Department of Labor: 2006006330

41392 Federal Register / Vol. 71, No.
140 / Friday, July 21, 2006 / Proposed Rules
(6) The number of requests for records on the past experience of the agency, to Attorney General an annual report
received by the agency and the number comply with different types of requests; covering each of the categories of
of requests the agency processed; (10) The number of full-time staff of records to be maintained in accordance
(7) The median number of days taken the agency devoted to the processing of with paragraph (a) of this section, for
by the agency to process different types requests for records under this section; the previous fiscal year. A copy of the
of requests; and report will be available for public
(11) The total amount expended by inspection and copying at the OSHRC
(8) The total amount of fees collected the agency for processing these requests.
by the agency for processing requests; (b) The FOIA Disclosure Officer shall FOIA Reading Room, and a copy will be
(9) The average amount of time that annually, on or before February 1 of accessible through OSHRC’s Web site at
the agency estimates as necessary, based each year, prepare and submit to the http://www.oshrc.gov.
APPENDIX A TO PART 2201.—SCHEDULE OF FEES

Type of fee Amount of fee
Threshold Amount (Amount below which fees will not be assessed) ..... $10.
Search and Review Hourly Fees:
Clerical (GS–9 and below) ................................................................ $23.
Professional (GS–10 through GS 14) ............................................... $46.
Managerial (GS–15 and above) ........................................................ $76.
Duplication cost per page ......................................................................... $0.25.
Computer printout copying fee ................................................................. $0.40.
Searches of computerized records .......................................................... Actual cost to the Commission, but shall not exceed $300 per hour, in-
cluding machine time and the cost of the operator and clerical per-
sonnel.
Certification Fee ....................................................................................... $35 per authenticating affidavit or declaration. (Note: Search and re-
view charges may be assessed in accordance with the rates listed
above.)
[FR Doc. E6–11574 Filed 7–20–06; 8:45 am] update the annual reporting forms to FOR FURTHER INFORMATION CONTACT:
BILLING CODE 7600–01–P reflect current issues and agency Elizabeth A. Goodman or Michael Baird,
priorities. The regulatory amendments Office of Regulations and
thus would, upon adoption, apply for Interpretations, Employee Benefits
DEPARTMENT OF LABOR the reporting year for which the Security Administration, U.S.
electronic filing requirement is Department of Labor, (202) 693–8523
Employee Benefits Security implemented. The proposed regulatory (not a toll-free number).
Administration amendments will affect the financial
SUPPLEMENTARY INFORMATION:
and other information required to be
29 CFR Part 2520 reported and disclosed by employee A. Background
RIN 1210–AB06 benefit plans filing the Form 5500
Annual Return/Report of Employee Under Titles I and IV of ERISA, and
Annual Reporting and Disclosure Benefit Plan under Part 1 of Subtitle B the Internal Revenue Code (Code), as
of Title I of ERISA. amended, pension and other employee
AGENCY: Employee Benefits Security
benefit plans are generally required to
Administration, Labor. DATES: Written comments must be file annual returns/reports concerning,
ACTION: Proposed rule. received by the Department of Labor on among other things, the financial
or before September 19, 2006. condition and operations of the plan.
SUMMARY: This document contains
proposed amendments to Department of ADDRESSES: Comments should be Filing the Form 5500 ‘‘Annual Return/
Labor (Department) regulations relating addressed to the Office of Regulations Report of Employee Benefit Plan,’’
to annual reporting and disclosure and Interpretations, Employee Benefits together with any required attachments
requirements under Part 1 of Subtitle B Security Administration (EBSA), Room and schedules (Form 5500 Annual
of Title I of the Employee Retirement N–5669, U.S. Department of Labor, 200 Return/Report) generally satisfies these
Income Security Act of 1974, as Constitution Avenue, NW., Washington, annual reporting requirements. The
amended (ERISA or Act). The proposed DC 20210. Attn: Form 5500 Regulation Form 5500 Annual Return/Report is the
amendments contained in this Revisions (RIN 1210–AB06). Comments primary source of information
document are necessary to conform the also may be submitted electronically to concerning the operation, funding,
annual reporting and disclosure e-ori@dol.gov or by using the Federal assets, and investments of pension and
regulations to proposed revisions to the eRulingmaking Portal http:// other employee benefit plans. In
Form 5500 Annual Return/Report of www.regulations.gov (follow addition to being an important
Employee Benefit Plan forms and instructions for submission of disclosure document for plan
instructions. The proposed changes to comments). EBSA will make all participants and beneficiaries, the Form
the Form 5500 and implementing comments available to the public on its 5500 Annual Return/Report is a
rmajette on PROD1PC65 with PROPOSAL
regulatory amendments are intended to Web site at http://www.dol.gov/ebsa. compliance and research tool for the
facilitate the transition to an electronic The comments also will be available for Department and a source of information
filing system, separately proposed at 70 public inspection at the Public and data for use by other federal
FR 51542 (August 30, 2005), reduce and Disclosure Room, N–1513, EBSA, U.S. agencies, Congress, and the private
streamline annual reporting burdens, Department of Labor, 200 Constitution sector in assessing employee benefit,
especially for small businesses, and Avenue, NW., Washington, DC 20210. tax, and economic trends and policies.
VerDate Aug<31>2005 14:43 Jul 20, 2006 Jkt 208001 PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 E:\FR\FM\21JYP1.SGM 21JYP1
Federal Register / Vol. 71, No. 140 / Friday, July 21, 2006 / Proposed Rules 41393
B. Discussion of the Proposed Revisions described in the proposed regulation at Accordingly, under the proposal, the
to Part 2520 § 2520.103–1(c)(2)(iii). A detailed following schedules will no longer be
description of the proposed Form 5500– required to be filed as part of the Form
1. Section 2520.103–1
SF and a facsimile of the form is in the 5500 Annual Return/Report: Schedule E
The Department of Labor Notice of Proposed Forms Revisions (ESOP Annual Information), Schedule P
(Department) annual reporting being published concurrently in today’s (Annual Return of Fiduciary of
regulations, including § 2520.103–1, are Federal Register. Substantially all of the Employee Benefit Trust), and Schedule
promulgated under the provisions of information required to be reported by SSA (Annual Registration Statement
ERISA that authorize the creation of employee benefit plans on the proposed Identifying Separated Participants With
limited exemptions and simplified Short Form 5500 currently is included Deferred Vested Benefits). The IRS,
reporting and disclosure for welfare in that information required to be however, has advised the Department
plans under ERISA section 104(a)(3), reported as part of the Form 5500 that it intends that plan administrators,
simplified annual reports under ERISA Annual Return/Report under the employers, and certain other entities
section 104(a)(2)(A) for pension plans simplified reporting options presently that are subject to filing and reporting
that cover fewer than 100 participants, available to small plans. The proposal requirements under the Code will have
and alternative methods of compliance would not eliminate the existing to continue to satisfy any applicable
for all pension plans under ERISA simplified reporting options for small requirements in accordance with IRS
section 110(a). Various changes are plans but, rather, would add the Short revenue procedures, regulations,
being proposed to the Form 5500 Form 5500 as another simplified publications, forms, and instructions. In
Annual Return/Report and its reporting option for eligible small plans. that regard, the IRS has independently
instructions in a Notice of Proposed The Internal Revenue Service (IRS) eliminated the Schedule P from the
Form Revisions published today in the has advised the Department that, 2006 Form 5500 in anticipation of the
Federal Register. To accommodate although there are no mandatory transition to a wholly electronic filing
those form and instruction changes, the electronic filing requirements for the environment. Further, as described
regulatory amendments to 29 CFR Form 5500 under the Code or the elsewhere in this document, the
2520.103–1 are being proposed to regulations issued thereunder, to ease Department is proposing to move to the
update the references to the annual the burdens on plans that are not subject Schedule R three questions on ESOP
report to reflect the new structure and to Title I of ERISA but that file the Form information formerly reported on the
components of the Form 5500 Annual 5500–EZ to satisfy the annual reporting Schedule E, and the IRS has advised the
Return/Report. and filing obligations imposed by the Department that it does not anticipate
The following subsections outline Code, the IRS is proposing to permit requiring separate filings by ESOPs on
major changes to the Form 5500. A more certain Form 5500–EZ filers to satisfy the remaining questions from the
comprehensive discussion of the form the requirement to file the Form 5500– Schedule E. The IRS is evaluating the
and instructions changes is in the EZ with the IRS by filing the proposed information collected on Schedule SSA,
above-referenced Notice of Proposed Short Form 5500 electronically through and considering whether other existing
Forms Revisions. Facsimiles of the the EFAST processing system. information collections could be used in
proposed form revisions and proposed Therefore, under the IRS’ proposal, place of the Form 5500 Annual Return/
form instructions can be viewed on the Report.
certain Form 5500–EZ filers will be
EBSA’s Web site at http://www.dol.gov/
provided both electronic and paper (c) Schedule A (Insurance Information)
ebsa.1 To avoid unnecessary
filing options. The electronic option
duplication, only a general summary of Schedule A must be attached to the
will allow 5500–EZ filers to complete
the form and instruction changes is Form 5500 Annual Return/Report for an
and electronically file with EFAST
included in this notice as background ERISA-covered plan if any pension or
selected information on the Short Form
for the required cost/benefit and welfare benefits under the plan are
5500. 5500–EZ filers will also be able to
regulatory analysis discussions. For a provided by, or if the plan holds any
choose instead to file a Form 5500–EZ
comprehensive discussion of form and investment contracts with, an insurance
on paper with the IRS.2
instruction changes, see the Notice of company or other similar organization.
Proposed Forms Revisions published (b) Removal of Internal Revenue Although the proposal would retain
concurrently in today’s Federal Service-Only Schedules From the Form most of the Schedule A data
Register. 5500 Annual Return/Report substantially unchanged, the
(a) Short Form 5500 (Eligible Small Plan Under the proposal the Form 5500 Department is proposing to add a line
Filers) Annual Return/Report will no longer item to give administrators a specific
include any of the schedules from the space on the Schedule A to report the
A new two-page Form 5500 Annual failure by an insurance carrier to
Return/Report of Employee Benefit current Form 5500 Annual Return/
Report that are required only for the provide necessary information. Certain
Plan—the Form 5500–SF (Short Form other technical changes are being
5500)—is being proposed in an effort to IRS. This will effectuate the adoption of
a wholly electronic filing requirement proposed to the Schedule A form and
streamline the reporting requirements instructions to improve Schedule A as
for certain small pension and welfare for the Form 5500 Annual Return/
Report given the current limitations on a tool for disclosure of insurance fees
plans (generally, plans with fewer than and commissions.
100 participants) that have investment the IRS’s authority to mandate
portfolios in which their assets are held electronic filing of certain tax returns. (d) Schedule B (Actuarial Information)
by regulated financial institutions and 2 Under the voluntary electronic filing option, Schedule B is required for defined
the investments have a readily 5500–EZ filers filing an amended return for a plan benefit pension plans subject to the
determinable fair market value as year must file the amended return electronically minimum funding standards (see Code
using the Form 5500–SF if they initially filed section 412 and Part 3 of Title I of
1 Paper copies of the proposed form revisions and electronically for the plan year and must file with
proposed instructions may be obtained by the IRS using the paper Form 5500–EZ if they filed
ERISA). The Pension Benefit Guaranty
telephoning 1–866–444–EBSA (3272) (this is a toll- for plan year with the IRS on a paper Form 5500– Corporation (PBGC) proposes adding
free number). EZ. questions to the Schedule B designed to
41394 Federal Register / Vol. 71, No. 140 / Friday, July 21, 2006 / Proposed Rules
obtain a ‘‘look-through’’ allocation of providers, including, among others, Line 4a of Schedule H and I relating to
plan investments in certain pooled investment managers, consultants, delinquent participant contributions.
investment funds for certain very large brokers, and trustees, as well as all other
2. Section 2520.104–44
defined benefit plans. Under the fiduciaries.
proposal, defined benefits plans with Section 2520.104–44 and the current
(f) Schedule R (Retirement Plan Form 5500 Annual Return/Report
more than 1,000 participants would be
Information) instructions provide for limited
required to breakout the percentage of
total plan assets held as ‘‘stock,’’ ‘‘debt,’’ In light of the proposed removal of the reporting for pension plans exclusively
‘‘real estate,’’ and ‘‘other.’’ The Schedule E (ESOP Annual Information), using a tax deferred annuity
underlying investments in master trusts, certain questions from the Schedule E arrangement under Code section
common or collective trusts, pooled are being incorporated into the 403(b)(1), custodial accounts for
separate accounts, and other pooled Schedule R in order to continue to regulated investment company stock
investment vehicles, would be required collect certain information regarding under Code section 403(b)(7), or a
to be broken out and could not be ESOPs as part of the Form 5500 Annual combination of both. Under the
treated merely as ‘‘other,’’ regardless of Return/Report. In addition, proposal, the exemption in § 2520.104–
how they are listed on Schedule H. For multiemployer defined benefit pension 44(b)(3) would be eliminated, with the
investments in ‘‘debt,’’ plans would be plans would have to provide a list result that Code section 403(b) pension
required to provide the ‘‘Macaulay identifying each employer contributing plans subject to Title I would be treated
duration’’ and break out the percentages an annual amount equal to or greater the same as any other Title I pension
held as government debt, investment- than five percent of all annual plan for purposes of the annual
grade corporate debt, and high-yield contributions to the plan (measured in reporting requirements under Title I of
corporate debt. dollars) and setting forth (1) the name of ERISA. With the growth in the size and
the contributing employer; (2) number of Code section 403(b)
