Request for Information-SECURE 2.0 Reporting and Disclosure
| Published date | 11 August 2023 |
| Record Number | 2023-17249 |
| Citation | 88 FR 54511 |
| Court | Employee Benefits Security Administration |
| Section | Proposed rules |
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1
88 FR 11793 (Feb. 24, 2023).
2
88 FR 9408 (Feb. 14, 2023).
Issued in Washington, DC, on August 4,
2023.
Karen L. Chiodini,
Acting Manager, Rules and Regulations
Group.
[FR Doc. 2023–17074 Filed 8–10–23; 8:45 am]
BILLING CODE 4910–13–C
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
29 CFR Parts 2510, 2520, 2550
RIN 1210–AC23
Request for Information—SECURE 2.0
Reporting and Disclosure
AGENCY
: Employee Benefits Security
Administration, U.S. Department of
Labor.
ACTION
: Request for information.
SUMMARY
: The Employee Benefits
Security Administration of the U.S.
Department of Labor (the Department) is
publishing this Request for Information
to solicit public feedback and to begin
developing a public record for a number
of provisions of Division T of the
Consolidated Appropriations Act, 2023,
(Dec. 29, 2022) (referred to as the
SECURE 2.0 Act of 2022 or SECURE 2.0)
that impact the reporting and disclosure
framework of the Employee Retirement
Income Security Act of 1974 (ERISA).
Several sections of SECURE 2.0
establish new, or revise existing, ERISA
reporting and disclosure requirements,
in some cases also requiring that the
Department undertake a review of
existing or new requirements and
submit reports to Congress on the
Department’s findings. The Department
believes that it will be helpful to initiate
several of these actions, given their
commonality in affecting reporting of
information to the Department and the
disclosure of information to retirement
plan participants and beneficiaries, in
this Request for Information. Any later
action by the Department on these
SECURE 2.0 provisions, whether
rulemaking or otherwise, will be better
informed by responses to this Request
for Information.
DATES
: To be assured consideration,
comments must be received at one of
the following addresses no later than
October 10, 2023.
ADDRESSES
: You may submit written
comments to the Office of Regulations
and Interpretations, identified by RIN
1210–AC23, to one of the following
addresses:
•Federal eRulemaking Portal:
www.regulations.gov. Follow the
instructions for submitting comments.
•Mail: Office of Regulations and
Interpretations, Employee Benefits
Security Administration, Room N–5655,
U.S. Department of Labor, 200
Constitution Avenue NW, Washington,
DC 20210, Attention: Request for
Information—SECURE 2.0 Reporting
and Disclosure.
Instructions: Persons submitting
comments electronically are encouraged
not to submit paper copies. Comments
will be available to the public, without
charge online at www.regulations.gov, at
www.dol.gov/agencies/ebsa, and at the
Public Disclosure Room, EBSA, U.S.
Department of Labor, Suite N–1513, 200
Constitution Avenue NW, Washington,
DC 20210.
Warning: Do not include any
personally identifiable or confidential
business information that you do not
want publicly disclosed. Comments are
public records and can be retrieved by
most internet search engines.
FOR FURTHER INFORMATION CONTACT
:
Kristen Zarenko, Office of Regulations
and Interpretations, EBSA, Department
of Labor, (202) 693–8500.
SUPPLEMENTARY INFORMATION
:
Background
On December 29, 2022, the
Consolidated Appropriations Act, 2023,
H.R. 2617 was enacted. Part of this Act,
SECURE 2.0, includes provisions
amending ERISA and the Internal
Revenue Code (the Code). Some of the
provisions in SECURE 2.0 require
regulations or other guidance for
implementation. Other provisions direct
the Department to undertake a review of
certain statutory and regulatory
requirements and submit reports to
Congress on the Department’s findings.
This Request for Information (RFI)
focuses on certain SECURE 2.0 sections
that principally impact, directly or
indirectly, ERISA’s reporting and
disclosure requirements. Not all of the
SECURE 2.0 provisions that affect the
reporting and disclosure framework of
ERISA are covered in this RFI, generally
because the Department has already
started or intends to initiate separate
notice and comment rulemaking,
actions, issue guidance, request
additional information, or release
reports, as appropriate, to implement
these other provisions. For example, the
changes to ERISA’s audit requirements
by section 345 of SECURE 2.0 were
implemented through a recent
rulemaking relating to annual reporting
requirements under ERISA.
1
In
addition, the Department published a
solicitation for comment on the effects
of section 305 of SECURE 2.0 on the
Department’s Voluntary Fiduciary
Correction Program on February 14,
2023.
2
Another example of a SECURE 2.0
provision that affects reporting and
disclosure but which is not addressed in
this RFI is section 319 of SECURE 2.0.
This provision directs the Department,
in consultation with the Department of
the Treasury (Treasury Department) and
the Pension Benefit Guaranty
Corporation (PBGC), to review each
agency’s existing reporting and
disclosure requirements for retirement
plans. After this review, and in
consultation with a balanced group of
participant and employer
representatives, the agencies must
report to Congress on the effectiveness
of these reporting and disclosure
requirements, including
recommendations to consolidate,
simplify, standardize, and improve such
requirements. Rather than dealing with
the specific substance of individual
reporting and disclosure requirements
under ERISA and the Code, the section
319 review is expansive in scope and
calls for more generalized questions
about how to best communicate
information—information that can be
quite complex—to the government and
to workers of widely variable
capabilities, enabling workers to obtain,
understand, and use information about
their plans and retirement. Further,
these themes are to be explored in the
context of a significant number of
reporting and disclosure requirements
under the jurisdiction of three different
agencies. The Department currently
intends to move forward by formally
soliciting public input on the section
319 project, in coordination with the
Treasury Department and PBGC, but as
part of a rulemaking initiative separate
from this RFI.
