[Federal Register Volume 75, Number 217 (Wednesday, November 10, 2010)]
[Notices]
[Pages 69130-69133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28306]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
Proposed Extension of Information Collection Request Submitted
for Public Comment; Prohibited Transaction Exemptions 81-8, 96-62, 77-
4, 98-54; Delinquent Filer Voluntary Compliance Program; Suspension of
Benefits Regulation
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Notice.
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SUMMARY: The Department of Labor (the Department), in accordance with
the Paperwork Reduction Act of 1995 (PRA 95) (44 U.S.C. 3506(c)(2)(A)),
provides the general public and Federal agencies with an opportunity to
comment on proposed and continuing collections of information. This
helps the Department assess the impact of its information collection
requirements and minimize the public's reporting burden. It also helps
the public understand the Department's information collection
requirements and provide the requested data in the desired format. The
Employee Benefits Security Administration (EBSA) is soliciting comments
on the proposed extension of the information collection requests (ICRs)
contained in the documents that are described below. A copy of the ICRs
may be obtained by contacting the office listed in the ADDRESSES
section of this notice. ICRs also are available at reginfo.gov (http://www.reginfo.gov/public/do/PRAMain).
DATES: Written comments must be submitted to the office shown in the
Addresses section on or before January 10, 2011.
ADDRESSES: G. Christopher Cosby, Department of Labor, Employee Benefits
Security Administration, 200 Constitution Avenue, NW., Washington,
[[Page 69131]]
DC 20210, (202) 693-8410, FAX (202) 693-4745 (these are not toll-free
numbers).
SUPPLEMENTARY INFORMATION: This notice requests public comment on the
Department's request for extension of the Office of Management and
Budget's (OMB) approval of ICRs contained in the rules described below.
The Department is not proposing any changes to the existing ICRs at
this time. An agency may not conduct or sponsor, and a person is not
required to respond to, an information collection unless it displays a
valid OMB control number. A summary of the ICRs and the current burden
estimates follows:
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: Class Exemption for Investment of Plan Assets in Certain
Types of Short-Term Investments.
Type of Review: Extension without change of a currently approved
collection of information.
OMB Number: 1210-0061.
Affected Public: Business or other for-profit; Not-for-profit
institutions.
Respondents: 50,000.
Responses: 250,000.
Estimated Total Burden Hours: 41,700.
Estimated Total Burden Cost (Operating and Maintenance): $102,500.
Description: Prohibited Transaction Class Exemption 81-8 permits
the investment of plan assets that involve the purchase or other
acquisition, holding, sale, exchange or redemption by or on behalf of
an employee benefit plan in certain types of short-term investments.
These include investments in banker's acceptances, commercial paper,
repurchase agreements, certificates of deposit, and bank securities.
Absent the exemption, certain aspects of these transactions might be
prohibited by section 406 and 407(a) of the Employee Retirement Income
Security Act (ERISA).
In order to ensure that the exemption is not abused, that the
rights of participants and beneficiaries are protected, and that the
conditions of the exemption have been satisfied, the Department has
included in the exemption two basic disclosure requirements. Both
affect only the portion of the exemption dealing with repurchase
agreements. The first requirement calls for the repurchase agreements
between the seller and the plan to be in writing. The second
requirement obliges the seller of such repurchase agreements to agree
to provide financial statements to the plan at the time of the sale and
as future statements are issued. The seller must also represent, either
in the repurchase agreement or prior to the negotiation of each
repurchase agreement transaction, that there has been no material
adverse change in the seller's financial condition since the date that
the most recent financial statement was furnished which has not been
disclosed to the plan fiduciary with whom the written agreement is
made.
Without the recording and disclosure requirements included in this
ICR, participants and beneficiaries of a plan would not be protected in
their investments, the Department would be unable to monitor a plan's
activities for compliance, and plans would be at a disadvantage in
assessing the value of certain short-term investment activities. The
ICR is scheduled to expire on April 30, 2011.
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: Prohibited Transaction Class Exemption 96-62, Process for
Expedited Approval of Exemption for Prohibited Transaction.
Type of Review: Extension without change of a currently approved
collection of information.
OMB Number: 1210-0098.
Affected Public: Business or other for-profit; Not-for-profit
institutions.
Respondents: 50.
Responses: 50.
Estimated Total Burden Hours: 62.
Estimated Total Burden Cost (Operating and Maintenance): $67,375.
