plans should know and expect that
reporting this information would result in a de minimis increase in
burden.
Based on the changes that will be effective beginning with the 2022
Schedules SB, MB and R, and the relevant comments for each, the
Agencies believes that the implementation of the changes by plans will
be the only measurable change and the aggregate change is de minimis.
The opinion is founded on the idea that the changes can be described by
one or more of the following; (1) The change replaces an existing data
element for a new element or set of elements that are assumed to be at
hand for plans, (2) changes to reporting thresholds based on plan size
reduce the number of plans required to respond and this change offsets
any potential additional burden incurred by plans still required to
report \41\ and (3) the changes are benign and meant to clarify or
simplify reporting. Therefore, the Agencies include 2 hours for plan
administrators to prepare for the reporting changes in plan year 2022
and assume there to be no ongoing additional burden from the changes in
subsequent years. This results in a one-time cost of $5.0 million for
the 25,069 defined benefit plan filers.
---------------------------------------------------------------------------

\41\ Using data from the 2019 PBGC Data Tables table S-31 and M-
6, EBSA calculates that the change in size threshold will half the
number of PBGC insured Single-employer (SE) plans required to
provide information (where applicable) from 19.2 percent (4,511
plans) to 10 percent (2,343 plans) of the plan universe (23,477
plans) in plan year 2020. The PBGC insured multiemployer universe
reporting falls as well, from 79.7 percent (1,091 plans) to 62.1
percent (850 plans) of the plan universe (1,369 plans). https://www.pbgc.gov/sites/default/files/2019-pension-data-tables.xlsx.
---------------------------------------------------------------------------

Multiple-Employer Pension Plan (MEP) Reporting Improvements: New to
the 2022 plan year forms are four new plan characteristics codes to
identify different types of defined contribution MEPs: (a) Pooled
employer plans, (b) association retirement plans, and (c) PEO plans,
along with a residual category (d) for all other defined contribution
MEPs. Plans already report characteristics codes and the inclusion of
these additional codes for these recently added plan types does not
increase the estimated plan reporting burden for these plans.
5. Uncertainty
The SECURE Act created pooled employer plans. Due to these final
rules designed to implement the SECURE Act, as well as the DOL's final
rules with respect to association retirement plans and PEO-sponsored
plans, the Agencies assume that these types of entities will file a
Form 5500 and report the number of participating employers, numbers of
covered participants, and amount of assets in the future. However,
until they

[[Page 31144]]

file and there is a way to identify them, the Agencies face significant
uncertainty about the number of each type of entity and whether they
are providing coverage in a different manner than was already provided
by employers to their employees through single employer plans or
already existing MEPs (including association retirement plans and PEOs)
or whether with the availability of additional commercial arrangements
and plans, more employers will establish plans for their employees.
The Agencies requested information during the proposed rule stage
that would help improve its estimates of the numbers of affected
entities, employers and the burdens they would experience, but did not
receive comments that would help improve its estimates.
6. Alternatives
As discussed earlier in the preamble, the Agencies considered
alternative approaches for some of the information required to be
reported in order to reduce possible burden, including:
In the NPFR, line 8b(3) of Schedule MB and line 26b of Schedule SB
were proposed to be applicable to plans with 500 or more participants.
After receiving comments on the proposed changes, the Agencies decided
to revise this requirement for these lines and also for line 8b(1) of
Schedule MB so the requirement would only be applicable to plans with
1,000 or more participants, hence reducing the number of plans required
to provide attachments. In the NPFR, line 8b(4) of Schedule MB and line
26(c) of Schedule SB were proposed to require plans to provide the
average age and average benefit for terminated vested participants and
participants in pay-status. After receiving comments on the proposed
changes, the Agencies decided to not include these provisions in the
final rule.
The Agencies also considered finalizing the Schedule MEP but as
discussed above, the Agencies decided not to finalize the Schedule MEP
in the final forms revisions because of the need to carefully consider
the public comments, allow sufficient lead time for programming and
systems changes, as well as time to develop contracts and other
communications among the plans and their service providers, done in
conjunction with a separate contractual development schedule for
integrating form and instruction changes into the EFAST2 wholly-
electronic filing system that receives and displays Forms 5500 series
annual returns/reports.

