87 FR 166 pgs. 52821-52822 - Proposed Submission of Information Collection for OMB Review; Comment Request; Annual Reporting (Form 5500 Series)
Type: NOTICEVolume: 87Number: 166Pages: 52821 - 52822
Pages: 52821, 52822FR document: [FR Doc. 2022-18572 Filed 8-26-22; 8:45 am]
Agency: Pension Benefit Guaranty Corporation
Official PDF Version: PDF Version
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PENSION BENEFIT GUARANTY CORPORATION
Proposed Submission of Information Collection for OMB Review; Comment Request; Annual Reporting (Form 5500 Series)
AGENCY:
Pension Benefit Guaranty Corporation.
ACTION:
Notice of intent to request extension of OMB approval of information collection.
SUMMARY:
The Pension Benefit Guaranty Corporation (PBGC) intends to request that the Office of Management and Budget (OMB) extend approval, with modifications, under the Paperwork Reduction Act, of a collection of information for Annual Reporting under OMB control number 1212-0057, which expires on June 30, 2025. This notice informs the public of PBGC's intent and solicits public comment on the collection of information.
DATES:
Comments must be submitted on or before October 28, 2022.
ADDRESSES:
Comments may be submitted by any of the following methods:
• Federal eRulemaking Portal: http://www.regulations.gov . Follow the online instructions for submitting comments.
• Email: paperwork.comments@pbgc.gov . Refer to OMB control number 1212-0057 in the subject line.
• Mail or Hand Delivery: Regulatory Affairs Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington, DC 20024-2101.
Commenters are strongly encouraged to submit public comments electronically. PBGC expects to have limited personnel available to process public comments that are submitted on paper through mail. Until further notice, any comments submitted on paper will be considered to the extent practicable.
All submissions must include the agency's name (Pension Benefit Guaranty Corporation, or PBGC) and refer to OMB control number 1212-0057. Comments received will be posted without change to PBGC's website, www.pbgc.gov, including any personal information provided. Do not submit comments that include any personally identifiable information or confidential business information.
Copies of the collection of information may be obtained by writing to Disclosure Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington, DC 20024-2101, or calling 202-229-4040 during normal business hours. If you are deaf or hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
FOR FURTHER INFORMATION CONTACT:
Karen Levin ( levin.karen@pbgc.gov ), Attorney, Regulatory Affairs Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington, DC 20024-2101, 202-229-3559. If you are deaf or hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
SUPPLEMENTARY INFORMATION:
[top] Annual reporting to the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA), and the Pension Benefit Guaranty Corporation (PBGC) is required by law for most employee benefit plans. For example, section 4065 of the Employee Retirement Income Security Act of 1974 (ERISA) requires annual reporting to PBGC for pension plans covered by title IV of ERISA. To accommodate these filing requirements, IRS, EBSA, and PBGC have jointly promulgated the Form 5500 Series, which includes the
The collection of information has been approved by OMB under control number 1212-0057 through June 30, 2025. PBGC intends to request that OMB extend its approval, with modifications, for three years. An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
PBGC is proposing modifications to the 2023 Schedule R (Retirement Plan Information) and to the 2023 Schedule SB (Single-Employer Defined Benefit Plan Actuarial Information), and to their related instructions, as described below.
Schedule R
PBGC is proposing modifications to line 19 of Schedule R and its instructions, a line that applies to all defined benefit plans (except DFEs) that have 1,000 or more participants. Currently, such plans must provide a breakdown of plan assets in line 19a by reporting the percent of assets held in five categories of investments. PBGC is proposing to reconfigure the categories as shown below:
| Current | Proposed |
|---|---|
| Stock | Public Equity. |
| Investment-Grade Debt | Private Equity. |
| High-Yield Debt | Investment-Grade Debt and Interest-Rate Hedging Assets. |
| Real Estate | High-Yield Debt. |
| Other | Real Assets. Cash or Cash Equivalents. Other. |
In addition, for certain investments, PBGC is proposing to modify the instructions to clarify how certain atypical investments should be categorized for this purpose. For example, as currently drafted, it is not clear whether cash equivalents should be included in "Investment Grade Debt" or in "Other". Similarly, it is not clear whether infrastructure investments should be included in the "Real Estate" or the "Other" category. By expanding the list of categories and modifying the instructions, the more detailed information will be reported consistently which will enable PBGC to better model important characteristics of plan portfolios.
PBGC is also proposing to modify the instructions for line 19a so that the percentages reported reflect the asset allocation as of the end of the plan year instead of the beginning of the plan year. Having more recent information will lead to better projections and more accurate analysis by PBGC, and because the Form 5500 isn't due until several months after the end of the plan year, this change should not create any timing issues for filers.
In addition, PBGC is proposing changes to line 19b (average duration) and its instructions, and to eliminate line 19c (method used to determine the duration reported in line 19b). Under modified line 19b, applicable filers would be required to check a box to indicate the average duration of the plan's combined investment-grade debt and interest-rate hedging assets portfolio, thereby replacing the current requirement to check the box that shows the average duration of the plan's combined investment-grade and high yield debt portfolio. The average duration ranges were also adjusted from 3-year periods to 5-year periods. Line 19c currently asks for the duration measure used to calculate line 19b. Because the alternative duration measures do not provide meaningfully different results, eliminating line 19c will not hinder PBGC's modelling results.
Schedule SB
PBGC is proposing modifications to Schedule SB, line 6 (Target Normal Cost) and its instructions, to address a possible, albeit unlikely, situation in which line 6c (Target Normal Cost) reported on Schedule SB would not be consistent with IRS regulation and statute if lines 6a and 6b were determined in accordance with the current line 6 instructions. This situation would arise only if (1) a plan requires mandatory employee contributions and (2) the mandatory contributions for the plan year exceed the present value of benefits accruing during the plan year. PBGC's proposed changes to lines 6a and 6c of the instructions, and to line 6c of the Form, will rectify this situation by clarifying the amount to be reported in line 6a and by detailing that line 6c requires the sum of lines 6a and 6b, "reduced (but not below zero) by any mandatory employee contributions expected to be made during the plan year."
In addition, PBGC is proposing to change the current instructions for the Schedule SB, line 26b attachment (projected benefit payments), to provide that, in situations where a plan assumes some, or all, benefits are paid in a lump sum, but uses the annuity substitution rule (26 CFR 1.430(d)-1(f)(4)(iii)(B)) to determine the funding target, the attachment may show projected benefits payable in the annuity form instead of in the form assumed for valuation purposes, as indicated in the current instructions. PBGC notes that the instructions for the current line 26b attachment, which was added for the 2022 plan year, suggest that for such plans, the benefit projection be based on a different form of payment than what was used to determine the funding target.
PBGC estimates that it will receive approximately 25,000 Form 5500 and Form 5500-SF filings per year under this collection of information for the 2023 Form 5500 Series. PBGC further estimates that the total annual burden of this collection of information for the Form 5500 Series, attributable to PBGC, will be 17,743 hours and that there will be no cost burden.
PBGC is soliciting public comments to-
• evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodologies and assumptions used;
• enhance the quality, utility, and clarity of the information to be collected; and
• minimize the burden of the 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., permitting electronic submission of responses.
Issued in Washington, DC, by
Hilary Duke,
Assistant General Counsel for Regulatory Affairs, Pension Benefit Guaranty Corporation.
[FR Doc. 2022-18572 Filed 8-26-22; 8:45 am]
BILLING CODE 7709-02-P