Supporting Statement for Paperwork Reduction Act Submission

AGENCY: Pension Benefit Guaranty Corporation

TITLE: Payment of Premiums (29 CFR Part 4007) and PBGC forms and instructions 

thereunder 

STATUS: Request for approval of revision of currently approved collection (OMB control 

number 1212-0009; expires April 30, 2017) 

CONTACT: Catherine B. Klion (326-4400, ext. 3041) or Deborah C. Murphy (326-4400, 

ext. 3451) 

1. Need for collection. Section 4007 of Title IV of the Employee Retirement Income

Security Act of 1974 (“ERISA”) requires the Pension Benefit Guaranty Corporation (“PBGC”) 

to collect premiums from pension plans covered under Title IV pension insurance programs. 

Pursuant to section 4007, PBGC has issued its regulation on Payment of Premiums (29 CFR 

Part 4007). Under § 4007.3 of the premium payment regulation, plan administrators are required 

to file premium payments and information prescribed by PBGC (premium-related data and 

information about plan identity, status, and events).

Premium information is filed electronically using “My Plan Administration Account” 

(“My PAA”) through PBGC’s web site. Premium filings must be made annually. Under

§ 4007.10 of the premium payment regulation, plan administrators are required to retain records

about premiums and information submitted in premium filings.

Section 4006 of ERISA, implemented by PBGC’s regulation on Premium Rates (29 CFR 

Part 4006), sets premium rates. All plans covered by Title IV of ERISA pay a flat-rate perparticipant premium. An underfunded single-employer plan also pays a variable-rate premium 

(VRP) based on the plan’s unfunded vested benefits (UVBs). The VRP is subject to a cap added 

by the Moving Ahead for Progress in the 21st Century Act (MAP-21) and modified by the 
Bipartisan Budget Act of 2013 (BBA 2013). Single-employer premium rates and the level of the

cap are adjusted for inflation pursuant to MAP-21 and BBA 2013. Multiemployer premium rates 

and the inflation adjustment for them are provided for in the Consolidated and Further 

Continuing Appropriations Act, 2015, Pub. L. 113-235, which was signed into law December 16, 

2014.

On March 11, 2014 (at 79 FR 13547), PBGC published a final rule to streamline and 

simplify PBGC’s premium payment due dates.1 The rule changed the premium due date for 

small plans to be consistent with the due date for larger plans and provided a phase-in to the new 

due date structure which gave small plans extra time to file for 2014; for 2015, due dates are the 

same for plans of all sizes. Another provision established a “look-back rule” whereby small 

plans could use prior-year data to calculate the variable-rate premium. Procedures for opting out 

of the look-back rule for the first year of look-back (2014) were provided in the 2014 

instructions. The 2015 premium instructions are the “final” instructions for the phased-in 

provisions under the March 2014 rule.

PBGC intends to revise the 2015 filing procedures and instructions to:

● Require reporting the numbers of persons involved in certain risk-transfer 

transactions (lump sum windows and annuity purchases);

● Change certain premium filing certification procedures;

● Eliminate due-date phase-in instructions that are no longer needed;

● Provide additional guidance about exercising small-plan look-back rule options;

and

1 See http://www.pbgc.gov/documents/2014-05212.pdf. This was the second of two final rules resulting from a 

2013 proposal. The first final rule, which eliminated the early due date for large plans’ flat-rate premiums, was 

published January 3, 2014 (79 FR 347). http://www.pbgc.gov/documents/2013-31109.pdf.

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● Offer the opportunity for a plan to provide a telephone number specifically for 

inclusion in PBGC’s “Is My Pension Insured?” List on PBGC’s web site, instead 

of the number provided for PBGC to contact the plan administrator.

PBGC is also intending to update the premium rates and make conforming, clarifying, and 

editorial changes.

None of these changes will have a noticeable effect on the burden of the information 

collection.