B. Paperwork Reduction Act Statement

In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44
U.S.C. 3506(c)(2)(A)), the Agencies solicited comments concerning the
information collection request (ICR) included in the revision of the
Form 5500 Annual Return/Report. At the same time, the Agencies also
submitted an information collection request (ICR) to the Office of
Management and Budget (OMB), in accordance with 44 U.S.C. 3507(d).
The Agencies did not receive comments that specifically addressed
the paperwork burden analysis of the information collection requirement
contained in the proposed rule.
In connection with publication of the final forms revision, the
Agencies are submitting an ICR to OMB requesting a revision of the
collection of information under OMB Control Number 1210-0110 reflecting
the instruction changes being finalized in this document. The Agencies
will notify the public when OMB approves the ICR.
A copy of the ICR may be obtained by contacting the PRA addressee
shown below or at www.RegInfo.gov. PRA ADDRESSEE: Address requests for
copies of the ICRs to James Butikofer, Office of Research and Analysis,
U.S. Department of Labor, Employee Benefits Security Administration,
200 Constitution Avenue NW, Room N-5655, Washington, DC 20210 or email:
[email protected]. ICRs submitted to OMB also are available at http://www.RegInfo.gov.
The burden analysis is based on data from the 2019 Form 5500
filings (the latest year for which complete data are available). The
burden analysis includes the burden of the current information
collection and adjusts it for changes made by the final forms
revisions.
Burden estimates take into account the change in plan counts due to
the creation of pooled employer plans, with an increase in MEPs and a
small decrease in single employer plans, reflecting some single
employer plans moving to pooled employer plans. The Agencies estimated
that there are 4,538 defined contribution MEPs and that 202 PEPs will
be formed. The burden also includes the additional burden from the
changes to the 2022 Form 5500 and related schedules.
The Agencies' burden estimation methodology excludes certain
activities from the calculation of ``burden.'' If the activity is
performed for any reason other than compliance with the applicable
Federal tax administration system or the Title I annual reporting
requirements, it was not counted as part of the paperwork burden. For
example, most businesses or financial entities maintain, in the
ordinary course of business, detailed accounts of assets and
liabilities, and income and expenses for the purposes of operating the
business or entity. These recordkeeping activities were not included in
the calculation of burden because prudent business or financial
entities normally have that information available for reasons other
than Federal tax or Title I annual reporting. Only time for gathering
and processing information associated with the tax return/annual
reporting systems, and learning about the law, was included. In
addition, an activity is counted as a burden only once if performed for
both tax and Title I purposes. The Agencies also have designed the
instruction package for the Form 5500 Annual Return/Report so that
filers generally will be able to complete the Form 5500 Annual Return/
Report by reading the instructions without needing to refer to the
statutes or regulations. The Agencies, therefore, have considered in
their PRA calculations the burden of reading the instructions and find
there is no recordkeeping burden attributable to the Form 5500 Annual
Return/Report.
Note that to reflect OMB's preference that burden incurred by
service providers be reported as hour burden instead of cost burden,
burden that has historically been included as cost burden has been
included here as hour burden.
A summary of paperwork burden estimates follows. As noted above,
these estimates include the burden of the overall Form 5500 information
collection and makes adjustments for the final instructions revisions
included in this document.
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: Annual Information Return/Report of Employee Benefit Plan.
Type of Review: Revision of existing collection.
Affected Public: Individuals or households; Private Sector--
Business or other for-profit; Not-for-profit institutions.
OMB Number: 1210-0110.
Total Respondents: 839,728.
Total Responses: 839,728.
Estimated Total Burden Hours: 3,029,299.
Estimated Total Annualized Costs: $0.

Agency: Department of Treasury--IRS.
Title: Annual Information Return/Report of Employee Benefit Plan.
Type of Review: Revision of existing collection.

[[Page 31145]]

Affected Public: Individuals or households; Private Sector--
Business or other for-profit; Not-for-profit institutions.
OMB Number: 1545-1610.
Total Respondents: 984,354.
Total Responses: 984,354.
Estimated Total Burden Hours: 1,970,038.
Estimated Total Annualized Costs: $0.

Agency: PBGC.
Title: Annual Information Return/Report of Employee Benefit Plan.
Type of Review: Revision of existing collection.
Affected Public: Individuals or households; Private Sector--
Business or other for-profit; Not-for-profit institutions.
OMB Number: 1212-0057.
Total Respondents: 25,069.
Total Responses: 25,069.
Estimated Total Burden Hours: 17,743.
Estimated Total Annualized Costs: $0.
Paperwork and Respondent Burden: Estimated time needed to complete
the forms listed below reflects the combined requirements of the IRS,
the DOL, and the PBGC. The times will vary depending on individual
circumstances. The estimated average times are:

Table 1--Average Estimated Time per Schedule, per Filer Type
----------------------------------------------------------------------------------------------------------------
Pension plans
--------------------------------------------------------------------------
Large Small, filing Form 5500 Small, filing 5500-SF
----------------------------------------------------------------------------------------------------------------
Form 5500............................ 1 hr, 50 min........... 1 hr, 19 min...........
Sch A................................ 2 hr, 52 min........... 2 hr, 52 min...........
Sch MB............................... 8 hr, 53 min........... 8 hr, 14 min........... 8 hr, 14 min.
Sch SB............................... 6 hr, 38 min........... 6 hr, 49 min........... 6 hr, 49 min.
Sch C................................ 2 hr, 49 min...........
Sch D................................ 1 hr, 39 min........... 20 min.................
Sch G................................ 14 hr, 14 min..........
Sch H................................ 7 hr, 38 min...........
Sch I................................ ....................... 2 hr, 6 min............
Sch R................................ 1 hr, 41 min........... 1 hr, 7 min............
Form 5500-SF......................... ....................... ....................... 2 hr, 35 min.
----------------------------------------------------------------------------------------------------------------

Direct filing entities
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Master trusts CCTs PSAs 103-12 IEs GIAs
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Form 5500......................... 1 hr, 50 min.................. 1 hr, 29 min.................. 1 hr, 24 min.................. 1 hr, 33 min................. 1 hr, 22 min.
Sch A............................. 2 hr, 54 min.................. 2 hr, 48 min.................. 2 hr, 46 min.................. 2 hr, 52 min................. 2 hr, 53 min.
Sch C............................. 3 hr, 1 min................... 1 hr, 1 min................... 29 min........................ 1 hr, 22 min................. 51 min.
Sch D............................. 1 hr, 30 min.................. 47 min........................ 34 min........................ 49 min....................... 41 min
Sch G............................. 12 hr, 32 min................. .............................. .............................. 5 hr, 42 min.................
Sch H............................. 8 hr, 7 min................... 7 hr, 36 min.................. 7 hr, 33 min.................. 8 hr, 17 min................. 7 hr, 38 min.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Welfare plans that include health
benefits
---------------------------------------
Small, unfunded,
combination
unfunded/fully
Large insured, or funded
with a trust 5500-
SF
------------------------------------------------------------------------
Form 5500....................... 1 hr, 45 min...... 1 hr, 14 min.
Sch A........................... 3 hr, 40 min...... 2 hr, 43 min.
Sch C........................... 3 hr, 38 min......
Sch D........................... 1 hr, 52 min...... 20 min
Sch G........................... 11 hr, 0 min......
Sch H........................... 8 hr, 36 min......
Sch I........................... .................. 1 hr, 56 min.
Form 5500-SF.................... .................. 2 hr, 35 min.
------------------------------------------------------------------------

Welfare plans that do not include health benefits
--------------------------------------------------------------------------
Small, filing Form 5500-
Large Small, filing Form 5500 SF
----------------------------------------------------------------------------------------------------------------
Form 5500............................ 1 hr, 45 min........... 1 hr, 14 min...........
Sch A................................ 3 hr, 40 min........... 2 hr, 43 min...........
Sch C................................ 3 hr, 38 min...........
Sch D................................ 1 hr, 52 min........... 20 min.................
Sch G................................ 11 hr, 0 min...........
Sch H................................ 8 hr, 36 min...........
Sch I................................ ....................... 1 hr, 56 min...........
Form 5500-SF......................... ....................... 2 hr, 35 min...........
----------------------------------------------------------------------------------------------------------------

The aggregate hour burden for the Form 5500 Annual Return/Report
(including schedules and short form) is estimated to be 5 million hours
annually shared between the DOL, IRS, and the PBGC. The hour burden
reflects filing activities carried out directly by filers.

[[Page 31146]]

Presented below is a chart showing the total hour and cost burden
of the revised Form 5500 Annual Return/Report, including the changes
due to the current and past revisions. The chart displays the total
hour burden separately allocated across the DOL, the IRS, and the PBGC.

Table 2--Hour Burden Distribution per Agency
----------------------------------------------------------------------------------------------------------------
Hour burden
-----------------------------------------------
DOL IRS PBGC
----------------------------------------------------------------------------------------------------------------
Pension Large Plans............................................. 893,879 409,717 2,513
Pension Small Plans............................................. 929,498 1,063,423 12,649
Welfare Large Plans............................................. 1,065,506 17,906 ..............
Welfare Small Plans............................................. 64,616 22,140 ..............
DFEs............................................................ 70,103 34,404 75
EZ Filers....................................................... .............. 374,340 ..............
January 2013 Revision........................................... 630 .............. ..............
2014 CSEC Revision.............................................. 2,728 .............. ..............
2021/2022 Revisions............................................. 2,339 48,108 2,507
-----------------------------------------------
Total Agency Burden......................................... 3,029,299 1,970,038 17,743
----------------------------------------------------------------------------------------------------------------