Apart from these exceptions, the
Department believes that it will be
helpful to initiate progress on the
specific SECURE 2.0 items set forth
below in this RFI by expeditiously
obtaining feedback from a diverse set of
stakeholders from the earliest stages of
the process and building an initial
public record. This feedback will inform
more specific, detailed rulemaking or
other guidance on such provisions in
the future, including completion of
multiple reports to Congress, as required
by SECURE 2.0. Moving forward, as
relevant, the Department will continue
to consult with other agencies,
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The required study will focus on: the legal name
and number of pooled employer plans; the number
of participants in such plans; the range of
investment options provided in such plans; the fees
assessed in such plans; the manner in which
employers select and monitor such plans; the
disclosures provided to participants in such plans;
the number and nature of any enforcement actions
by the Department on such plans; the extent to
which such plans have increased retirement savings
coverage in the United States; and any additional
information as the Department determines is
necessary. SECURE 2.0 section 344.
4
29 CFR 2550.404a–5(h)(4).
including the Treasury Department and
PBGC.
II. Request for Information—SECURE
2.0 Reporting and Disclosure Provisions
The purpose of this RFI, as explained
above, is to inform future action by the
Department on the following SECURE
2.0 mandates related to ERISA’s
reporting and disclosure provisions. The
Department invites comments,
including relevant data, if available,
from all interested stakeholders. The
RFI includes questions about a number
of distinct SECURE 2.0 provisions.
Commenters need not answer every
question, but are encouraged to identify,
by number, each question addressed.
A. Pooled Employer Plans. Section
105 of SECURE 2.0 amended ERISA
section 3(43)(B)(ii), defining a ‘‘pooled
employer plan’’ (PEP), to provide that
the terms of the plan must ‘‘designate a
named fiduciary (other than an
employer in the plan) to be responsible
for collecting contributions to the plan
and require such fiduciary to implement
written contribution collection
procedures that are reasonable, diligent,
and systematic[.]’’ This clarification as
to which persons may be designated as
a named fiduciary for this purpose is
effective for plan years beginning after
December 31, 2022. The Department
intends to update the Form PR and
Instructions (Registration for Pooled
Plan Provider), as necessary, to reflect
this amendment for purposes of
reporting the designated named
fiduciary.
Section 344 of SECURE 2.0 also
directs Department action on the topic
of PEPs. Specifically, section 344 directs
the Department, not later than five years
after enactment, and every five years
thereafter, to submit a report to
Congress, and make publicly available
on a website, the Department’s findings
from a study of the PEP industry,
including recommendations on how
PEPs can be improved, through
legislation, to serve and protect
retirement plan participants.
3
The
Department is in the preliminary stages
of planning such a study and anticipates
using data collected from the Form PR
and the Form 5500 Annual Report to
assist in preparing this report. As part
of this RFI, the Department is requesting
commenters’ ideas about how to
construct such a study effectively in
response to this directive and whether,
and what, additional information the
Department should focus on to help
achieve the stated objectives of the
study to improve PEPs and subsequent
reports to Congress. In addition to
general feedback on the methodology
and scope of the required study, the
Department seeks input on the specific
issues set forth below.
DQuestion 1: What guidance, if any,
for purposes of reporting on Form PR or
otherwise, do pooled plan providers,
fiduciaries, trustees, or other parties
need to implement the revised
definition in ERISA section 3(43)(B)(ii)
effectively?
DQuestion 2: In addition to the Form
PR and the Form 5500 Annual Report,
what are other data sources the
Department could use to collect data on
the topics enumerated in SECURE 2.0
section 344(1), e.g., the fees assessed in
such plans, or the range of investment
options provided in such plans?
DQuestion 3: The Department
interprets the language in section
344(1)(C) of SECURE 2.0 requiring
identification of ‘‘the range of
investment options provided in such
plans’’ to mean the specific investment
options the responsible plan fiduciary
has selected as ‘‘designated investment
alternatives’’ under the plan.
4
The
Department does not, for example,
consider this language to require
examination of the potentially large
range of investments available through a
brokerage window or similar
arrangement, to the extent offered in a
PEP. What would be efficient and
comprehensive methods for the
Department to determine the range of
designated investment alternatives for
all PEPs?
DQuestion 4: Section 344(1)(E) of
SECURE 2.0 requires the study to focus
on the ‘‘manner in which employers
select and monitor such plans.’’ How
and by whom are PEPs most commonly
marketed to employers? Do marketing
techniques differ based on the size of
employers? How often do employers
rely on the advice of others when
selecting and monitoring a PEP? If so,
who gives this advice to employers,
generally, e.g., consultants, financial
advisors, brokers, record keepers,
others? In addition to this RFI, are there
other efficient and comprehensive
methods for the Department to solicit
information on the steps employers take
to select and monitor PEPs and to
decide to stay in the PEPs? For instance,
should the Department consider a
public hearing, focus groups,
questionnaires, online polling, or other
similar information gathering
techniques? From whom should the
Department solicit this information (i.e.,
directly from employers, pooled plan
providers, or both), using these other
techniques?