Transactions to offer lump sum options or annuitize benefits for a specified group of 

individuals — also referred to as “de-risking” or “risk transfer” events2 — deserve PBGC’s 

attention because (among other things) they lower the participant count and thus reduce the flatrate premium and potentially the variable rate premium. Premium losses have the potential to 

degrade PBGC’s ability to carry out its mandate to provide for the timely and uninterrupted

payment of pension benefits under title IV plans.3 Furthermore, numerous external sources have 

reported that recent increases in PBGC premium rates may be responsible for some portion of 

risk transfer activity; thus understanding the prevalence of risk transfers directly implicates 

PBGC’s mandates to encourage the continuation and maintenance of voluntary private pension 

plans while maintaining premiums at the lowest level consistent with carrying out its 

obligations.4 Because relatively few respondents will report risk transfer events in any year, and 

because the information requested is so modest and so easy to report, there is no material 

additional burden associated with this collection.

2 PBGC prefers the term “risk transfer” because the risks are not eliminated; they simply have been transferred from 

the employer to an individual and/or an insurance company. 3 See ERISA section 4002(a)(2). 4 See ERISA section 4002(a)(1) and (3).

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The certification procedures that are being changed apply to electronic premium filings 

submitted without electronic signature by the plan administrator, plan actuary, or both. The old 

procedures require an ink signature on a paper copy of the filing information that may be made 

after a filing is submitted. The new procedures require that the paper copy be signed before the 

filing is submitted. Thus the only change is in the order in which acts are done. Although the 

new procedure may be less convenient for some filers than the old one, there is no material 

additional burden associated with the change.

The alternative telephone number that a plan will be allowed to report is for use in a list 

of insured plans on PBGC’s web site. This oft-visited list tells participants whether a plan is 

covered by the title IV pension insurance system and includes the plan administrator’s telephone 

number as reported in the premium filing. The revised practice permits a plan to provide an 

alternative phone number. Only plans that want to be contacted at a number different from the 

plan administrator’s number will report an alternative number. PBGC expects few plans to 

choose to report an alternative number, making the added burden negligible in the context of the 

whole information collection.

2. Use of information. PBGC uses information from premium filings to identify the

plans for which premiums are paid, to verify whether the amounts paid are correct, to help PBGC

determine the magnitude of its exposure in the event of plan termination, to help track the 

creation of new plans and transfer of participants and plan assets and liabilities among plans, and 

to keep PBGC’s insured-plan inventory up to date. Risk transfer information will be used to 

project premium income, improve financial projections, and respond to inquiries from other 

executive agencies and other branches of government.

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The reported information and the retained records may be used for audit purposes.

3. Information technology. Electronic filing is required under PBGC’s regulations. 

PBGC provides data entry and editing screens for premium filing through the “My PAA”

electronic facility on PBGC’s Web site. In addition, PBGC offers two electronic filing options 

that allow filers to use private-sector premium-filing-preparation software compatible with My

PAA: (1) a filer can draft a premium filing and then import it into My PAA’s data entry and 

editing screens for review, certification, and submission to PBGC; and (2) a filer can create a

premium filing and then upload it directly to PBGC via the My PAA application. Filers can pay

premiums and receive premium refunds by electronic funds transfer.

4. Duplicate or similar information. In general, the information required in premium 

filings is not routinely filed with, and available from, any other Federal Government agency, and 

there is no similar information that can be used “as is” instead of the information reported in 

premium filings.

Participant count breakdown

Numbers of retired, terminated vested, and active participants are in the annual report that 

plans submit using Form 5500, and PBGC is willing to accept numbers determined using the 

same methodology for assigning participants to one or another category as for Form 5500. 

However, “participant” is defined differently for premium purposes than for reporting on Form 

5500, so that the actual numbers reported on the two forms can be expected to be different. 

Moreover, for Form 5500 and premium filings due at the same time, the participant-count 

information on the Form 5500 filing is a year older than that on the premium filing. PBGC’s 

uses for the participant-count breakdown are much better served by getting current data.

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VRP Data

Under the look-back rule, many plans’ asset values that are reported on premium filings 

are often also available from Form 5500. However, PBGC’s electronic premium-filing system 

automatically calculates premiums based on input data, and this feature could not work if assets 

were not reported. And for plans not using the look-back rule, there would be a one-year lag

until the Form 5500 figures became available. Using Form 5500 assets data instead of having 

premium filers report it directly would thus be inconvenient for both filers and PBGC and would 

save filers little time or effort.

