[Federal Register Volume 72, Number 201 (Thursday, October 18, 2007)]
[Proposed Rules]
[Pages 59050-59053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-20538]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4003
RIN 1212-AB15
Rules for Administrative Review of Agency Decisions
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Proposed rule.
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SUMMARY: Pension Benefit Guaranty Corporation (PBGC) proposes amending
its regulation on Administrative Review of Agency Decisions (29 CFR
part 4003) to clarify that the agency's Appeals Board may refer certain
categories of appeals to other PBGC departments for a written response
and to remove determinations under section 4022A of the Employee
Retirement Income Security Act of 1974 (ERISA) from the scope of part
4003. The proposed amendments also include minor clarifying and
technical changes to the rules for administrative review of agency
decisions.
DATES: Comments must be submitted on or before December 17, 2007.
ADDRESSES: Comments, identified by Regulatory Information Number (RIN)
1212-AB15, may be submitted by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the Web site instructions for submitting comments.
E-mail: [email protected].
Fax: 202-326-4224.
Mail or Hand Delivery: Legislative and Regulatory
Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW.,
Washington, DC 20005-4026.
All submissions must include the Regulatory Information Number for
this rulemaking (1212-AB15). Comments received, including personal
information provided, will be posted to http://www.pbgc.gov. Copies of
comments may also be obtained by writing to Disclosure Division, Office
of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K
Street, NW., Washington, DC 20005-4026, or
[[Page 59051]]
calling 202-326-4040 during normal business hours. (TTY and TDD users
may call the Federal relay service toll-free at 1-800-877-8339 and ask
to be connected to 202-326-4040.)
FOR FURTHER INFORMATION CONTACT: Joseph J. Shelton, Attorney, Office of
the General Counsel or Catherine B. Klion, Manager, Regulatory and
Policy Division, Legislative and Regulatory Department, Pension Benefit
Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026;
202-326-4024. (TTY/TDD users may call the Federal relay service toll-
free at 1-800-877-8339 and ask to be connected to 202-326-4024.)
SUPPLEMENTARY INFORMATION:
Background
Current Rules for Administrative Review of Agency Decisions
PBGC administers the pension plan termination insurance program
under Title IV of ERISA. Under PBGC's regulation for Administrative
Review of Agency Decisions, persons aggrieved by certain PBGC
determinations may appeal to the agency's Appeals Board. 29 CFR part
4003.
The powers of the Appeals Board are set forth in, among other
places, Sec. 4003.58 of the regulations. It states that ``the Appeals
Board may request the submission of any information or the appearance
of any person it considers necessary to resolve a matter before it and
to enter any order it considers necessary for or appropriate to the
disposition of any matter before it.'' 29 CFR 4003.58. The decision of
the Appeals Board constitutes final agency action by PBGC with respect
to the determination which was the subject of the appeal and is binding
on all parties who participated in the appeal. 29 CFR 4003.59(b).
The Appeals Board reviews the following categories of
determinations:
Determinations that a plan is not covered under section
4021 of ERISA;
Determinations under section 4022(a) or (c) or section
4022A(a) of ERISA with respect to benefit entitlement of participants
and beneficiaries under covered plans and determinations that a
domestic relations order is or is not a qualified domestic relations
order under section 206(d)(3) of ERISA and section 414(p) of the
Internal Revenue Code;
Determinations under section 4022(b) or (c), section
4022A(b) through (e), or section 4022B of ERISA of the amount of
benefits payable to participants and beneficiaries under covered plans;
Determinations of the amount of money subject to recapture
under section 4045 of ERISA;
Determinations of the amount of liability under section
4062(b)(1), section 4063, or section 4064 of ERISA; and
Determinations that the amount of a participant's or
beneficiary's benefit under section 4050(a)(3) of ERISA has been
correctly computed based on the designated benefit paid to PBGC under
section 4050(b)(2) of ERISA, or that the designated benefit is correct,
but only to the extent that the benefit to be paid does not exceed the
participant's or beneficiary's guaranteed benefit.
29 CFR 4003.1(b)(5) through (b)(10). Additionally, nothing in part 4003
limits the authority of PBGC to review, either upon request or on its
own initiative, a determination to which part 4003 does not apply when,
in its discretion, it determines that it would be appropriate to do so.