Description: Section 408(a) of ERISA provides that the Secretary of
Labor may grant exemptions from the prohibited transaction provisions
of sections 406 and 407(a) of ERISA, and directs the Secretary to
establish an exemption procedure with respect to such provisions. On
July 31, 1996, the Department published Prohibited Transaction
Exemption 96-62, which, pursuant to the exemption procedure set forth
in 29 CFR 2570, subpart B, permits a plan to seek approval on an
accelerated basis of otherwise prohibited transactions. A class
exemption will only be granted on the conditions that the plan
demonstrate to the Department that the transaction is substantially
similar to those described in at least two prior individual exemptions
granted by the Department and that it presents little, if any,
opportunity for abuse or risk of loss to a plan's participants and
beneficiaries. This ICR is intended to provide the Department with
sufficient information to support a finding that the exemption meets
the statutory standards of section 408(a) of ERISA, and to provide
affected parties with the opportunity to comment on the proposed
transaction, while at the same time reducing the regulatory burden
associated with processing individual exemptions for transactions
prohibited under ERISA. The ICR is scheduled to expire on April 30,
2011.
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: Class Exemption 77-4 for Certain Transactions Between
Investment Companies and Employee Benefit Plans.
Type of Review: Extension without change of a currently approved
collection of information.
OMB Number: 1210-0049.
Affected Public: Business or other for-profit; Not-for-profit
institutions.
Respondents: 900.
Responses: 118,000.
Estimated Total Burden Hours: 10,301.
Estimated Total Burden Cost (Operating and Maintenance): $167,000.
Description: Without the relief provided by this exemption, an
open-end mutual fund would be unable to sell shares to, or purchase
shares from, a plan when the fiduciary with respect to the plan is also
the investment advisor for the mutual fund. As a result, plans would be
compelled to liquidate their existing investments involving such
transactions and to amend their plan documents to establish new
investment structures and policies.
In order to ensure that the exemption is not abused and that the
rights of participants and beneficiaries are protected, the Department
has included in the exemption three basic disclosure requirements. The
first requires at the time of the purchase or sale of such mutual fund
shares that the plan's independent fiduciary receive a copy of the
current prospectus issued by the open-end mutual fund and a full and
detailed written statement of the investment advisory fees charged to
or paid by the plan and the open-end mutual fund to the investment
advisor. The second requires that the independent fiduciary approve in
writing such purchases and sales. The third requires that the
independent fiduciary, once notified of changes in the fees, re-approve
in writing the purchase and sale of mutual fund shares. The ICR is
scheduled to expire on April 30, 2011.
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: PTE 98-54 Relating to Certain Employee Benefit Plan Foreign
Exchange Transactions Executed Pursuant to Standing Instructions.
Type of Review: Extension without change of a currently approved
collection of information.
[[Page 69132]]
OMB Number: 1210-0111.
Affected Public: Business or other for-profit; Not-for-profit
institutions.
Respondents: 35.
Responses: 8,400.
Estimated Total Burden Hours: 4,200.
Estimated Total Burden Cost (Operating and Maintenance): $0.
Description: PTE 98-54 permits certain foreign exchange
transactions between employee benefit plans and certain banks, broker-
dealers, and domestic affiliates thereof, which are parties in interest
with respect to such plans, pursuant to standing instructions. In the
absence of an exemption, foreign exchange transactions pursuant to
standing instructions would be prohibited under circumstances where the
bank or broker-dealer is a party in interest or disqualified person
with respect to the plan under ERISA or the Internal Revenue Code.
The class exemption has five basic information collection
requirements. The first requires the bank or broker-dealer to maintain
written policies and procedures for handling foreign exchange
transactions for plans for which it is a party in interest, which
policies and procedures ensure that the party acting for the bank or
broker-dealer knows it is dealing with a plan. The second requires that
the transactions are performed in accordance with a written
authorization executed in advance by an independent fiduciary of the
plan. The third requires that the bank or broker-dealer provides the
authorizing fiduciary with a copy of its written policies and
procedures for foreign exchange transactions involving income item
conversions and de minimis purchase and sale transactions prior to the
execution of a transaction. The fourth requires the bank or broker-
dealer to furnish the authorizing fiduciary a written confirmation
statement with respect to each covered transaction within five days
after execution. The fifth requires that the bank or broker-dealer
maintains records necessary for plan fiduciaries, participants, the
Department, and the Internal Revenue Service, to determine whether the
conditions of the exemption are being met for a period of six years
form the date of execution of a transaction.
By requiring that records pertaining to the exempted transaction be
maintained for six years, this ICR ensures that the exemption is not
abused, the rights of the participants and beneficiaries are protected,
and that compliance with the exemption's conditions can be confirmed.
The exemption affects participants and beneficiaries of the plans that
are involved in such transactions, as well as, certain banks, broker-
dealers, and domestic affiliates thereof. The ICR currently is
scheduled to expire on April 30, 2011.
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: Delinquent Filer Voluntary Compliance Program.
Type of Review: Extension without change of a currently approved
collection of information.
OMB Number: 1210-0089.
Affected Public: Business or other for-profit; Not-for-profit
institutions.
Respondents: 15,000.
Responses: 15,000.
Estimated Total Burden Hours: 750.
Estimated Total Burden Cost (Operating and Maintenance): $608,250.