Frozen plan data

“Freezes” can affect a plan in several different ways (for example, by ceasing accrual of 

benefits or admission of new participants). To predict and address the impact of plan freezes on 

PBGC’s future premium revenues and net financial position, PBGC needs to know which of the 

plans that PBGC covers have been affected by freezes and the exact nature of each freeze.

PBGC currently collects freeze information on ERISA section 4010 filings because it 

needs the information as early as possible for the small group of 4010 filers, and the information 

is reported in section 4010 filings before it is reported in premium filings. PBGC has considered 

exempting 4010 filers from reporting this information again in the premium filing, but concluded 

that there would be a control problem if the agency’s premium database were not internally

consistent.

Form 5500 collects general information on whether a plan has been frozen, but only for 

the most severe type of freeze (when all accruals cease for all participants) and only for the year 

before the current year. The Form 5500 data are thus too little and too late for PBGC’s purposes.

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Plan transfer data

PBGC’s plan transfer questions ask about transfers to and from other plans, as well as 

transfer types (merger, consolidation, or spin-off), to save PBGC (and filers) the administrative 

burden of determining why plans have failed to file when expected or have filed information 

inexplicably different from the previous year. Form 5500 collects information about assets 

and/or liabilities transferred from a plan to another plan (or plans) during the plan year, but not 

data on transfer types. Plans must submit information to the Internal Revenue Service about 

transfers to and from other plans on Form 5310-A, but only for non-de minimis transactions; 

PBGC needs this information regardless of transaction size. Furthermore, Form 5310-A 

information is not available to PBGC as promptly as PBGC needs it.

Final filing data

Form 5500 collects general information on whether a plan was terminated in a standard or

distress termination; whether PBGC became trustee of a plan; and whether a plan is covered by

PBGC. However, the Form 5500 data often do not adequately explain why filings have ceased 

in cases where plans merge out of existence. In addition, terminated or merged plans often do 

not submit a final Form 5500, especially when the final plan year is short. Thus, these sources of

information on plan disappearances do not adequately satisfy PBGC’s need to know why plans 

have stopped filing.

5. Reducing the burden on small entities. Small plans use prior-year data to compute the

VRP, which means that the VRP and Form 5500 due dates for the same year are aligned. (The 

flat-rate premium is based on more recent data — the participant count — but the participant 

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count is relatively easy to determine.) First-year filings for most small plans are simplified by a 

first-year exemption from the VRP.

In addition to the MAP-21 cap that applies to all VRP filers, another (generally lower) 

cap applies to the VRP of certain plans of small employers (those with 25 or fewer employees). 

Plans that both qualify for the small-employer VRP cap and pay the full amount of the cap do not 

need to determine or report UVBs.

6. Consequence of reduced collection. Since the information collected is essential to

proper administration of PBGC’s insurance programs, including auditing of premium filings, and 

to estimate PBGC’s future capability to provide guaranteed benefits, failure to collect it would

seriously impair PBGC’s program operations. Further, the premium payable to PBGC is an 

annual premium. Therefore, premium filings cannot be made less often than annually.

PBGC allows a plan to make an estimated VRP filing and then reconcile the estimated 

premium at a later date without a late premium payment penalty. This practice accommodates

unusual circumstances that could make an accurate VRP filing by the due date inconvenient. In 

infrequent cases, therefore, a plan may make two filings for a year, rather than one.

7. Special circumstances. PBGC requires plan administrators to retain information 

necessary to support premium filings for six years. The six-year period corresponds to the record 

retention requirement of Title I of ERISA and is needed to ensure that records are available

during the statutory limitations period within which PBGC may bring an action to collect

premiums.

In unusual circumstances, PBGC may require submission of information in less than 30 

days in connection with an audit. This would accommodate a situation where PBGC finds that 

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its interests may be prejudiced by a delay in the receipt of information, such as where collection 

of unpaid premiums (or associated interest or penalties) would otherwise be jeopardized.

In other respects, this collection of information is not conducted in a manner inconsistent 

with 5 CFR § 1320.5(d)(2).

8. Outside input. On September 23, 2014 (at 79 FR 56831), PBGC published a notice of 

its intention to request OMB approval of this revised collection of information, soliciting public 

comment. PBGC received nine comment letters from representatives of employers, pension 

practitioners, annuity providers, and participants.5 The comments focused almost exclusively on 

the new risk transfer items in Part VI of the premium filing form.

