[Federal Register Volume 64, Number 150 (Thursday, August 5, 1999)]
[Proposed Rules]
[Pages 42792-42797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19860]
[[Page 42791]]
_______________________________________________________________________
Part III
Department of Labor
_______________________________________________________________________
Pension and Welfare Benefits Administration
_______________________________________________________________________
29 CFR Parts 2520, 2560 and 2570
Removal of Superseded Regulations Relating to Plan Descriptions and
Summary Plan Descriptions; Proposed Rule
Furnishing Documents to the Secretary of Labor on Request Under ERISA
Section 104(a)(6) and Assessment of Civil Penalties Under ERISA Section
502(c)(6); Proposed Rule
Federal Register / Vol. 64, No. 150 / Thursday, August 5, 1999 /
Proposed Rules
[[Page 42792]]
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
29 CFR Parts 2520 and 2560
RIN 1210-AA66
Removal of Superseded Regulations Relating to Plan Descriptions
and Summary Plan Descriptions, and Other Technical Conforming
Amendments
AGENCY: Pension and Welfare Benefits Administration, Department of
Labor.
ACTION: Notice of Proposed Rulemaking.
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SUMMARY: This document sets forth a proposed rule that would remove
certain provisions from the Code of Federal Regulations (CFR) that were
superseded, in whole or in part, by amendments of the Employee
Retirement Income Security Act of 1974 (ERISA) enacted as part of the
Taxpayer Relief Act of 1997 (TRA '97). These TRA '97 amendments
eliminated the requirements that plan administrators file summary plan
descriptions (SPDs) and summaries of material modifications (SMMs) with
the Department of Labor (Department). The amendments also eliminated
all requirements pertaining to plan descriptions. In addition to
removing superseded regulations from the CFR, this proposed rule would
make miscellaneous technical amendments to the CFR designed to correct
affected cross-references.
DATES: Written comments concerning the proposed regulation must be
received by October 4, 1999.
ADDRESSES: Written comments (preferably three copies) should be sent
to: Office of Regulations and Interpretations, Room N-5669, Pension and
Welfare Benefits Administration, U.S. Department of Labor, 200
Constitution Avenue, NW, Washington, DC 20210; Attention: Proposed SPD/
Plan Description Regulations. All submissions will be open to public
inspection at the Public Documents Room, Pension and Welfare Benefits
Administration, Room N-5638, 200 Constitution Avenue, NW, Washington,
DC.
FOR FURTHER INFORMATION CONTACT: Jeffrey J. Turner, Office of
Regulations and Interpretations, Pension and Welfare Benefits
Administration, U.S. Department of Labor, (202) 219-8671 (not a toll-
free number).
SUPPLEMENTARY INFORMATION:
1. Overview
TRA '97 amended sections 101(b), 102, and 104(a)(1) of ERISA to
eliminate the requirements that plan administrators file SPDs, SMMs,
and plan descriptions with the Department.1 TRA '97 also
amended section 104(b) of ERISA to eliminate the requirement that plan
administrators furnish plan descriptions to participants and
beneficiaries. These statutory amendments superseded, in whole or in
part, the Department's regulations that implemented the SPD, SMM, and
plan description filing requirements. This proposed rule would remove
those superseded regulations from the CFR.2 This proposed
rule also would make several technical conforming amendments to reflect
the fact that regulatory relief from certain plan description, SPD, and
SMM requirements is no longer needed in light of TRA '97 and to correct
affected regulatory and statutory cross-references in parts 2520 and
2560 of Chapter XXV of Title 29 of the CFR. A chart identifying each
regulation that would be changed by this proposed rule is printed
below.
