Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 9243 

efficient use of airspace. This regulation 

is within the scope of that authority as 

it would modify R–4401A, B, and C, 

Camp Shelby, MS, to provide sufficient 

restricted airspace to contain hazardous 

activities. 

Related Airspace Proposal 

In addition to the proposed restricted 

area modification described above, the 

ANG is also requesting the FAA to 

modify the Military Operations Areas 

(MOA) associated with the Camp Shelby 

range. MOAs are not regulatory airspace 

and, therefore, are not published in 14 

CFR part 73. The ANG is requesting 

additional MOA airspace above the 

current De Soto 1 and De Soto 2 MOAs, 

to extend the MOA airspace supporting 

the range, up to 17,999 feet MSL. The 

FAA will seek comment on this separate 

airspace proposal through 

nonrulemaking procedures. 

Environmental Review 

This proposal will be subject to an 

environmental analysis in accordance 

with FAA Order 1050.1E, 

‘‘Environmental Impacts: Policies and 

Procedures,’’ prior to any FAA final 

regulatory action. 

List of Subjects in 14 CFR Part 73 

Airspace, Prohibited areas, Restricted 

areas. 

The Proposed Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

proposes to amend 14 CFR part 73 as 

follows: 

PART 73—SPECIAL USE AIRSPACE 

1. The authority citation for part 73 

continues to read as follows: 

Authority: 49 U.S.C. 106(g), 40103, 40113, 

40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389. 

§ 73.44 [Amended] 

2. § 73.44 is amended as follows: 

* * * * * 

R–4401A Camp Shelby, MS [Amended] 

By removing the current boundaries and 

substituting the following: 

Boundaries. Beginning at lat. 31°12′55′′ N., 

long. 89°11′03′′ W.; to lat. 31°11′49′′ N., long. 

89°00′00′′ W.; to lat. 31°10′16′′ N., long. 

88°56′34′′ W.; to lat. 31°04′37′′ N., long. 

88°56′34′′ W.; to lat. 31°04′37′′ N., long. 

89°11′00′′ W.; to the point of beginning. 

* * * * * 

R–4401B Camp Shelby, MS [Amended] 

By removing the current boundaries and 

substituting the following: 

Boundaries. Beginning at lat. 31°12′55′′ N., 

long. 89°11′03′′ W.; to lat. 31°11′49′′ N., long. 

89°00′00′′ W.; to lat. 31°10′16′′ N., long. 

88°56′34′′ W.; to lat. 31°04′37′′ N., long. 

88°56′34′′ W.; to lat. 31°04′37′′ N., long. 

89°11′00′′ W.; to the point of beginning. 

* * * * * 

R–4401C Camp Shelby, MS [Amended] 

By removing the current boundaries and 

substituting the following: 

Boundaries. Beginning at lat. 31°12′55′′ N., 

long. 89°11′03′′ W.; to lat. 31°11′49′′ N., long. 

89°00′00′′ W.; to lat. 31°10′16′′ N., long. 

88°56′34′′ W.; to lat. 31°04′37′′ N., long. 

88°56′34′′ W.; to lat. 31°04′37′′ N., long. 

89°11′00′′ W.; to the point of beginning. 

* * * * * 

Issued in Washington, DC, on February 12, 

2008. 

Ellen Crum, 

Acting Manager, Airspace and Rules Group. 

[FR Doc. E8–3138 Filed 2–19–08; 8:45 am] 

BILLING CODE 4910–13–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Part 4010 

RIN 1212–AB01 

Annual Financial and Actuarial 

Information Reporting; Pension 

Protection Act of 2006 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

amend PBGC’s regulation on Annual 

Financial and Actuarial Information 

Reporting to implement the provisions 

of the Pension Protection Act of 2006, 

Public Law 109–280 (‘‘PPA 2006’’), 

which changed the standards for 

determining which persons are required 

to report under ERISA section 4010 

(Authority to Require Certain 

Information) and made other changes to 

the reporting requirements. In addition 

to providing proposed guidance on 

implementing the PPA 2006 changes, 

PBGC is proposing to waive reporting in 

certain cases for controlled groups with 

aggregate plan underfunding of $15 

million or less, to modify the standards 

for determining which plans are 

exempted from the actuarial information 

requirements, to revise the actuarial 

information requirements to conform 

with other PPA 2006 changes, and to 

provide other clarifications. 

DATES: Comments must be submitted on 

or before April 21, 2008. 

ADDRESSES: Comments may be 

submitted by any of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the Web 

site instructions for submitting 

comments. 

• E-mail: reg.comments@pbgc.gov. 

• Fax: 202–326–4224. 

• Mail or Hand Delivery: Legislative 

and Regulatory Department, Pension 

Benefit Guaranty Corporation, 1200 K 

Street, NW., Washington, DC 20005–

4026. 

All submissions must include the 

Regulatory Identification Number for 

this rulemaking (RIN 1212–AB01). 

Comments received, including personal 

information provided, will be posted to 

http://www.pbgc.gov. Copies of 

comments may also be obtained by 

writing to Disclosure Division, Office of 

the General Counsel, Pension Benefit 

Guaranty Corporation, 1200 K Street, 

NW., Washington, DC 20005–4026, or 

calling 202–326–4040 during normal 

business hours. (TTY and TDD users 

may call the Federal relay service tollfree at 1–800–877–8339 and ask to be 

connected to 202–326–4040.) 

FOR FURTHER INFORMATION CONTACT: John 

H. Hanley, Director, Legislative and 

Regulatory Department; or Catherine B. 

Klion, Manager, Regulatory and Policy 

Division, Legislative and Regulatory 

Department, Pension Benefit Guaranty 

Corporation, 1200 K Street, NW., 

Washington, DC 20005–4026; 202–326–

4024. (TTY/TDD users may call the 

Federal relay service toll-free at 1–800–

877–8339 and ask to be connected to 

202–326–4024.) 

SUPPLEMENTARY INFORMATION: 

Background 

Pension Benefit Guaranty Corporation 

(PBGC) administers the pension 

insurance programs under Title IV of 

the Employee Retirement Income 

Security Act of 1974 (ERISA). In order 

to give PBGC an opportunity to 

anticipate and attempt to minimize 

potential liabilities that may arise from 

the termination of significantly 

underfunded plans, ERISA section 4010 

requires the reporting of actuarial and 

financial information by controlled 

groups with pension plans that have 

significant funding problems. That 

information is exempt from disclosure 

under section 552 of title 5, United 

States Code and may not be made 

public, except as may be relevant to any 

administrative or judicial action or 

proceeding. 

Pursuant to ERISA section 4010, 

PBGC issued its regulation on Annual 

Financial and Actuarial Information 

Reporting in 1995 (29 CFR part 4010). 

The regulation specifies the items of 

identifying, financial, and actuarial 

information that filers must submit 

under section 4010. PBGC reviews the 


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9244 Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 

1ERISA section 4010(d)(2)(B) was added by 

section 505 of PPA 2006 and provides that ‘‘the 

term ‘funding target attainment percentage’ has the 

meaning provided in section 302(d)(2) [sic].’’

However, ERISA section 302(d)(2) contains no 

reference to ‘‘funding target attainment percentage’’

but applies to certain retroactive plan amendments. 