Comments ranged from strong approval to firm disapproval of the new items. Four 

commenters also expressed views on risk transfers themselves, both in favor and opposed. Most 

commenters had questions or suggestions for the new items that went into some detail. PBGC 

has made changes to the new items (both the questions themselves and the instructions) in 

response to some of the comments. The changes are discussed in detail below.

Cost-benefit concerns

A number of commenters questioned PBGC’s need for the new risk transfer information. 

(Other comments, in contrast, asserted that PBGC needs the information and that even more such 

information is needed to understand the effects of risk transfers.) In particular, the connection 

between the new items and PBGC premiums was challenged. One commenter said that without 

information about the size of risk transfer payments, the new items would be insufficient for 

PBGC’s purposes.

5 The notice and comments are posted at http://www.pbgc.gov/prac/pg/other/guidance/paperwork-notices.html. 

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PBGC believes that it can derive valuable information about future premium income 

from the new items without the need to ask respondents for dollar amounts. Data on number of 

offers can be compared to data on total participant counts to yield projections of future offers, 

and applying the take-up rate (ratio of acceptances to offers) can provide a picture of the effect of 

risk transfers on participant counts and thus on premiums.

The amount paid by a plan in lump sums or to annuitize benefits generally correlates with 

the amount of benefit liabilities transferred, and one commenter took the position that this 

correlation means that risk transfers do not affect PBGC’s future claims and renders the new risk 

transfer items unnecessary. But although the amounts paid and the reductions in benefit 

liabilities generally correlate, they are not equal, because they are calculated using different 

actuarial assumptions, and the reductions in liabilities, measured with plan termination 

assumptions, are often less than the amounts paid.

One commenter questioned the basis for collecting information only for window lump

sum offers and requiring filers to disaggregate pay-status and non-pay-status data. The point of 

the information collection is to acquire information on risk-transfer events; PBGC believes that 

the results would be “muddied” if the information collected included routine events that do not 

reflect a special emphasis on quick substantial reduction of benefit liabilities. PBGC also 

believes that the motivations and concerns of older retirees and of younger unretired workers are 

likely to differ significantly (leading, for example, to significantly different take-up rates), a 

circumstance that would affect PBGC’s premium expectations.

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Two commenters complained that the new items would be unnecessarily burdensome, 

with one commenter suggesting that they would tend to lead sponsors to terminate their plans.6

 

Another commenter said that risk transfer events involving small plans or small numbers of 

participants should be exempted from reporting to avoid unnecessary burden. In fact, because 

the new risk transfer items are expected to require very little additional time for very few filers, 

the burden of the premium filing requirement (which is conservatively estimated) will not 

meaningfully increase.

Alternative sources of information

Two commenters suggested that PBGC could get the information it needs by analyzing 

changes in data such as participant counts, assets, and liabilities reported on premium forms or 

Schedule SB to Annual Report Form 5500. No specific methodology for such analysis was 

offered, and PBGC believes that the data it needs cannot be teased out of other data; data from 

Form 5500 would in any event not be timely available because of the reporting lag between the 

premium and Form 5500 filing dates. Another commenter suggested that the risk transfer data 

be obtained by adding questions to Form 5500 rather than the premium form (thus suggesting 

disagreement with the view that information from the existing Form 5500 would be sufficient for 

PBGC’s purposes). Such an approach suffers from the timeliness problem just noted; 

additionally, gathering this information through Form 5500, which is filed by many more plans 

than PBGC’s premium form, does not appear to be a less burdensome approach. Another 

suggestion was that PBGC coordinate its information collection with Form 5500 to avoid 

6 That commenter apparently — but erroneously — concluded that the total burden of the premium filing 

requirement was attributable to the changes.

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duplication and confusion. No particular duplicative or confusing questions or instructions were 

cited, and PBGC believes that this is not a matter for concern.

One commenter suggested that reporting of risk transfers should be governed by ERISA 

section 4043 (Reportable Events), but that such reporting would require a statutory change. 