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\1\ Prior to 1979, the administrator of an employee benefit plan
subject to the provisions of Part 1 of Title I of ERISA was required
to file with the Department a plan description (Form EBS-1) to
satisfy the statutory filing requirements of section 104(a) and 29
CFR 2520.104a-2. See 41 FR 16957 (April 23, 1976). In 1979, the
Department amended 29 CFR 2520.104a-2 (44 FR 31639 (June 1, 1979)),
to provide that the administrator of an employee benefit plan would
satisfy the plan description filing requirements of section
104(a)(1)(B) by filing with the Department a SPD and an updated SPD
in accordance with section 104(a)(1)(C) and the regulations
thereunder.
\2\ Under a separate notice, the Department will promulgate
proposed regulations to implement new sections 502(c)(6) and
104(a)(6) of ERISA. Section 502(c)(6) provides that if, within 30
days of a request by the Department to a plan administrator for
documents under section 104(a)(6), the plan administrator fails to
furnish the material requested to the Department, the Department may
assess a civil penalty against the plan administrator of up to $100
a day from the date of such failure, but in no event in excess of
$1,000 per request. Section 104(a)(6) provides that the
administrator of any employee benefit plan must furnish to the
Department, upon request, any documents relating to the employee
benefit plan, including but not limited to, the latest SPD, and the
bargaining agreement, trust agreement, contract, or other instrument
under which the plan is established or operated.
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2. Removal of Superseded Regulations
This proposed rule would remove, in whole or in part, the following
superseded regulations from 29 CFR part 2520, which pertain to
reporting and disclosure under ERISA. This proposed rule also would
reserve certain removed sections of the CFR to preserve the continuity
of codification in the CFR.
A. Regulations Superseded in Whole
This proposed rule would remove and reserve Secs. 2520.102-1 and
2520.104a-2. These sections require plan administrators to file a plan
description with the Department in accordance with Secs. 101(b)(2) and
104(a)(1)(B) of ERISA.3 They were superseded by paragraphs
(a) and (c) of Sec. 1503 of TRA '97, which eliminated Secs. 101(b)(2)
and 104(a)(1)(B) of ERISA.
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\3\ See supra note 1.
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This proposed rule would remove and reserve Sec. 2520.104a-3. This
section implements sections 101(b)(1) and 104(a)(1)(C) of ERISA, which
require plan administrators to file with the Department a copy of any
SPD that is required to be furnished to participants covered under the
plan and beneficiaries receiving benefits under the plan. Section
2520.104a-3 was superseded by paragraphs (a) and (c) of section 1503 of
TRA '97, which eliminated sections 101(b)(1) and 104(a)(1)(C) of ERISA.
This proposed rule would remove and reserve Secs. 2520.104a-4 and
2520.104a-7. These sections implement Secs. 101(b)(3), 102(a)(2), and
104(a)(1)(D) of ERISA, which require plan administrators to file with
the Department a copy of summaries of material modifications in the
terms of the plan and summaries of any changes in the information
required to be in the SPD. Sections 2520.104a-4 and 2520.104a-7 were
superseded by paragraphs (a) and (c) of Sec. 1503 of TRA '97, which
eliminated Secs. 101(b)(3), 102(a)(2), and 104(a)(1)(D) of ERISA.
B. Regulations Superseded in Part
This proposed rule would amend Sec. 2520.104-20 to reflect the fact
that certain of the reporting relief granted by that regulation is no
longer needed in light of TRA '97. Specifically, Sec. 2520.104-20
exempts certain unfunded or insured welfare plans with fewer than 100
participants from, among others, the requirements to file plan
descriptions, SPDs, and SMMs with the Department. Inasmuch as plan
descriptions, SPDs, and SMMs are no longer required to be filed under
ERISA as amended by TRA '97, this proposed rule would amend
Sec. 2520.104-20(a) to remove the provisions that grant relief from
such filing requirements. The amendments made by this proposed rule
would not otherwise change the relief available in Sec. 2520.104-20.