On the other hand, ERISA section 303(d)(2) is 

entitled ‘‘Funding Target Attainment Percentage’’

and provides a definition for that term. Therefore, 

this proposed rule presumes the reference should 

have been to ERISA section 303(d)(2). 

2ERISA section 4010(a), which was unaltered by 

PPA 2006, provides that filers must provide the 

information specified by PBGC in regulations. 

information that is filed and enters it 

into an electronic database for more 

detailed analysis. Computer-assisted 

analysis of this information helps PBGC 

to anticipate possible major demands on 

the pension insurance system and to 

focus PBGC resources on situations that 

pose the greatest risks to that system. 

Because other sources of information are 

usually not as current as the section 

4010 information, the section 4010 

filing plays a major role in PBGC’s 

ability to protect participant and 

premium-payer interests. 

In March of 2005, PBGC amended part 

4010 to require electronic reporting and 

to make other less significant changes. 

Reporting is now accomplished through 

PBGC’s secure e-4010 Web-based 

application. 

PPA 2006 Changes 

On August 17, 2006, the President 

signed into law the Pension Protection 

Act of 2006, Public Law 109–280 (‘‘PPA 

2006’’), which made numerous changes 

in the area of pension law, including 

changes to ERISA section 4010. Prior to 

its amendment by PPA 2006, ERISA 

section 4010(b) required reporting, in 

general, if: (1) The aggregate unfunded 

vested benefits of all plans maintained 

by members of the controlled group 

exceeded $50 million, disregarding 

plans with no unfunded vested benefits 

(the ‘‘$50 Million Gateway Test’’); (2) 

the conditions specified in ERISA 

section 302(f) and section 412(n) of the 

Internal Revenue Code (‘‘Code’’) for 

imposing a lien for missed contributions 

exceeding $1 million had been met with 

respect to any plan maintained by any 

member of the controlled group; or (3) 

the Internal Revenue Service had 

granted minimum funding waivers in 

excess of $1 million to any plan 

maintained by any member of the 

controlled group, and any portion of the 

waiver(s) was still outstanding. 

Section 505 of PPA 2006 amended 

ERISA section 4010(b)(1), replacing the 

$50 Million Gateway Test with a test 

based on the funding target attainment 

percentage of each plan in the 

controlled group. As amended by PPA 

2006, ERISA section 4010(b)(1) requires 

reporting if: 

the funding target attainment percentage 

(as defined in subsection (d) 1) at the end of 

the preceding plan year of a plan maintained 

by the contributing sponsor or any member 

of its controlled group is less than 80 percent. 

(Current filers are reminded that PBGC 

regulations provide that if a filer for the 

immediately preceding information year 

is not required to file for the current 

information year, the filer must submit 

information, in accordance with the 

instructions on PBGC’s Web site, 

demonstrating why a filing is not 

required for the current information 

year. This requirement would apply, for 

example, to a filer who was required to 

file for the information year ending on 

December 31, 2007, based on the $50 

million Gateway Test, but who is not 

required to file for the information year 

ending on December 31, 2008, based on 

the new funding target attainment 

percentage gateway test.) 

Although PPA 2006 did not alter the 

substance of the other two triggers 

(found in paragraphs (b)(2) and (b)(3) of 

ERISA section 4010), it made other 

changes that affect these provisions. For 

instance, because PPA 2006 made 

changes to references in paragraph 

(b)(2), references in § 4010.4(a) (which 

describes who must file under part 

4010) need to be amended. Similarly, 

PPA 2006 made changes to the 

minimum funding waiver provisions, 

which are referred to in part 4010. 

Finally, PPA 2006 added ERISA 

sections 4010(d)(1) and 4010(e). ERISA 

section 4010(d)(1) lists three items that 

must be included in the information 

filers submit to PBGC.2 ERISA section 

4010(e) requires PBGC to submit to 

Congress an annual summary report of 

the information submitted to PBGC 

pursuant to ERISA section 4010. 

Summary of Proposed Rule 

This proposed rule would amend part 

4010 of PBGC’s regulations to 

implement the change to ERISA section 

4010(b)(1). In particular, this proposed 

rule provides guidance on how to 

determine whether reporting is required 

with respect to a plan based on the 

plan’s funding target attainment 

percentage. The proposed rule would 

also make conforming changes to 

address the PPA 2006 changes affecting 

the section 4010 reporting triggers based 

on the imposition of certain liens or on 

the granting of certain minimum 

funding waivers. 

In conjunction with these changes, 

PBGC also is proposing: (1) To waive 

reporting in certain cases for controlled 

groups with aggregate underfunding of 

$15 million or less; (2) to modify the 

standards for determining which plans 

are exempted from reporting actuarial 

information; (3) to modify the reporting 

requirements in light of the PPA 2006 

changes; and (4) to make other 

clarifications (for instance, the proposed 

rule would provide guidance for 

reporting for multiple employer plans 

and for dealing with certain unusual 

timing issues with respect to plan years 

and information years). 

The proposed rule would be 

applicable to information years 

beginning after December 31, 2007. (In 

the rare case of a short information year 

beginning in 2008, such as an 

information year beginning on January 

1, 2008, and ending on March 31, 2008, 

the employer should contact PBGC to 

request a reporting extension.) However, 

the changes made to paragraphs (a) and 

(b) of § 4010.8 (Plan actuarial 

information) are effective only for plan 

years beginning after December 31, 

2007. 

Discussion of Proposed Rule 

Information Year 

In the original proposed rule under 

ERISA section 4010 (60 CFR 35308, July 

6, 1995), PBGC introduced the concept 

of ‘‘information year’’ The information 

year is the fiscal year, except that in the 

case of controlled group members with 

different fiscal years, the information 

year is the calendar year (§ 4011.5). In 

the preamble to that original proposed 

rule, PBGC explained that ‘‘information 

year’’ serves four purposes: 

First, it will help persons determine which 

plan years and fiscal years to use to identify 

Filers. Second, it will help Filers determine 

whether a pension plan qualifies for a filing 

exemption. Third, it is used to identify the 

information to be submitted by a Filer. 

Fourth, it establishes the due date for 

submission of required information by a 

Filer. The regulation does not require a Filer 

to change its fiscal year or the plan year of 

any pension plan. Further, the regulation 

does not require a Filer to report financial 

information on any accounting period other 

than an existing fiscal year or to report 

actuarial information for any period other 

than the existing plan year of a pension plan. 

Generally, the Information Year is the fiscal 

year of the Filer. If all members of a 

controlled group do not report financial 

information on the same fiscal year, the 

Information Year is the calendar year. 

‘‘Information year’’ has been integral to 

the process of reporting under ERISA 

section 4010 and PBGC finds no 

indication that PPA 2006 alters this. 

Therefore, under the proposed rule, 

reporting will continue to be based on 

the concept of ‘‘information year.’’

