Multi-Employer Pension Plan Information Made Available on Request
[09/14/2007]
Volume 72, Number 178, Page 52527-52534
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2520
RIN 1210-AB21
Multi-Employer Pension Plan Information Made Available on Request
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of proposed rulemaking.
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SUMMARY: This document contains a proposed regulation that, upon
adoption, would implement amendments to the Employee Retirement Income
Security Act of 1974, as amended (ERISA or the Act), requiring the
administrator of a multi-employer plan to provide copies of certain
actuarial and financial information about the plan to participants and
others upon request. The amendments, enacted by the Pension Protection
Act of 2006, added subsection (k) to section 101 of ERISA. The proposed
regulation would affect plan administrators, participants and
beneficiaries of multi-employer plans, as well as employee
representatives of such participants and employers that have an
obligation to contribute to such plans.
DATES: Written comments on the proposed regulation should be received
by the Department of Labor on or before October 15, 2007.
ADDRESSES: To facilitate the receipt and processing of comments, the
Department encourages interested persons to submit their comments
electronically by e-mail to e-ORI@dol.gov, or by using the Federal
eRulemaking portal at http://www.regulations.gov (follow
[[Page 52528]]
instructions for submission of comments). Persons submitting comments
electronically are encouraged not to submit paper copies. Persons
interested in submitting comments on paper should send or deliver their
comments (at least three copies) to the Office of Regulations and
Interpretations, Employee Benefits Security Administration, Room N-
5669, U.S. Department of Labor, 200 Constitution Avenue, NW.,
Washington, DC 20210, Attention: ERISA 101(k) Regulation. Comments
received will be posted without change to http://www.regulations.gov and
http://www.dol.gov/ebsa, and available for public inspection at the Public
Disclosure Room, N-1513, Employee Benefits Security Administration, 200
Constitution Avenue, NW., Washington, DC 20210, including any personal
information provided.
FOR FURTHER INFORMATION CONTACT: Stephanie L. Ward, Office of
Regulations and Interpretations, Employee Benefits Security
Administration, (202) 693-8500. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
A. Background
Section 502(a)(1) of the Pension Protection Act of 2006, Public Law
109-280, 120 Stat. 780 (PPA), which was enacted on August 17, 2006,
amended the Employee Retirement Income Security Act of 1974, as amended
(ERISA or the Act), by adding section 101(k). Section 101(k)(1) of
ERISA requires the administrator of a multi-employer pension plan, upon
written request, to furnish certain documents to any plan participant,
beneficiary, employee representative, or any employer that has an
obligation to contribute to the plan. The documents that are required
to be furnished are: (A) A copy of any periodic actuarial report
(including sensitivity testing) received by the plan for any plan year
which has been in the plan's possession for at least 30 days; (B) a
copy of any quarterly, semi-annual, or annual financial report prepared
for the plan by any plan investment manager or advisor or other
fiduciary which has been in the plan's possession for at least 30 days;
and (C) a copy of any application filed with the Secretary of the
Treasury requesting an extension under section 304 of the Act (or
section 431(d) of the Internal Revenue Code of 1986) and the
determination of such Secretary pursuant to such application.
Section 502(a)(2) of the PPA amended section 502(c)(4) of ERISA to
provide that the Secretary of Labor may assess a civil penalty of not
more than $1,000 a day for each violation of section 101(k). Section
502(a)(3) of the PPA provides that the Secretary of Labor shall
prescribe regulations under section 101(k)(2) not later than one year
after the date of enactment of the PPA. Section 502(d) of the PPA
provides that section 101(k) shall apply to plan years beginning after
December 31, 2007.
B. Overview of Proposed Regulation
Included in this notice is a proposed regulation that, upon
adoption, would implement the new disclosure requirement under section
101(k) of the Act. Interested parties are invited to comment on all
aspects of the regulation. The Department intends to publish a separate
regulation implementing the Secretary's authority to assess civil
penalties under section 502(c)(4) of ERISA at a later date.
Paragraph (a) of the proposed regulation provides that the
administrator of a multi-employer pension plan shall furnish copies of
actuarial, financial and funding-related documents to certain persons
who make written requests to the plan.
For purposes of paragraph (a), a person entitled to request and
receive documents is any participant within the meaning of section 3(7)
of the Act; any beneficiary receiving benefits under the plan; any
labor organization representing participants under the plan; or any
employer that is a party to the collective bargaining agreement(s)
pursuant to which the plan is maintained or who otherwise may be
subject to withdrawal liability pursuant to section 4203 of the Act.