This proposed rule would similarly amend Sec. 2520.104-21 to
reflect the fact that the SPD, SMM, and plan description filing relief
granted by that regulation is no longer needed in light of the TRA '97
elimination of those filing requirements. Specifically, Sec. 2520.104-
21 provides a limited
[[Page 42793]]
exemption from, among others, the requirements to file SPDs, SMMs, and
plan descriptions with the Department for welfare benefit plans that
cover fewer than 100 participants at the beginning of the plan year,
are part of a group insurance arrangement, and that otherwise satisfy
the conditions of Sec. 2520.104-21(b). This proposed rule would amend
Sec. 2520.104-21(a) by removing the provisions on SPDs, SMMs, and plan
descriptions because these documents are no longer required to be filed
under ERISA as amended by TRA '97. The amendments made by this proposed
rule would not otherwise change the relief available in Sec. 2520.104-
21.4
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\4\ See 63 FR 68370, 68388 (Dec. 10, 1998) (eliminating
references to requirements to file plan descriptions, SPDs, and SMMs
in Sec. 2520.104-21-(d)(3) as part of proposed amendments to annual
reporting regulations).
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This proposed rule would further amend Secs. 2520.104-20 and
2520.104-21 to reflect the fact that the need for relief under ERISA
from the requirement to disclose plan descriptions was eliminated by
TRA '97. These section exempt eligible welfare plans from the
requirement to: (1) Furnish upon written request of any participant or
beneficiary a copy of the plan description, and (2) make copies of the
plan description available in the principle office of the administrator
and such other places as may be necessary for examination by any
participant or beneficiary. This proposed rule would amend
Secs. 2520.104-20(a)(2) and (3) and 2520.104-21(a)(1) and (2) by
removing the provisions on disclosing plan descriptions because plan
descriptions are nolonger required to be furnished or made available
under ERISA as amended by TRA '97.
This proposed rule would amend Secs. 2520.104-26 and 2520.104-27 to
reflect the fact that the need for relief under ERISA from the
requirement to file plan descriptions, SPDs, and SMMs was eliminated by
TRA '97. These regulations provide certain unfunded dues financed
welfare and pension plans maintained by employee organizations with a
limited exemption from, among others, the requirement to file plan
descriptions and a simplified option for complying with the filing and
disclosure requirements applicable to SPDs. This proposed rule would
amend Secs. 2520.104-26 and 2520.104-27 by removing the provisions on
plan descriptions and would further amend Secs. 2520.104-26 and
2520.104-27 to remove the simplified option provisions for filing SPDs
because plan descriptions and SPDs are no longer required to be filed
with the Department under ERISA as amended by TRA '97. The proposal is
not otherwise intended to change the relief available under these
sections.
3. Technical Conforming Amendments
This proposal also would make technical changes that are needed to
conform certain cross references in the CFR to sections of ERISA as
amended by TRA '97. For example, Sec. 2520.104a-5 refers to section
104(a)(1)(A) of ERISA as the authority for the requirement to file
annual reports with the Department. After TRA '97, the correct citation
is to Sec. 104(a)(1) of ERISA. Similar technical changes are also being
made to conform internal CFR cross references.
4. Effective Date
This regulation is proposed to be effective 60 days after
publication of a final rule in the Federal Register. If adopted, the
proposed amendments implementing TRA '97 would be applicable as of the
August 5, 1997, effective date of section 1503 of TRA '97.
5. Quick Reference Chart
The chart below lists each section of 29 CFR parts 2520 and 2560
that would be affected by this proposed rule and includes a brief
description of the proposed change.
Quick Reference Chart
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CFR section(s) Remove Add Reason(s)
----------------------------------------------------------------------------------------------------------------
2520.102-1........................... The whole section...... ``Reserved''........... All ``plan
description''
requirements
eliminated from ERISA.
2520.102-4........................... The last sentence...... Nothing................ SPD filing requirement
eliminated.
2520.103-1(a)........................ ``section ``section 104(a)(1)''.. Cross reference
104(a)(1)(A)''. correction.
