Electronic Filing of Notices for Apprenticeship and Training Plans and Statements for Pension Plans for Certain Select Employees
| Published date | 17 June 2019 |
| Citation | 84 FR 27952 |
| Record Number | 2019-12653 |
| Section | Rules and Regulations |
| Court | Employee Benefits Security Administration |
Federal Register, Volume 84 Issue 116 (Monday, June 17, 2019)
[Federal Register Volume 84, Number 116 (Monday, June 17, 2019)]
[Rules and Regulations]
[Pages 27952-27955]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12653]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2520
RIN 1210-AB62
Electronic Filing of Notices for Apprenticeship and Training
Plans and Statements for Pension Plans for Certain Select Employees
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Final rule.
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SUMMARY: This document contains final regulations that revise the
procedures for filing apprenticeship and training plan notices and
``top hat'' plan statements with the Secretary of Labor. The final
regulations require electronic submission of these notices and
statements, as opposed to paper filings. The final regulations will
make filing these notices and statements easier and lower regulatory
burdens on these plans. The final regulations also will enable the
Department of Labor to make reported data more readily available to
participants and beneficiaries and other
[[Page 27953]]
interested members of the public than in the past.
DATES: The final rule is effective August 16, 2019.
FOR FURTHER INFORMATION CONTACT: Marjorie M. Kress or Thomas M.
Hindmarch, Office of Regulations and Interpretations, Employee Benefits
Security Administration, Department of Labor, at (202) 693-8500.
SUPPLEMENTARY INFORMATION:
A. Background
Part 1 of Title I of the Employee Retirement Income Security Act of
1974, as amended (ERISA), contains reporting and disclosure
requirements applicable to plans covered by ERISA. For instance,
sections 103 and 104 of ERISA establish requirements for the
publication and filing of annual reports, while sections 102 and 104 of
ERISA require plan administrators to furnish summary plan descriptions
and summaries of material modifications or changes to participants and
beneficiaries.
Section 104(a)(3) of ERISA, however, authorizes the Secretary to
exempt any welfare benefit plan from all or part of the reporting and
disclosure obligations, or to provide simplified reporting and
disclosure, if the Secretary finds that the requirements are
inappropriate for these plans. Under this authority, the Secretary, in
1980, issued 29 CFR 2520.104-22, which provides an exemption from the
reporting and disclosure provisions of Part 1 of Title I of ERISA for
employee welfare benefit plans that provide only apprenticeship or
training benefits, or both, if certain conditions are met.\1\ Under
this regulation, a welfare plan that provides only these benefits is
not required to meet the requirements of Part 1 of Title I if the
administrator files with the Secretary a notice as described in Sec.
2520.104-22 by mail or personal delivery, takes steps reasonably
designed to ensure that the information required to be contained in the
notice is disclosed to employees of employers contributing to the plan
who may be eligible to enroll, and makes the notice available to these
employees upon request.
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\1\ 40 FR 34526, 34529-34530, 34536 (Aug. 15, 1975); 45 FR 15527
(Mar. 11, 1980).
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Similarly, section 110(a) of ERISA permits the Secretary to specify
an alternative form of compliance with the reporting and disclosure
obligations of Part 1 of Title I for any pension plan or class of
pension plans subject to ERISA if certain findings are made. Under the
authority of section 110(a), in 1975 the Department issued 29 CFR
2520.104-23 to provide an alternative method of compliance with the
reporting and disclosure requirements of Part 1 of Title I for unfunded
or insured pension plans established for a select group of management
or highly compensated employees (``top hat'' plans).\2\ Under the
alternative method of compliance, the administrator of a top hat plan
satisfies the requirements for the reporting and disclosure provisions
of Part 1 of Title I by filing a statement with the Secretary by mail
or personal delivery to the address specified in the regulation, and by
providing plan documents, if any, to the Secretary upon request. The
statement must include the information listed in the regulation.
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\2\ 40 FR 34526, 34530, 34536 (Aug. 15, 1975).
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On September 30, 2014, the Department published in the Federal
Register a proposed rule that would revise the procedures for filing
apprenticeship and training plan notices under Sec. 2520.104-22 and
top hat plan statements under Sec. 2520.104-23 to require electronic
submission of these notices and statements.\3\ On the same date, the
Department also made available a new web-based filing system for these
notices and statements.\4\ Use of this web-based filing system was
voluntary until the adoption of this final rule. Approximately 65% of
the apprenticeship and training plan notices and approximately 54% of
the top hat plan statements have been filed electronically since
then.\5\
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\3\ 79 FR 58720.