(e) Schedule C (Service Provider employer’s employer identification arrangements, and the advent of Code
Information) number (EIN); (3) dollar amount section 401(k) plans, the Code 403(b)
Schedule C must be attached to the contributed; (4) contribution rate; (5) arrangements have become more like
Form 5500 Annual Return/Report filed whether the contribution base unit Code section 401(k) plans. In this
by large plan filers to report any person measure was hourly, weekly, unit of regard, the IRS has undertaken to
who rendered services to the plan that product, or other; and (6) expiration update certain of its regulations. See 69
received directly or indirectly $5,000 or date for the collective bargaining FR 67075, 67076 (November 16, 2004).
more in compensation from the plan agreement pursuant to which For those section 403(b) plans that are
during the plan year, and to report contributions are required to be made to subject to Title I of ERISA, the
terminated accountants or actuaries. the plan. Department has detected violations in a
Consistent with recommendations of the high percentage of its investigations of
(g) Technical and Conforming Changes
ERISA Advisory Council Working Code section 403(b) plans. The
for Forms and Instructions
Groups and the Government predominant issue has been improper
Accountability Office (GAO), EBSA has Various other technical and handling of employee contributions.
concluded that more information should conforming changes are being proposed The Department believes that these
be disclosed on the Form 5500 Annual as part of the restructuring of the Form developments warrant amending the
Return/Report regarding plan fees and 5500 Annual Return/Report. Several of annual reporting requirements to put
expenses. See ERISA Advisory Council the more significant changes include: (1) Code section 403(b) plans on par with
Report of the Working Group on Plan Revision of the instructions for the Form other ERISA-covered pension plans.
Fees and Reporting on Form 5500 5500 Annual Return/Report and Small Code section 403(b) plans
(November 10, 2004) (available on the development of instructions for the generally would be 100 percent invested
Internet at: http://www.dol.gov/ebsa/ Short Form 5500 to reflect the new in eligible assets for purposes of filing
publications) and the Government structure of the reports and electronic the proposed Short Form 5500.
Accountability Office (See Private filing requirements; (2) addition of
questions regarding compliance with 3. Section 2520.104–46
Pensions: Government Actions Could
Improve the Timeliness and Content of the Department’s blackout notice In accordance with the Department’s
Form 5500 Pension Information, GAO– regulation in 29 CFR 2510.101–3; (3) authority under section 104(a)(2)(A) and
05–491) (available on the Internet at: addition of a compliance question on 104(a)(3) of ERISA, the Department has
http://www.gao.gov). EBSA’s proposal whether the plan failed to pay benefits adopted, at 29 CFR 2520.104–41,
would continue to limit Schedule C when due under the plan; (4) expansion simplified annual reporting
reporting to large plan filers and would of the use of codes to report plan feature requirements for pension and welfare
retain the $5,000 reporting threshold, information on pension and welfare benefit plans with fewer than 100
but would revise the Schedule C and benefit plans; (5) elimination of the participants. In addition, the
accompanying instructions to clarify the optional entry of the name and the EIN Department, at 29 CFR 2520.104–46, has
requirements regarding reporting of of the preparer; (6) requiring prescribed for such small plans a waiver
direct and indirect compensation (i.e., administrative expenses to be reported from the requirements of section
money or anything else of value) separately from other expenses on the 103(a)(3)(A) to engage an IQPA and to
received during the plan year in Schedule I; (7) addition of a question on include the opinion of the accountant as
connection with services rendered to whether any minimum funding amount part of the plan’s annual report. The
the plan or the person’s position with reported for a pension plan will be met waiver of the IQPA requirements for
the plan. Also, a new section would be by the funding deadline; and (8) pension plans was conditioned, among
added requiring that the source and adoption of a standard format for use in other requirements, on enhanced
nature of compensation in excess of connection with an independent disclosure in the Summary Annual
$1,000 received from parties other than qualified public accountant (IQPA) Report (SAR) provided to participants
the plan or the plan sponsor be rendering an opinion on the and beneficiaries. In that regard, the
disclosed for certain key service supplemental schedule information on Department prepared a model notice
that plans could use to satisfy the and disclosure requirements would be facilitates reporting, eliminates
enhanced SAR disclosure conditions. adverse to the interests of plan duplicative reporting requirements, and
That model notice has been available at participants in the aggregate. simplifies the content of the annual
the EBSA’s Web site at http:// For purposes of Title I of ERISA, the report in general. The Form 5500
www.dol.gov/ebsa. In order to provide filing of a completed Form 5500 Return/ Annual Return/Report, under the
plan administrators with additional Report, including the filing of the proposed revision, including the
access to the model notice and facilitate proposed Short Form 5500, in proposed Short Form, is intended to
compliance with the audit waiver and accordance with the instructions and further reduce the administrative
Short Form 5500 eligibility conditions, related regulations, generally would burdens and costs attributable to
the Department is proposing to add the constitute compliance with the limited compliance with the annual reporting
model notice as an appendix to exemption and alternative method of requirements.
§ 2520.104–46. compliance in 29 CFR 2520.103–1(b). Taking into account the above, the
The findings required under ERISA Department has determined that
4. Section 2520.104b–10 sections 104(a)(3) and 110 relating to the application of the statutory annual
Section 104(b)(3) of ERISA provides use of the proposed revised Form 5500 reporting and disclosure requirements
in part that, each year, administrators Annual Return/Report, including the without the availability of the Form
must furnish to participants and proposed Short Form 5500, as 5500 Annual Return/Report, including
beneficiaries receiving benefits under a alternative methods of compliance, the proposed Short Form 5500, would
plan materials that fairly summarize the simplified report, and limited be adverse to the interests of
plan’s annual report. Section 2520.104b- exemption from the reporting and participants in the aggregate. The
10 sets forth the requirements for the disclosure requirements of part 1 of proposed revised Form 5500 Annual
SAR and prescribes formats for such Title I of ERISA are set forth below. Return/Report provides for the reporting
reports. The amendments being In proposing revisions to the Form and disclosure of basic financial and
proposed do not include any change to 5500 Annual Return/Report and the other plan information described in
the SAR requirements. However, in amendments in this proposed section 103 of ERISA in a uniform,
order to facilitate compliance with the rulemaking, the Department has efficient, and understandable manner,
SAR requirement for Short Form 5500 attempted to balance the needs of thereby facilitating the disclosure of
filers, the Department is updating its participants, beneficiaries, and of the such information to plan participants
cross-reference guide to correspond to Department to obtain information and beneficiaries.
the line items of the SAR to the relevant necessary to protect ERISA rights and Finally, the Department has
line items on the Short Form 5500. The interests with the needs of determined under section 104(a)(3) of
cross-reference guide, as before, would administrators to minimize costs ERISA that a strict application of the
continue to be an appendix to attendant with the reporting of statutory reporting requirements,
§ 2520.104b–10. information to the federal government. without taking into account the
The Department makes the following proposed revisions to the Form 5500
C. Findings on the Revised Form 5500
findings under sections 104(a)(3) and Annual Return/Report and the proposed
Annual Return/Report (including Short
110 of the Act with regard to the use of Short Form 5500, would be
Form 5500) as a Limited Exemption and
the revised Form 5500 Annual Return/ inappropriate in the context of welfare
Alternative Method of Compliance
Report as a simplified report, alternative plans for the same reasons discussed
Section 104(a)(2)(A) of the Act method of compliance, and limited
authorizes the Secretary of Labor above (i.e., the streamlined form reduces
exemption pursuant to 29 CFR filing burdens without impairing
(Secretary) to prescribe by regulation 2520.103–1(b).
simplified reporting for pension plans enforcement, research, and policy
The use of the proposed revised Form
that cover fewer than 100 participants. needs, while at the same time providing
5500 Annual Return/Report, including
Section 104(a)(3) authorizes the adequate disclosure to participants and
the proposed Short Form 5500, is
Secretary to exempt any welfare plan beneficiaries).
consistent with the purposes of Title I
from all or part of the reporting and of ERISA and provides adequate D. Regulatory Impact Analysis
disclosure requirements of Title I of disclosure to participants and
ERISA or to provide simplified Executive Order 12866 Statement
beneficiaries and adequate reporting to
reporting and disclosure if the Secretary the Secretary. While the information Under Executive Order 12866, the
finds that such requirements are that would be required to be reported on Department must determine whether the
inappropriate as applied to such plans. or in connection with the revised Form regulatory action is ‘‘significant’’ and
Section 110 permits the Secretary to 5500 Annual Return/Report and the therefore subject to the requirements of
prescribe for pension plans alternative proposed Short Form 5500 deviates, as the Executive Order and subject to
methods of complying with any of the before, in some respects, from that review by the Office of Management and
reporting and disclosure requirements if delineated in section 103 of the Act, the Budget (OMB). Under section 3(f) of
the Secretary finds that: (1) The use of information essential to ensuring Executive Order 12866, the order
the alternative method is consistent adequate disclosure and reporting under defines a ‘‘significant regulatory action’’
with the purposes of Title I of ERISA, Title I is required to be included on or as an action that is likely to result in a
provides adequate disclosure to plan as part of the Form 5500 Annual Return/ rule (1) having an annual effect on the
participants and beneficiaries, and Report, as proposed to be revised, and economy of $100 million or more, or
provides adequate reporting to the the proposed Short Form 5500. adversely and materially affecting a
Secretary; (2) application of the The use of Form 5500 Annual Return/ sector of the economy, productivity,
statutory reporting and disclosure Report, as revised, or the proposed competition, jobs, the environment,
requirements would increase costs to Short Form 5500 will relieve plans public health or safety, or State, local or
the plan or impose unreasonable subject to the annual reporting tribal governments or communities (also
administrative burdens with respect to requirements from increased costs and referred to as ‘‘economically
the operation of the plan; and (3) the unreasonable administrative burdens by significant’’); (2) creating serious
application of the statutory reporting providing a standardized format that inconsistency or otherwise interfering
with an action taken or planned by requirements without sacrificing the reporting requirements, and simplifies
another agency; (3) materially altering quality of the information collected. the content of the annual report in
the budgetary impacts of entitlement As described in the preamble to the general.
grants, user fees, or loan programs or the Department’s proposal to require Moreover, the Department believes
rights and obligations of recipients electronic filing of the Form 5500 (70 FR that the revisions to the Form 5500
thereof; or (4) raising novel legal or 51542) (E-Filing Proposal), the Annual Return/Report implemented by
policy issues arising out of legal Department is in the process of creating these proposed regulations, as compared
mandates, the President’s priorities, or a fully electronic filing system to receive to the existing form and schedules, will
the principles set forth in the Executive the annual reports filed by employee both reduce the cost of reporting, on
Order. benefit plans. In addition, as noted aggregate and for a large majority of
Pursuant to the terms of the Executive above, the Department has received affected plans, and enhance the
Order, it has been determined that this reports from the GAO and the ERISA protection of ERISA rights.
regulatory action will have an annual Advisory Council that suggest the need
Regulatory Alternatives
effect on the economy of more than for some substantive changes to the
annual reporting forms and the Executive Order 12866 directs Federal
$100 million. Therefore, this action is Agencies promulgating regulations to
reporting regulations. The Department,
‘‘economically significant’’ and subject evaluate regulatory alternatives. The
in coordination with the IRS, and the
to OMB review under section 3(f)(4) of Department has concluded that, in
PBGC (Agencies), also conducted a
Executive Order 12866. The Department connection with its proposal to move to
thorough review of the content
accordingly has undertaken to assess the a wholly electronic filing environment
requirements for the Form 5500. The
costs and benefits of this regulatory for employee benefit plan annual
Agencies believe the proposed
action in satisfaction of the applicable reports, form revisions and
regulatory and form changes, in
requirements of the Executive Order. implementing regulatory changes
conjunction with adoption of the
In accordance with OMB Circular A– electronic filing system, will should be made to facilitate the
4 (available at http:// substantially reduce plan transition to an electronic filing system,
www.whitehouse.gov/omb/circulars/ administrators’ reporting compliance reduce and streamline annual reporting
a004/a-4.pdf), Table 1 below depicts an burdens and also enhance the utility burdens, especially for small businesses,
accounting statement showing the net and accessibility of reported and update the annual reporting forms
annual cost reduction associated with information to the government, to reflect current issues and agency
the provisions of this proposed rule. participants and beneficiaries, and priorities.
The Department believes that some others. In developing the forms revisions and
employee benefit plans will see a The Form 5500 Annual Return/Report implementing regulatory changes, the
decrease in costs and others might see serves as the primary source of Department was informed by
an increase in costs due to this proposed information concerning the operation, recommendations made by GAO and the
rule. Further information about the funding, assets, and investments of ERISA Advisory Council and conducted
amount of increase and decrease in pension and other employee benefit a thorough-going review of the current
costs for particular plan types is plans. The Form 5500 Annual Return/ regulations and the scope of information
displayed in the cost section later on in Report is an important disclosure collected, which included consideration
