[Federal Register Volume 60, Number 61 (Thursday, March 30, 1995)]
[Notices]
[Pages 16504-16507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7742]
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[[Page 16505]]
DEPARTMENT OF LABOR
Office of the Secretary
Delinquent Filer Voluntary Compliance Program
AGENCY: Office of the Secretary, Labor.
ACTION: Expedited review of the information collected pursuant to the
Delinquent Filer Voluntary Compliance Program under the Paperwork
Reduction Act.
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SUMMARY: The Pension and Welfare Benefits Administration, Department of
Labor, in carrying out its responsibilities under the Paperwork
Reduction Act (44 U.S.C. Chapter 35, 5 CFR 1320 (53 FR 16618, May 10,
1988)), is submitting the information collection required under the
Delinquent Filer Voluntary Compliance Program (Program) for review. The
information collected is required to be reported by pension and welfare
benefit plan administrators under Title I of the Employee Retirement
Income Security Act of 1974. Plan administrators who choose to
participate in this Program, which offers a substantial reduction in
penalties, are required to submit minimal documentation along with
payment to verify plan information and facilitate Federal record
keeping.
DATES: Pension and Welfare Benefits Administration has requested an
expedited review of this submission under the Paperwork Reduction Act
due to the time-sensitive nature of the collection and the penalties
that accumulate daily due to late filing or failure to file annual
reports; this Office of Management and Budget (OMB) review has been
requested to be completed by April 14, 1995.
FOR FURTHER INFORMATION CONTACT:
Comments and questions regarding the Delinquent Filer Voluntary
Compliance Program should be directed to Mr. Kenneth A. Mills,
Departmental Clearance Officer, Office of Information Resource
Management Policy, U.S. Department of Labor, 200 Constitution Avenue,
N.W., Room N-1301, Washington, D.C. 20210, 202 219-5095. Comments
should also be sent to OMB, Office of Information and Regulatory
Affairs, Attn: OMB Desk Officer for PWBA, NEOB Room 10235, Washington,
D.C. 20503, 202 395-7316.
Any member of the public who wants to comment on the information
collection request which has been submitted to OMB should advise Mr.
Mills of this intent at the earliest possible date.
Average Burden Hours/Minutes Per Response: 21 minutes
Frequency of Response: Annual
Number of Respondents: 10,000 (year 1); 7,000 in following years
Total Annual Burden Hours: 3,500
Total Annual Responses: 10,000
Affected Public: Business and other for-profit; Not-for-profit
institutions
Respondents Obligation to Reply: Voluntary.
Signed at Washington, D.C. this 24th day of March 1995.
Kenneth A. Mills,
Departmental Clearance Officer.
Supporting Statement For Paperwork Reduction Act Submissions
Delinquent Filer Voluntary Compliance Program 1210-AA49
A. Justification
1. Explain the circumstances that make the collection of
information necessary. Identify any legal or administrative
requirements that necessitate the collection.
Attach a copy of the appropriate section of each statute and of
each regulation mandating or authorizing the collection of information.
The Secretary of Labor has the authority, under section 502(c)(2)
of ERISA, to assess civil penalties of up to $1,000 a day against plan
administrators who fail or refuse to file complete and timely annual
reports (Form 5500 Series Annual Return/Reports) as required under
section 101(b)(4) of ERISA and the Secretary's regulations codified in
29 CFR part 2520. Pursuant to 29 CFR 2560.502c-2 and 2570.60 et seq.
PWBA has maintained a program for the assessment of civil penalties for
noncompliance with the annual reporting requirements. Under this
program, plan administrators filing annual reports after the date on
which the report was required to be filed may be assessed $40 per day
for each day an annual report is filed after the date on which the
annual report(s) was required to be filed, without regard to any
extensions for filing. Plan administrators who fail to file an annual
report may be assessed a penalty of $300 per day, up to $30,000 per
year, until a compete annual report is filed. Penalties are applicable
to each annual report required to be filed under Title I of ERISA. The
Department may, in its discretion, waive all or part of a civil penalty
assessed under section 502(c)(2) upon a showing by the administrator
that there was reasonable cause for the failure to file a complete and
timely annual report.
The Department has determined that the possible assessment of the
above described civil penalties may deter certain delinquent filers
from voluntarily complying with the annual reporting requirements under
Title I of ERISA. In an effort to encourage annual reporting
compliance, therefore, the Department has decided to implement the
Delinquent Filer Voluntary Compliance (DFVC) Program, under which
administrators otherwise subject to the assessment of higher civil
penalties will be permitted to pay reduced civil penalties for
voluntarily complying with the annual reporting requirements under
Title I of ERISA, referred to as the ``Program.''