\4\ Available at https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/e-file/tophat-plan-filing-instructions (for top hat plans)
and https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/e-file/apprenticeship-and-training-plan-filing-instructions (for
apprenticeship and training plan notices).
\5\ During the three year period from January 1, 2015, to
December 31, 2017, 112 of the 171 apprenticeship and training plan
notices and 2,964 of the 5,444 top hat plan statements filed with
the Department were submitted electronically using the Department's
web-based filing system.
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In the proposal, the Department solicited comments on the
electronic filing mandate as well as on the design and operation of its
web-based filing system.\6\ The Department received one written
comment, a copy of which is available under the ``public comments''
section of the Department's website at https://www.dol.gov/agencies/ebsa/laws-and-regulations/rules-and-regulations/public-comments/1210-AB62. Although this commenter applauded the Department for recognizing
the benefits of electronic filing of these notices and statements, the
comment letter focused primarily on the need (in this commenters' view)
for the Department to update its regulation pertaining to the use of
electronic media by plan administrators to furnish disclosures to
participants and beneficiaries. After careful consideration of the
comment, the final rule amends 29 CFR 2520.104-22(c) (i.e.,
apprenticeship and training plan notices) and 29 CFR 2520.104-23(c)
(i.e., top hat plan statements), as proposed.
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\6\ In the preamble to the proposal, the Department stated that
notices and statements will be posted on EBSA's website and
explicitly requested public comment as to whether there are any
concerns with making information in the notices and statements
publicly accessible online. EBSA received no comments in response to
this request.
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B. Final Regulation
The final rule revises the current procedures for filing
apprenticeship and training plan notices under Sec. 2520.104-22 and
top hat plan statements under Sec. 2520.104-23 with the Secretary of
Labor to require electronic submission of these notices and statements.
The final rule does not change the current content requirements in
either of these regulations.\7\ The final rule requires electronic
filing with the Secretary through EBSA's website in accordance with
instructions published by the Department. Going forward, EBSA's web-
based filing system will be the exclusive method for filing these
notices and statements; filings by mail or personal delivery will no
longer be accepted. The new web-based system is designed to assist
administrators by ensuring that all of the information required by the
regulations is included in the notice or statement before the filing
can be completed through the website. Upon submission of a completed
filing, the new web-based filing system sends an electronic
confirmation of receipt to the administrator. This confirmation is not
available through the existing paper-based filing system. The design of
the new filing system facilitates the requirement that plan
administrators of apprenticeship and training plans make notices
available to participants upon request as required under Sec.
2520.104-22(a)(3). Filings are now available to the public on the
Department's website at http://www.dol.gov/ebsa.
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\7\ The new web-based filing system requires filers to input an
email address. Although neither regulation explicitly mentions an
email address, the Department does not view this item as a content
requirement of the regulations. Rather, the email address is needed
for system functionality because without it the filer would not
receive instantaneous confirmation of the filing.
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[[Page 27954]]
C. Regulatory Impact Analysis
1. Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing and streamlining rules, and
promoting flexibility.
Under Executive Order 12866, ``significant'' regulatory actions are
subject to the requirements of the executive order and review by the
Office of Management and Budget (OMB). Section 3(f) of Executive Order
12866 defines a ``significant regulatory action'' as an action that is
likely to result in a rule (1) having an annual effect on the economy
of $100 million or more, or adversely and materially affecting a sector
of the economy, productivity, competition, jobs, the environment,
public health or safety, or State, local or tribal governments or
communities (also referred to as ``economically significant''); (2)
creating serious inconsistency or otherwise interfering with an action
taken or planned by another agency; (3) materially altering the
budgetary impacts of entitlement grants, user fees, or loan programs or
the rights and obligations of recipients thereof; or (4) raising novel
legal or policy issues arising out of legal mandates, the President's
priorities, or the principles set forth in the Executive Order.
OMB determined that this action is not ``significant'' within the
meaning of section 3(f)(4) of the Executive Order, and therefore the
rule was not reviewed by OMB under Executive Order 12866. The rule
merely replaces the paper-based filing of apprenticeship and training
plan notices and top hat plan statements with an electronic filing
system and does not change the content of the notices and statements.
Therefore, as discussed below, the Department has determined that this
regulatory action will result in small cost savings that are
attributable to reduced material and postage costs and time savings
resulting from a more user-friendly filing system.
This final rule is not subject to E.O. 13771 because it is not
significant under E.O. 12866.
2. Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes
certain requirements with respect to Federal rules that are subject to
the notice and comment requirements of section 553(b) of the
Administrative Procedures Act (5 U.S.C. 551 et seq.) and that are
likely to have a significant economic impact on a substantial number of
small entities. Unless an agency determines that a final rule is not
likely to have a significant economic impact on a substantial number of
small entities, section 604 of the RFA requires the agency to present a
final regulatory flexibility analysis describing the rule's impact on
small entities and explaining its decision with respect to the
application of the rule to small entities. Pursuant to section 605(b)
of the RFA, the Department certified that the proposed rule did not
have a significant economic impact on a substantial number of small
entities and provided an analysis of the rationale for that
certification. In the preamble of the proposed rule, the Department
requested comments regarding the certification; however no comments
were received. Based on the rationale set out in the proposal and the
absence of any comments, the Department hereby certifies that this
final rule will not have a significant economic impact on a substantial
number of small entities.
Section 610 of the RFA requires that an agency review each rule
that has or will have a significant economic impact on a substantial
number of small entities within ten years of publication of a final
rule. EBSA initiates a Section 610 review to determine if the
provisions of a rule should be continued without change, rescinded, or
amended to minimize adverse economic impact on small entities. The
preamble of the proposed rule requested comments on other possible
changes or amendments to the two regulations (Sec. Sec. 2520.104-22(c)
and 2520.104-23(c)) that are the subject of this final rule. EBSA
received no comments in response to this request.
3. Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act
of 1995 (PRA) (44 U.S.C. 3506(c)(2)), the Department's proposed
regulation, ``Electronic Filing of Notices for Apprenticeship and
Training Plans and Statements for Pension Plans for Certain Select
Employees'' solicited comments on the information collections included
therein. The Department also submitted an information collection
request (ICR) to OMB in accordance with 44 U.S.C. 3507(d),
contemporaneously with the publication of the proposed regulation, for
OMB's review. The Department received one comment that was supportive
of the proposed changes to the information collections.
In connection with publication of this final regulation, the
Department is submitting an ICR to OMB requesting approval of a
revision to OMB Control Number 1210-0153. The Department will notify
the public when OMB approves the revised ICR.
A copy of the ICR may be obtained by contacting the PRA Addressee:
G. Christopher Cosby, Office of Policy and Research, U.S. Department of
Labor, Employee Benefits Security Administration, 200 Constitution
Avenue NW, Room N-5718, Washington DC 20210; telephone (202) 693-8410;
fax: (202) 2195333. These are not toll-free numbers. ICRs submitted to
OMB also are available at http://www.Reginfo.gov.
As stated earlier in this preamble, Sec. 2520.104-22 provides an
exemption to the reporting and disclosure provisions of Part 1 of Title
I of ERISA for employee welfare benefit plans that provide only
apprenticeship or training benefits, or both, if the plan
administrator: (1) Files a notice with the Secretary that provides the
name of the plan, the plan sponsor's Employer Identification Number
(EIN), the plan administrator's name, and the name and location of an
office or person from whom interested individuals can obtain certain
information about courses offered by the plan; (2) takes steps
reasonably designed to ensure that the information required to be
contained in the notice is disclosed to employees of employers
contributing to the plan who may be eligible to enroll in any course of
study sponsored or established by the plan; and (3) makes the notice
available to these employees upon request. Prior to the effective date,
the plan administrator may file the notice with the Secretary by
mailing or delivering it to the Department at the address in the
regulation.
Section 2520.104-23 provides an alternative method of compliance
with the reporting and disclosure provisions of Title I of ERISA for
unfunded or insured plans established for a select group of management
or highly compensated employees (i.e., top hat plans). In order to
satisfy the alternative method of compliance, the plan administrator
must: (1) File a statement with the Secretary of Labor that includes
the name and address of the employer, the employer EIN, a declaration
that the employer maintains
[[Page 27955]]
a plan or plans primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employees, and a statement of the number of such plans and the
employees covered by each; and (2) make plan documents available to the
Secretary upon request. Only one statement needs to be filed for each
employer maintaining one or more of the plans. Prior to the effective
date, the statements may be filed with the Secretary by mail or
personal delivery.
The final rule replaces the paper-based filing of apprenticeship
and training plan notices and top hat plan statements with an
electronic filing system. No substantive changes have been made to the
notices and statements. On average, the Department annually receives
approximately 57 apprenticeship and training plan notices and
approximately 1,815 top hat plan statement filings. The Department
estimates in-house human resource professionals on average will spend
10 minutes preparing each filing on the Department's electronic filing
system. Based on the foregoing, the total burden for filing is 9 hours
for apprenticeship and training plan notice filings and 303 hours for
top hat plan statement filings, resulting in an overall total of 312
burden hours. This reflects a 250-total-hour burden reduction
(approximately $11,000 equivalent cost) from the estimated hour burden
associated with optional paper-based filing.
