[Federal Register Volume 87, Number 213 (Friday, November 4, 2022)]
[Notices]
[Pages 66762-66763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-24094]


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PENSION BENEFIT GUARANTY CORPORATION


Submission of Information Collection for OMB Review; Comment 
Request; Annual Reporting (Form 5500 Series)

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice of request for extension of OMB approval of information 
collection.

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SUMMARY: The Pension Benefit Guaranty Corporation (PBGC) is requesting 
that the Office of Management and Budget (OMB) extend approval, with 
modifications, under the Paperwork Reduction Act, of a collection of 
information for Annual Reporting under OMB control number 1212-0057, 
which expires on June 30, 2025. This notice informs the public of 
PBGC's request and solicits public comment on the collection of 
information.

DATES: Comments must be submitted on or before December 5, 2022.

ADDRESSES: Written comments and recommendations for the proposed 
information collection should be sent within 30 days of publication of 
this notice to www.reginfo.gov/PRAMain. Find this particular 
information collection by selecting ``Currently under 30-day Review--
Open for Public Comments'' or by using the search function. A copy of 
the request will be posted on PBGC's website at https://www.pbgc.gov/prac/laws-and-regulation/federal-registernotices-open-for-comment. It 
may also be obtained without charge by writing to the Disclosure 
Division of the Office of the General Counsel of PBGC, 445 12th Street 
SW, Washington, DC 20024-2101; or, calling 202-229-4040 during normal 
business hours. If you are deaf or hard of hearing or have a speech 
disability, please dial 7-1-1 to access telecommunications relay 
services.

FOR FURTHER INFORMATION CONTACT: Karen Levin ([email protected]), 
Attorney, Regulatory Affairs Division, Office of the General Counsel, 
Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington, 
DC 20024-2101; 202-229-3559. If you are deaf or hard of hearing or have 
a speech disability, please dial 7-1-1 to access telecommunications 
relay services.

SUPPLEMENTARY INFORMATION: Annual reporting to the Internal Revenue 
Service (IRS), the Employee Benefits Security Administration (EBSA), 
and the Pension Benefit Guaranty Corporation (PBGC) is required by law 
for most employee benefit plans. For example, section 4065 of the 
Employee Retirement Income Security Act of 1974 (ERISA) requires annual 
reporting to PBGC for pension plans covered by title IV of ERISA. To 
accommodate these filing requirements, IRS, EBSA, and PBGC have jointly 
promulgated the Form 5500 Series, which includes the Form 5500 Annual 
Return/Report of Employee Benefit Plan and the Form 5500-SF Short Form 
Annual Return/Report of Small Employee Benefit Plan.
    The existing collection of information was approved by the Office 
of Management and Budget (OMB) under OMB control number 1212-0057 
(expires June 30, 2025). On August 29, 2022, PBGC published in the 
Federal Register (at 87 FR 52821), a notice informing the public of its 
intent to request an extension of this collection of information, as 
modified. PBGC received one comment in support of the collection of 
information. PBGC is requesting that OMB extend approval of the 
collection, with modifications, for three years. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.
    PBGC is proposing modifications to the 2023 Schedule R (Retirement 
Plan Information) and to the 2023 Schedule SB (Single-Employer Defined 
Benefit Plan Actuarial Information), and to their related instructions, 
as described below.

Schedule R

    PBGC is proposing modifications to line 19 of Schedule R and its 
instructions, a line that applies to all defined benefit plans (except 
DFEs) that have 1,000 or more participants at the beginning of the plan 
year. Currently, such plans must provide a breakdown of plan assets in 
line 19a by reporting the percent of assets held in five categories of 
investments. PBGC is proposing to reconfigure the categories as shown 
below:

------------------------------------------------------------------------
                  Current                             Proposed
------------------------------------------------------------------------
Stock.....................................  Public Equity.
Investment-Grade Debt.....................  Private Equity.
High-Yield Debt...........................  Investment-Grade Debt and
                                             Interest Rate Hedging
                                             Assets.
Real Estate...............................  High-Yield Debt.
Other.....................................  Real Assets.
                                            Cash or Cash Equivalents.
                                            Other.
------------------------------------------------------------------------