Description: The Secretary of Labor has the authority, under
section 502(c)(2) of ERISA, to assess civil penalties of up to $1,000 a
day against plan administrators who fail or refuse to file complete and
timely annual reports (Form 5500 Series Annual Return/Reports) as
required under section 101(b)(4) of ERISA-related regulations. Pursuant
to 29 CFR 2560.502c-2 and 2570.60 et seq., EBSA has maintained a
program for the assessment of civil penalties for noncompliance with
the annual reporting requirements. Under this program, plan
administrators filing annual reports after the date on which the report
was required to be filed may be assessed $50 per day for each day an
annual report is filed after the date on which the annual report(s) was
required to be filed, without regard to any extensions for filing.
Plan administrators who fail to file an annual report may be
assessed a penalty of $300 per day, up to $30,000 per year, until a
complete annual report is filed. Penalties are applicable to each
annual report required to be filed under Title I of ERISA. The
Department may, in its discretion, waive all or part of a civil penalty
assessed under section 502(c)(2) upon a showing by the administrator
that there was reasonable cause for the failure to file a complete and
timely annual report.
The Department has determined that the possible assessment of these
civil penalties may deter certain delinquent filers from voluntarily
complying with the annual reporting requirements under Title I of
ERISA. In an effort to encourage annual reporting compliance,
therefore, the Department implemented the Delinquent Filer Voluntary
Compliance (DFVC) Program (the Program) on April 27, 1995 (60 FR
20873). Under the Program, administrators otherwise subject to the
assessment of higher civil penalties are permitted to pay reduced civil
penalties for voluntarily complying with the annual reporting
requirements under Title I of ERISA.
This ICR covers the requirement of providing data necessary to
identify the plan along with the penalty payment. This data is the
means by which each penalty payment is associated with the appropriate
plan. With respect to most pension plans and welfare plans, the
requirement is satisfied by sending a photocopy of the delinquent Form
5500 annual report that has been filed, along with the penalty payment.
Under current regulations, apprenticeship and training plans may be
exempted from the reporting and disclosure requirements of Part 1 of
Title I, and certain pension plans maintained for highly compensated
employees, commonly called ``top hat'' plans, may comply with these
reporting and disclosure requirements by using an alternate method by
filing a one-time identifying statement with the Department. The DFVC
Program provides that apprenticeship and training plans and top hat
plans may, in lieu of filing any past due annual reports and paying
otherwise applicable civil penalties, complete and file specific
portions of a Form 5500, file the identifying statements that were
required to be filed, and pay a one-time penalty. The ICR currently is
scheduled to expire on May 31, 2011.
Agency: Employee Benefits Security Administration, Department of
Labor.
Title: Suspension of Pension Benefits Regulation Pursuant to 29 CFR
2530.203-3.
Type of Review: Extension without change of a currently approved
collection of information.
OMB Number: 1210-0048.
Affected Public: Business or other for-profit; Not-for-profit
institutions.
Respondents: 47,614.
Responses: 233,181.
Estimated Total Burden Hours: 162,274.
Estimated Total Burden Cost (Operating and Maintenance): $107,263.
Description: Section 203(a)(3)(B) of ERISA governs the
circumstances under which pension plans may suspend pension benefit
payments to retirees that return to work or to participants that
continue to work beyond normal retirement age. Furthermore, section
203(a)(3)(B) of ERISA authorizes the Secretary to prescribe regulations
necessary to carry out the provisions of this section.
In this regard, the Department issued a regulation which describes
the circumstances and conditions under which plans may suspend the
pension benefits of retirees that return to work,
[[Page 69133]]
or of participants that continue to work beyond normal retirement age
(29 CFR 2530.203-3). In order for a plan to suspend benefits pursuant
to the regulation, it must notify affected retirees or participants (by
first class mail or personal delivery) during the first calendar month
or payroll period in which the plan withholds payment, that benefits
are suspended. This notice must include the specific reasons for such
suspension, a general description of the plan provisions authorizing
the suspension, a copy of the relevant plan provisions, and a statement
indicating where the applicable regulations may be found (i.e., 29 CFR
2530.203-3). In addition, the suspension notification must inform the
retiree or participant of the plan's procedure for affording a review
of the suspension of benefits. The ICR currently is scheduled to expire
on May 31, 2011.
III. Focus of Comments
The Department is particularly interested in comments that:
Evaluate whether the collections of information are
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
Evaluate the accuracy of the agency's estimate of the
collections of information, including the validity of the methodology
and assumptions used;
Enhance the quality, utility, and clarity of the
information to be collected; and
Minimize the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technological collection
techniques or other forms of information technology, e.g., by
permitting electronic submissions of responses.
Comments submitted in response to this notice will be summarized
and/or included in the ICRs for OMB approval of the extension of the
information collection; they will also become a matter of public
record.
Dated: November 3, 2010.
Joseph S. Piacentini,
Director, Office of Policy and Research, Employee Benefits Security
Administration.
[FR Doc. 2010-28306 Filed 11-9-10; 8:45 am]
BILLING CODE 4510-29-P