[Federal Register Volume 63, Number 120 (Tuesday, June 23, 1998)]
[Notices]
[Pages 34206-34209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-16679]
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PENSION BENEFIT GUARANTY CORPORATION
Proposed Submission of Information Collections for OMB Review;
Comment Request; Multiemployer Plan Regulations
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Notice of intention to request extension of OMB approval.
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SUMMARY: The Pension Benefit Guaranty Corporation (PBGC) intends to
request that the Office of Management and Budget (OMB) extend approval,
under the Paperwork Reduction Act, of collections of information in the
PBGC's regulations on multiemployer plans under the Employee Retirement
Income Security Act of 1974 (ERISA). This notice informs the public of
the PBGC's intent and solicits public comment on the collections of
information.
DATES: Comments must be submitted by August 24, 1998.
ADDRESSES: Comments may be mailed to the Office of the General Counsel,
suite 340, Pension Benefit Guaranty Corporation, 1200 K Street, NW.,
Washington, DC 20005-4026, or delivered to that address between 9 a.m.
and 4 p.m. on business days. Written comments will be available for
public inspection at the PBGC's Communications and Public Affairs
Department, suite 240 at the same address, between 9 a.m. and 4 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT: Deborah C. Murphy, Attorney, Office of
the General Counsel, Pension Benefit Guaranty Corporation, 1200 K
Street, NW., Washington, DC 20005-4026, 202-326-4024. (For TTY/TDD
users, call the Federal relay service toll-free at 1-800-877-8339 and
ask to be connected to 202-326-4024.)
SUPPLEMENTARY INFORMATION: 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. OMB has
approved and issued control numbers for the collections of information,
described below, in the PBGC's regulations relating to multiemployer
plans. (The regulations may be accessed on the PBGC's web site at
http://www.pbgc.gov.) The PBGC intends to request that OMB extend its
approval of these collections of information for three years.
The PBGC is soliciting public comments to--
Evaluate whether the proposed collections of information
are 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 proposed collections of information, including the
validity of the methodologies and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collections 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 identify the specific part number(s) of the
regulation(s) they relate to.
[[Page 34207]]
The collections of information for which the PBGC intends to
request extension of OMB approval are as follows:
1. Termination of Multiemployer Plans (29 CFR Part 4041A) (OMB
Control Number 1212-0020)
Section 4041A(f)(2) of ERISA authorizes the PBGC to prescribe
reporting requirements for and other ``rules and standards for the
administration of'' terminated multiemployer plans. Section 4041A(c)
and (f)(1) of ERISA prohibit the payment by a mass-withdrawal-
terminated plan of lump sums greater than $1,750 or of nonvested plan
benefits unless authorized by the PBGC.
The regulation requires the plan sponsor of a terminated plan to
submit a notice of termination to the PBGC. It also requires the plan
sponsor of a mass-withdrawal-terminated plan that is closing out to
give notices to participants regarding the election of alternative
forms of benefit distribution and to obtain PBGC approval to pay lump
sums greater than $1,750 or to pay nonvested plan benefits.
The PBGC uses the information in a notice of termination to assess
the likelihood that PBGC financial assistance will be needed. Plan
participants and beneficiaries use the information on alternative forms
of benefit to make personal financial decisions. The PBGC uses the
information in an application for approval to pay lump sums greater
than $1,750 or to pay nonvested plan benefits to determine whether such
payments should be permitted.
This collection of information is being revised to include certain
items that were previously covered under OMB control number 1212-0032
(because they were in a different part of the PBGC's regulations) but
that were moved into Part 4041A when the PBGC reorganized its
regulations in 1996. As revised, control number 1212-0020 will cover
all collection of information requirements in Part 4041A.
The PBGC estimates that plan sponsors each year (1) submit notices
of termination for 20 plans, (2) distribute election notices to
participants in 15 of those plans, and (3) submit requests to pay
benefits or benefit forms not otherwise permitted for 1 of those plans.
The estimated annual burden of the collection of information is 48
hours and $13,481.
2. Extension of Special Withdrawal Liability Rules (29 CFR Part
4203) (OMB Control Number 1212-0023)
Sections 4203(f) and 4208(e)(3) of ERISA allow the PBGC to permit a
multiemployer plan to adopt special rules for determining whether a
withdrawal from the plan has occurred, subject to PBGC approval.
The regulation specifies the information that a plan that adopts
special rules must submit to the PBGC about the rules, the plan, and
the industry in which the plan operates. The PBGC uses the information
to determine whether the rules are appropriate for the industry in
which the plan functions and do not pose a significant risk to the
insurance system.
The PBGC estimates that at most 1 plan sponsor submits a request
each year under this regulation. The estimated annual burden of the
collection of information is 1 hour and $2,400.