this document. On aggregate, the document for participants and of alternative methods of reaching its
Department estimates a cost reduction beneficiaries, an enforcement and goals. The Department’s consideration
of up to $174 million in the first year. research tool for the Department, and a included, for example, different
source of information and data for use approaches to eligibility for the Short
TABLE 1.—ACCOUNTING STATEMENT: by other federal agencies, Congress, and Form 5500, (see discussion in preamble
ESTIMATED COST REDUCTION FROM the private sector in assessing employee to the Notice of Proposed Forms
THE CURRENT REPORTING REQUIRE- benefit, tax, and economic trends and
Revisions under the heading ‘‘Short
Form 5500 as New Simplified Report for
MENTS TO THE PROPOSED 2008 RE- policies. The Department in this
proposal has attempted to balance the Certain Small Plans’’), different
PORTING REQUIREMENTS approaches to reporting for welfare
interests of participants, beneficiaries,
[In millions] and the Department in the protection of plans (see id. under the heading ‘‘F.
ERISA rights, as well as the public’s Other Welfare Plan Issues’’), and
Net cost different approaches to improving the
Category reduction interest in the availability of
information on benefit plans, with plan reporting of direct and indirect
Annualized Monetized Benefit .. $174 administrators’ and sponsors’ interest in compensation paid to service providers
minimizing costs attendant with the (see id. under the heading ‘‘Schedule C:
Need for Regulatory Action reporting of information to the federal Compensation received by plan service
government. The Department believes providers’’). Similarly, the Notice of
The annual reporting regulations for that the proposed regulations’ benefits Proposed Forms Revision discusses the
which amendments are being proposed justify the costs. The basis for this assessments on how to balance the need
provide specific limited exceptions, for conclusion is explained below. for information to help the PBGC
certain types of welfare benefit plans, As stated in this preamble, the evaluate the financial solvency of
from the statutory reporting Department has determined that the use multiemployer plans and the potential
requirements; simplified reporting and of the revised Form 5500 Annual burden on administrators of
disclosure requirements for other types Return/Report, including the proposed multiemployer plans (see id. under the
of small plans; and an alternative new Short Form 5500, would relieve heading ‘‘Schedule R: Contributors to
method of compliance in general for all plans subject to the annual reporting Multiemployer Pension Plans’’).
pension plans. In providing these requirements from increased costs and Inasmuch as the regulatory amendments
special rules, the Department and the administrative burdens by providing a contained in this Notice are intended to
other Agencies intend to reduce the standardized format that facilitates implement the forms revisions
overall burden of the statutory reporting reporting, eliminates duplicative contained in the Notice of Proposed
Forms Revisions, the discussions in the PBGC initially considered the protections, or to reduce costs in ways
Notice of Proposed Forms Revisions are application of the additional that do not compromise protections.
directly relevant to the Department’s requirements to all large defined benefit The revisions are considered separately
analysis under Executive Order 12866 plans (15,000 plans), it subsequently below.
and should be read as part of the determined that additional information Removal of the IRS-only schedules:
Department’s compliance with the for the largest plans, i.e., those with As explained in the Notice of Proposed
requirements of the Executive Order. more than 1,000 participants (5,000 Forms Revisions published
The Department therefore incorporates plans), on the level and types of assets simultaneously with these proposed
those discussions by this reference. in the plan and the sensitivity of these regulations, this change is intended
The public is invited to comment assets to changes in market conditions partly to facilitate a change to
specifically on the decision points for would suffice for the desired mandatory electronic filing—a change
the several categories of proposed improvement in the monitoring of plan which is expected to yield substantial
revisions, and on the adequacy of the funding. benefits. As also explained therein, to
models, assumptions, and data the extent that some Title I information
developed in order to evaluate Benefits and Costs
may have been collected in these
regulatory burden. In considering these Benefits—These regulations and the schedules, these proposed regulations
alternatives, the Department weighted Form 5500 Annual Return/Report and provide for the ongoing collection of
the objective of reduced regulatory Short Form 5500 that the regulations that information in other parts of the
burden against the need for adequate implement will provide a standardized, Annual Return/Report. In addition, it is
reporting and disclosure to insure the streamlined alternative means of
the Department’s understanding that
protection of plan participants, compliance with applicable statutory
some of the IRS-only information that
quantifying impacts where possible. For reporting requirements. In so doing,
will no longer be collected as part of the
example: they will both ease plan administrators’
annual return/report may be collected in
• Establishment of a Short Form 5500 compliance with reporting requirements
the future via other Treasury or IRS
for certain small plans: In considering and greatly enhance the utility and
vehicles. The Department expects this
criteria of eligibility for filing the Short accessibility of information reported to
revision to preserve protections of
Form 5500 the Department evaluated the government, participants and
ERISA rights, while reducing Form 5500
both less stringent and more stringent beneficiaries, and others. In particular,
Return/Report filing reporting costs as
criteria. If, for example, the Department the regulations and forms, together with
the Department’s planned program for estimated below. From a broader
had relied solely on the conditions for
assisting filers in the preparation and societal perspective, the reduction in
a waiver of the audit requirements for
electronic submission of filings, will reporting costs may be less than what
small plans, the Department believes
that as many as 95 percent of small give plan administrators clear guidance has been assumed here if IRS elects to
plans (612,000 plans) would meet the and a supportive, routine mechanism collect some of this information through
Short Form 5500 requirements. Because for satisfying their reporting obligations. other channels.
of concern about the need to limit They also will make it possible to Establishment of a Short Form 5500
eligibility to small plans with easy to efficiently capture and assemble the for certain small plans: The Short Form
value investment portfolios, however, information into an electronic data 5500 is being developed with the
the Department added the requirements system. The data can then be processed specific intent of reducing reporting
of small plans that invest in secure and analyzed in the service of many costs (as estimated below) while
assets that are held or issued by beneficial activities. These include continuing to collect sufficient
regulated financial institutions and that monitoring compliance with ERISA’s information to preserve ERISA
have a fair market value that is easily reporting and other requirements, protections, satisfying the enforcement,
determined. In so doing, the Department targeting, and carrying out prompt and research, and regulatory needs of the
estimates that approximately 90 percent effective enforcement actions; informing Department and the other Agencies, and
of small plans (571,000 plans) that participants and beneficiaries of the the disclosure needs of participants and
formerly were able to file under the characteristics, operations, and financial beneficiaries. The Agencies determined
simplified requirements would qualify status of their benefit plans; producing that less information is needed in the
as eligible to file the Short Form 5500. statistics on the employee benefit case of small plans that invest in secure
An additional 9,000 small Code section system and monitoring trends therein assets that are held or issued by
403(b) plans would also qualify. and informing the public; and regulated financial institutions and that
• Addition of certain asset allocation assembling information and conducting have a fair market value that is easily
and duration information to Schedule B: research that advances knowledge and determined. The Agencies believe that
Schedule B is filed by defined benefit fosters the formulation of sound public the eligibility conditions for Short Form
pension plans subject to the minimum policies toward employee benefits. The 5500 filers, including the requirements
funding standards. As noted below, this Department believes that the benefits of relating to security and valuation of the
revision will increase reporting costs for the proposed regulations justify the plan’s investments, ensure that the
affected plans. The Agencies, however, costs. Short Form 5500 will provide adequate
believe that these costs are justified by The Department further believes that disclosure to the participants and
the need to better monitor plan funding. the revisions to the existing reporting beneficiaries in the plan and adequate
In developing this proposed revision, requirements contained in the proposed annual reporting to the Agencies. The
the PBGC considered the approach that regulations will both reduce aggregate Notice of Proposed Forms Revisions
could balance the need for better reporting costs and enhance protection published simultaneously with these
monitoring of plan funding and the of ERISA rights. The former anticipated proposed regulations details the content
increased burden that would be effect is quantified in the discussion of of the Short Form 5500 and elaborates
incurred to provide additional costs below. With respect to the latter, on its adequacy for its intended
information on the breakdown of assets the Department developed each of the purpose. Small plans that are not
and duration of debt instruments held revisions contained in the proposed eligible to file the Short Form 5500
by defined benefit plans. While the regulations either to enhance would continue to be able to file
simplified reports as under the current investments of plans sponsored by Other Improvements and
system. privately held companies, and generally Clarifications of Existing Form 5500
Elimination of the special reporting is already required to be provided to the Reporting Requirements: Some of the
rules for Code section 403(b) plans: As United States Securities and Exchange revisions that come under this heading
noted below, this revision is expected to Commission by public company are technical clarifications or
increase reporting costs for affected sponsors of defined benefit plans. conforming changes to more substantive
plans. However, the Department proposed revisions. These entail no
Adding Multiemployer Plan
believes these added costs are justified material benefits or costs. Other
Contributing Employer Information: The
by the need to enhance ERISA revisions make small adjustments to the
Form 5500 Annual Return/Report
protections in connection with these instructions or reporting requirements
currently does not require plans to state
plans the Department believes that
the number or identities of employers to reflect changing market or
developments with respect to Code
participating in a multiemployer plan. compliance trends. Some of these entail
section 403(b) plans, described above in
connection with the proposed Multiemployer plans are, however, small increases in reporting costs that
amendment to 2520.104–44, warrant currently required to keep a list of are justified by the need to stay current.
amending the annual reporting participating employers on file and to These include, for example, the addition
requirements to put Code section 403(b) make such information available to of feature codes to identify plans with
plans on par with other ERISA-covered participants on request. Accordingly, certain default features, compliance
pension plans. Small Code section requiring multiemployer plans to questions directed at the provision of
403(b) plans generally would be 100 provide the number of participating blackout notices, and fuller instruction
percent invested in eligible assets for employers will not create any new on the reporting of certain indirect plan
purposes of filing the proposed Short recordkeeping requirements. This expenses. Others, such as the
Form 5500. This would result in only a information will be useful to various elimination of the requirement for self-
modest increase in the annual reporting governmental and private firms that use insured health benefit plans to
burden on small Code section 403(b) the Form 5500 Annual Return/Report separately report certain payments to
plan filers. data for policy and research purposes. individual health care providers, may
Addition of certain asset allocation The Form 5500 Annual Return/Report reduce reporting costs without
and duration information to Schedule B: also currently lacks information that compromising protections. These
As noted below, this revision will shows a multiemployer plan’s basis for revisions and their respective intents are
increase reporting costs for affected employer contributions. This detailed in the Notice of Proposed
plans. The Agencies, however, believe information is particularly important Forms Revisions published
that these costs are justified by the need with respect to multiemployer defined simultaneously with these proposed
to better monitor plan funding. The benefit pension plans, as this regulations.
PBGC has found that it needs more information is needed by the PBGC in
information on the breakdown of assets order for it to assess the financial risk Costs
and duration of debt instruments held posed to the plan by the financial
by defined benefit plans. A plan’s collapse or withdrawal of one or more Although the costs to plans of
funded status is highly dependent on contributing employers. Over the past satisfying their annual reporting
the level and types of assets in the plan several years, the financial condition of obligations will be lower under these
and the sensitivity of these assets to many multiemployer plans has been proposed regulations than they would
changes in market conditions. Thus, the deteriorating. The PBGC believes it is be under existing regulations, they will
additional information required by this prudent to begin monitoring those still be substantial.3 As shown in Table
revision will improve the PBGC’s ability companies that are major contributors to 2 below, the aggregate cost of such
to estimate the impact of economic the multiemployer plans. To do so, the reporting under the existing regulations
changes on the financial status of the PBGC must be able to identify these is estimated to be $1,062 million
plans it insures, and by extension, on companies. Because multiemployer annually, shared across the 833,000
the future financial status of the PBGC. plans are most at risk when a major filers subject to the filing requirement.
Much of the information newly required contributing sponsor encounters The Department estimates that the
by this revision is typically in the financial difficulties, this proposed proposed regulations, however, impose
immediate possession of the committee revision would require identification an annual cost burden on the 833,000
or authority that oversees the only of major contributors. filers of only $888 million.4
TABLE 2.—SUMMARY OF COSTS: CURRENT REQUIREMENTS VS. PROPOSED REQUIREMENTS