29 CFR 4003.1(c)(1).
A person who is adversely affected by a determination involving any
of the matters listed above has not exhausted his or her administrative
remedies, and thus may not challenge the determination in court, until
he or she has filed an appeal under Sec. 4003.51 and a decision
granting or denying the relief requested has been issued by the Appeals
Board. 29 CFR 4003.7. An appeal must be filed within 45 days after the
date of the determination being appealed, unless the appellant requests
an extension of time to file within the 45-day period and the request
is granted. 29 CFR 4003.52, 4003.4, 4003.5.
An appeal must be in writing, be clearly designated as an appeal,
contain a statement of the ground on which it is based and the relief
sought, reference all pertinent information already in the possession
of PBGC, and include any additional information or data that the
appellant believes is relevant. 29 CFR 4003.54. The filing of an appeal
generally stays the effectiveness of a determination until a decision
on the appeal has been issued by the Appeals Board. 29 CFR 4003.22(a),
(b).
Appeals Board's Current Practice of Referring Certain Appeals to Other
PBGC Departments
This proposed regulation formalizes the Appeals Board's practice of
referring certain routine appeals, such as those that allege a mistake
of fact or that request a more detailed benefit explanation, to other
PBGC departments or Appeals Board staff for a written response. The
practice began after the agency concluded that other PBGC departments,
such as the Benefits Administration and Payment Department (BAPD),
could handle these types of appeals efficiently given their familiarity
with the relevant facts underlying the initial benefit determinations.
At the same time, the agency concluded that it would be appropriate
for Appeals Board staff (rather than the Appeals Board) to respond to
untimely and premature appeals, as well as appeals alleging that
benefit reductions required by law will work a financial hardship.
Appeals Board staff provide support to the Appeals Board in the areas
of receipt, review, and closing of appeals and other correspondence.
Appeals Board staff also analyze incoming correspondence to determine
whether it should be addressed by the Appeals Board as an appeal,
referred to another PBGC department, such as BAPD, or retained by
Appeals Board staff for response as an inquiry, extension request, or a
request for additional information.
In 2006, approximately 35% of the appeals received by the Appeals
Board involved simple factual disputes, or requested only a more
detailed explanation of a benefit determination. These appeals were
referred to other PBGC departments for a response and were answered, on
average, within 45 days. In situations where PBGC's initial
determination is incorrect, BAPD can quickly resolve the matter,
without the need for an Appeals Board decision, by issuing a corrected
benefit determination. Similarly, if an appellant only requests--in the
form of an appeal--a more detailed explanation of his or her initial
benefit determination, BAPD can quickly provide a detailed explanation
given its familiarity with the initial determination and the relevant
participant data.
Under current practice, when an appeal is referred to another PBGC
department or Appeals Board staff for a written response, the time
period for filing a request for Appeals Board review is extended for an
additional 30 days from the date of the written response. As discussed
more fully below, under the proposed regulation, the time period for
filing a request for Appeals Board review would be extended for an
additional 45 days from the date of the PBGC department's or Appeals
Board staff's written response.
Summary of Proposed Amendments
Powers of the Appeals Board
The proposed regulation would amend Sec. 4003.58 of the
regulations to clarify that the Appeals Board may refer
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certain appeals to other PBGC departments or Appeals Board staff for a
response. Appeals that would be subject to referral include those that
(1) request an explanation of a covered initial benefit determination,
(2) dispute specific data used in a covered initial determination, such
as date of hire, date of retirement, date of termination of employment,
length of service, compensation, marital status, and the form of
benefit elected; or (3) request an explanation of the limits on
benefits payable by PBGC under part 4022, subpart B, such as the
maximum guaranteeable benefit and phase-in.
The PBGC department's or Appeals Board staff's response would be in
writing and address the matters raised in the appeal. Alternatively,
appeals referred to BAPD could be answered in the form of a corrected
benefit determination. The written response or corrected benefit
determination would provide that the appellant may file a written
request for review by the Appeals Board within 45 days of the date of
the written response or corrected benefit determination. If a written
request for review is not filed with the Appeals Board within 45 days,
the Appeals Board would not review the case and the initial
determination or corrected benefit determination would become effective
under Sec. 4003.22(a).
A written response or corrected benefit determination would not be
a decision of the Appeals Board within the meaning of Sec. 4003.59 of
the regulations. Thus, a person who is issued such a response or
corrected benefit determination would not have exhausted his or her
administrative remedies under Sec. 4003.7 of the regulations unless
and until he or she files a request for review by the Appeals Board and
a decision granting or denying the relief requested has been issued.