2520.103-5(a), (c)(1)(i), ``section ``section 104(a)(1)''.. Cross reference
(c)(1)(iii), (c)(2)(ii), 104(a)(1)(A)''. correction.
(c)(2)(iii), and (c)(3).
2520.103-12(a)....................... ``section ``section 104(a)(1)''.. Cross reference
104(a)(1)(A)''. correction.
2520.104-4(a)........................ Last sentence.......... Nothing................ SPD filing requirement
eliminated.
2520.104-20(a) (introductory text)... ``any of the following Nothing................ All ``plan
documents: Plan description''
description, copy of requirements
summary plan eliminated from ERISA,
description, SPD filing requirement
description of eliminated, and SMM
material modification filing requirement
in the terms of a plan eliminated.
or change in the
information required
to be included in the
plan description,''.
2520.104-20(a)(2).................... ``plan description,''.. Nothing................ All ``plan
description''
requirements
eliminated from ERISA.
2520.104-20(a)(3).................... ``plan description Nothing................ All ``plan
and''. description''
requirements
eliminated from ERISA.
2520.104-20(c)....................... ``(section 104(a)(1))'' ``(section 104(a)(6))'' Requirement to furnish
documents to the
Department upon
request--moved to
different paragraph of
ERISA section 104.
[[Page 42794]]
2520.104-21(a) (introductory text)... ``with the Secretary After the word file, All ``plan
any of the following add: ``with the description''
documents: Plan Secretary a terminal requirements
description, copy of report or furnish upon eliminated from ERISA,
summary plan written request of any SPD filing requirement
description, participant or eliminated, and SMM
description of beneficiary a copy of filing requirement
material modification any terminal report as eliminated.
in the terms of a plan required by section
or change in the 104(b)(4) of the
information required Act.''.
to be included in the
plan description, and
terminal report. In
addition, the
administrator of a
plan exempted under
this section:''.
2520.104-21(a)(1).................... All of (a)(1).......... Nothing................ All ``plan
description''
requirements
eliminated from ERISA.
2520.104-21(a)(2).................... All of (a)(2).......... Nothing................ All ``plan
description''
requirements
eliminated from ERISA.
2520.104-21(c) (second parenthetical) ``section ``section 104(a)(1)''.. Cross reference
104(a)(1)(A)''. correction.
2520.104-21(c) (third parenthetical). ``section 104(a)(1)''.. ``section 104(a)(6)''.. Requirement to furnish
documents to the
Department upon
request--moved to
different paragraph of
ERISA section 104.
2520.104-23(b)(2).................... ``104(a)(1)''.......... ``104(a)(6)''.......... Requirement to furnish
documents to the
Department upon
request--moved to
different paragraph of
ERISA section 104.
2520.104-24(b)....................... ``104(a)(1)''.......... 104(a)(6)''............ Requirement to furnish
documents to the
Department upon
request--moved to
different paragraph of
ERISA section 104.
2520.104-25.......................... ``104(a)(1)''.......... ``104(a)(6)''.......... Requirement to furnish
documents to the
Department upon
request--moved to
different paragraph of
ERISA section 104.
2520.104-26(a)....................... All of paragraph (a), New paragraph (a), Paragraph (a) needed to
(a)(1), (a)(2), and (a)(1), and (a)(2). be restructured to
(a)(3). reflect the fact that
all ``plan
description''
requirements and the
SPD filing requirement
were eliminated from
ERISA.
2520.104-27(a)....................... All of paragraph (a), New paragraph (a), Paragraph (a) needed to
(a)(1), (a)(2), and (a)(1), and (a)(2). be restructured to
(a)(3). reflect the fact that
all ``plan
description''
requirements and the
SPD filing requirement
were eliminated from
ERISA.
2520.104-41(b)....................... ``section ``section 104(a)(1)''.. Cross reference
104(a)(1)(A)''. correction.
2520.104-43(a)....................... ``section ``section 104(a)(1)''.. Cross reference
104(a)(1)(A)''. correction.