Another commenter said risk transfers should be treated as reportable events in addition to being 

reported in premium filings. Although PBGC may consider whether risk transfers should be 

treated as reportable events, such treatment would take time to develop and implement 

(regardless of whether a statutory amendment is needed). PBGC needs this information now.

Confidentiality concerns

Three commenters urged the need for confidentiality of reports of the number of 

employees who were eligible for (one commenter) or accepted (two commenters) lump sum 

offers in a risk transfer event. One of the commenters — who favored making risk transfers 

reportable events — noted that doing so would keep such responses confidential under section 

4043(f) (exempting reportable event notices from disclosure).

The commenters did not suggest a statutory basis for confidentiality of the requested risk 

transfer data. The data are all plan data and may not qualify as trade secrets or as commercial or 

financial information; while the plan sponsor may be exercising a settlor function in deciding 

whom to annuitize and whom to offer a lump sum, that information (and the other information 

being collected) would appear to be within the scope of the plan administrator’s fiduciary 

functions. In any event, submitters who believe this information to comprise trade secrets in 

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whole or in part may follow the process set forth in PBGC’s regulation on Examination and 

Copying of Pension Benefit Guaranty Corporation Records.7

Clarifications

Two commenters objected to the lack of clarity in the phrase “certain undertakings” that 

was used in PBGC’s Federal Register notice of its proposed paperwork approval submission to 

OMB. That phrase is not in the proposed information collection itself, which was available to 

the public on request and (in PBGC’s view) makes clear what undertakings are referred to.

Three commenters asked for changes in terminology in the risk transfer items, preferring 

“eligible” to “offered.” Two of the commenters noted that it might not be clear — where a 

member of a lump sum offeree group was missing or failed to respond to the lump sum offer —

whether the person should or should not be counted as having been offered a lump sum. In 

response to these comments, PBGC has changed “offered” to “eligible to elect.” And although a 

missing or non-responsive person is still eligible to elect under plan terms, PBGC is providing 

that a plan may either count or not count such persons as eligible. These same commenters also 

preferred “paid” or “received” to “elected.” Because PBGC believes that the act of electing a 

lump sum in one of these transactions (rather than payment or receipt, which may be delayed) is 

the most appropriate basis for reporting, it did not make this change.

Two commenters wanted PBGC to clarify that “participant” as used in the risk transfer 

items either includes or excludes beneficiaries. In response, PBGC has revised the questions and 

instructions to use the term “person” and thus make clear that beneficiaries are included. The 

7 See 29 CFR § 4901.24. An assertion that information in a premium filing is confidential may be made by email to 

premiums@pbgc.gov, identifying the filing by Employer Identification Number, Plan Number, and plan year 

commencement date.

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revised language also makes clear, as commenters requested, that reporting is not required for 

mandatory cashouts or for lump sum offers or annuitizations in connection with plan termination 

or in the course of routine plan operations.

One commenter thought it insufficiently clear that data on annuity contracts bought as 

plan investments were to be excluded. The annuitization item speaks of annuities “for” the 

persons whose benefits are annuitized; this language excludes annuity contracts bought as plan 

investments, which are “for” the plan. To remove any lingering doubt, PBGC is clarifying that 

contracts that remain plan assets need not be reported on.

One commenter asked PBGC to affirm that filers need not report on regularly recurring 

lump sum windows, on periodic reminders about lump sum options not limited by windows, and 

on offers of enhanced lump sums. The new lump sum risk transfer item is aimed at limitedduration offers but explicitly contemplates the possibility of multiple offers within a single 

reporting period. A window that is otherwise reportable is not rendered non-reportable by the 

circumstance that it is one of a series of windows or that enhanced lump sums are offered. But a 

lump sum option that is a permanent feature of a plan does not become reportable because the 

plan sends eligible persons periodic reminders about the option. PBGC is also providing that 

plans need not report on early retirement windows (incentive programs to encourage active 

participants to retire early).

Timing issues

Four commenters requested that there be a longer time lag between a risk transfer event 

and the date of a premium filing in which the event would have to be reported on. PBGC 

proposed a 30-day lag; two commenters asked for a 60-day lag and two others for longer periods 

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(in one instance 90 and in the other instance 120 days). In response to the comments on this 

point, PBGC has changed the instructions to provide for a 60-day lag.