Total burden
Total costs hours
(in millions) (in millions)
Current Reporting Requirements ............................................................................................................................. $1,062 13.51

Change due to Revisions for 2008 .......................................................................................................................... 174 2.26
Proposed Reporting Requirement, 2008 ................................................................................................................. 888 11.25
Note: Number of affected plans: 833,000.
3 The Department believes, however, that the the statutory filing requirements without the benefit 4 More detail about the cost estimates can be
annual cost burden on filers would be higher still of any regulatory exceptions, simplified reporting, found in the section ‘‘Assumptions, Methodology,
in the absence of the existing regulations, because or alternative methods of compliance. and Uncertainty’’.
the filers would then be required to comply with
Because these proposed regulations the Department carried out the anticipated to add an estimated $3
make substantial revisions to the calculations in the following way: million (41,000 hours) for 79,000
existing reporting requirements, they 1. Removal of the IRS-only schedules: affected plans to annual reporting costs.
will entail some one-time transition Under the proposed regulations some of 5. Addition of requirements for
costs. The Department examined such the information formerly collected in certain multi-employer plans to report
transition costs in connection with the these schedules will be collected by the certain information about contributing
last major revision to the Form 5500 Department elsewhere in the Form 5500 employers: This is anticipated to add an
Annual Return/Report, which revised Annual Return/Report filing. On net, estimated $300,000 (3,500 hours) to
the Annual Return/Report for plan years however, this revision will substantially annual reporting costs for 10,000
beginning in 1999. See 65 FR 5026 (Feb. reduce the amount of information multiemployer plans.
collected. Relative to the current filing 6. Adoption of various technical
2, 2000). Based on information provided
requirement, this revision will reduce revisions and other miscellaneous
by plan service providers and Form
the total annual burden hours for revisions to the Form 5500 Annual
5500 Annual Return/Report software 740,000 affected filers by 1.2 million
developers at that time, the Department Return/Report to improve and clarify
hours. Applying an hourly labor rate of existing reporting requirements:
concluded that such costs are generally $84 for service providers and $59 for
loaded into the prices paid by plans for Together these are estimated to add an
plan sponsors, the Department estimates estimated $12 million (154,000 hours) to
affected services and products, spread that this will lower the aggregate annual
both across plans and across the annual reporting costs and affect
reporting cost by an estimated $90 approximately 250,000 plans.
expected life of the service and product million.5
changes. The Department’s estimates 2. Establishment of a Short Form 5500 7. Elimination of the special reporting
provided here are therefore intended to for certain small plans: A large majority rules for Code section 403(b) plans:
reflect such spreading and loading of of small plans, or 580,000 of the 640,000 Approximately eighteen thousand Code
these transition costs. That is, the total small plan filers, are estimated to section 403(b) plans are subject to the
gradual defrayal of the transition costs be eligible to use the Short Form 5500, annual reporting requirements. It is
is included in the annual cost estimates thereby saving an estimated $154 anticipated that all 9,000 small Code
here. million (1.9 million hours) annually. section 403(b) plans will be eligible to
This estimate includes about 9,000 use the new Short Form and will be
In addition to estimating the total eligible for waiver of the audit
impact of the proposed revisions on small Code section 403(b) plans that
under the proposed rule would be requirement. The impact of the
aggregate costs, the Department has proposed changes on the small Code
broken down the change in cost by subjected to increased filing
requirements. section 403(b) plans is quantified above.
individual revisions. This apportioning Nine thousand large Code section 403(b)
3. Addition of certain asset allocation
of costs to individual revisions could be and duration information to Schedule B: plans will be newly subject to the audit
potentially done in several ways, as The provision of this information, and requirement and required to file a Form
some types of plans are affected by more its certification by an actuary, will entail 5500 Annual Return/Report similar to
than one revision and therefore estimated additional annual costs of those filed by similar Code section
sequencing of the changes becomes $1.5 million (19,000 hours) for 5,000 401(k) plans. This revision will increase
important for the calculations. For affected defined benefit pension plans annual reporting costs for large Code
example, large and small Code section with more than 1,000 participants. section 403(b) plans by an estimated $54
403(b) plans are affected by the 4. Revision of Schedule C (Service million (or 690,000 hours).
elimination of the special reporting Provider Information): This revision A summary of the changes in costs
rules, but small Code section 403(b) intends to clarify the reporting and burden hours that were allocated to
plans are affected also by the requirements and improve the the groups of proposed changes as
introduction of the Short Form 5500. information plan officials receive outlined above, as well as the number
For the purpose of quantifying the regarding amounts being received by of affected employee benefit plans, can
impact of the individual law changes, plan service providers. This is be found in Table 3 below.
TABLE 3.—SUMMARY OF PROPOSED CHANGES TO THE REPORTING REQUIREMENTS: COST, BURDEN, AND AFFECTED
PLANS
Change in costs Change in Number of
Revisions for 2008 (in millions) burden hours affected plans
IRS-only Schedules, Short Form and small .............................................................................. ¥$90.1 ¥1,226,000 739,000
Code Section 403(b) plans ........................................................................................................ ¥154.3 ¥1,938,000 580,000
Schedule B ................................................................................................................................ 1.5 19,000 5,000
Schedule C ................................................................................................................................ 3.2 41,000 79,000
Multi-employer plans .................................................................................................................. 0.3 3,500 10,000
Technical and Miscellaneous Revisions .................................................................................... 11.9 154,000 253,000
Large Code Section 403(b) plans ............................................................................................. 53.9 689,000 9,000
Total .................................................................................................................................... ¥173.6 (2,258.30) 833,000