Removal of Determinations Under ERISA Section 4022A
Under PBGC's multiemployer program, when a plan becomes insolvent,
PBGC provides financial assistance to the plan sufficient to pay
guaranteed benefits to participants and administrative expenses.
Section 4022A of ERISA sets forth PBGC's guarantee for multiemployer
pension plan benefits. A multiemployer plan is considered insolvent if
the plan is unable to pay benefits (at least equal to PBGC's guaranteed
benefit limit) when due. The plan must repay this financial assistance
in accordance with terms and conditions specified by PBGC.
Unlike the situation with single-employer plans, however, PBGC does
not trustee or otherwise assume responsibility for the liabilities of a
financially troubled multiemployer plan. As a result, PBGC does not
issue determinations under section 4022A of ERISA with respect to
benefit entitlement of participants and beneficiaries. Accordingly,
PBGC proposes to amend Sec. 4003.1(b)(6) and (7) to remove the
reference to section 4022A. The effect of this amendment would be to
remove determinations under section 4022A from the scope of part 4003.
Contents of Appeal
Under this proposal, Sec. 4003.54(3) and (4) of the regulation
would be amended to reflect the plain language used in the ``Your Right
to Appeal'' brochure that currently accompanies all benefit
determinations and is available on PBGC's Web site, http://www.pbgc.gov.
Section 4003.54(3) states that an appeal shall ``[c]ontain a
statement of the grounds upon which it is brought and the relief
sought.'' Addressing the same requirement, the brochure states that an
appeal must ``[s]pecifically explain why PBGC's determination is wrong
and the result you are seeking.'' The proposed regulation would replace
the language in Sec. 4003.54(3) with language similar to that which is
currently used in the brochure.
PBGC also proposes to amend Sec. 4003.54(4) of the regulation,
which states that an appeal shall ``[r]eference all pertinent
information already in the possession of the PBGC and include any
additional information believed to be relevant.'' Addressing the same
requirement, the ``Your Right to Appeal'' brochure states, in part,
that an appeal must ``[d]escribe the relevant information you believe
is known by PBGC and include copies of documents that provide
additional information that the Appeals Board should consider.'' The
proposed regulation would replace the language in Sec. 4003.54(4) with
language similar to that which is currently used in the brochure.
Where To File
PBGC proposes to amend Sec. 4003.53 of the regulations, which
provides information on where to file an appeal, to remove the filing
address for appeals and requests for filing extensions because it is no
longer accurate. In its place, PBGC would incorporate Sec. 4000.4,
which provides general instructions on where to file submissions to
PBGC.
Replacing the Term ``Executive Director'' With ``Director'' in Part
4003
On August 17, 2006, the President signed into law the Pension
Protection Act of 2006, Pub. L. 109-280 (``PPA 2006''). Section 411 of
PPA 2006 amended section 4002(a) of ERISA to state that PBGC shall be
administered by a Director, who shall be appointed by the President, by
and with the advice and consent of the Senate. Thus, PBGC proposes to
replace all references to the term ``Executive Director'' in part 4003
with the term ``Director.'' See Sec. Sec. 4003.2 (Definitions), 4003.4
(Extension of time); 4003.33 (Where to submit request for
reconsideration), 4003.35 (Final decision on request for
reconsideration); and 4003.60 (Referral of appeal to the Executive
Director).
Applicability
The amendments in this proposed rule would be applicable to appeals
filed on or after the effective date of the final rule.
Compliance With Rulemaking Guidelines
PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866. Pursuant to section 1(b)(1) of E.O. 12866 (as amended by
Executive Order 13422), PBGC has determined that regulatory action is
required in this area. Principally, this regulatory action is necessary
to update PBGC's rules for administrative review of agency decisions to
accurately reflect the agency's appeals handling procedures. In
addition, because PBGC does not issue determinations under section
4022A of ERISA with respect to benefit entitlement of participants and
beneficiaries, the proposed rule would remove determinations under
section 4022A of ERISA from the scope of part 4003. Finally, the
proposed rule contains minor clarifying and technical changes to the
rules for administrative review of agency decisions that will
streamline the appeals process and make the rules governing
administrative appeals easier to understand.
As a rule of agency organization, procedure, or practice, this rule
is exempt from notice and public comment and delayed effective date
requirements of section 553 of the Administrative Procedure Act.