DQuestion 5: Section 344(1)(F) of
SECURE 2.0 requires the study to focus
on the disclosures provided to
participants in such plans. What would
be efficient and comprehensive methods
for the Department to collect examples
of such disclosures or otherwise solicit
information from employers, PEPs, plan
administrators, or other parties on the
disclosures provided to plan
participants? Is there additional or
different information that should be
disclosed to participants in the context
of PEPs, versus what is required to be
disclosed under ERISA to participants
in other defined contribution plans? If
so, why, and what other additional
disclosures should be required in the
context of PEPs?
DQuestion 6: Section 344(1)(H) of
SECURE 2.0 requires the study to focus
on the extent to which PEPs have
‘‘increased retirement savings coverage
in the United States.’’ How should the
Department measure ‘‘increased
retirement savings coverage’’ and what
information would the Department need
to make this assessment? For example,
the formation of new PEPs may suggest
increased coverage, but if the
participating employers previously
maintained a retirement plan, that could
indicate a transfer of coverage types,
rather than an increase in coverage.
What are efficient and comprehensive
methods for the Department, depending
on how ‘‘increase retirement savings
coverage’’ is measured, to collect such
information?
B. Emergency Savings Accounts
Linked to Individual Account Plans.
Section 127 of SECURE 2.0 amended
ERISA section 3 to add a new definition,
at section 3(45), for a ‘‘pension-linked
emergency savings account’’ (PLESA). A
PLESA is a short-term savings account
established and maintained as part of an
individual account plan. Section 127 of
SECURE 2.0 also added a new part 8 to
subtitle B of title I of ERISA that
includes a comprehensive set of
requirements for PLESAs. This includes
a requirement that plan administrators
for individual account plans that
include PLESAs furnish to participants
an initial and annual notice as to: the
purpose of PLESAs; limits on and tax
treatment of, contributions to a PLESA;
any fees, expenses, restrictions, or
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See, e.g., Field Assistance Bulletin 2012–02R
(July 30, 2012), Question 16; 75 FR 64910, 917 (Oct.
20, 2010).
charges associated with PLESAs;
procedures for electing to make or
opting out of PLESA contributions,
changing contribution rates, and making
participant withdrawals; the amount of
the PLESA account and the amount or
percentage of compensation a
participant has contributed to the
PLESA; the designated investment
option for PLESA contributions; options
for the PLESA account balance after
termination of employment or of the
PLESA by the plan sponsor; and other
information. Section 127 of SECURE 2.0
also amended section 110 of ERISA to
grant the Department authority to
prescribe an alternative method for
satisfying any reporting and disclosure
requirement under ERISA with respect
to PLESAs. Section 127 of SECURE 2.0
also amended section 404(c) of ERISA
with respect to specified default
investment arrangements for PLESAs.
The amendments made to ERISA are
applicable to plan years beginning after
December 31, 2023.
DQuestion 7: What guidance, if any,
do plan administrators need to
effectively implement the requirements
of section 127 of SECURE 2.0 and new
part 8 of ERISA? Because section 127 of
SECURE 2.0 impacts many provisions
under ERISA and the Code, commenters
are encouraged to be as specific as
possible with their responses, with clear
citation to the specific statutory
provision or provisions in question. If
guidance is needed on multiple
provisions, commenters are asked to
prioritize the issues according to
importance and offer a supporting
rationale for the priority.
DQuestion 8: Would administrators
of plans that include PLESAs benefit
from a model notice or model language
for inclusion in the required notice
under section 801 of ERISA? If so,
commenters are encouraged to submit
suggested model language.
C. Performance Benchmarks for Asset
Allocation Funds. Section 318 of
SECURE 2.0 requires that the
Department, not later than two years
after enactment, issue regulations under
ERISA section 404 (Fiduciary duties)
providing that:
[I]n the case of a designated investment
alternative that contains a mix of asset
classes, the administrator of a plan may, but
is not required to, use a benchmark that is
a blend of different broad-based securities
market indices if—(1) the blend is reasonably
representative of the asset class holdings of
the designated investment alternative; (2) for
purposes of determining the blend’s returns
for 1-, 5-, and 10-calendar-year periods (or for
the life of the alternative, if shorter), the
blend is modified at least once per year if
needed to reflect changes in the asset class
holdings of the designated investment
alternative; (3) the blend is furnished to
participants and beneficiaries in a manner
that is reasonably calculated to be
understood by the average plan participant;
and (4) each securities market index that is
used for an associated asset class would
separately satisfy the requirements of such
regulation for such asset class.
DQuestion 9: Are there additional
factors beyond the criteria in section
318 of SECURE 2.0 that plan
administrators should use to ensure
they can effectively select and monitor,
and participants and beneficiaries can
effectively understand and utilize,
blended performance benchmarks for
mixed asset class funds? If so, why, and
what are the other factors the
Department should consider when
developing regulations? Commenters are
encouraged to review the Department’s
prior guidance on the use of blended
performance benchmarks, albeit as
secondary benchmarks, for purposes of
the participant-level disclosure
regulation; the standards for use of a
‘‘reasonable’’ blended performance
benchmark therein are similar, but not
identical, to the four criteria in section
318 of SECURE 2.0.