2. Indicate how, by whom, how frequently, and for what purpose the
information is to be used. For revisions, extensions, and
reinstatements of a currently approved collection, indicate the actual
use the agency has made of the information received from the current
collection.
Under Title I of ERISA, the administrator of each welfare and each
pension plan, unless otherwise exempt, is required to file an annual
report with the Secretary containing the information set forth in
Section 103 of ERISA. The statutory annual reporting requirements under
Title I of ERISA, Title IV of ERISA, and the Internal Revenue Code are
satisfied generally by filing, in accordance with the instructions to
the forms and related regulations, the appropriate annual return/report
(the Form 5500 Series). The Form 5500 Series collection has been given
OMB control number 1210-AA16. The Form 5500 Series collection has been
approved under the Paperwork Reduction Act on October 28, 1994.
The DFVC Program is intended to afford eligible plan administrators
the opportunity to avoid the assessment of civil penalties otherwise
applicable to administrators who fail to file timely annual reports for
plan years beginning on or after January 1, 1988. Eligible
administrators may avail themselves of the DFVC Program by complying
with the filing requirements and paying the specified civil penalties,
set out in the Federal Register Notice.
The DFVC Program is available only to a plan administrator who
complies with each of the requirements the Notice prior to the date on
which the administrator:
(a) is notified in writing, pursuant to 29 CFR 2560.502c-2, of the
Department's intention to assess a civil penalty under section
502(c)(2) of ERISA for failure to file a timely annual report; or
(b) is otherwise notified in writing by the Department of a failure
to file a timely annual report under Title I of ERISA. [[Page 16506]]
It is anticipated that the administrator of an employee welfare or
benefit plan would make use of the DFVC Program no more than once per
year, and would avoid use of the Program entirely if the statutory
filing obligation were met in a timely manner.
The only information collection requirement in the Notice is the
requirement of providing data necessary to identify the plan along with
the penalty payment. This data is the only means by which each penalty
payment will be associated with the relevant plan. With respect to most
pension plans and welfare plans, the requirement is satisfied by
sending, along with the penalty payment, a copy of the first page of
the delinquent annual report, which under current procedures is sent to
the IRS.
Under current procedures, certain pension plans for highly
compensated employees, commonly ``top hat'' plans, and apprenticeship
plans may file a one-time statement in lieu of annual reports. With
respect to such plans the information collection requirements of the
Notice are satisfied by sending a completed first page of an annual
report form along with the penalty payment. The one-time statements are
required to be sent to a different address within the Department. The
Program is designed to allow the processing of all penalty payments at
a single location within the Department.
3. Describe any consideration of information technology used to
reduce burden, as well as any technical or legal obstacles to reducing
burden.
The Department, in conjunction with the IRS, PBGC, and OMB, is
currently exploring means by which to enhance the Form 5500 filing
review, processing, and data system. Until that time when an electronic
filing alternative is available, the Department has chosen the least
burdensome collection method for receiving notification of
participation in the Program and correctly accounting for payment of
penalties.
4. Describe efforts to identify duplication. Show specifically why
any similar information already available cannot be used or modified
for use for the purpose(s) described in 2 above.
The Department, IRS, and PBGC utilize a consolidation annual report
(Form 5500 Series) which eliminates the duplicative reporting that
would otherwise result from the separate reporting to each agency.
However, the consolidated report does not accommodate specific
notification of the Department of participation in the Program, nor
does it accommodate recording of payment of penalties. Therefore, the
minimal information collection requirements of this Program were deemed
necessary.
There is no similar information gathered by any state or Federal
agency or other sources that would enable the Department of effectively
monitor participation in the Program.
5. If the collection of information has a significant impact on a
substantial number of small businesses or other small entities (item 15
of the Paperwork Reduction Act Submission form), describe the methods
used to minimize burden.
Not Applicable.
6. Describe the consequence to Federal program or policy activities
if the collection is not conducted or is conducted less frequently.
If the collection is not conducted, it may not be possible to
institute the Program because the Department would be unable to
determine whether persons seeking to take advantage of the reduced
penalties offered under the Program had in fact complied with its
conditions. The purpose of the Program is to encourage delinquent plan
administrators to come forward and file delinquent reports. Lack of
compliance with existing filing requirements impairs the administration
and enforcement of the statute by the Department, as well as the IRS
and the PBGC. The collection used in the Program creates a minimal
burden on plan administrators who are already in breach of ERISA's
filing requirements while giving them access to reduced penalties.
7. Explain any special circumstances that require the collection to
be conducted in a manner inconsistent with the general information
collection guidelines in 5 CFR 1320.6 (e.g., payment to respondents,
disclosure of proprietary information, etc.).