2520.104-44(d)....................... ``section ``section 104(a)(1)''.. Cross reference
104(a)(1)(A)''. correction.
2520.104a-2.......................... Whole section.......... ``Reserved''........... All ``plan
description''
requirements
eliminated from ERISA.
2520.104a-3.......................... Whole section.......... ``Reserved''........... SPD filing requirement
eliminated.
2520.104a-4.......................... Whole section.......... ``Reserved''........... SMM filing requirement
eliminated.
2520.104a-5(a)....................... ``section ``section 104(a)(1)''.. Cross reference
104(a)(1)(A)''. correction.
2520.104a-5(a)(1).................... All text in paragraph ``Reserved''........... Provision obsolete.
(a)(1).
2520.104a-7.......................... Whole section.......... ``Reserved''........... SMM filing requirement
eliminated.
2520.104b-1(b)(3).................... ``plan description''... Nothing................ All ``plan
description''
requirements
eliminated from ERISA.
2520.104b-3(f)....................... All of para. (f)....... Nothing................ Part of paragraph (f)
was superseded by TRA
'97 and the rest of
the paragraph has
become obsolete as a
result of the removal
of Sec. 2520.104a-3
by this rule.
[[Page 42795]]
2520.104b-3(g)....................... All of para. (g)....... Nothing................ Paragraph (g) was
superseded by TRA '97
and as a result of the
removal of Sec.
2520.104a-3 by this
rule.
2560.502c-2(a)....................... ``section 101(b)(4)''.. ``section 101(b)(1)''.. Cross reference
correction.
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Executive Order 12866 Statement
Under Executive Order 12866, the Department must determine whether
the regulatory action is ``significant'' and therefore subject to the
requirements of the Executive Order and subject to review by the Office
of Management and Budget (OMB). Under section 3(f), the 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 serious
inconsistency or otherwise interfering with an action taken or planned
by another agency; (3) materially altering the budgetary impacts of
entitlement 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. Pursuant to the terms
of the Executive Order, it has been determined that this action is not
significant within the meaning of the Executive Order.
Paperwork Reduction Act
The rule being issued here is not subject to the requirements of
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) because it
does not contain an ``information collection request'' as defined in 44
U.S.C. 3502(3).
Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires each
Federal agency to perform an initial regulatory flexibility analysis
for all proposed rules unless the head of the agency certifies that the
rule will not, if promulgated, have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, organizations, and governmental jurisdictions. Because this
proposed rule would remove certain provisions of the CFR and make a
number of technical amendments to the CFR designed to correct cross-
references affected by amendments to ERISA enacted as part of TRA '97,
the proposed rule would have no impact, independent of the statutory
change eliminating the SPD and SMM filing requirements, on small plans.
As a result, the undersigned certifies that this proposed rule, if
promulgated, would not have a significant impact on a substantial
number of small entities. The factual basis for this certification is
the same regardless of whether one uses the definition of small entity
found in regulations issued by the Small Business Administration (13
CFR 121.201) or one defines small entity, on the basis of section
104(a)(2) of ERISA, as an employee benefit plan with fewer than 100
participants.
Small Business Regulatory Enforcement Fairness Act
The proposed rule being issued here is subject to the 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 or 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 12875, this proposed rule does not
include any Federal mandate that may result in expenditures by State,
local, or tribal governments, and will not impose an annual burden of
$100 million or more on the private sector.
Statutory Authority
This proposed rule is promulgated pursuant to the authority
contained in section 505 of ERISA (Pub. L. 93-406, 88 Stat. 894, 29
U.S.C. 1135) and sections 101(b) and 104(a)(1) of ERISA, as amended,
and under the Secretary of Labor's Order No. 1-87, 52 FR 13139, April
21, 1987.
List of Subjects
29 CFR Part 2520
Employee benefit plans, Employee Retirement Income Security Act,
Group health plans, Pension plans, Welfare benefit plans.