5
DQuestion 10: Section 318 of
SECURE 2.0 also requires that the
Department, not later than three years
after the applicability date of such
regulations, deliver a report to Congress
regarding the utilization, and
participants’ understanding of these
benchmark requirements. Comments are
solicited on methods the Department
might use to assess whether, and the
extent to which, participants
understand the type of benchmark
described in section 318 of SECURE 2.0.
D. Defined Contribution Plan Fee
Disclosure Improvements. Section 340
of SECURE 2.0 requires the Department
to undertake a review of 29 CFR
2550.404a–5, relating to fiduciary
requirements for disclosure in
participant-directed individual account
plans. The review must explore how the
contents and design of the disclosures
under this regulation may be improved
to enhance participants’ understanding
of defined contribution plan fees and
expenses, including the cumulative
effect of such fees on retirement savings
over time. The Department must submit
a report of its findings to Congress
within three years, including
recommendations for legislative
changes. Although the Department may
take steps in addition to this RFI to
conduct its review of the regulation in
question, the Department anticipates
that responses to the following
questions will be a helpful start.
The regulation that is the subject of
this required review was published in
2010. The intent of the regulation was
to increase fee transparency and to
provide America’s workers with the
information they need to effectively
manage and invest the money they
contribute to their 401(k)-type
retirement plans. The regulation
requires that plan administrators use
standard methodologies when
calculating and disclosing investment
expense and historical return
information to achieve uniformity
across the spectrum of investment
options that exist in 401(k)-type plans,
facilitating ‘‘apples-to-apples’’
comparisons among investment options.
The regulation also requires that
investment-related information is
furnished in a format that enables
workers to meaningfully compare the
cost and historical performance of
investment options available in their
plan.
DQuestion 11: What information,
including information required by the
subject regulation, is currently being
provided to participants in participant-
directed individual account plans to
provide them with information about
their plans’ fees and expenses and the
cumulative effect of fees and expenses
on their retirement savings over time?
How is the information adequate or
inadequate in helping plan participants
make informed investment decisions? If
inadequate, is there evidence that this
inadequacy is tied directly to the subject
regulation as opposed to other
exogenous factors impacting financial
literacy?
DQuestion 12: Is there evidence that
the subject regulation could or should
be improved to help participants better
understand the fees and expenses
related to their participant-directed
individual account plans? For instance,
is there additional or different content,
not required under the current
regulation, that could enhance
participants’ understanding of the costs
associated with participating in their
plan, including the costs of their
available investment options? In
addition, are there additional or
different design, formatting, delivery, or
other similar characteristics, not
required under the current regulation,
that could improve the effectiveness of
these disclosures? If so, how should
these improvements be incorporated
into the subject regulation?
DQuestion 13: The subject regulation
requires that investment fee and
performance information for each
designated investment alternative under
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See 29 CFR 2550.404a–5(d)(2).
7
Section 338 of SECURE 2.0 did not amend the
alternative notice provision in section 105(a)(3) of
ERISA. ERISA section 105(a)(3)(A), in relevant part,
provides that plan administrators of defined benefit
plans shall be treated as meeting the requirements
of ERISA section 105(a)(1)(B)(i) ‘‘if at least once
each year the administrator provides to the
participant notice of the availability of the pension
benefit statement and the ways in which the
participant may obtain such statement.’’
8
29 CFR 2520.104b–31; 85 FR 31884 (May 27,
2020).
the plan must be furnished in a chart or
similar format that is designed to
facilitate a comparison of such
information.
6
Is the Department’s model
comparative chart, attached to this RFI
as Appendix A, helpful to participants
in facilitating a meaningful comparative
analysis and selecting among
investment options and for plan
administrators in satisfying their
disclosure obligations under the
regulation? If not, how could the model
be modified to enhance its
effectiveness? Are there examples of
disclosures provided to satisfy the
subject regulation that use formats or
designs that differ from the
Department’s model comparative chart
that have proven to be more effective?
E. Eliminating Unnecessary Plan
Requirements Related to Unenrolled
Participants. Section 320 of SECURE 2.0
amended ERISA by inserting a new
section 111, applicable for plan years
beginning after December 31, 2022.
Section 111 provides that, with respect
to individual account plans, no required
disclosure, notice, or other plan
document, must be furnished to
unenrolled participants, subject to two
exceptions. Under the first exception,
the unenrolled participant must be
furnished an annual reminder notice of
the participant’s eligibility to participate
in the plan and any applicable election
deadlines. Under the second exception,
the unenrolled participant must be
furnished any document to which they
are otherwise entitled if the participant
requests the document. Section 111
defines an ‘‘unenrolled participant’’ for
this purpose as an employee who is
eligible to participate in an individual
account plan; has been furnished a
summary plan description and any
other ERISA or Code notices related to
the participant’s initial eligibility to
participate in the plan; is not
participating in such plan; and satisfies
such other criteria as the Department, in
consultation with the Treasury
Department, may determine
appropriate. Section 111 also defines an
‘‘annual reminder notice’’ for this
purpose as a notice provided in
accordance with 29 CFR 2520.104b–1
that is furnished in connection with the
annual open season election period for
the plan or, if there is no such period,
is furnished within a reasonable period
prior to the beginning of each plan year;
and that notifies the unenrolled
participant of their eligibility to
participate in the plan, the key benefits
and rights under the plan, with a focus
on employer contributions and vesting
provisions; and provides such
information in a prominent manner
calculated to be understood by the
average participant. Section 320 of
SECURE 2.0 also makes amendments to
the Code that are parallel to the
amendments to ERISA.