See Sec. 2520.101-6(d). In this regard, the phrase ``any employer that
has an obligation to contribute to the plan'' under section 101(k) of
the Act has been construed under paragraph (d)(4) of the proposed
regulation in a manner that is consistent with the construction given
to similar language under section 101(f) of ERISA, which relates to
annual funding notices of multi-employer defined benefit pension
plans.\1\
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\1\ See 29 CFR 2520.101-4(f)(4); 71 FR 1904, Jan. 11, 2006.
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Paragraph (b)(1) of the proposed regulation provides that the plan
administrator must furnish the requested document or documents to the
requester not later than 30 days after the date the written request is
received by the plan, subject to the limitations in paragraphs (b)(3)
and (b)(4).
Paragraph (b)(3) of the proposed regulation provides that a plan
administrator is not required to furnish to any requester more than one
copy of a document described in paragraph (c) during any 12-month
period. Thus, an eligible requester would not be entitled to receive
more than one copy of the same financial report within a 12-month
period. This limitation, however, does not mean that an eligible
requester would not be entitled to request and receive copies of two
different reports (e.g., one financial report and one actuarial report)
during any 12-month period. For purposes of the application of this 12-
month limitation, the Department is of the view that the 12-month
period commences from the earlier of the date the plan actually
responds to a request or the 30th day referenced in paragraph (b)(1) of
the regulation.
Paragraph (b)(4) of the proposed regulation permits the plan
administrator to charge the requester for the reasonable costs of
furnishing documents. The PPA specifically authorizes the Department to
prescribe in regulations the maximum amount that would be considered a
reasonable charge for furnishing documents under this section. For this
purpose, the Department proposes that a reasonable charge may not
exceed the lesser of the actual cost to the plan for the least
expensive means of acceptable reproduction of the document, or 25 cents
per page, plus the cost of mailing or otherwise delivering the
requested document. This standard adopts the existing reasonable charge
standard under 29 CFR 2520.104b-30, but also permits the plan
administrator to charge the requester the actual cost to the plan of
mailing or delivering the document or information.
Paragraph (b)(2) provides that such documents must be furnished in
a manner consistent with the general furnishing requirements set forth
in 29 CFR 2520.104b-1 including the use of electronic media. See Sec.
2520.104b-1(c). In this regard, wherever possible, the Department
encourages plan administrators to use electronic media to furnish
requested information in order to reduce compliance costs under the
regulation.\2\
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\2\ As part of a separate rulemaking initiative, the Department
is undertaking a review of the rules in paragraph (c) of Sec.
2520.104b-1 relating to disclosure through electronic media. The
Department is reviewing these rules in light of advances in
technology and new disclosure requirements under ERISA following
enactment of the PPA.
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Paragraph (c) of the proposed regulation delineates the documents
that must be disclosed pursuant to section 101(k). Paragraph (c)(1)
provides that information subject to the disclosure requirement in
paragraph (a) consists of a copy of any periodic
[[Page 52529]]
actuarial report (including any sensitivity testing) received by the
plan that has been in the plan's possession for at least 30 days before
the plan receives the written request; a copy of any quarterly, semi-
annual, or annual financial report prepared for the plan by any plan
investment manager or advisor (without regard to whether such advisor
is a fiduciary within the meaning of section 3(21) of the Act) or other
fiduciary which has been in the plan's possession for at least 30 days
before the plan receives the written request; and a copy of any
application filed by the plan sponsor with the Secretary of the
Treasury requesting an amortization extension under section 304 of the
Act or section 431(d) of the Internal Revenue Code of 1986 and the
determination of such Secretary pursuant to such application.
To provide plan administrators with clarity regarding their
disclosure obligations under section 101(k), the proposed regulation
clarifies that financial reports prepared by advisors are subject to
disclosure without regard to whether the advisor or advisors are
fiduciaries within the meaning of section 3(21) of ERISA. See Sec.
2520.101-6(c)(1)(ii). The Department specifically requests comments on
whether this clarification alone provides sufficient certainty as to
what financial reports are required to be disclosed, or, whether, in
addition, the term ``financial report'' should also be clarified in
regulation and, if so, how.
Paragraph (c)(2) provides that documents required to be disclosed
under the regulation shall not include certain information. In this
regard, paragraph (c)(2)(i) provides that required disclosures do not
include the information or data which served as the basis for such
report or application, e.g., the data behind or underlying a report or
application. In addition, paragraph (c)(2)(ii) of the proposed
regulation provides that disclosed reports or applications shall not
include any information that the plan administrator reasonably
determines to be either individually identifiable information regarding
any plan participant, beneficiary, employee, fiduciary, or contributing
employer, or proprietary information regarding the plan, any
contributing employer, or entity providing services to the plan. The
Department specifically invites comment on whether clarification is
needed with respect to determinations regarding what information should
be considered ``proprietary'' or ``individually identifiable'' in this
context and, if so, what standards should govern such determinations.