The Department assumes that no other cost burden is associated with
this ICR, because in-house staff will prepare and electronically file
the notices on behalf of each plan.
These paperwork burden estimates are summarized as follows:
Title: Alternate Reporting Methods for Apprenticeship and Training
Plan Notices and Top Hat Plan Statements.
OMB Control Number: 1210-0153.
Affected Public: Private Sector--business or other for-profit and
not-for-profit institutions.
Respondents: 1,872 (57 apprenticeship and training plans and 1,815
top hat plans).
Responses: 1,872.
Frequency of Response: Annually.
Estimated Total Annual Burden Hours: 312 (9 hours for
apprenticeship and training plan notices and 303 hours for top hat plan
statements).
Estimated Total Annual Burden Cost: $0.
4. Congressional Review Act
The final rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and will be transmitted to Congress and the
Comptroller General for review. The final rule is not a ``major rule''
as that term is defined in 5 U.S.C. 804, because it is not likely to
result in (1) an annual effect on the economy of $100 million or more;
(2) a major increase in costs or prices for consumers, individual
industries, or Federal, State, or local government agencies, or
geographic regions; or (3) significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
United States-based enterprises to compete with foreign-based
enterprises in domestic and export markets.
5. Unfunded Mandates Reform Act
For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4), as well as Executive Order 12875, this final rule does not
include any Federal mandate that may result in expenditures by State,
local, or tribal governments in the aggregate of more than $100
million, adjusted for inflation, or increase expenditures by the
private sector of more than $100 million, adjusted for inflation.
6. Federalism Statement
Executive Order 13132 (August 4, 1999) outlines fundamental
principles of federalism, and requires the adherence to specific
criteria by Federal agencies in the process of their formulation and
implementation of policies that have substantial direct effects on the
States, the relationship between the national government and States, or
on the distribution of power and responsibilities among the various
levels of government. This final rule does not have federalism
implications because it has no substantial direct effect on the States,
on the relationship between the national government and the States, or
on the distribution of power and responsibilities among the various
levels of government. Section 514 of ERISA provides, with certain
exceptions specifically enumerated, that the provisions of Titles I and
IV of ERISA supersede any and all laws of the States as they relate to
any employee benefit plan covered under ERISA. The electronic filing
requirements in this final rule do not alter the fundamental reporting
and disclosure requirements of the statute for employee benefit plans,
and, as such, have no implications for the States or the relationship
or distribution of power between the national government and the
States.
List of Subjects in 29 CFR Part 2520
Employee benefit plans, Employee Retirement Income Security Act,
Pension plans, Pension and welfare plans, Reporting and recordkeeping
requirements, Welfare benefit plans.
For the reasons discussed in the preamble, the Department amends 29
CFR part 2520 as follows:
PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE
0
1. The authority citation for part 2520 is revised to read as follows:
Authority: 29 U.S.C. 1021-1025, 1027, 1029-1031, 1059, 1134 and
1135. Secretary of Labor's Order 1-2011, 77 FR 1088 (January 9,
2012). Sec. 2520.101-2 also issued under 29 U.S.C. 1132, 1181-1183,
1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.102-3,
2520.104b-1 and 2520.104b-3 also issued under 29 U.S.C. 1003, 1181-
1183, 1181 note, 1185, 1185a-b, 1191, and 1191a-c. Secs. 2520.104b-1
and 2520.107 also issued under 26 U.S.C. 401 note, 111 Stat. 788.
Sec. 2520.101-5 also issued under sec. 501 of Pub. L. 109-280, 120
Stat. 780, and sec. 105(a), Pub. L. 110-458, 122 Stat. 5092.
0
2. Section 2520.104-22 is amended by revising paragraph (c) to read as
follows:
Sec. 2520.104-22 Exemption from reporting and disclosure requirements
for apprenticeship and training plans.
* * * * *
(c) The notice referred to in paragraph (a) of this section shall
be filed with the Secretary electronically in accordance with the
instructions published by the Department.
0
3. Section 2520.104-23 is amended by revising paragraph (c) to read as
follows:
Sec. 2520.104-23 Alternative method of compliance for pension plans
for certain selected employees.
* * * * *
(c) Electronic filing of statement. Statements referred to in
paragraph (b) of this section shall be filed with the Secretary
electronically in accordance with the instructions published by the
Department.
* * * * *
Signed this 31st day of May, 2019.
Preston Rutledge,
Assistant Secretary, Employee Benefits Security Administration, U.S.
Department of Labor.
[FR Doc. 2019-12653 Filed 6-14-19; 8:45 am]
BILLING CODE 4510-29-P