29 CFR Part 2560
Claims, Employee benefit plans, Employee Retirement Income Security
Act, Law enforcement, Pensions.
For the reasons set forth above, parts 2520 and 2560 of Chapter XXV
of Title 29 of the Code of Federal Regulations are amended as follows:
PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE
1. The authority citation for Part 2520 continues to read as
follows:
Authority: Secs. 101, 102, 103, 104, 105, 109, 110, 111 (b)(2),
111(c), and 505, Pub. L. 93-406, 88 Stat. 840-52 and 894 (29 U.S.C.
1021-1025, 1029-31, and 1135); Secretary of Labor's Order No. 27-74,
13-76, 1-87, and Labor Management Services Administration Order 2-6.
Sections 2520.102-3, 2520.104b-1 and 2520.104b-3 also are issued
under sec. 101(a), (c) and (g)(4) of Pub. L. 104-191, 110 Stat.
1936, 1939, 1951 and 1955 and, sec. 603 of Pub. L. 104-204, 110
Stat. 2935 (29 U.S.C. 1185 and 1191(c)).
2. Section 2520.102-1 is removed and reserved.
3. Revise section 2520.102-4 to read as follows:
Sec. 2520.102-4 Option for different summary plan descriptions.
In some cases an employee benefit plan may provide different
benefits for various classes of participants and beneficiaries. For
example, a plan amendment altering benefits may apply to only those
participants who are employees of an employer when the
[[Page 42796]]
amendment is adopted and to employees who later become participants,
but not to participants who no longer are employees when the amendment
is adopted. (See Sec. 2520.104b-4). Similarly, a plan may provide for
different benefits for participants employed at different plants of the
employer, or for different classes of participants in the same plant.
In such cases the plan administrator may fulfill the requirement to
furnish a summary plan description to participants covered under the
plan and beneficiaries receiving benefits under the plan by furnishing
to each member of each class of participants and beneficiaries a copy
of a summary plan description appropriate to that class. Each summary
plan description so prepared shall follow the style and format
prescribed in Sec. 2520.102-2, and shall contain all information which
is required to be contained in the summary plan description under
Sec. 2520.102-3. It may omit information which is not applicable to the
class of participants or beneficiaries to which it is furnished. It
should also clearly identify on the first page of the text the class of
participants and beneficiaries for which it has been prepared and the
plan's coverage of other classes. If the classes which the employee
benefit plan covers are too numerous to be listed adequately on the
first page of the text of the summary plan description, they may be
listed elsewhere in the text so long as the first page of the text
contains a reference to the page or pages in the text which contain
this information.
4. Section 2520.103-1(a), introductory text, is amended by removing
the term ``section 104(a)(1)(A)'' and adding, in its place, the term
``section 104(a)(1)''.
5. Section 2520.103-5 is amended by removing the term ``section
104(a)(1)(A)'' from paragraphs (a), introductory text, (c)(1)(i),
(c)(1)(iii), (c)(2)(ii), (c)(2)(iii) and (c)(3) and adding, in their
place, the term ``section 104(a)(1)''.
6. Section 2520.103-12 is amended by removing from paragraph (a)
the term ``section 104(a)(1)(A)'' and adding, in its place, the term
``section 104(a)(1)''.
7. Revise paragraph (a) of Sec. 2520.104-4 to read as follows:
Sec. 2520.104-4 Alternative method of compliance for certain successor
pension plans.
(a) General. Under the authority of section 110 of the Act, this
section sets forth an alternative method of compliance for certain
successor pension plans in which some participants and beneficiaries
not only have their rights set out in the plan, but also retain
eligibility for certain benefits under the terms of a former plan which
has been merged into the successor. This section is applicable only to
plan mergers which occur after the issuance by the successor plan of
the initial summary plan description under the Act. Under the
alternative method, the plan administrator of the successor plan is not
required to describe relevant provisions of merged plans in summary
plan descriptions of the successor plan furnished after the merger to
that class of participants and beneficiaries still affected by the
terms of the merged plans.