In this regard, paragraph (c)(2)(ii) of the proposed rule clarifies
that, in responding to a request under the regulation, a plan
administrator is required to inform the requester if the plan
administrator withholds any information determined to be
``proprietary'' or ``individually identifiable'' within the meaning of
the restrictions in paragraph (c)(2) of the proposed regulation.
Along with the proposed regulation under section 101(k), discussed
above, this notice also includes amendments to 29 CFR 2520.104b-30,
which provides guidelines for assessing a reasonable charge for
furnishing plan documents pursuant to section 104(b)(4) of the Act
(e.g., latest updated summary plan description, latest annual report,
any terminal report, etc.). Language in Sec. 2520.104b-30 could be
construed as contrary to specific language in section 101(k) of ERISA,
Sec. 2520.101-6, and other PPA provisions amending title I of ERISA
that expressly permit plan administrators to impose reasonable charges
on requesters for the cost of furnishing the requested information,
including handling and postage charges. Accordingly, minor conforming
amendments are being proposed to paragraph (a) of Sec. 2520.104b-30 to
eliminate any ambiguity that may be caused by current Sec. 2520.104b-
30.
C. Regulatory Impact Analysis
Summary
The proposed rule contains guidance necessary to implement the
amendments made by new section 101(k) of the Act, as enacted by section
502(a)(1) of the PPA, which requires multiemployer plan administrators
to provide, upon written request, copies of certain actuarial and
financial reports about the plan to participants, beneficiaries,
employee representatives, or any employer that has an obligation to
contribute to the plan.
This disclosure requirement of PPA was enacted because more
complete disclosures were considered an important element of measures
enacted in PPA to strengthen the long-term health of the multiemployer
plan pension system. Providing participants and beneficiaries, employee
representatives, and contributing employers with greater access to
actuarial and financial information regarding their plans will increase
the transparency of the operation of multiemployer pension plans and
afford all parties interested in the financial viability of such plans
greater opportunity to monitor their funding and financial status and
to take appropriate action when necessary.
By clarifying certain terms used in section 101(k) of the Act, this
regulation will also permit multiemployer plan administrators to
fulfill their disclosure responsibilities under this section with
greater certainty and less cost. The increase in transparency of plan
operations may also contribute to an atmosphere of greater
accountability on the part of plan officials. These benefits have not
been quantified.
The cost of the multiemployer plan disclosure requirement under
section 101(k) of the Act and the rule is expected to total
approximately $2.3 million in the year of implementation, $2.0 million
in the second year, and $1.4 million in the third year. These costs
arise from logging in disclosure requests, copying and mailing the
reports, and contracting for redacting individually identifiable and
proprietary information from the reports. In addition, multiemployer
plans will devote in-house staff time to complying with this
regulation. The total hour burden is estimated to be 56,000 hours in
2008, 49,000 in 2009 and 37,000 in 2010. Both the dollar burden and the
hour burden are projected to fall over the three-year period as
interest in the aging inventory of existing documents subject to this
regulation wanes. The dollar equivalent of the three-year hour burden
is estimated to be $4.4 million.
Because the costs of the proposed regulation arise from notice
provisions in the PPA, the data and methodology used in developing
these estimates are more fully described in the Paperwork Reduction Act
section of this analysis of regulatory impact.
Executive Order 12866 Statement
Under Executive Order 12866 (58 FR 51735), the Department must
determine whether a regulatory action is ``significant'' and therefore
subject to review by the Office of Management and Budget (OMB). 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
[[Page 52530]]
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. Although the Department believes that
this regulatory action is not economically significant within the
meaning of section 3(f)(1) of the Executive Order, the action has been
determined to be significant within the meaning of section 3(f)(4) of
the Executive Order, and the Department accordingly provides the
following assessment of its potential costs and benefits. As elaborated
below, the Department believes that the benefits of the rule justify
its costs.
In assessing the costs and benefits of the rule and associated
provisions of the Act, the Department endeavored to consider all of the
major activities that will be carried out pursuant to them. For
example, multiemployer pension plan administrators will have to make
arrangements for copying and mailing the reports and redacting
individually identifiable and proprietary information from the reports.
Because the regulation does not require the creation of any new
documents, the costs of the rule are limited to those arising from
logging in requests and from copying, mailing and redacting disclosed
reports.