Under the proposed rule, reporting 


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Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 9245 

3ERISA section 303(g)(2) provides that the 

valuation date of a plan for any plan year is the first 

day of the plan year, except that certain small plans 

may designate any date in the plan year to be the 

valuation date for the plan year and succeeding 

plan years. For this purpose, small plans are plans 

with 100 or fewer participants on each day of the 

plan year, when aggregated with all plans in the 

controlled group. Because PBGC proposes to 

exclude controlled groups with under $15 million 

in underfunding, plans that would be considered 

small plans for purposes of determining valuation 

dates would rarely be subject to reporting under 

part 4010. Therefore, the valuation date for nearly 

all plans subject to 4010 reporting would be the 

beginning of the plan year. 

would be required (unless otherwise 

waived) if any plan within the 

controlled group has a funding target 

attainment percentage of less than 80 

percent for the plan year ending within 

the information year (the ‘‘80% Funded 

Gateway Test’’). 

The proposed rule also would clarify 

how the 4010 requirements apply to 

certain unusual situations, such as 

when a plan has two plan years that end 

in the information year or has no plan 

year that ends in the information year. 

Under the proposed rule, the last plan 

year ending on or before the end of the 

information year would be treated as the 

plan year that ends within the 

information year. In addition, in order 

to prevent circularity, the proposed rule 

would provide that when a controlled 

group reports on the basis of two 

different fiscal years, the determination 

of whether an entity is exempt is made 

on the basis of a calendar year 

information year. 

Funding Target Attainment Percentage 

As discussed above, ERISA section 

4010(b)(1), as amended by PPA 2006, 

requires reporting if the funding target 

attainment percentage at the end of the 

preceding plan year of a plan 

maintained by the contributing sponsor 

or any member of its controlled group 

is less than 80 percent. ERISA section 

303(d)(2) provides that the ‘‘funding 

target attainment percentage’’ of a plan 

for a plan year is the ratio (expressed as 

a percentage) which—

(A) the value of plan assets for the plan 

year (as reduced under subsection (f)(4)(B)), 

bears to 

(B) the funding target of the plan for the 

plan year (determined without regard to 

subsection (i)(1)). 

In accordance with ERISA section 

303(g)(1), for a plan year, the value of 

plan assets and the funding target of a 

plan are determined as of the valuation 

date of the plan for such plan year. 

Under ERISA section 303(g)(2), the 

valuation date for nearly all plans 

subject to 4010 reporting will be the 

beginning of the plan year.3 Thus, while 

section 4010(b)(1) refers to the funding 

target attainment percentage at the end 

of the preceding plan year, in nearly all 

cases both elements of the funding 

target attainment percentage must be 

calculated as of the beginning of the 

plan year. This creates an ambiguity 

with regard to the date as of which the 

funding target attainment percentage is 

to be calculated for purposes of section 

4010(b)(1). 

The proposed rule would resolve this 

ambiguity by providing that the funding 

target attainment percentage (for 

purposes of the 80% Funded Gateway 

Test) would be determined as of the 

valuation date for the plan year ending 

within the information year—generally, 

the first day of the plan year that ends 

within the information year. Because 

plans will need to determine the 

funding target attainment percentage as 

of the valuation date for other purposes, 

measuring the funding target attainment 

percentage as of the valuation date for 

the 80% Funded Gateway Test should 

be less burdensome on prospective filers 

than requiring a separate determination 

as of the end of the preceding plan year. 

In addition, using this measurement 

date will give controlled groups ample 

time to determine whether reporting is 

required pursuant to the 80% Funded 

Gateway Test and to prepare the section 

4010 filing (if required) by the due date. 

Reduction of Assets Based on Carryover 

and Prefunding Balances 

ERISA section 303(d)(2) provides that 

in determining the funding target 

attainment percentage of a plan for a 

plan year, plan assets are reduced by the 

amount of the prefunding balance and 

the funding standard carryover balance. 

Plan sponsors are permitted under 

ERISA section 303(f) to make certain 

elections to use, increase, or reduce a 

prefunding balance or a funding 

standard carryover balance effective at 

the beginning of the plan year. Under 

PPA 2006, the Department of the 

Treasury (‘‘Treasury’’) is to provide 

guidance on the timing and manner of 

these elections. On August 31, 2007, 

Treasury published a proposed rule 

(Benefit Restrictions for Underfunded 

Pension Plans) in the Federal Register 

at 72 FR 50544, which would provide 

guidance on such elections. That rule 

would require any such election to 

satisfy certain timing rules. As 

proposed, those Treasury rules would 

require an election that affects the 

funding target attainment percentage for 

a plan year to be made well before the 

due date for the section 4010 filing. 

Therefore, PBGC’s proposed rule 

assumes that filers will have no 

difficulty including these elections in 

determinations made for purposes of 

section 4010. However, if under final 

Treasury regulations it is possible for a 

plan sponsor to make such an election 

after the due date for the section 4010 

filing, the PBGC would expect 

controlled groups to anticipate any such 

election when determining the funding 

target attainment percentage, regardless 

of when the election is made. 

Certain Plans to Which Special Funding 

Rules Apply 

Sections 104, 105, and 106 of PPA 

2006 defer the effective date of the 

funding amendments for certain plans 

described in those sections, which in 

general deal with plans of cooperatives, 

plans affected by settlement agreements 

with PBGC, and plans of government 

contractors. Section 402 of PPA 2006 

applies special funding rules to certain 

plans of commercial passenger airlines 

and airline caterers. Section 402 of PPA 

was amended by the U.S. Troop 

Readiness, Veterans’ Care, Katrina 

Recovery, and Iraq Accountability 

Appropriations Act, 2007, Public Law 

110–28. None of these provisions affects 

the applicability of the amendments to 

ERISA section 4010. The proposed rule 

provides explicitly that plans in this 

small group must apply part 4010 in the 

same manner as all other plans (i.e., 

without regard to these sections of PPA). 

However, for purposes of § 4010.8(a)(9) 

(which specifies what information must 

be contained in the actuarial valuation 

report), the filer must provide details of 

any such funding rules that are 

applicable to the plan. Where the 

different funding rules for this small 

group affect an item described in 

§ 4010.8(a)(9), PBGC would expect that 

filers could, in consultation with PBGC, 

provide appropriately modified 

information. 

Minimum Funding Waivers 

ERISA section 4010(b) requires 4010 

reporting if the Internal Revenue Service 

has granted minimum funding waivers 

in excess of $1 million to any plan 

maintained by any member of the 

controlled group and as of the end of the 

plan year ending within the information 

year there is an outstanding balance on 

the waiver. 

In general, the waiver will continue to 

be included for all five years of the 

amortization period, unless the waiver 

amortization bases are reduced to zero 

pursuant to ERISA section 303(e)(5) or 

Code section 430(e)(5). PBGC notes that 

there is some uncertainty as to the effect 

of PPA 2006 on the carryover balances 

for funding waivers granted before 2008. 

The proposed rule makes clear that the 

statutory amortization period will not be 

deemed to have ended merely because 


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9246 Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 

4Q&A 17 in the 2001 Blue Book and Q&A 19 in 

the 2002 Blue Book, available at www.pbgc.gov. 

Blue Books are summaries of the questions and 

answers discussed at meetings between PBGC staff 

and representatives of the Enrolled Actuaries 

Program Committee in preparation for the annual 

Enrolled Actuaries Meetings. The summaries reflect 

the views of individual staff members and do not 

represent the official position of PBGC. 

5Q&A 25 in the 2000 Blue Book. 

the funding waivers granted with 

respect to plan years beginning before 

2008 are not carried over as a separate 

amortization base for the post-2007 plan 

years. 