DQuestion 14: Is there any guidance,
regulatory or otherwise, that plan
administrators need or would find
helpful to implement ERISA section
111?
DQuestion 15: Are there additional
criteria that the Department, in
consultation with the Treasury
Department, should consider for
determining who is an unenrolled
participant?
DQuestion 16: Is there additional
information that the Department, in
consultation with the Treasury
Department, should consider for
inclusion on the required ‘‘annual
reminder notice’’ to unenrolled
participants?
DQuestion 17: Would plan
administrators benefit from a model
notice or model language for inclusion
in the required ‘‘annual reminder
notice’’ to unenrolled participants? If so,
commenters are encouraged to submit
suggested model language, specifically
focusing on the ‘‘key benefits and rights
under the plan, with a focus on
employer contributions and vesting
provisions’’ language. Considering that
different plans contain different
‘‘benefits and rights,’’ and a range of
plan-specific employer contribution
rates and vesting provisions, is it
feasible for the Department to create
model language?
DQuestion 18: Is there a reliable
source of data to estimate the number of
people that may be impacted by section
111 of ERISA?
F. Requirement to Provide Paper
Statements in Certain Cases. Section
338 of SECURE 2.0 amended ERISA
section 105(a)(2) by adding a new
requirement, ‘‘Provision of Paper
Statements,’’ effective for plan years
beginning after December 31, 2025, that
at least one pension benefit statement
furnished for a calendar year for an
individual account plan, and at least
one pension benefit statement furnished
every three years for a defined benefit
plan, must be furnished on paper in
written form, with two general
exceptions. First, if a plan furnishes
such statement in accordance with 29
CFR 2520.104b–1(c) (the Department’s
2002 electronic delivery safe harbor, or
the 2002 safe harbor), no paper
statement must be furnished. Second, if
a plan permits participants and
beneficiaries to request that pension
benefit statements be furnished by
electronic delivery, no paper statement
must be furnished to individuals who
request electronic delivery if the
statements are so delivered.
7
Section 338 of SECURE 2.0 directs the
Department to update the 2002 safe
harbor to provide that, in addition to the
other requirements of the safe harbor,
participants who first become eligible to
participate (and beneficiaries who first
become eligible for benefits) after
December 31, 2025 must be furnished a
one-time initial notice on paper in
written form, prior to the electronic
delivery of any pension benefit
statement, their right to request that all
documents be furnished on paper in
written form. Section 338 of SECURE
2.0 also directs the Department, no later
than December 31, 2024, to update
‘‘applicable guidance governing
electronic disclosure,’’ except for the
2002 safe harbor, as necessary to ensure
that (1) participants and beneficiaries
are permitted the opportunity to request
that any disclosure required to be
delivered on paper under such guidance
shall be furnished electronically; (2)
each paper statement furnished
pursuant to such updated guidance
includes an explanation of how to
request that all such statements, and any
other documents required to be
disclosed under ERISA, be furnished
electronically and contact information
for the plan sponsor, including a
telephone number; (3) the plan may not
charge any fee to a participant or
beneficiary for delivery of any paper
statements; (4) each required document
that is furnished electronically by such
plan shall include an explanation of
how to request that all such documents
be furnished on paper in written form;
and (5) a plan is permitted to furnish a
duplicate electronic statement in any
case when the plan furnishes a paper
pension benefit statement. The
‘‘applicable guidance governing
electronic disclosure’’ referenced in
section 338(b) of SECURE 2.0 refers to
the Department’s second electronic
delivery safe harbor regulation at 29
CFR 2520.104b–31, titled ‘‘Alternative
method for disclosure through
electronic media—Notice-and-access’’
(the 2020 electronic delivery safe
harbor, or the 2020 safe harbor).
8
The
Department intends, therefore, to update
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the 2020 safe harbor as necessary to
reflect these updates.
DQuestion 19: What modifications or
updates to the 2002 safe harbor are
needed to implement section 338 of
SECURE 2.0? Commenters are
encouraged to consider whether any
additional information (other than a
statement of the right to request that all
documents required to be disclosed
under ERISA be furnished on paper in
written form) should be included, and
whether there are other standards that
should apply to the required one-time
initial paper notice that must be
furnished for compliance with 29 CFR
2520.104b–1(c), the 2002 safe harbor?
For example, should the 2002 safe
harbor be modified or updated to
include an initial paper notice that
resembles the initial paper notice
required by paragraph (g) of the 2020
safe harbor regulation?
DQuestion 20: What modifications or
updates to the 2020 safe harbor are
needed to implement section 338 of
SECURE 2.0? Commenters are
encouraged to consider and compare the
contents of the initial paper notification
required under paragraph (g) of the 2020
safe harbor with the content
requirements of section 338(b)(2)(B) of
SECURE 2.0. To what extent should a
statement under ERISA section 105(a)(2)
contain the content of the initial paper
notification described in paragraph (g)
of the 2020 safe harbor, and why?