The Department estimates that the total cost \3\ for all
multiemployer plans to comply with the regulation will average $1,200
per plan year over the 2008-2010 periods. Given that total 2004 assets
of multiemployer pension plans averaged about $247 million in defined
benefit plans and $50 million in defined contribution plans, this
annual cost is approximately 0.0012% of average plan assets in defined
benefit plans and 0.0061% of assets in defined contribution plans. The
Department believes that the transparency contained in the rule and
associated section 101(k) of the Act will provide participants,
beneficiaries, employee representatives, and contributing employers
with important information regarding the funding and financial status
of multiemployer pension plans. These disclosures will allow
participants, beneficiaries, employee representatives, and contributing
employers to learn more about the financial status of their plans and
take action where appropriate. Although the benefits of this increased
transparency have not been quantified, the Department has concluded
that these benefits of the rule outweigh its modest costs. The
Department invites comments on this assessment and its conclusions.
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\3\ Total cost is the sum of the dollar burden and the dollar
equivalent of the hour burden.
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Paperwork Reduction Act
As part of its continuing effort to reduce paperwork and respondent
burden, the Department of Labor conducts a preclearance consultation
program to provide the general public and federal agencies with an
opportunity to comment on proposed and continuing collections of
information in accordance with the Paperwork Reduction Act of 1995 (PRA
95) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested data
can be provided in the desired format, reporting burden (time and
financial resources) is minimized, collection instruments are clearly
understood, and the impact of collection requirements on respondents
can be properly assessed.
Currently, EBSA is soliciting comments concerning the proposed
information collection request (ICR) included in the Proposed
Regulation on Multiemployer Pension Plan Information Made Available on
Request. A copy of the ICR may be obtained by contacting the PRA
addressee shown below.
The Department has submitted a copy of the proposed rule to OMB in
accordance with 44 U.S.C. 3507(d) for review of its information
collections. The Department and OMB are particularly interested in
comments that:
Evaluate whether the collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
Evaluate the accuracy of the agency's estimate of the
burden of the collection of information, including the validity of the
methodology and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, e.g., permitting
electronic submission of responses.
Comments should be sent to the Office of Information and Regulatory
Affairs, Office of Management and Budget, Room 10235, New Executive
Office Building, Washington, DC 20503; Attention: Desk Officer for the
Employee Benefits Security Administration. OMB requests that comments
be received within 30 days of publication of the proposed regulation to
ensure their consideration.
PRA Addressee: Address requests for copies of the ICR to Joseph S.
Piacentini, Office of Policy and Research, U.S. Department of Labor,
Employee Benefits Security Administration, 200 Constitution Avenue,
NW., Room N-5647, Washington, DC 20210. Telephone (202) 693-8410; Fax:
(202) 219-5333. These are not toll-free numbers.
The proposed regulation would, upon adoption, implement the
disclosure requirements of new section 101(k) of the Act, as added by
section 502(a)(1) of the PPA. As described earlier in the preamble,
section 101(k)(1) of the Act requires multiemployer plan
administrators, upon written request, to furnish certain documents to
any plan participant, beneficiary, employee representative, or any
employer that has an obligation to contribute to the plan. The
documents that may be requested are (1) a copy of any periodic
actuarial report (including sensitivity testing) received by the plan
for any plan year which has been in the plan's possession for at least
30 days; (2) a copy of any quarterly, semi-annual, or annual financial
report prepared for the plan by any plan investment manager or advisor
or other fiduciary that has been in the plan's possession for at least
30 days; and (3) a copy of any application filed with the Secretary of
the Treasury requesting an extension under section 304 of the Act (or
section 431(d) of the Internal Revenue Code of 1986) and the
determination of such Secretary pursuant to such application.
The information collection provisions of this proposed rule are
found in section 2520.101-6(a) of the proposed rule, which requires
multiemployer defined benefit and defined contribution pension plan
administrators to furnish copies of actuarial, financial, and funding
related documents to plan participants, beneficiaries, employee
representatives, and contributing employers upon request. This
information constitutes a third-party disclosure from the administrator
to participants, beneficiaries, employee representatives, and
contributing employers. Pursuant to section 2520.101-6(c)(2) the
documents required to be disclosed shall not contain any information
that the plan administrator reasonably determines to be either: (i)
Individually identifiable information regarding any plan participant,
beneficiary, employee, fiduciary, or contributing employer, or (ii)
proprietary information regarding the plan, any contributing employer,
or entity providing services to the plan.
[[Page 52531]]
The plan administrator must inform the requester if any such
information is withheld.