To simplify the regulation, the 

proposed rule would eliminate the 

provision in the current regulation that 

provides that a minimum funding 

waiver is not outstanding under certain 

circumstances where an agreement 

requires the maintenance of a specific 

credit balance. PBGC found that this 

occurred infrequently. In those cases 

where it does occur, PBGC will consider 

waiving the 4010 reporting requirement 

on a case-by-case basis under § 4010.11. 

Reporting Requirements 

In addition to the requirements 

described in ERISA section 4010(a), 

which provides that filers must submit 

certain financial and actuarial 

information as prescribed by PBGC in 

regulations, ERISA section 4010(d), as 

amended by PPA 2006, specifies three 

items that are required to be filed with 

PBGC. That section provides that 

information filed under section 4010 

must include: 

(1) The amount of benefit liabilities under 

the plan determined using the assumptions 

used by the corporation [PBGC] in 

determining liabilities; 

(2) The funding target of the plan 

determined as if the plan has been in at-risk 

status for at least 5 plan years; and 

(3) The funding target attainment 

percentage of the plan. 

The proposed rule provides detailed 

guidance on how to determine benefit 

liabilities as described in item (1), i.e., 

how to determine benefit liabilities for 

ongoing plans using the assumptions 

used by PBGC in determining liabilities. 

This determination would be similar to 

that set forth in the current regulation 

under § 4010.8(d)(2). As with the 

current regulation, the proposed rule 

would require filers to use the 

assumptions prescribed by §§ 4044.51 

through 4044.57. However, as explained 

below, in two respects the proposed 

regulation would modify or expand 

upon previous guidance (including 

informal guidance) given by PBGC or 

PBGC staff relating to certain 

assumptions not specified in §§ 4044.51 

through 4044.57. 

First, the proposed rule provides that 

solely for purposes of determining the 

earliest retirement age (ERA) at 

valuation date and the unreduced 

retirement age (URA) to be used when 

determining expected retirement age 

(XRA), an active participant would be 

treated as continuing in service after the 

end of the plan year. This provision 

would modify informal guidance 

provided by PBGC that future expected 

service should be disregarded when 

determining XRAs for 4010 liability 

calculations.4 This modification would 

eliminate an inconsistency between 

how filers compute benefit liabilities for 

4010 purposes and how PBGC 

calculates benefit liabilities as part of its 

plan monitoring functions. The main 

impact of this change on 4010 filers 

would be that they would need to make 

a one-time modification of their 

computer programs. The proposed rule 

includes examples demonstrating how 

XRA would be calculated and applied 

in determining benefit liabilities. 

Second, the proposed rule provides 

that a 4010 filer would be permitted to 

use pre-retirement assumptions other 

than mortality (such as turnover and 

disability assumptions) as long as the 

filer uses the same pre-retirement 

assumptions used to determine 

minimum required contributions. This 

provision would expand informal 

guidance provided by PBGC that it is 

permissible for 4010 purposes to use 

pre-retirement assumptions other than 

mortality.5 The informal guidance was 

silent on which pre-retirement 

assumptions could be used. In PBGC’s 

experience, most actuaries who choose 

to use pre-retirement assumptions for 

4010 purposes use those same preretirement assumptions to determine 

minimum required contributions. 

Because the actuary certifies that the 

funding assumptions represent his best 

estimate of future experience, this 

practice is entirely reasonable, and the 

proposed rule would codify it for 

consistency. 

The proposed rule also would clarify 

that, with the exception of preretirement assumptions, any other 

assumptions used to determine the 

minimum required contribution that are 

not overridden by §§ 4044.51 through 

4044.57 must be used when determining 

benefit liabilities. 

In addition to providing detailed 

guidance on how to determine benefit 

liabilities, the proposed rule reflects 

new requirements (under PPA 2006) to 

provide the funding target of the plan 

determined as if the plan has been in atrisk status for at least 5 plan years, and 

the funding target attainment percentage 

of the plan. Finally, for each plan (other 

than an exempt plan), the proposed rule 

would require filers to report whether 

the plan, at any time during the plan 

year, was subject to any of the 

limitations described in ERISA section 

206(g) and, if so, which limitations 

applied, when such limitations applied, 

and when they were lifted (if 

applicable). 

As with the current rule, the proposed 

rule would require submission of the 

actuarial valuation report for the plan 

year ending within the filer’s 

information year and would specify 

what information must be included in 

or attached to the report. PBGC is 

proposing to modify the required items 

of information to better suit the new 

funding structure instituted by PPA 

2006. The required information is 

information that PBGC expects most 

actuaries would include in valuation 

reports once PPA 2006 takes effect (e.g., 

target normal cost, information on 

shortfall amortization bases, information 

on funding assumptions, an age/service 

scatter). However, because the funding 

rules have changed so dramatically as a 

result of PPA 2006, and because 

Treasury regulations implementing the 

new funding rules are not yet final, the 

list of required items may exclude some 

relevant actuarial information. To allow 

PBGC to expand the list of required 

items as it gains more experience with 

the new funding requirements under 

PPA 2006, the proposed rule would 

provide that the online instructions to 

PBGC’s secure e-4010 web-based 

application may require that additional 

items be included in (or attached to) the 

valuation report. PBGC expects that any 

additional items would be items 

typically required to be reported on the 

Form 5500 schedule for defined benefit 

plan actuarial information (Schedule 

SB). 

Because the new actuarial reporting 

requirements are geared to the new 

funding rules, which generally are 

applicable to plan years beginning after 

December 31, 2007, the changes made to 

the actuarial information requirements 

under § 4010.8(a) and (b) would not 

apply to plan years beginning before 

2008. Information for such plan years 

would be based upon the prior 

regulation. (Note that the other 

paragraphs of § 4010.8 (as proposed), 

such as the new rules for determining 

which plans would be exempt from 

actuarial reporting requirements 

(§ 4010.8(c)) and the determination of 

liabilities (§ 4010.8(d)) would apply to 

all plan years ending within an 

information year that begins on or after 

January 1, 2008.) 


rwilkins on PROD1PC63 with PROPOSALS
Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 9247 

Waiver for Controlled Groups With Plan 

Underfunding Not Exceeding $15 

Million 

The Technical Explanation of PPA 

2006 prepared by the Staff of the Joint 

Committee on Taxation states: ‘‘It is 

intended that the PBGC may waive the 

requirement [for reporting under ERISA 

section 4010 based upon the 80% 

Funded Gateway Test] in appropriate 

circumstances, such as in the case of 

small plans.’’ Moreover, PBGC seeks to 

balance the benefit it derives from 

annual reporting of financial and 

actuarial information with the burden 

reporting imposes on filers. As the total 

underfunding in a filer’s controlled 

group becomes smaller, the benefit 

PBGC derives from reporting lessens, 

while the burden on the filer tends to 

increase relative to the filer’s resources. 

Based on its experience, PBGC has 

determined that controlled groups with 

aggregate plan underfunding of $15 

million or less present a level of risk 

and exposure to PBGC that is 

sufficiently low to warrant the waiver of 

reporting based on the 80% Funded 

Gateway Test. 