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) \42\ imposes certain
requirements with respect to Federal rules that are subject to the
notice and comment requirements of section 553(b) of the Administrative
Procedure Act and are likely to have a significant economic impact on a
substantial number of small entities.\43\ Unless the head of an agency
certifies 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 of the final rule.\44\ The Department prepared an
Initial Regulatory Flexibility Analysis at the proposed rule stage.
However, the final forms revisions are focused only on a subset of the
requirements proposed. As discussed in the cost section above, most
changes have negligible or no added burden. The Defined Benefit Plan/
Title IV Revisions have added costs in the first year as plans make
changes to what information is being reported. In 2019 there were
23,694 single employer defined benefit plans and 1,375 multiemployer
defined benefit plans that are covered by the PBGC and would be
impacted by these changes. These plans are a non-substantial fraction
(3.7 percent) of the 686,809 pension plans filing in 2019. The
Department certifies that the final forms revisions will not have a
significant impact on a substantial number of small entities.
Therefore, the Department has not prepared a Final Regulatory
Flexibility Analysis.
---------------------------------------------------------------------------

\42\ 5 U.S.C. 601 et seq. (1980).
\43\ 5 U.S.C. 551 et seq. (1946).
\44\ 5 U.S.C. 604 (1980).
---------------------------------------------------------------------------

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 requires each
Federal agency to prepare a written statement assessing the effects of
any Federal mandate in a proposed or final agency rule that may result
in an expenditure of $100 million or more (adjusted annually for
inflation with the base year 1995) in any one year by State, local, and
tribal governments, in the aggregate, or by the private sector.\45\ For
purposes of the Unfunded Mandates Reform Act, as well as Executive
Order 12875, the final forms revisions does not include any Federal
mandate that the Agencies expect would result in such expenditures by
State, local, or tribal governments, or the private sector.\46\
---------------------------------------------------------------------------

\45\ 2 U.S.C. 1501 et seq. (1995).
\46\ Enhancing the Intergovernmental Partnership, 58 FR 58093
(Oct. 28, 1993).
---------------------------------------------------------------------------

E. Federalism Statement

Executive Order 13132 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.\47\ Federal agencies promulgating regulations that have
federalism implications must consult with State and local officials and
describe the extent of their consultation and the nature of the
concerns of State and local officials in the preamble to the final
rule.
---------------------------------------------------------------------------

\47\ Federalism, supra note 6.
---------------------------------------------------------------------------

In the Agencies' view, the final forms revisions would not have
federalism implications because they would not have direct effects on
the States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among
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
requirements implemented in these rules do not alter the fundamental
provisions of the statute with respect to employee benefit plans, and
as such would have no implications for the States or the relationship
or distribution of power between the national government and the
States.

IV. Appendices

The Agencies have included Appendices A and B to provide more
detailed illustrations and explanations of the changes, which will be
implemented for the 2022 Form 5500 series, expected to be available for
filing on January 1, 2023: \48\ Appendix A contains a detailed
description of final changes to the 2022 Form 5500, Schedules MB, SB
and R. Appendix B contains a detailed description of final changes to
the 2022 Form 5500 and Form 5500-SF to implement Section 101 of the
SECURE Act.\49\
---------------------------------------------------------------------------

\48\ Consistent with prior year practice, ``information-only''
copies of the forms, schedules, and instructions may be published
earlier than January 1, 2023.
\49\ This approach of showing proposed changes will reduce costs
associated with publication of the proposed form changes in the
Federal Register and provide greater flexibility for the related
EFAST2 development processes. The Agencies intend to publish mock-
ups of the forms on the DOL's website as part of the EFAST2 third
party software developer certification process and in furtherance of
public education efforts about the changes to be implemented.

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Consistent with the Agencies annual updates to the forms, the final
versions may include minor technical corrections that do not require
further notice and comment under the PRA, the APA, or any relevant
Executive Order.
BILLING CODE 4910-29-P

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Statutory Authority

Accordingly, pursuant to the authority in sections 101, 103, 104,
109, 110 and 4065 of ERISA and sections 6058 and 6059 of the Code, the
Form 5500 Annual Return/Report and the instructions thereto are
proposed to be amended as set forth herein.

Signed at Washington, DC, this 9th day of May, 2022.
Ali Khawar,
Acting Assistant Secretary, Employee Benefits Security Administration,
U.S. Department of Labor.
Eric Slack,
Director, Employee Plans, Tax Exempt and Government Entities Division,
Internal Revenue Service.
Gordon Hartogensis,
Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2022-10658 Filed 5-20-22; 8:45 am]
BILLING CODE 4510-29-C