[Federal Register Volume 61, Number 22 (Thursday, February 1, 1996)]
[Notices]
[Pages 3735-3736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-2140]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
Annual Reporting and Disclosure Requirements
AGENCY: Pension and Welfare Benefits Administration, Department of
Labor.
ACTION: Notice of Change to the 1995 Form 5500 Series and Request for
Comment.
-----------------------------------------------------------------------
SUMMARY: This document announces a change made by the Department of
Labor to items 15h and 26h on the 1995 Form 5500-C/R, ``Return/Report
of Employee Benefit Plan (With Fewer Than 100 Participants),'' filed by
administrators of employee benefit plans under Part 1 of title I of the
Employee Retirement Income Security Act of 1974 (ERISA). This change,
and additional guidance in the instructions to all forms in the 1995
5500 Series, relate to the handling of participant contributions by
employers.
EFFECTIVE DATES: The change is incorporated in the 1995 Form 5500
Series, and is effective for plan years beginning on or after January
1, 1995.
ADDRESSES: Interested persons are invited to submit written comments to
the Office of Regulations and Interpretations, Pension and Welfare
Benefits Administration, Room N5669, U.S. Department of Labor, 200
Constitution Ave NW., Washington, DC 20210. Attention: 1995 Form 5500
Series Comments.
FOR FURTHER INFORMATION CONTACT:
Susan E. Rees, Plan Benefits Security Division, Office of the
Solicitor, U.S. Department of Labor, Washington, DC, (202) 219-9141, or
George M. Holmes, Jr., Office of Regulations and Interpretations,
Pension and Welfare Benefits Administration, U.S. Department of Labor,
Washington, DC, (202) 219-8515. These are not toll-free numbers.
SUPPLEMENTARY INFORMATION: As part of its effort to enhance the
security and protection of participant contributions, the Department
has modified items 15h and 26h on the 1995 Forms 5500-C/R to enable
more effective monitoring of the handling of participant contributions
by employers.\1\ Currently, item 15h of the 1994 Form 5500-CR,
applicable to Form 5500-R filers, and item 26h of the 1994 Form 5500-C/
R, applicable to Form 5500-C filers, asks whether, during the plan
year, the employer owed contributions to the plan that are more than 3
months overdue, and if so, the amount. For the 1995 Form 5500-C/R, the
Department has modified items 15h and 26h to focus on participant
contributions due from the employer. As modified, item 15h and item 26h
now ask whether, during the plan year, there were any participant
contributions transmitted to the plan more than 31 days after receipt
or withholding by the employer, and if so, the amount.
\1\ Among other things, the Department has proposed an amendment
to the participant contribution regulation to reduce the maximum
amount of time an employer may hold participant contributions before
such contributions constitute ``plan assets.'' See 29 CFR
Sec. 2510.3-102 and proposed amendment thereto at 60 Fed. Reg. 66036
(December 20, 1995).
---------------------------------------------------------------------------
In general, the Department believes that the information required
to be reported in modified item 15h and 26h on the Form 5500-C/R is, or
should be, readily available and easily accessible from the plan's and/
or the plan sponsor's records and, accordingly, should not result in
any new or additional recordkeeping burdens on plans or employers.
Further, as with the existing items 15h and 26h, an affirmative
response to the modified items does not necessarily mean that the
employer has violated ERISA. Lastly, this modification does not affect
the administrators of plans with 100 or more participants filing the
Form 5500 who, unlike Form 5500-C/R filers, are currently required to
disclose on the Form 5500 detailed information about prohibited
transactions involving delinquent participant contributions, and must
have their plans audited annually by an independent qualified public
accountant.\2\
\2\ The instructions for the 1995 Form 5500 Series, including
the Form 5500 and Form 5500-C/R, have been modified to remind filers
that a failure to segregate participant contributions that
constitute plan assets from an employer's general assets has
prohibited transaction implications.
---------------------------------------------------------------------------
Statutory Authority
These forms and instructions are issued pursuant to the Secretary's
general rulemaking authority under section 505 of ERISA, and under
[[Page 3736]]
sections 104(a)(2)(A) and 104(a)(3) of Part 1 of title I of ERISA which
authorize the Secretary to prescribe simplified reports. See 29 CFR
2520.104-41.
Effective Date of the Forms
The change to the Form 5500-C/R items 15h and 26h is effective for
plan years beginning on or after January 1, 1995. The Department has
determined that publication of the change as a proposal for comment
prior to publication of the 1995 Form 5500 Series is impracticable and
contrary to the public interest. The Department believes that reporting
and disclosure of this information is important for the 1995 plan year,
and, without incorporating the change immediately, the Department, and
participants and beneficiaries, will not be able to monitor and take
action on this information. The additional time needed to provide prior
notice and opportunity for comment would delay printing and
disseminating the 1995 Forms, creating administrative difficulties for
filers, and ultimately would be detrimental to the interests of the
participants and beneficiaries. Thus, the Department finds for good
cause that this prompt action is necessary and permissible under
section 553(b)(3)(B) of the Administrative Procedures Act (APA). The
Department also has determined that good cause exists to waive the 30
day pre-effective date requirement of section 553(b)(3)(D) of the APA.