    In addition, for certain investments, PBGC is proposing to modify 
the instructions to clarify how certain atypical investments should be 
categorized for this purpose. For example, as currently drafted, it is 
not clear whether cash equivalents should be included in ``Investment-
Grade Debt'' or in ``Other.'' Similarly, it is not clear whether 
infrastructure investments should be included in the ``Real Estate'' or 
the ``Other'' category. By expanding the list of categories and 
modifying the instructions, the more detailed information should be 
reported consistently which will enable PBGC to better model important 
characteristics of plan portfolios.
    PBGC is also proposing to modify the instructions for line 19a so 
that the percentages reported reflect the asset allocation as of the 
end of the plan year instead of the beginning of the plan year. Having 
more recent information will lead to better projections and more 
accurate analysis by PBGC, and because the Form 5500 isn't due until 
several months after the end of the plan year, this change should not 
create any timing issues for filers.
    In addition, PBGC is proposing changes to line 19b (average 
duration for certain investments) and its instructions and to eliminate 
line 19c (method used

[[Page 66763]]

to determine the duration reported in line 19b). Under modified line 
19b, PBGC is proposing that applicable filers would be required to 
check a box to indicate the average duration of the plan's combined 
Investment-Grade Debt and Interest Rate Hedging Assets portfolio, 
thereby replacing the current requirement to check the box that shows 
the average duration of the plan's combined Investment-Grade and High 
Yield Debt portfolio. PBGG is also proposing to change the average 
duration ranges to choose from 3-year periods to multiple 5-year 
periods, with the last choice being a period of 15 or more years.
    Line 19c currently asks for the duration measure used to calculate 
line 19b. Because the alternative duration measures do not provide 
meaningfully different results, eliminating line 19c will not hinder 
PBGC's modeling results.

Schedule SB

    PBGC is proposing a minor modification to Schedule SB, line 6 
(Target Normal Cost) and its instructions, to address a possible, 
albeit unlikely, situation in which line 6c (Target Normal Cost) 
reported on Schedule SB would not be consistent with IRS regulation and 
statute if lines 6a and 6b were determined in accordance with the 
current line 6 instructions. This situation would arise only if (1) a 
plan requires mandatory employee contributions and (2) the mandatory 
employee contributions for the plan year exceeded the present value of 
benefits accruing during the plan year. PBGC's proposed changes to 
lines 6a and 6c of the instructions, and to line 6c of the Form (which 
has changed from ``Total (line 6a + line 6b)'' to Total (Target Normal 
Cost)) will rectify this situation by clarifying the amount to be 
reported in line 6a is the present value of expected accruals and by 
detailing that line 6c requires the sum of lines 6a and 6b, ``reduced 
(but not below zero) by any mandatory employee contributions expected 
to be made during the plan year.''
    In addition, PBGC is proposing to change the current instructions 
for the Schedule SB, line 26b attachment (Schedule of Projection of 
Expected Benefit Payments), to provide that for a plan that has 1,000 
or more participants as of the valuation date, in situations where a 
plan assumes some, or all, benefits are paid in a lump sum but uses the 
annuity substitution rule (26 CFR 1.430(d)-1(f)(4)(iii)(B)) to 
determine the funding target, the attachment may show projected 
benefits payable in the annuity form instead of in the form assumed for 
valuation purposes, as indicated in the current instructions. PBGC 
notes that the instructions for the current line 26b attachment, which 
was added for the 2022 plan year, suggest that for such plans, the 
benefit projection would be based on a different form of payment than 
what was used to determine the funding target.
    In addition, the current instructions for line 26a of Schedule SB 
provide that a plan reporting 1,000 or more active participants on line 
3d, column (1), must also provide average compensation data. This 
instruction is incorrect because line 3d is where the total participant 
count is reported. PBGC is correcting this instruction to instead 
reference line 3c, column (1)), the active participant count.
    PBGC estimates that it will receive approximately 25,000 Form 5500 
and Form 5500-SF filings per year under this collection of information 
for the 2023 Form 5500 Series. PBGC further estimates that the total 
annual burden of this collection of information for the Form 5500 
Series, attributable to PBGC, will be 15,089 hours and that there will 
be no cost burden.

    Issued in Washington, DC.
Hilary Duke,
Assistant General Counsel for Regulatory Affairs, Pension Benefit 
Guaranty Corporation.
[FR Doc. 2022-24094 Filed 11-3-22; 8:45 am]
BILLING CODE 7709-02-P