Therefore, PBGC is proposing to 

waive reporting for a controlled group if 

the aggregate plan underfunding does 

not exceed $15 million (disregarding 

those plans with no underfunding); 

however, the waiver would not apply if 

reporting is required for any reason 

other than having a funding target 

attainment percentage below 80 percent. 

For this purpose, plan underfunding 

would equal the ‘‘4010 funding 

shortfall.’’ The proposed rule would 

define the 4010 funding shortfall as the 

funding shortfall defined in ERISA 

section 303(c)(4), but determined 

without regard to the credit balance 

reduction under ERISA section 

303(f)(4)(B). 

Exempt Plans 

Section 4010.8(c) of PBGC’s current 

regulation provides that reporting 

actuarial information is not required for 

plans with fewer than 500 participants. 

(It also provides an exemption for 

overfunded plans.) Through means 

other than reporting under part 4010, 

such as through PBGC’s early warning 

program (see Technical Update 00–3, 

available at www.pbgc.gov) and 

reportable events notices, PBGC has 

discovered that a number of plans with 

fewer than 500 participants have 

significant underfunding and thereby 

represent significant financial exposure 

for PBGC. In such cases, PBGC needs 

actuarial information on these plans to 

properly evaluate its risk and exposure 

for the entire controlled group. 

Therefore, PBGC is proposing to modify 

the exemption from reporting actuarial 

information. Under the proposed rule, 

actuarial information would not be 

required if (1) the plan has fewer than 

500 participants, and (2) the plan’s 4010 

funding shortfall does not exceed $15 

million. For this purpose, the 4010 

funding shortfall would be determined 

as of the valuation date for the plan year 

ending within the information year and 

would be based upon the same 

methodology prescribed for purposes of 

determining whether the $15 million 

controlled-group waiver would apply. 

The proposed rule retains the 

exemption from providing actuarial 

information for plans that have no 

unfunded benefits. For this purpose, 

unfunded benefits would be determined 

in the same manner as they would be 

determined for purposes of ERISA 

section 4010(d)(1), which requires the 

reporting of benefit liabilities using the 

assumptions used by PBGC. The only 

difference is that the filer would be 

allowed to use the retirement age 

assumptions used by the plan for that 

plan year for purposes of section 303 of 

ERISA (without regard to the at-risk 

assumptions of section 303(i) of ERISA) 

instead of the retirement age 

assumptions in § 4044.8(d)(2). 

Note that, as under the current 

regulation, these exemptions from 

reporting actuarial information do not 

apply if the plan has a funding waiver 

or has been more than 10 days late with 

minimum funding contributions. 

Multiple Employer Plans 

Over the last decade, PBGC has 

received a number of inquiries on the 

application of ERISA section 4010 to 

contributing sponsors of multiple 

employer plans. The proposed rule 

would provide for reduced reporting for 

certain multiple employer plans. In 

general, only information on employers 

that are among the 10 largest employers 

in terms of participants (for hourly 

plans) or contributions (for salaried 

plans) would need to be provided. Of 

course, PBGC could request additional 

information pursuant to § 4010.6(b). In 

addition, the proposed rule would allow 

a filer to provide the actuarial 

information on a multiple employer 

plan by reference if that information (for 

the same plan year) has been provided 

by another filer. The proposed rule 

would clarify that the entire 

underfunding (i.e., funding shortfall) of 

a multiple employer plan is counted 

when determining whether the $15 

million controlled-group waiver applies 

to an employer that is a contributing 

sponsor of the multiple employer plan. 

It also would clarify that filers are not 

required to provide identifying or 

financial information for another 

contributing sponsor of the multiple 

employer plan if that other contributing 

sponsor is not a member of the filer’s 

controlled group. 

Applicability 

Section 505(e) of PPA 2006 provides 

that the amendments made by section 

505 apply with respect to ‘‘years 

beginning after 2007.’’ We note that this 

applicability provision of PPA 2006 

uses the term ‘‘year’’ rather than ‘‘plan 

year,’’ although the term ‘‘plan year’’

appears in other applicability provisions 

in PPA 2006. PBGC interprets this 

section of PPA to mean the amendments 

apply to any information year beginning 

after 2007. Therefore, these rules, if 

adopted, would apply to information 

years beginning after 2007. In the rare 

case of a short information year 

beginning in 2008 (for example, an 

information year beginning on January 

1, 2008, and ending on March 31, 2008), 

the employer should contact PBGC to 

obtain a reporting extension. However, 

the changes made to paragraphs (a) and 

(b) of § 4010.8 (Plan actuarial 

information) are effective only for plan 

years beginning after December 31, 

2007. 

Transition Rules 

Under the proposed rule, a number of 

valuation determinations (for instance, 

the 80% Funded Gateway Test, the $15 

million controlled-group waiver, and 

the $15 million small-plan exemption 

from reporting actuarial information) 

would be made as of the valuation date 

for the plan year ending within the 

information year. For these purposes, 

the valuation determination is based on 

either the funding target attainment 

percentage or the 4010 funding shortfall 

as of the valuation date. The provisions 

of PPA 2006 defining funding target 

attainment percentage and funding 

shortfall apply only to plan years 

beginning after 2007. Therefore, for plan 

years beginning in 2007 but ending in 

information years that begin after 2007 

(and thus covered by these proposed 

rules), the funding target attainment 

percentage and funding shortfall are not 

prescribed by statute. As a result, this 

proposed rule would require employers 

to use a surrogate for determining the 

funding target attainment percentage 

and funding shortfall for plan years 

beginning before January 1, 2008. 

PBGC’s proposed surrogate would be 

similar to a rule proposed by Treasury 

in its proposed benefit restrictions rule. 

Section 1.436–1(j)(2)(iii) of Treasury’s 

proposed rule provides that, for benefit 

restriction purposes, the funding target 


rwilkins on PROD1PC63 with PROPOSALS
9248 Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 

attainment percentage for a pre-effective 

plan year is determined as a fraction 

(expressed as a percentage), the 

numerator of which is the value of net 

plan assets, and the denominator of 

which is the plan’s current liability on 

the valuation date for the last plan year 

that begins before 2008 (the 2007 plan 

year). For this purpose, the value of plan 

assets is determined under Code section 

412(c)(2) as in effect for the 2007 plan 

year, except that the value of plan assets 

prior to subtraction of the plan’s 

funding standard account credit balance 

described below can neither be less than 

90 percent of the fair market value of 

plan assets nor greater than 110 percent 

of the fair market value of plan assets on 

the valuation date for that plan year. In 

addition, if a plan has a funding 

standard account credit balance as of 

the valuation date for the 2007 plan 

year, that balance must be subtracted 

from the asset value described above as 

of that date unless the value of plan 

assets is greater than or equal to 90 

percent of the plan’s current liability 

determined under Code section 412(l)(7) 

on the valuation date for the 2007 plan 

year. Finally, if the employer makes an 

election to reduce some or all of the 

funding standard carryover balance as of 

the first day of the first plan year 

beginning in 2008 in accordance with 

§ 1.430(f)–1(e) of Treasury’s proposed 

rule, then the present value (determined 

as of the valuation date for the prior 

year using the valuation interest rate for 

that prior year) of the amount so 

reduced is not treated as part of the 

funding standard account credit balance 

when that balance is subtracted from the 

value of net plan assets. 