DQuestion 21: Should both safe
harbors be modified such that their
continued use by plans is conditioned
on access in fact? Can plan
administrators (through their electronic
delivery systems) reliably and
accurately ascertain whether an
individual actually accessed or
downloaded an electronically furnished
disclosure, or determine the length of
time the individual accessed the
document? If so, should the safe harbors
contain a condition that plan
administrators monitor whether
individuals actually visited the
specified website or logged on to the
website, as a condition of treating
website access as effective disclosure?
And, in the event that such monitoring
reveals individuals have not visited or
logged on to the specified website
(meaning that effective disclosure was
not achieved through website access),
should the safe harbors require that plan
administrators revert to paper
disclosures or take some other action in
the case of individuals whom plan
administrators know forsake such
access?
G. Consolidation of Defined
Contribution Plan Notices. Section 341
of SECURE 2.0 requires the Department
and the Treasury Department, not later
than two years after enactment, to issue
regulations providing that plan
administrators may, but are not required
to, consolidate two or more of the
following notices into a single notice:
(1) the qualified default investment
alternative notice, ERISA section
404(c)(5)(B); (2) the notice for
preemption of automatic contribution
arrangements, ERISA section 514(e)(3);
(3) the notice for alternative methods of
meeting nondiscrimination
requirements, Code section
401(k)(12)(D); (4) the notice for
alternative methods of meeting
nondiscrimination requirements for
automatic contribution arrangements,
Code section 401(k)(13)(E); and (5) the
notice for special rules for certain
withdrawals from eligible automatic
contribution arrangements, Code section
414(w)(4). The consolidated notice must
include all required content, clearly
identify the matters addressed therein,
satisfy the timing and frequency
requirements for each such notice, and
be presented in a manner that is
reasonably calculated to be understood
by the average plan participant without
obscuring, or failing to highlight, the
primary information for each notice.
DQuestion 22: To what extent are
regulations needed for plan
administrators to consolidate the notices
described in section 341 of SECURE 2.0?
What are the perceived legal
impediments to consolidation under
current law and regulations? What are
the perceived administrative or other
practical impediments to consolidation?
What are the benefits and drawbacks to
plans of consolidating the notices
described in section 341 of SECURE 2.0?
Similarly, what are the benefits and
drawbacks to plan participants and
beneficiaries of consolidating these
notices? Other than plans and plan
participants, are there other
stakeholders that have an interest in this
topic? If so, who and what are their
interests?
H. Information Needed for Financial
Options Risk Mitigation. Section 342 of
SECURE 2.0 amended part 1 of ERISA
by adding a new section 113 that
requires administrators of plans
amended to provide a period of time
during which a participant or
beneficiary may elect to receive a lump
sum to, among other things, provide
participants and beneficiaries with
advance notice of the opportunity to
elect a lump sum payment in lieu of
annuity payments for life from the
pension plan. The disclosure under
section 113 would provide participants
and beneficiaries, as they consider what
is best for their financial futures, with
important information to compare the
other distribution options available
under the plan, such as monthly
payments for life and the life of their
spouses, and the lump sum. In addition
to explaining the potential ramifications
of accepting the lump sum, the
disclosure also would explain how the
lump sum was calculated, including
whether the lump sum is based on the
early retirement benefit and, for a
terminated vested participant, the
relative values of the lump sum, the
single life annuity, and the qualified
joint and survivor annuity. The
disclosure would also have to provide
details about the election period, and
how to obtain additional information.
Section 342 of SECURE 2.0 requires the
Department to issue regulations
implementing the requirements under
section 113 of ERISA not earlier than
one year after enactment. Further, these
regulations must contain a model
disclosure reflecting the content
requirements under section 113 that
plan administrators may use to
discharge their statutory obligation.
DQuestion 23: Is there a need for
guidance with respect to any of the
specific content requirements in ERISA
section 113(b)(1)(A) through (H)? If so,
please specify the particular content
requirement and explain the need for
guidance.
DQuestion 24: ERISA section
113(b)(1)(E) requires the notice to
specify, in a manner calculated to be
understood by the average plan
participant, the ‘‘potential ramifications
of accepting the lump sum.’’ Beyond the
specific items set forth in ERISA section
113(b)(1)(E), what other potential
ramifications should the Department
consider incorporating into regulations
under ERISA section 113, and why?
DQuestion 25: Are transactional
complexity, aging and cognitive decline,
and financial literacy relevant factors
the Department should consider when
deciding to add to the list of potential
ramifications in making regulations
under section 113 of ERISA? Risk
transfer transactions are by nature
inherently complex involving
uncertainty. Some behavioral finance
professionals suggest that more and
better information by itself is unlikely to
ensure that people, even with average
financial literacy, make good choices in
the cognitively challenging task of
choosing between an annuity and a
lump-sum payout. Despite such
challenges, are there ways to structure
and present the notice that would
increase the likelihood of better
decisions and retirement outcomes?
DQuestion 26: Are there mandatory
notices or disclosures under the Code
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ERISA section 512 provides for the
establishment of an advisory council on employee
pension and welfare plans, known as the ERISA
Advisory Council. The Council is comprised of
fifteen members representing different stakeholders,
meets at least four times annually, and advises the
Department and submits recommendations on the
Department’s functions under ERISA.