Note: The displayed numbers might not sum up to the totals due to rounding.
5 A discussion on the appropriateness of the labor assumptions can be found in the Technical
rates used in the calculations as well as on other Appendix.
The proposed regulation otherwise Assumptions Underlying this proposed forms revisions. In the
generally does not alter reporting costs. Analysis—The Department’s analysis of following, the ARC model is described
Plans currently exempt from annual the costs and benefits of these proposed in broad terms. Further details about the
reporting requirements (such as certain amendments assumes that all benefits model are explained in the Technical
small unfunded or fully insured welfare and costs will be realized in the first Appendix that can be accessed at the
plans and certain Simplified Employer year of the reporting cycle to which the Department’s Web site at http://
Pensions) will remain exempt. Also, amendments apply and within each www.dol.gov/ebsa.
except for Code section 403(b) plans, year thereafter. This assumption is
plans eligible for limited reporting To estimate aggregate burdens, the
based on the nature of the statutory
options (such as certain IRA-based types of plans that have similar
reporting provisions, which require that
pension plans) will continue to be each plan complete a filing within a reporting requirements were grouped
eligible for that annual reporting relief. yearly period. The Department has used together. Thus, calculations were
The revisions continue the Form 5500 a ‘‘status quo’’ baseline for this analysis, prepared for different subsets of types of
Annual Return/Report structure that is assuming that the world absent the plans as appropriate based on the
familiar to individual and corporate regulations will resemble the present.6 specifics of the revisions to the
taxpayers—a simple two-page main reporting requirements. Table 4 below
Methodology—The underlying cost
form with basic information necessary data was developed by Mathematica shows the particular types of plans
to identify the plan for which the report Policy Research, Inc. (MPR), and has considered, the number of plans
is filed, along with a checklist of the been used by the Agencies in various affected by the proposed revisions, as
schedules being filed that are applicable burden estimates related to the Form well as the aggregate costs under current
to the filer’s plan type. The structure is 5500 Annual Return/Report during and proposed requirements. As can be
designed to aid filers by allowing them recent years. See, 65 FR 21068, 21077– seen from the Total line in Table 4,
to assemble and file a return customized 78 (April 19, 2000); Borden, William S., aggregate cost under current and
to their plan. ‘‘Estimates of the Burden for Filing proposed regulations add up to $1,062
Assumptions, Methodology, and Form 5500: The Change in Burden from million and $888 million, respectively.
Uncertainty the 1997 to the 1999 Forms,’’ The universe of filers was divided into
Mathematica Policy Research, submitted three basic plan types: Defined benefit
The cost and burden associated with pension plans, defined contribution
the annual reporting requirement for to U.S. Dept. of Labor May 25, 1999.7 It
is grounded in surveys of filers and their pension plans, and welfare plans, and
any given plan will vary according to a
service providers, which measured the each of these major plan types was
variety of factors, including the plan’s
unit cost burden of providing various further subdivided into multiemployer
characteristics, practices, and
types of information. Aggregate and single-employer plans. Defined
operations, which in turn determine
what information must be provided. A estimates were produced by interacting contribution Code section 403(b) plans
small, single-employer defined these unit cost measures with historical were treated separately from other
contribution pension plan filing a new counts of Form 5500 Annual Return/ defined contribution plans. Since the
Short Form 5500 generally will incur far Report filers. filing requirements differ substantially
lower costs than a large, multiemployer A new burden estimating model, for small and large plans, the plan types
defined benefit pension plan that holds based on the Form 5500 Burden Model were also divided by plan size. For large
multiple insurance contracts, engages in that MPR most recently used for plans (100 or more participants), the
numerous reportable transactions, and estimating burdens in October 2004, defined benefit plans were further
pays large fees to a number of service was assembled by Actuarial Research divided between very large (1000 or
providers. Therefore, in arriving at its Corporation (ARC). ARC assembled a more participants) and other large plans
aggregate cost estimates, the Department simplified model, drawing on implied (at least 100 participants, but less than
separately considered the cost to burdens associated with subsets of filer 1000 participants). For each of these sets
different types of plans of providing groups represented in the MPR model. of respondents, burden hours per
different types of information. The basis The model used the level of detail respondent were estimated for the Form
for the Department’s estimates is consistent with reflecting burden 5500 Annual Return/Report itself and
elaborated below. differences associated with the various for up to eight schedules.
TABLE 4.—NUMBER OF AFFECTED FILERS AND COST UNDER CURRENT VS. PROPOSED REQUIREMENTS
Aggregate cost Aggregate cost
Number under current under proposed
Type of plan affected requirements requirements
5500 Large Plans (> = 100 participants)—189,000:

DB, ME, 100–1,000 participants ...................................................................................... 800 7.6 7.2
DB, ME, > 1,000 participants ........................................................................................... 1,100 13.3 13.2
DB, SE, 100–1,000 participants ....................................................................................... 8,900 80.2 74.2
DB, SE, > 1,000 participants ............................................................................................ 4,200 38.8 39.2
DC, ME, non-403(b) ......................................................................................................... 2,300 14.4 13.7
DC, ME, 403(b) ................................................................................................................ 400 0.016 2.4
DC, SE, non-403(b) .......................................................................................................... 70,000 437.1 401.3
DC, SE, 403(b) ................................................................................................................. 8,600 0.350 51.9

Welfare, ME ...................................................................................................................... 5,700 14.3 14.8
Welfare, SE ...................................................................................................................... 86,600 124.3 127.9
6 Further detail can be found in the Technical 7 The Mathematica report can be accessed at the
Appendix. Department’s Web site at http://www.dol.gov/ebsa.
TABLE 4.—NUMBER OF AFFECTED FILERS AND COST UNDER CURRENT VS. PROPOSED REQUIREMENTS—Continued
Number under current under proposed
Type of plan affected requirements requirements
5500 Small Short Form Eligible—580,000:

DB ..................................................................................................................................... 30,800 30.3 21.2
DC, non-403(b) ................................................................................................................. 533,000 263.9 87.8
DC, 403(b) ........................................................................................................................ 8,800 0.36 1.4
Welfare ............................................................................................................................. 7,000 3.4 1.2
5500 Small Short Form Ineligible—64,000:
DB ..................................................................................................................................... 4,000 3.8 3.7
DC, non-403(b) ................................................................................................................. 60,200 29.3 26.9
DC, 403(b) ........................................................................................................................ ........................ .......................... ..........................
Welfare ............................................................................................................................. 100 0.079 0.080
Total ........................................................................................................................... 832,500 1,061.5 888.08