PBGC’s proposed rule would provide 

that the funding target attainment 

percentage for section 4010 purposes for 

plan years beginning before 2008 would 

equal the funding target attainment 

percentage as determined under 

Treasury’s proposed special rule 

(§ 1.436–1(j)(2)(iii) of the regulation as 

proposed), except that: (1) Current 

liability would be determined by using 

the highest allowable interest rate for 

the plan year; and (2) there would be no 

special rule providing that if the value 

of plan assets is greater than or equal to 

90 percent of the plan’s current liability 

determined under Code section 412(l)(7) 

on the valuation date for the 2007 plan 

year, the value of assets is not reduced 

by the credit balance. 

The surrogate for 4010 funding 

shortfall would equal the excess, if any, 

of the plan’s current liability over the 

value of plan assets. For this purpose, 

both current liability and plan assets 

would be determined in the same 

manner as determined for purposes of 

PBGC’s transition rule for determining 

funding target attainment percentage, 

except that assets would not be reduced 

by the credit balance in the funding 

standard account (i.e., there would be 

no reduction as described in 26 CFR 

1.436–1(j)(2)(iii)(B)(2) and (3) (as 

proposed)). 

The following example demonstrates 

how the transition rules would work. 

Example. Assume Company X, which 

reports based on a calendar year information 

year, maintains Plan A, which has a plan 

year beginning on October 1 and ending on 

September 30 and an October 1 valuation 

date. The October 1, 2007 valuation results 

were as follows: actuarial value of assets of 

$115 million, market value of assets of $100 

million and current liability of $135 million. 

In addition, assume the funding standard 

account credit balance as of September 30, 

2007, was $20 million and that the employer 

does not elect to reduce the October 1, 2008, 

carryover balance at all. 

For the section 4010 report due on April 

15, 2009, the proposed rule prescribes that 

the 80% Funded Gateway Test is based on 

the plan’s funding target attainment 

percentage as of October 1, 2007. However, 

because funding target attainment percentage 

for purposes of ERISA section 303 applies to 

plan years beginning after 2007, the funding 

target attainment percentage is determined 

using a surrogate prescribed in § 4010.4(b)(3) 

of the proposed rule. 

The surrogate funding target attainment 

percentage is calculated as follows: First, 

because the 2007 actuarial value of assets is 

more than 10% above the market value of 

assets, assets are reduced to $110 million. 

Next, assets are reduced by the credit balance 

resulting in an asset value for the Funding 

Target Attainment Percentage of $90 million 

($110 million minus $20 million). The 

surrogate Funding Target Attainment 

Percentage is the ratio of $90 million to the 

plan’s current liability using the highest 

permitted rate ($135 million). So, the 

surrogate Funding Target Attainment 

Percentage is 67% ($90/$135). Since this is 

less than 80%, a section 4010 filing is 

required (unless the aggregate 4010 funding 

shortfall is less than $15 million). 

(Note that if the employer elects to reduce 

some, or all, of the October 1, 2008, carryover 

balance in accordance with the election 

procedures provided in 26 CFR 1.430(f)–1(e) 

(as proposed), the discounted value of the 

waived amount would be subtracted from the 

$20 million credit balance before the $20 

million credit balance is subtracted from the 

$110 million adjusted asset value.) 

The surrogate 4010 funding shortfall is 

determined under § 4010.11(c)(2) and equals 

the excess, if any, of liability using the 

highest permitted rate ($135 million) over 

assets (after any adjustments to bring the 

asset value within 10% of market value). For 

this calculation, assets are not reduced by the 

credit balance. Therefore, the 4010 funding 

shortfall is the excess of $135 million over 

$110 million, or $25 million. 

Compliance With Rulemaking 

Guidelines 

PBGC has determined that this 

proposed rule is a ‘‘significant 

regulatory action’’ under Executive 

Order 12866. The Office of Management 

and Budget has therefore reviewed the 

proposed rule under Executive Order 

12866. 

Pursuant to section 1(b)(1) of E.O. 

12866 (as amended by Executive Order 

13422), PBGC has determined that 

regulatory action is required in this area. 

Principally, this regulatory action is 

necessary to implement the changes 

made to ERISA section 4010 by PPA 

2006. The proposed rule would provide 

guidance without which plan sponsors 

would have significant difficulty 

determining whether reporting is 

required. Moreover, ERISA section 4010 

specifically provides that the actuarial 

and financial information to be 

reported, as well as the deadline for 

reporting, are as specified by PBGC in 

regulations. Finally, the proposed rule 

would provide exemptions, waivers, 

and reporting simplifications that 

reduce reporting burden for numerous 

plan sponsors. 

PBGC certifies under section 605(b) of 

the Regulatory Flexibility Act that the 

amendments in this proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities. This proposed rule would 

implement statutory changes made by 

Congress. It provides guidance on how 

to determine whether reporting under 

ERISA section 4010 is required and 

what to report. Furthermore, PBGC is 

providing an exemption for controlled 

groups that have total plan 

underfunding of $15 million or less. 

Accordingly, as provided in section 605 

of the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.), sections 603 and 604 

do not apply. 

The information requirements relating 

to reporting under ERISA section 4010 

have been approved by the Office of 

Management and Budget under the 

Paperwork Reduction Act (OMB control 

number 1212–0049, expires February 

29, 2008). 

PBGC is submitting the information 

requirements relating to these 

amendments to the Office of 

Management and Budget for review and 

approval under the Paperwork 

Reduction Act. (This submission also 

includes the information requirements 

relating to the current collection of 4010 

information.) Copies of PBGC’s request 

may be obtained free of charge by 

contacting the Disclosure Division of the 

Office of the General Counsel of PBGC, 


rwilkins on PROD1PC63 with PROPOSALS
Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 9249 

1200 K Street, NW., Washington, DC 

20005, 202–326–4040. 

PBGC expects that once the new rules 

take effect it will receive section 4010 

filings from about 300 contributing 

sponsors or controlled group members 

annually and that the total annual 

burden of the collection of information 

will be about 2,600 hours and 

$5,167,500. (Detailed information on 

these burden estimates is included in 

PBGC’s request.) 

Comments on the paperwork 

provisions under this proposed rule 

should be mailed to the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

Attention: Desk Officer for Pension 

Benefit Guaranty Corporation, via 

electronic mail at 

OIRA_DOCKET@omb.eop.gov or by fax 

to (202) 395–6974. Although comments 

may be submitted through April 21, 

2008, the Office of Management and 

Budget requests that comments be 

received on or before March 21, 2008 to 

ensure their consideration. Comments 

may address (among other things)—

• Whether the proposed collection of 

information is needed for the proper 

performance of PBGC’s functions and 

will have practical utility; 

• The accuracy of PBGC’s estimate of 

the burden of the proposed collection of 

information, including the validity of 

the methodology and assumptions used; 

• Enhancement of the quality, utility, 

and clarity of the information to be 

collected; and 

• Minimizing the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submission of 

responses. 

List of Subjects in 29 CFR Part 4010 

Pension insurance, Pensions, 

Reporting and recordkeeping 

requirements. 

For the reasons given above, PBGC 

proposes to amend 29 CFR parts 4010 as 

follows. 