Annual Hour Burden
In order to estimate the potential costs of the disclosure
provisions of section 101(k) of the Act and this proposed rule, the
Department estimated the number of multiemployer defined benefit and
defined contribution pension plans. Based on data derived exclusively
from the Form 5500 for the 2004 plan year, which is the most recent
year for which complete data are available, the Department estimates
that there are 1,533 multiemployer defined benefit plans \4\ and 1,372
multiemployer defined contribution plans that would be subject to this
disclosure requirement. Because section 101(k) of the Act and the
regulation generally do not limit the class of documents that can be
requested in any way by date of creation or receipt, the Department has
assumed for purposes of this estimate that each multiemployer defined
benefit and defined contribution pension plan will disclose both an
existing inventory and newly created periodic actuarial reports
(``actuarial reports''), quarterly, semiannual, or annual financial
reports (``financial reports''), and amortization extension requests
filed with the IRS (hereafter ``extension requests'').\5\
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\4\ All dollar or hour numbers in this burden analysis have been
rounded to either the nearest thousand or the nearest hundred, as
appropriate.
\5\ For purposes of this estimate, the Department assumes that
plans will receive no requests for documents in existing inventory
for years prior to 2002.
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In developing burden estimates, the Department has taken into
account the total estimated hours required to copy, mail, and contract
with a service professional to redact individually identifiable and
proprietary information from the reports.
With respect to an existing inventory of reports, the Department
estimates that multiemployer defined benefit plans will receive 169,000
requests to disclose existing financial reports (an average of 110 per
plan), 76,000 requests for existing actuarial reports (an average of 50
per plan), and 340 requests for existing amortization requests (an
average of .22 per plan), and defined contribution plans will receive
96,000 requests for existing financial reports (an average of 70 per
plan). Therefore, the Department estimates that multiemployer pension
plans would receive a total of 341,000 requests for disclosures of
existing inventory of reports.
The Department estimates that the total hour burden associated with
disclosing existing documents upon request over the 2008-2010 period
will be 66,000 hours. This would include 61,000 clerical hours to log
requests and to locate, copy, and mail paper disclosures \6\ and 5,000
of legal hours (1.8 hours per plan for financial reports, .7 hours for
actuarial reports, and 0 hours for extension requests) \7\ to redact
individually identifiable and proprietary information.\8\ The
equivalent costs of these hours are $2.1 million.\9\
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\6\ This is the product of the total documents disclosed times
the percentage of documents disclosed on paper times 15 minutes (to
locate, copy, and mail paper documents).
\7\ The Department estimates that 70% of the requested documents
will be redacted by outside legal counsel, and that 30% of financial
reports and 25% of actuarial reports will require redaction.
\8\ The Department estimates that 20% of existing financial
reports and actuarial reports for defined benefit plans will be
available electronically, 50% of existing extension requests for
such plans will be available electronically, and 20% of existing
defined contribution plan financial reports will be available
electronically. The Department invites comments on this estimate.
Documents are assumed to be disclosed on paper unless the requester
has access to e-mail and requests a document that already exists in
paper form.
\9\ Hourly wage estimates were based on data from the Bureau of
Labor Statistics Occupational Employment Survey (November 30, 2004)
and the 2005 Employment Cost Trends. Total labor costs (wages plus
benefits plus overhead) for clerical staff were estimated to average
$25 per hour over the period based on metropolitan wage rates for
Executive Secretaries and Administrative Assistants. Total labor
cost for legal staff was estimated to average $109 per hour based on
metropolitan wage estimates for attorneys.
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For purposes of this analysis, the Department assumes that 40% of
the existing documents would be requested in the year of
implementation, 30% in the second year, and 15% in the third year, with
the remaining 15% of disclosures of existing documents occurring after
2010.\10\ Based on this allocation, the first year hour burden is
estimated to be 56,000 hours ($1.7 million equivalent cost), the second
year hour burden would be 49,000 hours ($1.5 million equivalent cost),
and the third year burden would be 37,000 hours ($1.1 million
equivalent cost).
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\10\ This assumption is based on the expectation that interest
in receiving existing documents will be high in the initial year of
implementation and gradually decrease in subsequent years.
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With respect to newly created reports, the Department estimates
that multiemployer defined benefit plans will receive 107,000 requests
to disclose newly created financial reports (an average of 70 per
plan), 32,000 requests for newly created actuarial reports (an average
of 21 per plan), and 1,600 requests for newly created amortization
requests (an average of one per plan), and defined contribution plans
will receive 82,000 requests for newly created financial reports (an
average of 60 per plan). Therefore, the Department estimates that
multiemployer pension plans would receive a total of 223,000 requests
for disclosures of newly created reports.
The Department estimates that the total hour burden associated with
disclosing newly created documents upon request is 25,000 hours. This
includes 24,000 clerical hours to copy and mail paper disclosures and
1,200 legal hours to redact individually identifiable and proprietary
information. The equivalent costs of these hours are $744,000.
Annual Cost Burden
The costs arising from this information collection derive from the
direct costs of distributing the reports. As discussed above, the
Department believes that a substantial number of the existing documents
will be available only in paper form; therefore, costs will be incurred
to copy and to distribute the reports by mail.\11\ Some plans also will
incur costs to hire a service provider to review the reports and redact
individually identifiable and proprietary information from them.