There are no special circumstances that require the collection to
be conducted in a manner inconsistent with the guidelines in 5 CFR
1320.6.
8. Describe efforts to consult with persons outside the agency to
obtain their views on the availability of data, frequency of
collection, the clarity of instructions and recordkeeping, disclosure,
or reporting format (if any), and on the data elements to be recorded,
disclosed, or reported.
Consultation with representatives of those from whom information is
to obtained or those who must compile records should occur at least
once every 3 years--even if the collection of information activity is
the same as in prior periods. There may be circumstances that mitigate
against consultation in a specific situation. These circumstances
should be explained.
The employee benefit plan community is aware that the Department
has been considering institution of a reduced penalty program for
persons who voluntary file delinquent reports, and is generally
supportive of the Program. The minimal information collection
associated with the Program will not dissuade participation by
delinquent play administrators.
The Form 5500 Series was developed in coordination with the IRS and
PBGC, and the DFVC Program has been reviewed by these agencies as well.
In addition, PWBA regularly requests comments from the ERISA Advisory
Council with respect to suggestions for reducing paperwork.
9. Describe any assurance of confidentiality provided to
respondents and the basis for the assurance in statute, regulation, or
agency policy.
The annual reports are required by law to be made available for
inspection at the Department and at the offices of the plan
administrators. Accordingly, since this collection is merely one page
of the annual report, the Department provides no assurance of
confidentiality to respondents.
10. Provide additional justification for any questions of a
sensitive nature, such as sexual behavior and attitudes, religious
beliefs, and other matters that are commonly considered private. This
justification should include the reasons why the agency considers the
questions necessary, the specific uses to be made of the information,
the explanation to be given to persons from whom the information is
requested, and any steps to be taken to obtain their consent.
There are no questions of a sensitive nature pertaining to sexual
behavior and attitudes, religious beliefs, or other matters that are
commonly considered private.
11. Provide estimates of annualized cost to the Federal Government
and to the respondents. Also, provide a description of the method used
to estimate cost, which should include quantification of hours,
operational expenses (such as equipment, overhead, printing, and
support staff), any other expense that would not have been incurred
without this collection of information.
Based on expense estimates, the annual cost to the Department
attributable to the receipt and maintenance of the Program is estimated
to be approximately $150,000. This figure includes estimated costs to
the Department for lockbox maintenance, computer services, and other
[[Page 16507]] operational expenses such as equipment, overhead, and
support staff.
As reflected in item 12 below, the burden hours attributable to the
collection by the universe of respondents is estimated to be 3,500
hours. It is estimated that the cost to plans to complete the
collection will range from $20 to $25 per hour. Therefore, the
estimated aggregate cost to respondents is approximately $70,000 to
$87,500 in the first year, and $49,000 to $61,250 in succeeding years.
12. Provide estimates of the burden of the collection of
information including both recordkeeping and reporting requirements.
The statement should:
Provide number of respondents, frequency of response,
annual burden, and an explanation of how the burden was estimated.
Unless directed to do so, agencies should not make special surveys to
obtain information on which to base burden estimates. Consultation with
a sample of potential respondents is desirable. If the burden on
respondents is expected to vary widely because of differences in
activity, size or complexity, show the range of estimated burden and
explain the reasons for the variance.
An estimated 10,000 delinquent employee benefit plan administrators
are expected to file under the Program in the first year, and an
estimated 7,000 filings are expected in subsequent years. Participation
in the Program is voluntary, and filing under the Program would not be
necessary more often than annually, and most participants would
probably participate one time only. The annual burden per filing is
estimated to be approximately 21 minutes, based on a pilot pretest of
not more than nine people from both Federal employment and the private
sector. The burden on respondents is not expected to vary widely
because of differences in activity, size or complexity.
If the request for approval is for more than one form,
provide separate burden estimates for each form for which approval is
sought and aggregate the burdens on the Paperwork Reduction Act
Submission form. If only one form is submitted, you need not duplicate
the information entered on the Paperwork Reduction Act Submission form.
Not applicable.
13. For amendments to existing collections, explain reasons for
changes in burden, including the need for any increase.
Not applicable.
14. For collections of information whose results are planned to be
published, outline plans for tabulation and publication. Address any
complex analytical techniques that will be used. Provide the time
schedule for the entire project, including beginning and ending dates
of the collection of information, completion of report, publication
dates, and other actions.
The Form 5500 Series collection, and by extension, this DFVC
Program collection, are not a collection of information for statistical
use. Once collected, however, the information is available to the
Department and the public, and it is used for purposes other than
enforcement and disclosure.
[FR Doc. 95-7742 Filed 3-29-95; 8:45 am]
BILLING CODE 4510-22-M