* * * * *
8. Revise the introductory text in paragraph (a) and paragraphs
(a)(2), (a)(3), and (c) of Sec. 2520.104-20 to read as follows:
Sec. 2520.104-20 Limited exemption for certain small welfare plans.
(a) Scope. Under the authority of section 104(a)(3) of the Act, the
administrator of any employee welfare benefit plan which covers fewer
than 100 participants at the beginning of the plan year and which meets
the requirements of paragraph (b) of this section is exempted from
certain reporting and disclosure provisions of the Act. Specifically,
the administrator of such plan is not required to file with the
Secretary an annual or terminal report. In addition, the administrator
of a plan exempted under this section--
* * * * *
(2) Is not required to furnish upon written request of any
participant or beneficiary a copy of the annual report and any terminal
report, as required by section 104(b)(4) of the Act;
(3) Is not required to make copies of the annual report available
for examination by any participant or beneficiary in the principal
office of the administrator and such other places as may be necessary,
as required by section 104(b)(2) of the Act.
(b) * * *
(c) Limitations. This exemption does not exempt the administrator
of an employee benefit plan from any other requirement of Title I of
the Act, including the provisions which require that plan
administrators furnish copies of the summary plan description to
participants and beneficiaries (section 104(b)(1)) and furnish certain
documents to the Secretary of Labor upon request (section 104(a)(6)),
and which authorize the Secretary of Labor to collect information and
data from employee benefit plans for research and analysis (section
513).
* * * * *
9. Amend Sec. 2520.104-21 by revising paragraphs (a) and (c) to
read as follows:
Sec. 2520.104-21 Limited exemption for certain group insurance
arrangements.
(a) Scope. Under the authority of section 104(a)(3) of the Act, the
administrator of any employee welfare benefit plan which covers fewer
than 100 participants at the beginning of the plan year and which meets
the requirements of paragraph (b) of this section is exempted from
certain reporting and disclosure provisions of the Act. Specifically,
the administrator of such plan is not required to file with the
Secretary a terminal report or furnish upon written request of any
participant or beneficiary a copy of any terminal report as required by
section 104(b)(4) of the Act.
* * * * *
(c) Limitations. This exemption does not exempt the administrator
of an employee benefit plan from any other requirement of title I of
the Act, including the provisions which require that plan
administrators furnish copies of the summary plan description to
participants and beneficiaries (section 104(b)(1)), file an annual
report with the Secretary of Labor (section 104(a)(1)) and furnish
certain documents to the Secretary of Labor upon request (section
104(a)(6)), and authorize the Secretary of Labor to collect information
and data from employee benefit plans for research and analysis (section
513).
* * * * *
10. Section 2520.104-23 is amended by removing from paragraph
(b)(2) the term ``104(a)(1)'' and adding, in its place, the term
``104(a)(6)''.
11. Section 2520.104-24 is amended by removing from paragraph (b)
the term ``104(a)(1)'' and adding, in its place, the term
``104(a)(6)''.
12. Section 2520.104-25 is amended by removing the term
``104(a)(1)'' and adding, in its place, the term ``104(a)(6)''.
13. In Sec. 2520.104-26, revise paragraph (a) to read as follows:
Sec. 2520.104-26 Limited exemption for certain unfunded dues financed
welfare plans maintained by employee organizations.
(a) Scope. Under the authority of section 104(a)(3) of the Act, a
welfare benefit plan that meets the requirements of paragraph (b) of
this section is exempted from the provisions of the Act that require
filing with the Secretary an annual report and furnishing a summary
annual report to participants and beneficiaries. Such plans may use a
simplified method of reporting and disclosure to comply with the
[[Page 42797]]
requirement to furnish a summary plan description to participants and
beneficiaries, as follows:
(1) In lieu of filing an annual report with the Secretary or
distributing a summary annual report, a filing is made of Report Form
LM-2 or LM-3, pursuant to the LMRDA and regulations thereunder, and
(2) In lieu of a summary plan description, the employee
organization constitution or by-laws may be furnished in accordance
with Sec. 2520.104b-2 to participants and beneficiaries together with
any supplement to such document necessary to meet the requirements of
Secs. 2520.102-2 and 2520.102-3.