10
A list of witnesses providing input to the
Council on this topic, including their written
statements, is available at www.dol.gov/agencies/
ebsa/about-ebsa/about-us/erisa-advisory-council/
2015-written-statements-by-invited-witnesses-and-
issue-statements#2.
11
The full Report explaining the model is
available at www.dol.gov/sites/dolgov/files/EBSA/
about-ebsa/about-us/erisa-advisory-council/2015-
model-notices-and-disclosures-for-pension-risk-
transfers.pdf.
12
29 CFR 2520.101–5.
13
Although SECURE 2.0 made only modest
changes under section 101(f) with respect to
multiemployer defined benefit plans, commenters
are not precluded from submitting suggestions or
ideas on how to improve the existing model notice
for such plans.
that the Department should factor into
the development of regulations under
section 113 of ERISA? If so, which
notices and disclosures, and how
should they be factored into regulations
under section 113 of ERISA?
DQuestion 27: The Department must
issue a model notice for plan
administrators to use in discharging
their new statutory disclosure
obligations under section 113 of ERISA.
Commenters are encouraged to submit
for the Department’s consideration
exemplary samples of notices that plan
administrators have used in prior lump
sum offers that comprehensively
explain the consequences of electing a
lump sum in lieu of annuity payments
for life. Commenters should include a
concise explanation of why the
commenter believes that the sample was
effective in conveying meaningful
information to participants and
beneficiaries. The Department, in turn,
offers for consideration by commenters
a model notice developed in 2015 by the
ERISA Advisory Council.
9
The
Council’s model is the product of
careful deliberation following the
receipt of extensive public input from a
broad array of stakeholders.
10
The
model is attached as Appendix B to this
RFI.
11
Should the Department consider
using this model as the starting point for
the model required under section 113 of
ERISA, and if not, why? If so, to what
extent could and should this model be
improved, for example, to conform to
specific requirements under section 113
that were not considered by the ERISA
Advisory Council?
DQuestion 28: ERISA section 113
contains a pre- and post-election
window reporting framework under
which plans must report information
relating to the lump sum offerings and
elections to the Department and the
PBGC. In addition to the number of
participants and beneficiaries who
accepted the lump sum offer, the
Department has authority to require
plans to furnish ‘‘such other information
as the Department may require’’ in the
post-election report. Separately, the
Department itself must report
information about offerings and
elections to Congress on a biennial
basis. The Department also must post on
its website for public consumption the
information it receives under this
reporting framework. The Department is
considering what information should be
reported to the Department to ensure
that the Department can effectively
discharge its monitoring, enforcement,
public disclosure, and biennial
reporting obligations under ERISA. To
these ends, what data or information
other than the number of participants
and beneficiaries who were eligible for
and accepted lump sum offers should be
reported to the Department, and why?
For instance, should the Department
collect demographic information on
those individuals who elected lump
sum offers and, if so, what information?
This information could, for instance,
enable the Department to provide
Congress with more detailed
information on the cohorts of
participants and beneficiaries who
accept lump sum offers as compared to
those who do not.
I. Defined Benefit Annual Funding
Notices. Section 343 of SECURE 2.0
amended section 101(f) of ERISA by
modifying the content requirements for
defined benefit plan annual funding
notices. For single-employer defined
benefit plans, the ‘‘funding target
attainment percentage’’ was replaced by
the ‘‘percentage of plan liabilities
funded’’ as a measure to reflect the
plan’s current funding status in section
101(f) notices. The replacement measure
uses year-end market value for assets
rather than actuarial value, disregards
prefunding and funding carryover
balances, and determines year-end
liabilities using unadjusted spot
segment rates. Funding notices for
single-employer plans also must contain
a statement of the circumstances when
participants and beneficiaries may
receive benefits in excess of the amount
guaranteed by PBGC. The existing
requirement regarding participant
demographic data also was expanded to
include the preceding two years and
mandates presentation of the data in
tabular format. The new amendments
apply for plan years beginning after
December 31, 2023.
DQuestion 29: Is there a need for
guidance with respect to any of the
amended content requirements in
section 101(f)(2)(B) of ERISA? If so,
please specify the provision and explain
the need for such guidance.
DQuestion 30: Is there a need for
guidance on the interrelationship of the
new definition of ‘‘percentage of plan
liabilities funded’’ in section
101(f)(2)(B) and the segment rate
stabilization disclosure provisions in
section 101(f)(2)(D)? When applicable,
the segment rate stabilization disclosure
provisions continue to use the funding
target attainment percentage. In
responding to this question,
commenters are encouraged to address
the extent to which participants and
beneficiaries would find value in, or
alternatively be confused by, two
different funding percentages for the
same plan.
DQuestion 31: Existing regulations
under section 101(f) of ERISA contain a
model notice for single-employer
defined benefit plans.
12
The Department
is interested in suggestions and
comments on how to modify the model
to reflect the amendments to section
101(f) of ERISA by SECURE 2.0, and for
improvements more generally. For ease
of reference, the model is attached to
this RFI as Appendix C.
13
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1
CAIR had separate trading programs for annual
SO
2
emissions, ozone season NO
X
emissions, and
annual NO
X
emissions.