3. Variances for Sale of Assets (29 CFR Part 4204) (OMB Control
Number 1212-0021)
If an employer's covered operations or contribution obligation
under a plan ceases, the employer must generally pay withdrawal
liability to the plan. Section 4204 of ERISA provides an exception,
under certain conditions, where the cessation results from a sale of
assets. Among other things, the buyer must furnish a bond or escrow,
and the sale contract must provide for secondary liability of the
seller.
The regulation establishes general variances (rules for avoiding
the bond/escrow and sale-contract requirements) and authorizes plans to
determine whether the variances apply in particular cases. It also
allows buyers and sellers to request individual variances from the
PBGC. Plans and the PBGC use the information to determine whether
employers qualify for variances.
The PBGC estimates that 11 employers submit variance requests to
plans, and 2 employers submit variance requests to the PBGC, each year.
The estimated annual burden of the collection of information is 1 hour
and $2,663.
4. Reduction or Waiver of Complete Withdrawal Liability (29 CFR
Part 4207) (OMB Control Number 1212-0044)
Section 4207 of ERISA allows the PBGC to provide for abatement of
an employer's complete withdrawal liability, and for plan adoption of
alternative abatement rules, where appropriate.
Under the regulation, an employer applies to a plan for an
abatement determination, providing information the plan needs to
determine whether withdrawal liability should be abated, and the plan
notifies the employer of its determination. The employer may, pending
plan action, furnish a bond or escrow instead of making withdrawal
liability payments, and must notify the plan if it does so. When the
plan then makes its determination, it must so notify the bonding or
escrow agent.
The regulation also permits plans to adopt their own abatement
rules and request PBGC approval. The PBGC uses the information in such
a request to determine whether the amendment should be approved.
The PBGC estimates that 100 employers apply to plans for abatement
of complete withdrawal liability each year and that 1 plan sponsor
requests approval of plan abatement rules each year from the PBGC. The
estimated annual burden of the collection of information is 25.5 hours
and $15,000.
5. Reduction or Waiver of Partial Withdrawal Liability (29 CFR Part
4208) (OMB Control Number 1212-0039)
Section 4208 of ERISA provides for abatement, in certain
circumstances, of an employer's partial withdrawal liability and
authorizes the PBGC to issue additional partial withdrawal liability
abatement rules.
Under the regulation, an employer applies to a plan for an
abatement determination, providing information the plan needs to
determine whether withdrawal liability should be abated, and the plan
notifies the employer of its determination. The employer may, pending
plan action, furnish a bond or escrow instead of making withdrawal
liability payments, and must notify the plan if it does so. When the
plan then makes its determination, it must so notify the bonding or
escrow agent.
The regulation also permits plans to adopt their own abatement
rules and request PBGC approval. The PBGC uses the information in such
a request to determine whether the amendment should be approved.
The PBGC estimates that 1,000 employers apply to plans for
abatement of partial withdrawal liability each year and that 1 plan
sponsor requests approval of plan abatement rules each year from the
PBGC. The estimated annual burden of the collection of information is
250.5 hours and $150,000.
[[Page 34208]]
6. Allocating Unfunded Vested Benefits to Withdrawing Employers (29
CFR Part 4211) (OMB Control Number 1212-0035)
Section 4211(c)(5)(A) of ERISA requires the PBGC to prescribe how
plans can, with PBGC approval, change the way they allocate unfunded
vested benefits to withdrawing employers for purposes of calculating
withdrawal liability.
The regulation prescribes the information that must be submitted to
the PBGC by a plan seeking such approval. The PBGC uses the information
to determine how the amendment changes the way the plan allocates
unfunded vested benefits and how it will affect the risk of loss to
plan participants and the PBGC.
The PBGC estimates that 5 plan sponsors submit approval requests
each year under this regulation. The estimated annual burden of the
collection of information is 10 hours.
7. Notice, Collection, and Redetermination of Withdrawal Liability
(29 CFR Part 4219) (OMB Control Number 1212-0034)
Section 4219(c)(1)(D) of ERISA requires that the PBGC prescribe
regulations for the allocation of a plan's total unfunded vested
benefits in the event of a ``mass withdrawal.'' ERISA section 4209(c)
deals with an employer's liability for de minimis amounts if the
employer withdraws in a ``substantial withdrawal.''
The reporting requirements in the regulation give employers notice
of a mass withdrawal or substantial withdrawal and advise them of their
rights and liabilities. They also provide notice to the PBGC so that it
can monitor the plan, and they help the PBGC assess the possible impact
of a withdrawal event on participants and the multiemployer plan
insurance program.
The PBGC estimates that there is at most 1 mass withdrawal and 1
substantial withdrawal per year. The plan sponsor of a plan subject to
a withdrawal covered by the regulation provides notices of the
withdrawal to the PBGC and to employers covered by the plan, liability
assessments to the employers, and a certification to the PBGC that
assessments have been made. (For a mass withdrawal, there are 2
assessments and 2 certifications that deal with 2 different types of
liability. For a substantial withdrawal, there is 1 assessment and 1
certification (combined with the withdrawal notice to the PBGC).) The
estimated annual burden of the collection of information is 4 hours and
$3,939.