Because no general notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not apply to this rule. See 5 U.S.C.
601(2), 603, and 604. However, because the PBGC wishes to provide an
opportunity for public
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comment, this rule is being published as a proposed rule.
PBGC has determined that these proposed changes do not modify the
information collection requirements under Administrative Appeals (OMB
control number 1212-0061, expires 1/31/10).
List of Subjects in 29 CFR Part 4003
Administrative practice and procedure, Organization and functions
(Government agencies), Pension insurance, Pensions.
For the reasons given above, PBGC proposes to amend 29 CFR part
4003 as follows:
PART 4003--RULES FOR ADMINISTRATIVE REVIEW OF AGENCY DECISIONS
1. The authority citation for part 4003 continues to read as
follows:
Authority: 29 U.S.C. 1302(b)(3).
2. In Sec. 4003.1:
a. Paragraph (b)(6) is amended by removing the words ``or section
4022A(a)''.
b. Paragraph (b)(7) is amended by removing the words ``(c), section
4022A(b) through (e), or'' and adding in their place the words ``(c)
or''.
3. In Sec. 4003.2:
a. The definition of Appeals Board is amended by removing the word
``Executive''.
b. The definition of Director is amended by removing the word
``Executive'' where it appears twice in the definition.
4. In Sec. 4003.4, paragraph (b) is amended by removing the word
``Executive''.
5. Section 4003.33 is amended by removing the word ``Executive''.
6. In Sec. 4033.35, paragraph (a)(2) is amended by removing the
word ``Executive'' where it appears twice in the paragraph.
7. Section 4003.53 is amended by removing the words ``Appeals
Board, Pension Benefit Guaranty Corporation, 1200 K Street, NW.,
Washington, DC 20005-4026'' and adding in their place the words
``Appeals Board''.
8. In Sec. 4003.54, paragraphs (a)(3) and (a)(4) are revised to
read as follows:
Sec. 4003.54 Contents of appeal.
(a) * * *
(3) Specifically explain why PBGC's determination is wrong and the
result the appellant is seeking;
(4) Describe the relevant information the appellant believes is
known by PBGC, and summarize any other information the appellant
believes is relevant. It is important to include copies of any
documentation that support the appellant's claim or the appellant's
assertions about this information;
* * * * *
9. In Sec. 4003.58:
a. The existing text of the section is redesignated as paragraph
(a).
b. A new paragraph (b) is added to read as follows:
Sec. 4003.58 Powers of the Appeals Board.
* * * * *
(b) The Appeals Board may refer certain appeals to another PBGC
department or to Appeals Board staff to provide a response to the
appellant. The response from another PBGC department or Board staff
shall be in writing and address the matters raised in the appeal. The
response may be in the form of an explanation or corrected benefit
determination. In either case, the appellant will have 45 calendar-days
from the date of the response to file a written request for review by
the Appeals Board. If a written request for review is not filed with
the Appeals Board within the 45-calendar-day period the determination
shall become effective pursuant to Sec. 4003.22(a).
(1) Appeals that may be referred to another PBGC department or to
the Board staff include those that--
(i) Request an explanation of the initial determination being
appealed;
(ii) Dispute specific data used in the determination, such as date
of hire, date of retirement, date of termination of employment, length
of service, compensation, marital status and form of benefit elected;
or
(iii) Request an explanation of the limits on benefits payable by
PBGC under part 4022, subpart B, such as the maximum guaranteeable
benefit and phase-in of the PBGC guarantee.
(2) An explanation or corrected benefit determination issued under
this subsection is not considered a decision of the Appeals Board. If
an appellant aggrieved by PBGC's initial determination is issued an
explanation or corrected benefit determination under this section, the
appellant has not exhausted his or her administrative remedies until
the appellant has filed a timely request with the Appeals Board for
review and the Appeals Board has issued a decision granting or denying
the relief requested. See Sec. 4003.7 of this part.
10. In Sec. 4003.60:
a. The section heading is amended by removing the word
``Executive''.
b. The text of the section is amended by removing the word
``Executive'' wherever it appears.
Issued in Washington, DC, this 12th day of October 2007.
Charles E. F. Millard,
Interim Director, Pension Benefit Guaranty Corporation.
[FR Doc. E7-20538 Filed 10-17-07; 8:45 am]
BILLING CODE 7709-01-P