[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.
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    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\
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    \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.
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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