Note: The displayed numbers might not sum up to the totals due to rounding.
DB—defined benefit plans.
SE—single-employer plans.
Large plans—100 participants or more.
DC—defined contribution plans
ME—multi employer plans.
Small plans—less than 100 participants.
In addition to separating plans by Information), Schedule H (Financial filing for plan year 2002 (the most
type and size, costs were estimated Information), and Schedule R recent year for which complete data is
separately for the form and for each (Retirement Plan Information), and available), both for estimating the
schedule. When items on a Form 5500 would be required to submit an IQPA’s impact of changes in the numbers of
Annual Return/Report schedule are report and opinion. The Agencies’ filings associated with the introduction
required by more than one Agency, the methodology attempts to capture, of the Short Form 5500 for most small
estimated burden associated with that through its categorization, these filers as well as for estimating the
schedule is allocated among the different reporting burdens, thereby impact of changes in filing obligations
Agencies. This allocation is based on providing meaningful estimates of associated with other schedules. In
whether only a single item on a significant differences in the burdens summary, the model estimates that due
schedule is required by more than one placed on different categories of filers. to $174 million in cost reductions the
agency or whether several or all of the Burden estimates for each schedule proposed revisions would lead to
items are required by more than one were adjusted for the proposed aggregate costs of $888 million. While
agency. Filers must read not only the revisions, reflecting the numbers of there is a net reduction in costs, the
instructions for particular items but also items added or deleted in each schedule Department estimates that some large
instructions pertaining to the general or moved from one schedule to another, plans might experience cost increases,
filing requirements, and the burden and the average burden currently while small plans will experience cost
associated with reading the instructions attributable to items on each of the reductions. The total burden estimates,
is tallied and allocated accordingly. corresponding current schedules. The as well as the burden broken out by type
A plan’s reporting burden is estimated burden for the proposed Short Form of plan can be found in Table 4 above.
in light of the specific items and 5500 was built from the estimated Uncertainty within Estimates—The
schedules it must complete as well as its current burden associated with the Department acknowledges that there are
size, funding method, and investment various line items included in it. several areas of uncertainty that might
structures. For example, the annual The Department has not attributed a affect the estimates, in particular the
report for a large fully insured welfare recordkeeping burden to the Form 5500 unit cost estimates. While the
plan generally would consist of only a Annual Return/Report either here or in Department has a good sense for the
few questions on the Form 5500 and the its Paperwork Reduction Act analysis filing universe and for the number of
Schedule A (Insurance Information). because it believes that plan filers that file the different schedules of
The requirement that this plan provide administrators’ practice of keeping the Form 5500, the unit costs under the
very limited information on the Form financial records necessary to complete current requirements as well as the way
5500 Annual Return/Report is reflected the Form 5500 Annual Return/Report they would change due to the proposed
in the estimates of reporting burden arises from usual and customary revisions are more uncertain. The
time. By contrast, a large defined benefit management practices that would be Department has no direct measure for
pension plan that is intended to be tax- used by any financial entity, and does the unit costs, but rather uses a proxy
qualified and that uses a trust fund and not result from ERISA or Code annual adapted from the existing MPR model,
invests in insurance contracts would be reporting and filing requirements. which was developed in the late 1990s.
required to submit an annual report The aggregate baseline burden is the Additional uncertainty is added due to
completing almost all the line items of sum of the burden per form and the proposed revisions. Some of the
the Form 5500, plus Schedule A schedule filed multiplied by the revisions delete items or move them
(Insurance Information), Schedule B estimated aggregate number of forms from certain schedules to others. The
(Actuarial Information), Schedule C and schedules. The simplified model impact of these changes can be
(Service Provider Information), draws on Form 5500 Annual Return/ estimated more accurately than the
Schedule D (DFE/Participating Plan Report data representing each plan’s impact of the revisions that require the
reporting of new items like fees. of ERISA, which permits the Secretary result, the nature and mix of compliance
Consequently, the unit cost estimates to prescribe simplified annual reports issues and risks to ERISA rights change
would benefit from updated information for pension plans that cover fewer than over time. Frequent amendments to
and the Department welcomes 100 participants. Under ERISA section ERISA, the Code, and to associated
comments that would provide 104(a)(3), the Secretary may also regulations also change the parameters
information on this matter. provide for exemptions or for simplified of ERISA rights and the methods needed
reporting and disclosure for welfare to protect those rights. In addition, the
Peer Review
benefit plans. Pursuant to the authority technologies available to manage and
In December 2004, the Office of of ERISA section 104(a)(3), the transmit information continually
Management and Budget (OMB) issued Department has previously issued at 29 advance. It is incumbent on the
a Final Information Quality Bulletin for CFR 2520.104–20, 2520.104–21, Department to revise its reporting
Peer Review, 70 FR 2664 (January 14, 2520.104–41, 2520.104–46, and requirements from time to time to keep
2005) (Peer Review Bulletin), 2520.104b–10 certain simplified pace with such changes. The
establishing that important scientific reporting provisions and limited Department is proposing these
information shall be peer reviewed exemptions from reporting and regulations and associated forms
before it is disseminated by the Federal disclosure requirements for small plans, revisions to readjust its reporting
government. The Peer Review Bulletin including unfunded or insured welfare requirements to take into account
applies to original data and formal plans, that cover fewer than 100 certain recent changes in markets, the
analytic models used by agencies in participants and satisfy certain other law, and technology, many of which are
Regulatory Impact Analyses. The requirements. referenced above in this preamble and/
Department determined that the data Further, while some large employers or in the Notice of Proposed Forms
and methods employed in its regulatory may have small plans, in general small Revision published simultaneously with
analysis of this proposal constitutes employers maintain most small plans. these regulations.
‘‘influential scientific information’’ as Thus, EBSA believes that assessing the (2) Section 103 of ERISA requires
defined in the Peer Review Bulletin. impact of these proposed rules on small every employee benefit plan covered
Accordingly, a peer review was plans is an appropriate substitute for under part 1 of Subtitle B of Title I of
conducted under Section II of the evaluating the effect on small entities. ERISA to publish and file an annual
Bulletin. The peer review report The definition of small entity report concerning, among other things,
concluded that the methodology and considered appropriate for this purpose the financial conditions and operations
data generally were sound and differs, however, from a definition of of the plan. Section 109 of ERISA
produced plausible estimates, which small business that is based on size authorizes the Secretary to prescribe
supports the Department’s conclusion standards promulgated by the Small forms for the reporting of information
that the proposed form changes should Business Administration (SBA) (13 CFR that is required to be included in the
reduce the aggregate burden relative to 121.201) pursuant to the Small Business annual report. Section 104(a)(2)(A) of
the previous forms. The Peer Review Act (15 U.S.C. 631 et seq.). EBSA ERISA authorizes the Secretary to
Report can be accessed at the therefore requests comments on the prescribe by regulation simplified
Department’s Web site at http:// appropriateness of the size standard annual reporting for pension plans that
www.dol.gov/ebsa. used in evaluating the impact of these cover fewer than 100 participants.
Regulatory Flexibility Act proposed rules on small entities. EBSA Section 104(a)(3) of ERISA authorizes
has consulted with the SBA Office of the Secretary to exempt any welfare
The Regulatory Flexibility Act (5 Advocacy concerning use of this plan from all or part of the reporting and
U.S.C. 601 et seq.) (RFA) imposes participant count standard for RFA disclosure requirements of Title I of
certain requirements with respect to purposes. See 13 CFR 121.902(b)(4). The ERISA or to provide simplified
Federal rules that are subject to the following seven subsections address reporting and disclosure if the Secretary
notice and comment requirements of specific requirements of the RFA. finds that such requirements are
section 553(b) of the Administrative (1) The Department is proposing to inappropriate as applied to such plans.
Procedure Act (5 U.S.C. 551 et seq.) and amend the regulations relating to the Section 110 of ERISA permits the
that are likely to have a significant annual reporting and disclosure Secretary to prescribe for pension plans
economic impact on a substantial requirements of section 103 of ERISA to alternative methods of complying with
number of small entities. Unless an conform existing regulations to any of the reporting and disclosure
agency certifies that a proposed rule proposed revisions to the Form 5500 requirements if the Secretary finds that:
will not, if promulgated, have a Annual Return/Report forms that are (1) The use of the alternative method is
significant economic impact on a included in the Notice of Proposed consistent with the purposes of Title I
substantial number of small entities, Forms Revisions published of ERISA, and it provides adequate
section 603 of the RFA requires that the simultaneously with these regulations. disclosure to plan participants and
agency present an initial regulatory The Department continually strives to beneficiaries and adequate reporting to
flexibility analysis at the time of the tailor reporting requirements to the Secretary; (2) application of the
publication of the notice of proposed minimize reporting costs while ensuring statutory reporting and disclosure
rulemaking describing the impact of the that the information necessary to secure requirements would increase costs to
rule on small entities and seeking public ERISA rights is adequately available. the plan or impose unreasonable
comment on such impact. Small entities The optimal design for reporting administrative burdens with respect to
include small businesses, organizations, requirements to satisfy these objectives the operation of the plan; and (3) the
and governmental jurisdictions. changes over time. Benefit plan designs application of the statutory reporting
For purposes of analysis under the and practices evolve over time in and disclosure requirements would be
RFA, EBSA proposes to continue to response to market trends, including adverse to the interests of plan
consider a small entity to be an trends in labor markets, financial participants in the aggregate.
employee benefit plan with fewer than markets, health care and insurance The Department proposes to find that
100 participants. The basis of this markets, and markets for various use of the Form 5500 Annual Return/
definition is found in section 104(a)(2) services used by plans. Partly as a Report, as revised, along with the
proposed Short Form 5500, constitutes small plans, including small pension defined benefit pension plans.
an alternative method of compliance, an plans and small funded welfare plans, Therefore, for such plans satisfaction of
exemption, and/or a simplified report, currently are required to file annual their applicable annual reporting
as applicable, consistent with these reports and will continue to be so requirements is not expected to require
conditions. Generally, the Department required under these proposed the services of an IQPA or auditor, but
believes that use of the revised Form regulations and the associated forms will require the use of a mix of clerical
5500 Annual Return/Report and the revisions. Of these, an estimated and professional administrative skills.
proposed Short Form 5500 would 580,000 will be eligible to use the For an additional 31,000 small defined
relieve plans of all sizes of increased proposed new Short Form 5500. Use of benefit pension plans that would be
costs and burdens by providing a the Short Form 5500 is expected to eligible to use the streamlined Short
standard format that facilitates reporting reduce these plans’ reporting costs Form 5500, satisfaction of the reporting
required by the statute, eliminating while preserving or enhancing the requirements also will require services
duplicative reporting requirements, and protection of their participants’ ERISA of an actuary and submission of
streamlining the content of the annual rights. Schedule B. The remaining 64,000 small
return/report. Among small plans, perhaps the most plans will not be eligible to use the
The objectives of these proposed, acutely affected will be the Short Form 5500 and will continue to be
amended regulations and the associated approximately 9,000 small Code section required to file the Form 5500 Annual
proposed forms revisions are to 403(b) plans. As explained above, such Return/Report. Of these, 4,000 are
streamline reporting and reduce plans are currently subject only to defined benefit plans that must use an
aggregate reporting costs, particularly limited annual reporting requirements. actuary and file Schedule B, and 32,000
for small plans, while preserving and These proposed regulations and are ineligible for waiver of the audit
enhancing protection of ERISA rights. associated forms revisions, which will requirement and are required to employ
These purposes are detailed above in subject these plans to the same an IQPA and submit an IQPA’s report.
this preamble and in the Notice of requirements as other covered small All will require a mix of clerical and
Proposed Forms Revisions published plans, will increase these plans’ professional administrative skills to
simultaneously with these regulations. reporting costs. As discussed above, the satisfy their reporting requirements.
(3) These proposed regulatory Department believes these added costs
amendments do not alter the number of are justified by the need to strengthen Satisfaction of annual reporting
small plans required to comply with the protections for affected participants’ requirements under these proposed
annual reporting requirements, but do ERISA rights. The numbers and types of regulations is not expected to require
implement a new Short Form 5500, small plans affected by these proposed any additional recordkeeping that
which is designed specifically to further regulations and the magnitude and would not otherwise be part of normal