2
For additional background regarding these FIPs,
including details specific to Florida, see Proposed
Approval of Implementation Plans of Florida: Clean
Air Interstate Rule, 72 FR 42344 (August 2, 2007).
Signed at Washington, DC, this 8th day of
August, 2023.
Lisa M. Gomez,
Assistant Secretary, Employee Benefits
Security Administration, Department of
Labor.
[FR Doc. 2023–17249 Filed 8–10–23; 8:45 am]
BILLING CODE 4510–29–C
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R04–OAR–2022–0608; FRL–10387–
01–R4]
Air Plan Approval; FL; Noninterference
Demonstrations for Removal of CAIR
and Obsolete Rules in the Florida SIP
AGENCY
: Environmental Protection
Agency (EPA).
ACTION
: Proposed rule.
SUMMARY
: The Environmental Protection
Agency (EPA) is proposing to approve a
portion of a State Implementation Plan
(SIP) revision submitted by the Florida
Department of Environmental Protection
(FDEP) on April 1, 2022, for the purpose
of removing several rules from the
Florida SIP. EPA is proposing to remove
the State’s Clean Air Interstate Rule
(CAIR) rules from the Florida SIP as
well as several Reasonably Available
Control Technology (RACT) rules for
particulate matter (PM) because these
rules have become obsolete. The State
has provided a non-interference
demonstration to support the removal of
these rules from the Florida SIP
pursuant to the Clean Air Act (CAA or
Act).
DATES
: Comments are due on or before
September 11, 2023.
ADDRESSES
: Submit your comments,
identified by Docket ID No. EPA–R04–
OAR–2022–0608 at
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
EPA may publish any comment received
to its public docket. Do not submit
electronically any information you
consider to be Confidential Business
Information (CBI) or other information
whose disclosure is restricted by statute.
Multimedia submissions (audio, video,
etc.) must be accompanied by a written
comment. The written comment is
considered the official comment and
should include discussion of all points
you wish to make. EPA will generally
not consider comments or comment
contents located outside of the primary
submission (i.e., on the web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT
:
Evan Adams, Air Regulatory
Management Section, Air Planning and
Implementation Branch, Air and
Radiation Division, U.S. Environmental
Protection Agency, Region 4, 61 Forsyth
Street SW, Atlanta, Georgia 30303–8960.
The telephone number is (404) 562–
9009. Mr. Adams can also be reached
via electronic mail at adams.evan@
epa.gov.
SUPPLEMENTARY INFORMATION
:
I. Background on 62–296.470, F.A.C.,
Implementation of Federal Clean Air
Interstate Rule
Under CAA section 110(a)(2)(D)(i)(I),
which EPA has traditionally termed the
good neighbor provision, States are
required to address the interstate
transport of air pollution. Specifically,
the good neighbor provision requires
that each State’s implementation plan
contain adequate provisions to prohibit
air pollutant emissions from within the
State that will contribute significantly to
nonattainment in, or interfere with
maintenance by, any other State with
respect to any national ambient air
quality standard (NAAQS).
In 2005, EPA published CAIR to limit
the interstate transport of ozone and fine
particulate matter (PM
2.5
) under the
CAA’s good neighbor provision. See 70
FR 25162 (May 12, 2005). CAIR
originally required twenty-eight eastern
States, including Florida, to submit SIPs
prohibiting emissions that exceeded:
(1) Annual budgets specific to each
State for nitrogen oxides (NO
X
)—an
ozone precursor;
(2) ozone season budgets specific to
each State for NO
X
; and
(3) annual budgets specific to each
State for sulfur dioxide (SO
2
)—a PM
2.5
precursor. CAIR also established
several
1
trading programs for these
pollutants that EPA implemented
through Federal implementation plans
(FIPs) for electric generating units
(EGUs) greater than 25 megawatts in
each affected State.
2
However, these
trading programs did not apply to large
non-EGUs. States could then submit
SIPs to replace the FIPs to achieve the
required emission reductions from
EGUs and could choose to opt in non-
EGU sources.
On October 12, 2007, EPA approved
a SIP revision for Florida implementing
the requirements of CAIR. See 72 FR
58016. That revision to Florida’s SIP
included Rule 62–296.470, which, as
discussed later in this notice, EPA is
now proposing to remove from Florida’s
SIP as obsolete.
The United States Court of Appeals
for the District of Columbia Circuit (D.C.
Circuit) initially vacated CAIR in 2008,
but ultimately remanded the rule to EPA
without vacatur to preserve the
environmental benefits provided by
CAIR. See North Carolina v. EPA, 531
F.3d 896, modified on rehearing, 550
F.3d 1176 (D.C. Cir. 2008). The ruling
allowed CAIR to remain in effect
temporarily until a replacement rule
consistent with the court’s opinion was
developed. While EPA worked on
developing a replacement rule, the CAIR
program continued to be implemented
with the NO
X
annual and ozone season
trading programs beginning in 2009 and
the SO
2
annual trading program
beginning in 2010.
In response to the D.C. Circuit’s
remand of CAIR, EPA promulgated the
Cross-State Air Pollution Rule (CSAPR)
to address the good neighbor provision
for the 1997 ozone NAAQS, the 1997
PM
2.5
NAAQS, and the 2006 PM
2.5
NAAQS. See 76 FR 48208 (August 8,
2011). CSAPR requires EGUs in many
eastern States to meet annual and ozone
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