* * * * *
14. In Sec. 2520.104-27, revise paragraph (a) to read as follows:
Sec. 2520.104-27 Alternative method of compliance for certain unfunded
dues financed pension plans maintained by employee organizations.
(a) Scope. Under the authority of section 110 of the Act, a pension
benefit plan that meets the requirements of paragraph (b) of this
section is exempted from the provisions of the Act that require filing
with the Secretary an annual report and furnishing a summary annual
report to participants and beneficiaries. Such plans may use a
simplified method of reporting and disclosure to comply with the
requirement to furnish a summary plan description to participants and
beneficiaries, as follows:
(1) In lieu of filing an annual report with the Secretary or
distributing a summary annual report, a filing is made of Report Form
LM-2 or LM-3, pursuant to the LMRDA and regulations thereunder, and
(2) In lieu of a summary plan description, the employee
organization constitution or by-laws may be furnished in accordance
with Sec. 2520.104b-2 to participants and beneficiaries together with
any supplement to such document necessary to meet the requirements of
Secs. 2520.102-2 and 2520.102-3.
* * * * *
15. Section 2520.104-41 is amended by removing from paragraph (b)
the term ``section 104(a)(1)(A)'' and adding, in its place, the term
``section 104(a)(1)''.
16. Section 2520.104-43 is amended by removing from paragraph (a)
the term ``section 104(a)(1)(A)'' and adding, in its place, ``section
104(a)(1)''.
17. Section 2520.104-44 is amended by removing from paragraph (d)
the term ``section 104(a)(1)(A)'' and adding, in its place, ``section
104(a)(1)''.
18. Section 2520.104a-2 is removed and reserved.
19. Section 2520.104a-3 is removed and reserved.
20. Section 2520.104a-4 is removed and reserved.
21. Section 2520.104a-5 is amended by removing the term ``section
104(a)(1)(A)'' and adding, in its place, the term ``section
104(a)(1)''.
22. Section 2520.104a-5 is amended by removing and reserving
paragraph (a)(1).
23. Section 2520.104a-7 is removed and reserved.
24. Section 2520.104b-1 is amended by removing from the second
sentence of paragraph (b)(3) the term ``plan description,''.
25. In Sec. 2520.104b-3 paragraphs (f) and (g) are removed and
reserved.
PART 2560--RULES AND REGULATIONS FOR ADMINISTRATION AND ENFORCEMENT
26. The authority citation for part 2560 continues to read as
follows:
Authority: Secs. 502, 505 of ERISA, 29 U.S.C. 1132, 1135, and
Secretary's Order 1-87, 52 FR 13139 (April 21, 1987).
Section 2560.502-1 also issued under sec. 502(b)(2), 29 U.S.C.
1132(b)(2).
Section 2560.502i-1 also issued under sec. 502(i), 29 U.S.C.
1132(i).
Section 2560.503-1 also issued under sec. 503, 29 U.S.C. 1133.
Sec. 2560.502c-21 [Amended]
27. Section 2560.502c-2 is amended by removing from paragraph
(a)(1) and (a)(2) the term ``section 101(b)(4)'' each time it appears
and adding, in its place, the term ``section 101(b)(1)''.
Signed at Washington, D.C., this 28th day of July 1999.
Richard M. McGahey,
Assistant Secretary, Pension and Welfare Benefits Administration,
Department of Labor.
[FR Doc. 99-19860 Filed 8-4-99; 8:45 am]
BILLING CODE 4510-29-P