streamline the limited reporting nature of the proposed regulations’ business practices.
requirements presently applicable to effects are further elaborated below. Table 5 below compares the
small plans. The Department estimates (4) The proposed regulations’ Department’s estimates of small plans’
that more than six million small, reporting requirements applicable to reporting costs under the current
private-sector employee pension and small plans are detailed above and in requirements with those under the
welfare benefit plans are covered under the associated Notice of Proposed Forms proposed requirements for various
Title I of ERISA. However, a large Revisions. For a large majority of the classes of affected plans. As shown,
majority of these are fully insured or 644,000 small plans subject to annual costs under the proposed requirements
unfunded welfare benefit plans, which reporting requirements, or an estimated will be lower on aggregate and for most
currently are exempt from annual 549,000 plans, submission of the Short classes of plans. These estimates take
reporting requirements and will Form 5500 alone will fully satisfy their account of the quantity and mix of
continue to be exempt under these annual reporting requirements. All of clerical and professional skills required
proposed regulations and the associated these plans are eligible for the waiver of to satisfy the reporting requirements for
forms revisions. Approximately 644,000 audit requirements, and none are various classes of plans.
TABLE 5.—SMALL PLAN REPORTING COSTS UNDER CURRENT VS. PROPOSED REQUIREMENTS
under current under proposed
Class of plan Number affected requirements requirements
(In millions) (In millions)
Defined Benefit Pension, Short Form eligible ............ 31,000 ........................................................................ $30.34 $21.24
Defined Benefit Pension, Short Form ineligible ......... 4,000 .......................................................................... 3.77 3.67
Code Section 403(b) ................................................... All of 9,000 ................................................................. 0.36 1.45
Other Defined Contribution, Short Form eligible ........ 533,000 ...................................................................... 263.94 87.84
Other Defined Contribution Pension, Short Form in- 60,000 ........................................................................ 29.32 26.92
eligible.
Funded Welfare .......................................................... All of 7,000 ................................................................. 3.52 1.24
Other Welfare ............................................................. None of approximately 6 million ................................. .......................... ..........................
Total for All Affected Small Plans ....................... 644,000 ...................................................................... 331.26 142.35
The Department notes that the requirements, or just $22 if averaged $4,000 on average for each of the
estimated reporting costs amount to across all of the approximately 6.6 189,000 affected large filers.
$221 on average for each of the 644,000 million small plans covered by Title I of (5) The Department is unaware of any
small plans subject to annual reporting ERISA. This compares with roughly relevant federal rules for small plans
that duplicate, overlap, or conflict with Revisions published simultaneously Comments should be sent to the
these proposed regulations. with these proposed regulations will be Office of Information and Regulatory
(6) In developing these proposed treated as comments on this proposed Affairs, OMB, Room 10235, New
regulations and the associated forms rulemaking. Executive Office Building, Washington,
revisions, the Department considered a DC 20503; Attention: Desk Officer for
number of alternative provisions Paperwork Reduction Act Statement
the Employee Benefits Security
directed at small plans. For example, as The Department, as part of its Administration, Department of Labor.
discussed in the Notice of Proposed continuing efforts to reduce paperwork Although comments may be submitted
Forms Revisions published and respondent burden, invites the through September 19, 2006, OMB
simultaneously with these regulations, general public and Federal agencies to requests that comments be received
the ERISA Advisory Council suggested comment on proposed and/or within 30 days of publication of these
that the Department consider exempting continuing collections of information in proposed regulations to ensure their
welfare plans from reporting accordance with the Paperwork consideration.
requirements, or, alternatively, Reduction Act of 1995 (PRA) (44 U.S.C. PRA Addressee: Written comments
subjecting all welfare plans to new, 3506(c)(2)(A)). This helps to ensure that regarding only PRA and the ICR should
separately designed reporting requested data are provided in the be sent to Gerald B. Lindrew, U.S.
requirements. The Department opted desired format, reporting burden (time Department of Labor, EBSA/OPR, Room
instead to retain both the requirement and financial resources) is minimized, N–5718, 200 Constitution Avenue, NW.,
that small funded welfare plans submit collection instruments are clearly Washington, DC 20210, Telephone:
annual reports and the exception from understood, and the impact of collection (202) 693–8410; Fax: (202) 219–4745.
annual reporting requirements for other requirements on respondents is properly These are not toll-free numbers. Written
small welfare plans. Annual reporting assessed. The Department solicits comments must be submitted on or
by the relatively small number of small comments on the information collection before September 19, 2006 to be assured
funded welfare plans is necessary, in request (ICR) included in this proposed of consideration.
the Department’s view, to protect ERISA regulatory action, as well as the Notice
rights in connection with the assets that of Proposed Forms Revisions published Congressional Review Act
they hold. A requirement that the simultaneously with this Notice. In The notice of proposed rulemaking
remaining approximately six million order to avoid unnecessary duplication being issued here is subject to the
small welfare plans report annually is of public comments, the PRA Congressional Review Act provisions of
not justified insofar as these plans have information published in the associated the Small Business Regulatory
no assets to protect and insofar as the Notice of Proposed Forms Revisions is Enforcement Fairness Act of 1996 (5
vast majority of these plans are fully incorporated herein by this reference in U.S.C. 801 et seq.) and, if finalized, will
insured and therefore separately its entirety, and comments submitted in be transmitted to the Congress and the
protected by State oversight of the response to these Federal Register Comptroller General for review.
insurance contracts they hold and the publications will be treated as
Unfunded Mandates Reform Act
insurers that issue them. The comments on these proposed rules. A
Department also considered both copy of the ICR may be obtained by For purposes of the Unfunded
narrower and broader eligibility criteria contacting the office listed under the Mandates Reform Act of 1995 (Pub. L.
for use of the Short Form 5500, settling heading ‘‘PRA Addressee.’’ 104–4), as well as Executive Order
on criteria that limit eligibility to plans The Department has submitted a copy 12875, the proposed rules do not
holding relatively safe and protected of the proposed information collection include any Federal mandate that may
assets, which nonetheless includes a to OMB, in accordance with 44 U.S.C. result in expenditures by state, local, or
large majority of small plans. The 3507(d), for its review of the tribal governments in the aggregate of
Department also considered the information collection. The Department more than $100 million, or increased
inclusion of more or fewer of the items is particularly interested in comments expenditures by the private sector of
of information formerly collected from that: more than $100 million.
small plans in the Form 5500 Annual • Evaluate whether the proposed Federalism Statement
Return/Report, retaining only those collection of information is necessary
items it believes to be necessary and for the proper performance of the Executive Order 13132 (August 4,
adequate to the protection of small plan functions of the Agencies, including 1999) outlines fundamental principles
participants’ ERISA rights. whether the information will have of federalism and requires adherence to
(7) The Department invites interested practical utility; specific criteria by federal agencies in
persons to submit comments regarding • Evaluate the accuracy of the the process of their formulation and
the impact on small plans of these Agencies’ estimate of the burden of the implementation of policies that have
proposed regulations and the associated proposed collection of information, substantial direct effects on the States,
forms revisions, and on the including the validity of the the relationship between the national
Department’s assessment thereof. The methodology and assumptions used; government and the States, or on the
Department also requests comments on • Enhance the quality, utility, and distribution of power and
the alternatives it considered and its clarity of the information to be responsibilities among the various
conclusions regarding those collected; and levels of government. These proposed
alternatives; on any additional • Minimize the burden of the rules do not have federalism
alternatives it should have considered; collection of information on those who implications because they would have
on what, if any, special problems small are to respond, including through the no substantial direct effect on the States,
plans might encounter if the proposal use of appropriate automated, on the relationship between the national
were to be adopted; and what changes, electronic, mechanical, or other government and the States, or on the
if any, could be made to minimize those technological collection techniques or distribution of power and
problems. To avoid duplication of other forms of information technology, responsibilities among the various
comments, comments submitted in e.g., permitting electronic submission of levels of government. Section 514 of
response to the Notice of Proposed Form responses. ERISA provides, with certain exceptions
specifically enumerated, that the 43 and 2520.104a–6, the annual report similar financial institution, as defined
provisions of Titles I and IV of ERISA of an employee benefit plan that covers in § 2550.408b–4(c) of this chapter; by
supersede any and all laws of the States fewer than 100 participants at the an insurance company, qualified to do
as they relate to any employee benefit beginning of the plan year shall include business under the law of a State; by an
plan covered under ERISA. The a Form 5500 ‘‘Annual Return/Report of organization registered as a broker-
requirements implemented in these Employee Benefit Plan’’ and any dealer under the Securities Exchange
proposed rules do not alter the statements or schedules required to be Act of 1934; or by any other
fundamental provisions of the statute attached to the form, completed in organization authorized to act as a
with respect to employee benefit plans, accordance with the instructions for the trustee for individual retirement
and as such would have no implications form, including Schedule A (Insurance accounts under section 408 of the
for the States or the relationship or Information), Schedule B (Actuarial Internal Revenue Code; and any loan
distribution of power between the Information), Schedule D (DFE/ meeting the requirements of section
national government and the States. Participating Plan Information), 408(b)(1) of the Act and the regulations
Schedule I (Financial Information— issued thereunder.
List of Subjects in 29 CFR Part 2520 Small Plan), and Schedule R * * * * *
Accountants, Disclosure (Retirement Plan Information). See the
requirements, Employee benefit plans, instructions for this form. 3. In § 2520.104–44, remove
Employee Retirement Income Security (2)(i) The annual report of an paragraph (b)(3).
Act, Pension plans, Pension and welfare employee benefit plan that covers fewer 4. In § 2520.104–46, add a new
plans, Reporting and recordkeeping than 100 participants at the beginning of paragraph (e) and a new appendix to the
requirements, and Welfare benefit plans. the plan year and that meets the section to read as follows:
In view of the foregoing, the conditions in paragraph (c)(2)(ii) of this
§ 2520.104–46 Waiver of examination and
Department of Labor proposes to amend section with respect to a plan year may, report of an independent qualified public
29 CFR part 2520 as set forth below: as an alternative to the requirements of accountant for employee benefits plans
paragraph (c)(1) of this section, meet its with fewer than 100 participants.
PART 2520—RULES AND annual reporting requirements by filing * * * * *
REGULATIONS FOR REPORTING AND the Form 5500–SF ‘‘Short Form 5500
DISCLOSURE Annual Return/Report of Employee (e) Model notice. The appendix to this
Benefit Plan’’ and any statements or section contains model language for
1. The authority citation for part 2520 schedules required to be attached to the inclusion in the summary annual report
continues to read as follows: form, including Schedule B (Actuarial to assist plan administrators in
Authority: 29 U.S.C. 1021–1025, 1027, Information), completed in accordance complying with the requirements of
1029–31, 1059, 1134, and 1135; Secretary of with the instructions for the form. See paragraph (b)(1)(i)(B) of this section to
Labor’s Order 1–2003, 68 FR 5374 (February the instructions for this form. avail themselves of the waiver of
3, 2003). Sec. 2520.101–2 also issued under (ii) A plan meets the conditions in examination and report of the
29 U.S.C. 1132, 1181–1183, 1181 note, 1185, independent qualified public
1185a–b, 1191, and 1191a–c. this paragraph (c)(2)(ii) with respect to
the year if the plan: accountant for employee benefit plans
Secs. 2520.102–3, 2520.104b–1, and
2520.104b–3 also issued under 29 U.S.C. (A) Does not hold any employer with fewer than 100 participants. Use of
1003, 1181–1183, 1181 note, 1185, 1185a–b, securities at any time during the year; the model language is not mandatory. In
1191, and 1191a–c. Secs. 2520.104b–1 and (B) Satisfies the audit waiver order to use the model language in the
2520.107 also issued under 26 U.S.C. 401 conditions in §§ 2520.104– plan’s summary annual report,
note, 111 Stat. 788. 46(b)(1)(i)(A)(1) and 2520.104– administrators must, in addition to any
2. In § 2520.103–1, revise paragraphs 46(b)(1)(i)(B) and (b)(1)(i)(C); and other information required to be in the
(a)(2) and (c) to read as follows: (iii) Had at all times during the plan summary annual report, select among
year 100 percent of the plan’s assets alternative language and add relevant
§ 2520.103–1 Contents of the annual held for investment purposes invested information where appropriate in the
report. in assets that have a readily model language. Items of information
(a) * * * ascertainable fair market value. For that are not applicable to a particular
(2) Under the authority of subsections purposes of this section, the following plan may be deleted. Use of the model
104(a)(2), 104(a)(3) and 110 of the Act, shall be treated as assets that have a language, appropriately modified and
a simplified report, limited exemption readily ascertainable fair market value: supplemented, will be deemed to satisfy
or alternative method of compliance is Shares issued by an investment the notice content requirements of