One commenter objected that because the period covered by the first collection (over a 

year and a half) is so much longer than the period covered by each subsequent collection (about a 

year), PBGC would be unable to reasonably compare the data from the first collection with any 

subsequent collection. PBGC is aware of the difference in the length of the first collection 

period and is confident of its ability to compensate for that in making comparisons with later 

periods. Any difficulty arising from the extra length of the first period is outweighed by the 

value of data that reach back to include the 2014 plan year. 8

Finally, a commenter urged that amended filings not be required if errors are discovered 

in the information reported if the information initially reported was reasonably believed to be 

accurate. Filers will generally not need to amend 2015 filings simply because they discover 

inaccuracies in data reported for these items (although PBGC will welcome corrective 

amendments). Filers are encouraged to request guidance by contacting PBGC (as directed in

Appendix 2 to the premium filing instructions) if they discover significant errors in data 

reported.

Certification of uploads

Additionally, one commenter objected that the revised certification procedure for 

uploaded premium filings will be burdensome, impractical, and slow, with the potential for 

causing missed filing deadlines or necessitating amended filings. The revised procedures are 

8 Because the reporting requirement for 2015 applies to a much longer period than for subsequent years, PBGC is 

allowing plans to provide reasonable estimates based on readily available plan records if the exact numbers are not 

readily available.

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part of PBGC’s efforts to improve its controls and will make PBGC’s premium filing 

certification rules more uniform and respond to evolving audit requirements that PBGC’s 

practices must meet. The old certification process allowed a hard copy of the filing to be 

manually certified after the filing was uploaded; the new process requires that the manual 

certification be made before the upload. In this regard, the new process is like the process now 

required for submission of Form 5500, which is filed by many more plans than PBGC premium 

forms. The Form 5500 certification process requires submission of a graphical copy of the 

manually signed form; PBGC does not have such a requirement. PBGC requires that the filing 

confirmation number be written on the manually signed copy of the filing. There is no such 

requirement for Form 5500. On balance, PBGC considers its revised certification process no 

more onerous than the Form 5500 process, which is used by many more filers than upload PBGC 

premium filings. Although the new certification process may be slightly less convenient for 

some filers than the existing process, PBGC believes there is no material change in burden, 

practicality, speed, or the potential for late or amended filings. Accordingly, PBGC intends to 

proceed with the revised process.

Further comment

On January 12, 2015 (at 80 FR 1517), PBGC published a notice that it was requesting 

OMB approval of this revised collection of information and soliciting public comment to OMB. 

See the notice for information on how to comment.9

9. Payment to respondents. PBGC provides no payments or gifts to respondents in

connection with this collection of information.

9 See http://www.gpo.gov/fdsys/pkg/FR-2015-01-12/pdf/2015-00253.pdf.

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10. Confidentiality. Confidentiality of information is that afforded by the Freedom of

Information Act and the Privacy Act. PBGC’s rules that provide and restrict access to its records 

are set forth in 29 CFR Part 4901.

11. Sensitive questions. This collection of information does not call for submission of

information of a personal nature.

12. Hour burden on the public. The burden of this information collection is based on the 

following estimates:

Hours to Complete Premium Filing 

Type of Plan Single-employer 

Plans

Multiemployer

Plans

All 

Plans

Number of participants < 25 25-99 100-499 ≥ 500 < 500 ≥ 500 --

Comprehensive Premium Filing

• Plans that are exempt 

from VRP

# of plans 1,559 173 56 25 296 1,127 3,236

Hours per plan 3.5 3.5 3.5 3.5 3.5 3.5 --

Total hours 5,457 606 196 88 1,036 3,945 11,328

• Plans paying capped 

VRP & not reporting 

UVBs

# of plans 2,447 20 -- -- -- -- 2,467

Hours per plan 3.5 3.5 -- -- -- -- --

Total hours 8,565 70 -- -- -- -- 8,635

• Plans reporting UVBs # of plans 6,903 4,223 4,398 4,505 -- -- 20,029

Hours per plan 7.0 7.0 7.0 7.0 -- -- --

Total hours 48,321 29,561 30,786 31,535 -- -- 140,203

Total Hours 62,343 30,237 30,982 31,623 1,036 3,945 160,166

Thus (referring to the numbers in the “All Plans” column of the table) PBGC estimates that it 

will receive one premium filing per year from each of about 25,700 respondents (about 3,236 + 

2,467 + 20,029). (For simplicity, PBGC is disregarding the possibility that plans will make

estimated VRP filings followed up by reconciliation filings. Only 128 plans chose that twofiling option for 2011.) Of these 25,700 filings, PBGC estimates that about 20,000 will report 

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UVBs and about 5,700 (about 3,236 + 2,467) will not. The total time spent on premium filings 

will accordingly be about 160,000 hours.