PART 4010—ANNUAL FINANCIAL AND 

ACTUARIAL REPORTING 

1. The authority citation for part 4010 

continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1310. 

§ 4010.1 [Amended] 

2. Section 4010.1 is amended by 

removing the words ‘‘the PBGC under 

section 4010 of ERISA’’ and adding in 

their place the words ‘‘PBGC under 

ERISA section 4010’’; and by removing 

the last sentence of the section 

(beginning with the words ‘‘This part 

applies * * *’’). 

3. In § 4010.2: 

a. The words ‘‘of this part’’ are 

removed from the definitions of 

‘‘exempt entity,’’ ‘‘exempt plan,’’ ‘‘filer,’’

and ‘‘information year.’’

b. The definition of ‘‘exempt entity’’

is amended by removing the figures 

‘‘4010.4(d)’’ and adding in their place 

the figures ‘‘4010.4(c)’’. 

c. The definition of ‘‘information 

year’’ is amended by removing the 

words ‘‘the year’’ and adding in their 

place the words ‘‘the information year’’. 

d. The definition of ‘‘fair market value 

of the plan’s assets’’ is revised, and five 

new definitions are added, to read as 

follows: 

§ 4010.2 Definitions. 

* * * * * 

4010 funding shortfall means, with 

respect to a plan for a plan year, the 

4010 funding shortfall as determined 

under § 4010.11(c). 

At-risk status means, with respect to 

a plan for a plan year, at-risk status as 

defined in ERISA section 303(i)(4). 

* * * * * 

Fair market value of the plan’s assets 

means the fair market value of the plan’s 

assets determined without regard to any 

contributions receivable (i.e., 

contributions made after the date as of 

which the fair market value of the plan’s 

assets is determined are not included). 

* * * * * 

Funding target means, with respect to 

a plan for a plan year, the funding target 

as provided under ERISA section 

303(d)(1) determined as of the valuation 

date for the plan year. 

Funding target attainment percentage 

means, with respect to a plan for a plan 

year, the funding target attainment 

percentage as determined under 

§ 4010.4(b) for the plan year. 

* * * * * 

Valuation date means, with respect to 

a plan for a plan year, the valuation date 

as determined under ERISA section 

303(g)(2). 

§ 4010.3 [Amended] 

4. In § 4010.3, paragraph (a) is 

amended by revising the paragraph 

heading to read ‘‘General.’’; by removing 

the words ‘‘exempt plans) and except’’

and adding in their place the words 

‘‘exempt plans), and except’’ (with a 

comma after the closing parenthesis); by 

removing the words ‘‘waivers have been 

granted under § 4010.11’’ and adding in 

their place the words ‘‘one or more 

waivers under § 4010.11 apply’’; by 

removing the words ‘‘plans maintained 

by members of a controlled group’’ and 

adding in their place the words ‘‘plans 

maintained by members of the 

controlled group’’; by removing the 

words ‘‘the PBGC’’ (where they appear 

twice in the paragraph) and adding in 

their place each time the word ‘‘PBGC’’; 

and by removing the words ‘‘the 

PBGC’s’’ and adding in their place the 

word ‘‘PBGC’s’’. 

5. In § 4010.4: 

a. Paragraph (a) introductory text is 

amended by removing the words 

‘‘paragraph (d)’’ and adding in their 

place the words ‘‘paragraph (c)’’. 

b. Paragraph (a)(1) is amended by 

removing the words ‘‘The aggregate 

unfunded vested benefits of all plans’’

and adding in their place the words 

‘‘For any plan’’; by removing the words 

‘‘any exempt plans’’ and adding in their 

place the words ‘‘an exempt plan’’; and 

by removing the words ‘‘group exceed 

$50 million (disregarding those plans 

with no unfunded vested benefits)’’ and 

adding in their place the words ‘‘group, 

the funding target attainment percentage 

for the plan year ending within the 

information year is less than 80 

percent’’. 

c. Paragraph (a)(2) is amended by 

removing the words ‘‘a controlled 

group’’ and adding in their place the 

words ‘‘the controlled group’’; and by 

removing the words ‘‘section 

302(f)(1)(A) and (B) of ERISA or section 

412(n)(1)(A) and (B) of the Code’’ and 

adding in their place the words ‘‘ERISA 

section 303(k) or Code section 430(k)’’. 

d. Paragraph (a)(3) is amended by 

removing the words ‘‘a controlled 

group’’ and adding in their place the 

words ‘‘the controlled group’’; by 

removing the words ‘‘section 303 of 

ERISA or section 412(d) of the Code’’

and adding in their place the words 

‘‘ERISA section 302(c) or Code section 

412(c)’’; and by removing the words 

‘‘(determined in according with 

paragraph (c) of this section)’’. 

e. Paragraph (c) is removed. 

f. Paragraph (d) is redesignated as 

paragraph (c). 

g. Paragraph (b) is revised, and new 

paragraphs (d), (e), and (f) are added, to 

read as follows: 

§ 4010.4 Filers. 

* * * * * 

(b) Funding target attainment 

percentage—(1) General. Except as 

provided in paragraph (b)(3) of this 

section, the funding target attainment 

percentage for a plan for a plan year 

equals the funding target attainment 

percentage as provided under ERISA 

section 303(d)(2) determined as of the 

valuation date for the plan year. 


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9250 Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 

(2) Prefunding balance and funding 

standard carryover balance elections. 

For purposes of determining the funding 

target attainment percentage for a plan 

for a plan year, prefunding balances and 

funding standard carryover balances 

must reflect any elections (or deemed 

elections) under ERISA section 303(f) or 

Code section 430(f) for the plan year, 

regardless of when the elections (or 

deemed elections) are made. 

(3) Transition rule for plan years 

beginning before 2008. For plan years 

beginning before 2008, the funding 

target attainment percentage for a plan 

for a plan year equals the funding target 

attainment percentage as determined 

under 26 CFR 1.436–1(j)(2)(iii), except—

(i) Current liability is determined 

using the highest rate of interest 

allowable under Code section 412(l)(7) 

(as in effect for plan years beginning 

before 2008) for that plan year, 

regardless of whether that rate was 

actually used to determine current 

liability for the plan year; and 

(ii) The value of net plan assets is 

determined without regard to the 

second sentence of 26 CFR 1.436–

1(j)(2)(iii)(B)(2) (i.e., for this purpose, 

there is no special rule that provides 

that assets are not reduced by the credit 

balance if the value of plan assets is 

greater than or equal to 90 percent of the 

plan’s current liability). 

* * * * * 

(d) Transition rule; failure to make 

required contribution; minimum 

funding waiver. For plan years 

beginning before 2008, the reference in 

paragraph (a)(2) of this section to 

‘‘ERISA section 303(k) or Code section 

430(k)’’ is replaced by a reference to 

‘‘ERISA section 302(f)(1)(A) and (B) or 

Code section 412(n)(1)(A) and (B)’’, and 

the reference in paragraph (a)(3) of this 

section to ‘‘ERISA section 302(c) or 

Code section 412(c)’’ is replaced by a 

reference to ‘‘ERISA section 303 or Code 

section 412(d)’’ as those provisions are 

in effect for plan years beginning before 

2008. 