Although an opportunity to comment on the change has not been
provided prior to the publication of the 1995 Form 5500 Series, the
Department will consider public comment on the change for subsequent
filing years.
Economic Impact
The Department certifies that the change will not have a
``significant economic impact on a substantial number of small
entities'' within the meaning of the Regulatory Flexibility Act, 5
U.S.C. 601 et seq. The Department has also determined that this action
is not a ``significant regulatory action'' within the meaning of
Executive Order 12866 (58 FR 51735, Oct. 4, 1993).
Paperwork Reduction Act
The collection of information contained in this modification to the
1995 Form 5500 C/R has been submitted to the Office of Management and
Budget for emergency processing under section 3507(d) of the Paperwork
Reduction Act of 1995, 44 U.S.C. 3507(d). OMB approval has been
requested by February 6, 1996. For copies of the OMB submission,
contact Mrs. Theresa O'Malley, U.S. Department of Labor, OASAM/DIRM,
Room N-1301, 200 Constitution Ave. NW, Washington, D.C. 20210, 202-219-
5095 or via internet to tomalley@dol.gov.
Comments are solicited on the Department's need for this
information, specifically to: (1) Evaluate whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information will
have practical utility; (2) evaluate the accuracy of the agency's
estimate of the burden of the proposed collection of information,
including the validity of the methodology and assumptions used; (3)
enhance the quality, utility, and clarity of the information to be
collected; and (4) 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. Persons wishing to comment on the
collection of information should direct their comments to the Office of
Information and Regulatory Affairs, OMB, Room 10235, NEOB, Washington,
D.C. 20503, Attn: Desk Officer for PWBA. Comments must be filed with
the Office of Management and Budget within 60 days of this publication.
Although an opportunity to comment on the change has not been provided
prior to the publication of the 1995 Form 5500 Series, the Department
will consider public comment on the change for subsequent filing years.
A copy of any comments filed with the Office of Management and Budget
should also be sent to the following address at the Department: Mrs.
Theresa O'Malley, U.S. Department of Labor, OASAM/DIRM, Room N-1301,
200 Constitution Ave. NW, Washington, D.C. 20210. For further
information, contact Gerald B. Lindrew at 202-219-4782.
Title: Annual Report/Form 5500 Series (1210-0016).
Summary: Section 104(a)(1)(A) of ERISA requires plan administrators
to file an annual report containing the information described in
section 103 of ERISA. The Form 5500 Series provides a standard format
for fulfilling that requirement.
Needs and Uses: The change to the Forms 5500-C and R described here
is calculated to enhance the security and protection of participant
contributions and to enable more effective monitoring of the handling
of participant contributions by employers.
Respondents and Proposed Frequency of Response: The Department
staff estimates that approximately 665,000 plans will file either Form
5500-C or Form 5500-R for the 1995 plan year (of the estimated 822,000
annual filers).
Estimated Annual Burden: The change to the Forms described here
substitute one yes/no/amount question for another in reference to
contributions to the plan. It is the belief of the Department of Labor
that the same business records should be reviewed as in previous years,
so there should be no affect upon the recordkeeping burden of the
respondent plans. Therefore, the Department's annual collection burden
for the Form 5500 Series will remain at the previously budgeted
1,014,000 hours.
The Change to Form 5500-C/R: Form 5500-C, line 26h, and Form 5500-
R, line 15h, are modified to read as follows:
During this plan year:
Were any participant contributions transmitted to the plan more
than 31 days after receipt or withholding by the employer?
Yes{time} No{time} Amount ________
Additional Guidance to the Form 5500-C/R Instructions:\3\
\3\ The Department notes that similar guidance is provided for
1995 Form 5500 items 27e and f, relating to nonexempt prohibited
transactions.
---------------------------------------------------------------------------
An instruction for Form 5500-C, line 26h, and Form 5500-R, line
15h, has been added as follows:
Amounts paid by a participant or beneficiary to an employer and/or
withheld by an employer for contribution to the plan are participant
contributions that become plan assets as of the earliest date on which
such contributions can reasonably be segregated from the employer's
general assets (see 29 CFR 2510.3-102). An employer holding these
assets after that date commingled with its general assets will have
engaged in a prohibited use of plan assets (see ERISA section 406). If
a nonexempt prohibited transaction occurred with respect to a
disqualified person (see Code section 4975(e)(2)), file IRS Form 5330
to pay any applicable excise tax on the transaction.
Signed at Washington, DC, this 29th day of January 1996.
Alan D. Lebowitz,
Deputy Assistant Secretary for Program Operations, Pension and Welfare
Benefits Administration, Department of Labor.
[FR Doc. 96-2140 Filed 1-31-96; 8:45 am]
BILLING CODE 4510-29-M