The proportion of that time contracted out varies widely, with smaller plans generally 

contracting out virtually all of it and some large plans performing all the work in-house. Since 

most filers are smaller plans, PBGC makes a simplifying assumption that 95 percent of the time 

is contracted out. Thus the estimated hour burden on the public is approximately 8,000 hours 

(5 percent of 160,000 hours). The dollar equivalent of this hour burden may be estimated using 

the following data from the Bureau of Labor Statistics:

● Actuaries (occupational code 15-2011) are paid a mean hourly wage of $51.80.10

● Wage rates are about 70 percent of total labor costs (with the remaining 30 percent 

attributable to benefits costs).11 Thus total labor costs equal approximately the hourly 

wage rate divided by 70 percent (0.7).

For an hourly wage rate of $51.80, the total labor cost would thus be $74.00 per hour, and the 

dollar equivalent of 8,000 hours would be $592,000.

The recordkeeping requirement for premium information is not expected to impose any

significant burden, since most of the records covered by this requirement must already be 

retained under ERISA section 107. Since this recordkeeping burden is nominal, it is included in 

the estimated reporting burden, and no separate estimate of burden is made for recordkeeping 

under the regulation.

13. Cost burden on the public. PBGC estimates that 152,000 hours of filing preparation 

work (95 percent of 160,000 hours) is contracted out. Using the same methodology as in item 12 

above, and doubling the hourly labor cost (from $74 to $148) to account for overhead and other 

10 See http://www.bls.gov/oes/current/oes152011.htm . 11 See http://www.bls.gov/news.release/ecec.nr0.htm (see first paragraph).

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costs associated with contracting out, the estimated cost burden on the public would be about 

$22,496,000 (152,000 hours at $148 per hour). However, PBGC believes (based on the 

experience of PBGC pension actuaries) that the cost of pension actuarial services is far higher 

than the figures reported by BLS for actuaries generally. Accordingly, PBGC estimates the cost 

burden on the public as approximately $53,200,000 (152,000 hours at $350 per hour).

14. Costs to the Federal government. Based on its operational costs, personnel salaries, 

and overhead, PBGC estimates that the annual cost to the Federal Government of processing this 

collection of information is about $12,383,000. Approximately $11,706,000 of this amount is 

attributable to annual payments to contractors. 

PBGC estimates that its annual cost for contract oversight is approximately $677,000. In 

making this estimate, PBGC used annual wage costs from OPM’s wage chart for 201512 (for 

employees at GS-14, Step 5). PBGC assumed benefit costs are 27 percent of wage costs and a 

fixed annual overhead cost of $14,700.

12 See http://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2015/DCB.pdf.

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PBGC CONTRACTOR OVERSIGHT COSTS, ANNUAL

Number of 

Employees Salary Benefits Overhead Total Cost per Employee

Total 

Cost, All 

Employees

[1] [2] [3] [4] [5]=[2]+[3]+[4] [6]=[5]x[1]

Premium 

Operations 

Contract 

1 $121,635 $32,841 $14,700 $169,176 $169,176 

Premium 

System IT 

Contracts 

3 $121,635 $32,841 $14,700 $169,176 $507,529 

Total $676,706 

15. Change in burden. There is no change in the estimated annual burden of this 

collection of information because, as explained above, the changes to the information collection 

are expected to require very little additional time for relatively few filers in any year.

16. Publication plans. PBGC does not plan to publish the results of this collection of

information.

17. Display of expiration date. OMB has previously granted approval to omit the

expiration date from the premium forms and instructions.

18. Exceptions to certification statement. There are no exceptions to the certification 

statement for this submission.

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