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\11\ See footnote 9 above.
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The proposed rule allows plans to charge requesters for the
reasonable costs of furnishing documents in an amount that does not
exceed the lesser of the actual cost to the plan to furnish the
document, or 25 cents per page plus the cost of mailing or otherwise
delivering the requested document. The proposed rule does not allow
plans to charge for redaction costs. The extent to which plans will
impose such charges has not been estimated, but the Department has
estimated the amount these charges would reimburse plans for their
direct dollar cost if plans were to consistently charge requesters for
all allowable charges. Because copy costs will generally not exceed 25
cents per page, the proceeds from these charges, if imposed, would
reimburse plans for all mailing costs, for nearly all copy costs, and
for an estimated 60 percent of the total dollar burden expected over
the 2008-2010 period.
With respect to the existing inventory of documents for
multiemployer defined benefit plans, the Department estimates copying
costs of $791,000 for the existing inventory of financial reports,\12\
[[Page 52532]]
$171,000 for the existing inventory of actuarial reports, $41 for the
existing inventory of extension requests. For multiemployer defined
contribution plans, estimated copying costs for existing financial
reports is $455,000. Therefore, the total copying costs for the
existing inventory of all reports would be $1.4 million.
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\12\ The copying cost estimate is based on a $5.84 average per
document cost of disclosure of financial reports (estimated 40 pages
per document times $0.15 average copying cost per page), $2.80 for
actuarial reports (estimated 50 pages per document times $0.06
average copying cost per page), $0.24 for extension requests
(estimated 12 pages per document times $0.02 average copying cost
per page), and $5.84 for defined contribution plan financial reports
(estimated 50 pages per document times $0.15 average copying cost
per page). The average copying costs per page takes into account the
estimated percentage of documents that are in color, and will,
therefore, require more expensive color copying. The Department
assumes that 70% of financial reports and 20% of actuarial reports
are in color, and that 0% of extension requests are in color.
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The Department estimates mailing costs of $271,000 to deliver the
existing inventory of financial reports, $152,000 to deliver the
existing actuarial reports, and $129 to deliver existing extension
requests.\13\ Multiemployer defined contribution plans will incur an
estimated $157,000 of mailing costs to deliver existing financial
reports. Therefore, the total mailing costs for the existing inventory
of all reports is estimated to be $581,000.
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\13\ The negligible cost for all plans to mail extension
requests results from the interaction of various assumptions
regarding these documents--a low request rate, a high rate of
electronic disclosure, and a relatively low mailing cost arising
from the modest length of these documents.
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The costs to redact individually identifiable and proprietary
information from the existing inventory of financial reports are
$702,000 and from the existing inventory of actuarial reports are
$263,000. The Department estimates that no costs will be incurred for
redacting information from the existing inventory of amortization
extensions. For multiemployer defined contribution plans, the redaction
costs for existing financial reports are $628,000. Therefore, the total
redaction costs for the existing inventory of all reports are $1.6
million.
With respect to newly created reports for multiemployer defined
benefit plans, the Department estimates that the annual cost for all
plans to copy the newly created financial reports would be $212,000,
the newly created actuarial reports would be $30,000, and the newly
created amortization extension requests would be $21.\14\ For
multiemployer defined contribution plans, the copy cost for newly
created financial reports would be $176,000. Therefore, the total
copying costs for all newly created reports would be $416,000.
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\14\ The negligible cost for all plans to copy amortization
requests results from a combination of assumptions about these
documents--a low request rate, a high rate of electronic disclosure,
and a low cost of copying a modest number of black and white pages.
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The costs to mail the newly created financial reports would be
$73,000, newly created actuarial reports would be $27,000, and newly
created amortization extension requests would be $66. For multiemployer
defined contribution plans, the mailing costs for newly created
financial reports would be $55,000. Therefore, the total mailing costs
for newly created reports would be $155,000.
The estimated costs of contract work \15\ to redact individually
identifiable and proprietary information for newly created financial
reports would be $140,000 and $44,000 for newly created actuarial
reports. The Department estimates that no costs will be incurred for
redacting information from newly created amortization extension
requests. For multiemployer defined contribution plans, the redaction
cost for newly created financial reports is estimated to be $126,000.
Therefore, the total annual redaction costs for all newly created
reports are estimated to be $310,000.
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\15\ The Department has assumed that 70% of redaction work will
be contracted.
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Type of Review: New collection.
Agency: Department of Labor, Employee Benefits Security
Administration.
Title: Multiemployer Pension Plan Information Made Available on
Request.
OMB Number: 1210-NEW.