prescribed for employee welfare and company registered under the paragraph (b)(1)(i)(B) of this section.
pension benefit plans, as applicable. A Investment Company Act of 1940;
plan filing a simplified report or investment and annuity contracts issued Appendix to § 2520.104–46—Model
electing the limited exemption or by any insurance company, qualified to Summary Annual Report Notice (Plan
alternative method of compliance shall do business under the laws of a State, Administrators Will Need To Modify
file an annual report containing the that provides valuation information at the Model To Omit Information That Is
information prescribed in paragraph (b) least annually to the plan administrator; Not Applicable to the Plan)
or paragraph (c) of this section, as bank investment contracts issued by a The U.S. Department of Labor’s regulations
applicable, and shall furnish a summary bank or similar financial institution, as require that an independent qualified public
annual report as prescribed in defined in § 2550.408b–4(c) of this accountant audit the plan’s financial
§ 2520.104b–10. chapter, that provides valuation statements unless certain conditions are met
information at least annually to the plan for the audit requirement to be waived. This
* * * * * plan met the audit waiver conditions for the
(c) Contents of the annual report for administrator; securities (except plan year beginning (insert year) and
plans with fewer than 100 participants. employer securities) traded on a public therefore has not had an audit performed.
(1) Except as provided in paragraph exchange; government securities issued Instead, the following information is
(c)(2) of this section and in paragraph by the United States or by a State; cash provided to assist you in verifying that the
(d) of this section, and in §§ 2520.104– or cash equivalents held by a bank or assets reported on the (Form 5500 or Form
5500–SF—select as applicable) were actually assets were (1) qualifying employer If you are unable to obtain or examine
held by the plan. securities, (2) loans to participants, (3) held copies of the regulated financial institution
At the end of the (insert year) plan year, in individual participant accounts with statements or evidence of the fidelity bond,
the plan had (include separate entries for investments directed by participants and you may contact the regional office of the
each regulated financial institution holding beneficiaries and with account statements U.S. Department of Labor’s Employee
or issuing qualifying plan assets): from regulated financial institutions Benefits Security Administration (EBSA) for
[Set forth amounts and names of institutions furnished to the participant or beneficiary at assistance by calling toll-free 1.866.444.EBSA
as applicable where indicated] least annually, or (4) other assets covered by (3272). A listing of EBSA regional offices can
[(insert $ amount) in assets held by (insert a fidelity bond at least equal to the value of
be found at http://www.dol.gov/ebsa. General
name of bank)], the assets and issued by an approved surety
[(insert $ amount) in securities held by information regarding the audit waiver
company.]
(insert name of registered broker-dealer)], Plan participants and beneficiaries have a conditions applicable to the plan can be
[(insert $ amount) in shares issued by (insert right, on request and free of charge, to get found on the U.S. Department of Labor Web
name of registered investment company)], copies of the financial institution year-end site at http://www.dol.gov/ebsa under the
[(insert $ amount) in investment or annuity statements and evidence of the fidelity bond. heading ‘‘Frequently Asked Questions.’’
contract issued by (insert name of If you want to examine or get copies of the
insurance company)]. financial institution year-end statements or 5. Revise the Appendix to
The plan receives year-end statements from evidence of the fidelity bond, please contact § 2520.104b–10 to read as follows:
these regulated financial institutions that [insert mailing address and any other
confirm the above information. [Insert as available way to request copies such as e- § 2520.104b–10 Summary Annual Report.
applicable—The remainder of the plan’s mail and phone number]. * * * * *
APPENDIX TO § 2520.104b–10.—THE SUMMARY ANNUAL REPORT (SAR) UNDER ERISA: A CROSS-REFERENCE TO THE
ANNUAL REPORT
Form 5500—large plan filer line Form 5500—small plan filer line
SAR item Form 5500–SF—filer line items
items items
A. Pension Plan:
1. Funding arrangement ......... Form 5500–9a .............................. Same ............................................ Not applicable.
2. Total plan expenses ........... Sch. H—2j .................................... Sch. I—2j ...................................... Line 8h.
3. Administrative expenses ..... Sch. H—2i(5) ................................ Sch. I—2h ..................................... Line 8f.
4. Benefits paid ....................... Sch. H—2e(4) ............................... Sch. I—2e ..................................... Line 8d.
5. Other expenses .................. Sch. H—Subtract the sum of Sch. I—2i ...................................... Line 8g.
2e(4) & 2i(5) from 2j.
6. Total participants ................ Form 5500—6f Same ............................................ Line 5b.
7. Value of plan assets (net):
a. End of plan year .......... Sch. H—1l [Col. (b)] ..................... Sch. I—1c [Col. (b)] ...................... Line 7a [Col. (b)].
b. Beginning of plan year Sch. H—1l [Col. (a)] ..................... Sch. I—1c [Col. (a)] ...................... Line 7a [Col. (a)].
8. Change in net assets ......... Sch. H—Subtract 1l [Col. (a)] from Sch. I—Subtract 1c [Col. (a)] from Line 7c—Subtract Col. (a) from
1l [Col. (b)]. 1c [Col. (b)]. Col. (b).
9. Total income ....................... Sch. H—2d ................................... Sch. I—2d ..................................... Line 8c.
a. Employer contributions Sch. H—2a(1)(A) & 2a(2)—if ap- Sch. I—2a(1) & 2b if applicable ... Line 8a(1) if applicable.
plicable.
b. Employee contributions Sch. H—2a(1)(B) & 2a(2) if appli- Sch. I—2a(2) & 2b if applicable ... Line 8a(2) if applicable.
cable.
c. Gains (losses) from Sch. H—2b(4)(C) .......................... Not applicable ............................... Not applicable.
sale of assets.
d. Earnings from invest- Sch. H—Subtract the sum of Sch. I—2c ..................................... Line 8b.
ments. 2a(3), 2b(4)(C) and 2c from 2d.
10. Total insurance premiums Total of all Schs.A—5b ................. Total of all Schs.A—5b ................. Not applicable.
11. Funding deficiency:
a. Defined benefit plans .. Sch. B—10 ................................... Same ............................................ Same.
b. Defined contribution Sch. R—6c, if more than zero ...... Same ............................................ Line 12c.
plans.
B. Welfare Plan:
1. Name of insurance carrier .. All Schs. A—1(a) .......................... Same ............................................ Not applicable.
2. Total (experience rated and All Schs. A—Sum of 8a(4) and Same ............................................ Not applicable.
non-experienced rated) in- 9(a).
surance premiums.
3. Experience rated premiums All Schs. A—8a(4) ........................ Same ............................................ Not applicable.
4. Experience rated claims ..... All Schs. A—8b(4) ........................ Same ............................................ Not applicable.
5. Value of plan assets (net):
a. End of plan year .......... Sch. H—1l [Col. (b)] ..................... Sch. I—1c [Col. (b)] ...................... Line 7c—[Col. (b)].
b. Beginning of plan year Sch. H—1l [Col. (a)] ..................... Sch. I—1c [Col. (a)] ...................... Line 7c—[Col. (a)].
6. Change in net assets ......... Sch. H—Subtract 1l [Col. (a)] from Sch. I—Subtract 1c [Col. (a)] from Line 7c—Subtract [Col. (a)] from
1l [Col. (b)]. 1c [Col. (b)]. [Col. (b)].
7. Total income ....................... Sch. H—2d ................................... Sch. I—2d ..................................... Line 8c.
a. Employer contributions Sch. H—2a(1)(A) & 2a(2) if appli- Sch. I—2a(1) & 2b if applicable ... Line 8a(1) if applicable.
cable.
b. Employee contributions Sch. H—2a(1)(B) & 2a(2) if appli- Sch. I—2a(2) & 2b if applicable ... Line 8a(2) if applicable.
cable.
c. Gains (losses) from Sch. H—2b(4)(C) .......................... Not applicable ............................... Not applicable.
sale of assets.
d. Earnings from invest- Sch. H—Subtract the sum of Sch. I—2c ..................................... Line 8b.
ments. 2a(3), 2b(4)(C) and 2c from 2d.
APPENDIX TO § 2520.104b–10.—THE SUMMARY ANNUAL REPORT (SAR) UNDER ERISA: A CROSS-REFERENCE TO THE
ANNUAL REPORT—Continued
Form 5500—large plan filer line Form 5500—small plan filer line
SAR item Form 5500–SF—filer line items
items items
8. Total plan expenses ........... Sch. H—2j .................................... Sch. I—2j ...................................... Line 8h.
9. Administrative expenses ..... Sch. H—2i(5) ................................ Sch. I, line 2h ............................... Line 8f.
10. Benefits paid ..................... Sch. H—2e(4) ............................... Sch. I—2e ..................................... Line 8d.
11. Other expenses ................ Sch. H—Subtract the sum of Sch. I—2i ...................................... Line 8g.
2e(4) & 2i(5) from 2j.
Signed at Washington, DC, this 13th day of public docket for this rulemaking. around an oval racecourse. A fleet of
July 2006. Comments and material received from spectator vessels is anticipated to gather
Ann C. Combs, the public, as well as documents nearby to view the competition. Due to
Assistant Secretary, Employee Benefits indicated in this preamble as being the need for vessel control during the
Security Administration, U.S. Department of available in the docket, will become part event, vessel traffic will be temporarily
Labor. of this docket and will be available for restricted to provide for the safety of
[FR Doc. 06–6330 Filed 7–20–06; 8:45 am] inspection or copying at the above participants, spectators and transiting
BILLING CODE 4510–29–P address between 9 a.m. and 2 p.m., vessels.
Monday through Friday, except Federal
Discussion of Proposed Rule
holidays.
DEPARTMENT OF HOMELAND FOR FURTHER INFORMATION CONTACT: The Coast Guard proposes to establish
SECURITY Dennis Sens, Project Manager, temporary special local regulations on
Inspections and Investigations Branch, specified waters of the John H. Kerr
Coast Guard at (757) 398–6204. Reservoir adjacent to Occoneechee State
SUPPLEMENTARY INFORMATION:
Park, Clarksville, Virginia and State
33 CFR Part 100 Route 15 Highway Bridge. The regulated
Request for Comments area includes a section of the John H.
[CGD05–06–068]
We encourage you to participate in Kerr Reservoir approximately one half
RIN 1625–AA08 this rulemaking by submitting mile long, and bounded in width by
comments and related material. If you each shoreline. This rule will be
Special Local Regulations for Marine do so, please include your name and enforced from 7:30 a.m. to 6:30 p.m. on
Events; John H. Kerr Reservoir, address, identify the docket number for October 7 and 8, 2006, and will restrict
Clarksville, VA this rulemaking (CGD05–06–068), general navigation in the regulated area
indicate the specific section of this during the power boat race. The Coast
AGENCY: Coast Guard, DHS.
document to which each comment Guard, at its discretion, when practical
ACTION: Notice of proposed rulemaking. will allow the passage of vessels when
applies, and give the reason for each
SUMMARY: The Coast Guard proposes to comment. Please submit all comments races are not taking place. Except for
establish temporary special local and related material in an unbound participants and vessels authorized by
regulations for the ‘‘Clarksville format, no larger than 81⁄2 by 11 inches, the Coast Guard Patrol Commander, no
Hydroplane Challenge’’, a power boat suitable for copying. If you would like person or vessel will be allowed to enter
race to be held on the waters of the John to know they reached us, please enclose or remain in the regulated area during
H. Kerr Reservoir adjacent to a stamped, self-addressed postcard or the enforcement period. These
Clarksville, Virginia. These special local envelope. We will consider all regulations are needed to control vessel
regulations are necessary to provide for comments and material received during traffic during the event to enhance the
the safety of life on navigable waters the comment period. We may change safety of participants, spectators and
during the event. This action is this proposed rule in view of them. transiting vessels.
intended to restrict vessel traffic in Public Meeting Regulatory Evaluation
portions of the John H. Kerr Reservoir This proposed rule is not a
adjacent to Clarksville, Virginia during We do not now plan to hold a public
meeting. But you may submit a request ‘‘significant regulatory action’’ under
the power boat race. section 3(f) of Executive Order 12866,
for a meeting by writing to the address
DATES: Comments and related material Regulatory Planning and Review, and
listed under ADDRESSES explaining why
must reach the Coast Guard on or before one would be beneficial. If we does not require an assessment of
August 21, 2006. determine that one would aid this potential costs and benefits under
ADDRESSES: You may mail comments rulemaking, we will hold one at a time section 6(a)(3) of that Order. The Office
and related material to Commander and place announced by a later notice of Management and Budget has not
(dpi), Fifth Coast Guard District, 431 in the Federal Register. reviewed it under that Order. It is not
Crawford Street, Portsmouth, Virginia ‘‘significant’’ under the regulatory
23704–5004, hand-deliver them to Background and Purpose policies and procedures of the
Room 415 at the same address between On October 7 and 8, 2006, the Department of Homeland Security
9 a.m. and 2 p.m., Monday through Virginia Boat Racing Association will (DHS).
Friday, except Federal holidays, fax sponsor the ‘‘Clarksville Hydroplane We expect the economic impact of
them to (757) 391–8149, or e-mail them Challenge’’, on the waters of the John H. this proposed rule to be so minimal that
to Dennis.M.Sens@uscg.mil. The Kerr Reservoir. The event will consist of a full Regulatory Evaluation under the
Inspections and Investigations Branch, approximately 70 inboard hydroplanes regulatory policies and procedures of
Fifth Coast Guard District, maintains the racing in heats counter-clockwise DHS is unnecessary.

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41392 Federal Register / Vol. 71, No.

140 / Friday, July 21, 2006 / Proposed Rules

APPENDIX A TO PART 2201.—SCHEDULE OF FEES

TABLE 2.—SUMMARY OF COSTS: CURRENT REQUIREMENTS VS. PROPOSED REQUIREMENTS

Current Reporting Requirements ............................................................................................................................. $1,062 13.51

Total .................................................................................................................................... ¥173.6 (2,258.30) 833,000

5500 Large Plans (> = 100 participants)—189,000:

DC, SE, 403(b) ................................................................................................................. 8,600 0.350 51.9

Appendix. Department’s Web site at http://www.dol.gov/ebsa.

5500 Small Short Form Eligible—580,000:

Total ........................................................................................................................... 832,500 1,061.5 888.08

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