8. Procedures for PBGC Approval of Plan Amendments (29 CFR Part
4220) (OMB Control Number 1212-0031)
Under section 4220 of ERISA, a plan may within certain limits adopt
special plan rules regarding when a withdrawal from the plan occurs and
how the withdrawing employer's withdrawal liability is determined. Any
such special rule is effective only if, within 90 days after receiving
notice and a copy of the rule, the PBGC either approves or fails to
disapprove the rule.
The regulation provides rules for requesting the PBGC's approval of
an amendment. The PBGC needs the required information to identify the
plan, evaluate the risk of loss, if any, posed by the plan amendment,
and determine whether to approve or disapprove the amendment.
The PBGC estimates that 3 plan sponsors submit approval requests
per year under this regulation. The estimated annual burden of the
collection of information is 1.5 hours.
9. Mergers and Transfers Between Multiemployer Plans (29 CFR Part
4231) (OMB Control Number 1212-0022)
Section 4231(a) and (b) of ERISA requires plans that are involved
in a merger or transfer to give the PBGC 120 days' notice of the
transaction and provides that if the PBGC determines that specified
requirements are satisfied, the transaction will be deemed not to be in
violation of ERISA section 406(a) or (b)(2) (dealing with prohibited
transactions).
This regulation sets forth the procedures for giving notice of a
merger or transfer under section 4231 and for requesting a
determination that a transaction complies with section 4231.
The PBGC uses information submitted by plan sponsors under the
regulation to determine whether mergers and transfers conform to the
requirements of ERISA section 4231 and the regulation.
The PBGC estimates that there are 20 transactions each year for
which plan sponsors submit notices and approval requests under this
regulation. The estimated annual burden of the collection of
information is 5 hours and $2,500.
10. Notice of Insolvency (29 CFR Part 4245) (OMB Control Number
1212-0033)
If the plan sponsor of a plan in reorganization under ERISA section
4241 determines that the plan may become insolvent, ERISA section
4245(e) requires the plan sponsor to give a ``notice of insolvency'' to
the PBGC, contributing employers, and plan participants and their
unions in accordance with PBGC rules.
For each insolvency year under ERISA section 4245(b)(4), ERISA
section 4245(e) also requires the plan sponsor to give a ``notice of
insolvency benefit level'' to the same parties.
This regulation establishes the procedure for giving these notices.
The PBGC uses the information submitted to estimate cash needs for
financial assistance to troubled plans. Employers and unions use the
information to decide whether additional plan contributions will be
made to avoid the insolvency and consequent benefit suspensions. Plan
participants and beneficiaries use the information in personal
financial decisions.
The PBGC estimates that 9 plan sponsors give notices each year
under this regulation. The estimated annual burden of the collection of
information is 1 hour and $7,633.
11. Duties of Plan Sponsor Following Mass Withdrawal (29 CFR Part
4281) (OMB Control Number 1212-0032)
Section 4281 of ERISA provides rules for plans that have terminated
by mass withdrawal. Under section 4281, if nonforfeitable benefits
exceed plan assets, the plan sponsor must amend the plan to reduce
benefits. If the plan nevertheless becomes insolvent, the plan sponsor
must suspend certain benefits that cannot be paid. If available
resources are inadequate to pay guaranteed benefits, the plan sponsor
must request financial assistance from the PBGC.
The regulation requires a plan sponsor to give notices of benefit
reduction, notices of insolvency and annual updates, and notices of
insolvency benefit level to the PBGC and to participants and
beneficiaries and, if necessary, to apply to the PBGC for financial
assistance.
The PBGC uses the information it receives to make determinations
required by ERISA, to identify and estimate the cash needed for
financial assistance to terminated plans, and to verify the
appropriateness of financial assistance payments. Plan participants and
beneficiaries use the information to make personal financial decisions.
This collection of information is being revised to exclude certain
items that were previously covered under OMB control number 1212-0032
but that were moved into Part 4041A when the PBGC reorganized its
regulations in 1996. As revised, control number 1212-0032 will cover
only collection of information requirements in Part 4281.
[[Page 34209]]
The PBGC estimates that plan sponsors each year (1) give benefit
reduction notices for 1 plan, (2) give notices of insolvency for 2
plans, (3) give notices of insolvency benefit level and annual updates
for 23 plans, and (4) submit requests for financial assistance for 18
plans. The estimated annual burden of the collection of information is
1 hour and $66,900.
Issued in Washington, DC, this 18th day of June 1998.
Stuart A. Sirkin,
Director, Corporate Policy and Research Department, Pension Benefit
Guaranty Corporation.
[FR Doc. 98-16679 Filed 6-22-98; 8:45 am]
BILLING CODE 7708-01-P