Affected Public: Individuals or households; business or other for-
profit; not-for-profit institutions.
Respondents: 2,905.
Frequency of Response: Occasionally.
Responses: 960,000.
Estimated Total Annual Hour Burden: 56,000 (first year); 49,000
(second year); 37,000 (third year).
Estimated Total Annual Cost Burden: $2.3 million (first year); $2.0
million (second year); $1.4 million (third year).
OMB will consider comments submitted in response to this request in
its review of the request for approval of the ICR; these comments will
also become a matter of public record.
Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
certain requirements with respect to Federal rules that are subject to
the notice and comment requirements of section 553(b) of the
Administrative Procedure Act (5 U.S.C. 551 et seq.) and which are
likely to have a significant economic impact on a substantial number of
small entities. Unless an agency certifies that a proposed rule is not
likely to have a significant economic impact on a substantial number of
small entities, section 603 of RFA requires that the agency present an
initial regulatory flexibility analysis at the time of the publication
of the notice of proposed rulemaking describing the impact of the rule
on small entities and seeking public comment on such impact. Small
entities include small businesses, organizations and governmental
jurisdictions.
The Department has deemed that an employee benefit plan shall be
considered a small entity if it has fewer than 100 participants.\16\ By
this standard, forthcoming data from the EBSA Private Pension Bulletin
2004 show that only 291 multiemployer pension plans or 10% of all
multiemployer pension plans are small entities. The Department does not
consider this to be a substantial number of small entities. Therefore,
pursuant to section 605(b) of RFA, the Department hereby certifies that
the proposed rule is not likely to have a significant economic impact
on a substantial number of small entities.
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\16\ The basis for this definition is found in section 104(a)(2)
of the Act, which permits the Secretary of Labor to prescribe
simplified annual reports for pension plans that cover fewer than
100 participants.
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To the Department's knowledge, there are no federal regulations
that might duplicate, overlap, or conflict with the proposed regulation
under section 101(k) of ERISA.
Congressional Review Act
The rule being issued here is subject to the Congressional Review
Act provisions of the Small Business Regulatory Enforcement Fairness
Act of 1996 (5 U.S.C. 801 et seq.) and, if finalized, will be
transmitted to Congress and the Comptroller General for review. The
rule is not a ``major rule'' as that term is defined in 5 U.S.C. 804,
because it is not likely to result in (1) an annual effect on the
economy of $100 million or more; (2) a major increase in costs or
prices for consumers, individual industries, or Federal, State, or
local government agencies, or geographic regions; or (3) significant
adverse effects on competition, employment, investment, productivity,
innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export markets.
Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), as well as Executive Order
[[Page 52533]]
12875, the rule does not include any Federal mandate that may result in
expenditures by State, local, or tribal governments, and does not
impose an annual burden exceeding $100 million on the private sector.
Federalism Statement
Executive Order 13132 (August 4, 1999) outlines fundamental
principles of federalism and requires the adherence to specific
criteria by Federal agencies in the process of their formulation and
implementation of policies that have substantial direct effects on the
States, on the relationship between the national government and the
States, or on the distribution of power and responsibilities among the
various levels of government. The proposal does not have federalism
implications because it has no substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government. Section 514 of the Act provides, with certain
exceptions specifically enumerated that are not pertinent here, that
the provisions of Titles I and IV of the Act supersede any and all laws
of the States as they relate to any employee benefit plan covered under
Act. The requirements of the proposal would not alter the fundamental
reporting and disclosure requirements of the statute with respect to
employee benefit plans, and as such have no implications for the States
or the relationship or distribution of power between the national
government and the States.
List of Subjects in 29 CFR Part 2520
Accounting, Employee benefit plans, Employee Retirement Income
Security Act, Pensions, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Department of Labor
proposes to amend 29 CFR part 2520 as follows:
PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE
1. The authority citation for part 2520 is revised to read as
follows:
Authority: 29 U.S.C. 1021-1025, 1027, 1029-31, 1059, 1134 and
1135; and Secretary of Labor's Order 1-2003, 68 FR 5374 (Feb. 3,
2003). Sec. 2520.101-2 also issued under 29 U.S.C. 1132, 1181-1183,
1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.102-3,
2520.104b-1 and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-
1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.104b-1
and 2520.107 also issued under 26 U.S.C. 401 note, 111 Stat. 788.
Sec. 2520.101-4 also issued under sec. 103 of Pub. L. 108-218. Sec.
2520.101-6 also issued under sec. 502, Pub. L. 109-280, 120 Stat.
780.
Sec. 2520.101-5 [Reserved]
2. Add and reserve Sec. 2520.101-5 of subpart A.
3. Add Sec. 2520.101-6 to subpart A to read as follows:
Sec. 2520.101-6 Multiemployer Pension Plan Information Made Available
on Request.
(a) In general. For purposes of compliance with the requirements of
section 101(k) of the Employee Retirement Income Security Act of 1974,
as amended (the Act), 29 U.S.C. 1001, et seq., the administrator of a
multiemployer pension plan shall, in accordance with the requirements
of this section, furnish copies of actuarial, financial and funding-
related documents described in paragraph (c) of this section to plan
participants, beneficiaries, employee representatives and contributing
employers, described in paragraph (d) of this section.
(b) Obligation to furnish. (1) Subject to paragraphs (b)(3) and
(b)(4) of this section, the administrator of a multiemployer pension
plan shall, not later than 30 days after receipt of a written request
for a document or documents described in paragraph (c) of this section
from a plan participant, beneficiary, employee representative or
contributing employer described in paragraph (d) of this section,
furnish the requested document or documents to the requester.
(2) The plan administrator shall furnish documents pursuant to
paragraph (b)(1) of this section in a manner consistent with the
requirements of 29 CFR 2520.104b-1, including paragraph (c) of that
section relating to the use of electronic media.
(3) Nothing in this section shall require a plan administrator to
furnish to any requester a document described in paragraph (c) of this
section more than once during any 12-month period.
(4) The plan administrator may impose a reasonable charge to cover
the costs of furnishing documents pursuant to this section, but in no
event may such charge exceed--
(i) The lesser of: (A) the actual cost to the plan for the least
expensive means of acceptable reproduction of the document(s) or (B) 25
cents per page; plus
(ii) The cost of mailing or delivery of the document.
(c) Documents to be furnished. (1) For purposes of paragraph (a) of
this section, and subject to paragraph (b) of this section, a plan
participant, beneficiary, employee representative or contributing
employer described in paragraph (d) of this section, shall be entitled
to request and receive a copy of any:
(i) Periodic actuarial report (including any sensitivity testing)
received by the plan for any plan year which has been in the plan's
possession for at least 30 days prior to the date of the written
request;
(ii) Quarterly, semi-annual, or annual financial report prepared
for the plan by any plan investment manager or advisor (without regard
to whether such advisor is a fiduciary within the meaning of section
3(21) of the Act) or other fiduciary which has been in the plan's
possession for at least 30 days prior to the date of the written
request; and
(iii) Application filed with the Secretary of the Treasury
requesting an extension under section 304 of this Act or section 431(d)
of the Internal Revenue Code of 1986 and the determination of such
Secretary pursuant to such application.
(2) For purposes of this section, the document(s) required to be
disclosed shall not include:
(i) Any information or data which served as the basis for any
report or application described in paragraph (c)(1) of this section,
although nothing herein shall limit any other right that a person may
have to review or obtain such information under the Act; or
(ii) Any information that the plan administrator reasonably
determines to be either: (A) individually identifiable information
regarding any plan participant, beneficiary, employee, fiduciary, or
contributing employer, or (B) proprietary information regarding the
plan, any contributing employer, or entity providing services to the
plan. A plan administrator shall inform the requester if the plan
administrator withholds any such information included within a request
under paragraph (b) of this section.
(d) Persons entitled to request documents. For purposes of this
section, a plan participant, beneficiary, employee representative or
contributing employer entitled to request and receive documents
includes:
(1) Any participant within the meaning of section 3(7) of the Act;
(2) Any beneficiary receiving benefits under the plan;
(3) Any labor organization representing participants under the
plan;
(4) Any employer that is a party to the collective bargaining
agreement(s) pursuant to which the plan is maintained or who otherwise
may be subject to withdrawal liability pursuant to section 4203 of the
Act.
[[Page 52534]]
4. Amend Sec. 2520.104b-30 to revise paragraph (a) to read as
follows:
Sec. 2520.104b-30 Charges for documents.
(a) Application. The plan administrator of an employee benefit plan
may impose a reasonable charge to cover the cost of furnishing to
participants and beneficiaries upon their written request as required
under section 104(b)(4) of the Act, copies of the following
information, statements or documents: The latest updated summary plan
description, and the latest annual report, any terminal report, the
bargaining agreement, trust agreement, contract, or other instruments
under which the plan is established or operated. Except where
explicitly permitted under the Act, no charge may be assessed for
furnishing information, statements or documents as required by other
provisions of the Act, which include, in part 1 of title I, sections
104(b)(1), (2), (3) and (c) and 105(a) and (c).
* * * * *
Signed at Washington, DC, this 7th day of September, 2007.
Bradford P. Campbell,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. E7-18073 Filed 9-13-07; 8:45 am]
BILLING CODE 4510-29-P
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