(e) Minimum funding waiver—(1) 

General. For purposes of § 4010.4(a)(3), 

a portion of the minimum funding 

waiver for a plan is considered 

outstanding unless prior to the plan year 

ending within the information year the 

statutory amortization period has ended 

or, as of the valuation date for the plan 

year ending within the information year, 

the amortization bases are deemed to be 

reduced to zero pursuant to ERISA 

section 303(e)(5) and Code section 

430(e)(5). However, the statutory 

amortization period will not be deemed 

to have ended merely because the 

funding waivers granted with respect to 

plan years beginning before 2008 are not 

carried over as a separate amortization 

base for the post-2007 plan years. 

(2) Example. Company A sponsors 

Plan X, which received a minimum 

funding waiver of $700,000 for the plan 

year ending December 31, 2004, and 

another waiver of $500,000 for the plan 

year ending December 31, 2008. Assume 

that the amortization bases of the 

waivers are not reduced to zero 

pursuant to ERISA section 303(e)(5) and 

Code section 430(e)(5), and the waivers 

are therefore outstanding for the full 

five-year statutory amortization period. 

Also, assume Company A has a calendar 

information year. For the 2009 

information year, Company A must 

report under ERISA section 4010. 

However, for the 2010 information year, 

Company A, assuming no other 

obligation to report under ERISA section 

4010, is not required to report. 

(f) Certain plans to which special 

funding rules apply. Except as described 

in § 4010.8(a)(9)(xiii), the provisions of 

sections 104, 105, 106, and 402 (as 

amended by U.S. Troop Readiness, 

Veterans’ Care, Katrina Recovery, and 

Iraq Accountability Appropriations Act, 

2007, Pub. L. 110–28) of PPA 2006 are 

disregarded for purposes of this part. 

6. In § 4010.5: 

a. Paragraph (c)(1) is amended by 

adding to the end of the paragraph the 

words ‘‘(If any two members of the 

controlled group report financial 

information on the basis of different 

fiscal years, the determination of 

whether an entity is an exempt entity is 

based on a calendar year information 

year for purposes of this paragraph (c)(1) 

and § 4010.4(c).)’’. 

b. Paragraph (c)(2) is revised and new 

paragraph (d) is added to read as 

follows: 

§ 4010.5 Information year. 

* * * * * 

(c) Controlled group members with 

different fiscal years. 

* * * * * 

(2) Examples. (i) Companies A and B 

are the only members of the same 

controlled group, and both are 

contributing sponsors to nonexempt 

plans. Company A has a July 1 fiscal 

year, and Company B has an October 1 

fiscal year. The information year is the 

calendar year. Company A’s financial 

information with respect to its fiscal 

year ending June 30, 2009, and 

Company B’s financial information with 

respect to its fiscal year ending 

September 30, 2009, must be submitted 

to PBGC following the end of the 2009 

calendar year information year. 

(ii) The facts are the same as in 

example (i) except that Company B is 

not a contributing sponsor of a plan and 

would be an exempt entity using the 

calendar year as the information year. 

Because Company B is an exempt entity 

based on a calendar information year, it 

is excluded when determining the 

information year. Thus, the information 

year is the July 1 fiscal year. Note that 

Company B is an exempt entity even if 

it would not be exempt based on the 

July 1 information year. 

(iii) The facts are the same as in 

example (i) except that Company B 

would not be an exempt entity using the 

calendar year information year but 

would be exempt based on an 

information year that is the July 1 fiscal 

year. Since Company B is not exempt 

based on a calendar year information 

year, it may not be excluded when 

determining the information year. 

Therefore, the information year is the 

calendar year and Company B is not an 

exempt entity. 

(d) Special rules for certain plan 

years. If a plan maintained by the 

members of the contributing sponsor’s 

controlled group has two plan years that 

end in the information year or has no 

plan year that ends in the information 

year, the last plan year ending on or 

immediately before the end of the 

information year is deemed to be the 

plan year ending within the information 

year. 

§ 4010.6 [Amended] 

7. In § 4010.6: 

a. Paragraphs (a)(1) and (a)(2) are 

amended by removing the words ‘‘the 

PBGC’s website’’ (which appear once in 

each paragraph) and adding in their 

place the words ‘‘PBGC’s Web site’’. 

b. Paragraphs (b) and (c) are amended 

by removing the words ‘‘the PBGC’’

(which appear once in each paragraph) 

and adding in their place the word 

‘‘PBGC’’. 

8. In § 4010.7: 

a. Paragraphs (a) introductory text and 

(b) introductory text are amended by 

removing the words ‘‘the PBGC’s 

website’’ (which appear once in each 

paragraph) and adding in their place the 

words ‘‘PBGC’s Web site’’. 

b. Paragraph (b)(2) is amended by 

removing the words ‘‘maintaining the 

plan’’ and adding in their place the 

words ‘‘maintaining the plan (if 

applicable)’’; and by removing the 

words ‘‘paragraph (b)(1)’’ and adding in 

their place the words ‘‘paragraph (b)(1) 

of this section’’. 

c. New paragraph (c) is added to read 

as follows: 

§ 4010.7 Identifying information. 

* * * * * 

(c) Multiple employer plans. A filer 

that is a contributing sponsor of a 


rwilkins on PROD1PC63 with PROPOSALS
Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 9251 

multiple employer plan need not 

provide identifying information for 

another contributing sponsor of the 

multiple employer plan if that other 

contributing sponsor is not a member of 

the filer’s controlled group, and need 

not provide identifying information for 

another plan if neither the filer nor any 

member of the filer’s controlled group is 

a contributing sponsor of that other 

plan. 

9. In § 4010.8: 

a. Introductory text is added to the 

section. 

b. Paragraph (a) introductory text is 

amended by removing the words ‘‘For 

each plan’’ and adding in their place the 

words ‘‘Except as provided elsewhere in 

this part, for each plan’’; by removing 

the words ‘‘the PBGC’s website’’ and 

adding in their place the words ‘‘PBGC’s 

Web site’’; and by removing the words 

‘‘actuarial information’’ and adding in 

their place the words ‘‘actuarial 

information (except as specified below, 

determined as of the end of the plan 

year ending within the filer’s 

information year)’’. 

c. Paragraph (a)(3) is amended by 

removing the words ‘‘value of the plan’s 

benefit liabilities’’ and adding in their 

place the words ‘‘amount of benefit 

liabilities under the plan’’; by removing 

the words ‘‘setting forth separately the 

value’’ and adding in their place the 

words ‘‘setting forth separately the 

amount’’; and by removing the words 

‘‘participants, determined (in 

accordance with paragraph (d) of this 

section) at the end of the plan year 

ending within the filer’s information 

year’’ and adding in their place the 

words ‘‘participants (for this purpose, 

the amount of benefit liabilities equals 

the value of benefit liabilities 

determined in accordance with 

paragraph (d) of this section)’’. 

d. Paragraph (a)(4) is amended by 

removing the words ‘‘for interest (i.e., 

the specific interest rate(s), such as 5%), 

mortality, retirement age, and loading 

for administrative expenses, as’’; and by 

removing the word ‘‘and’’ after the semicolon at the end of the paragraph. 

e. Paragraphs (a)(5) and (a)(6) are 

redesignated as paragraphs (a)(9) and 

(a)(10) respectively. 

f. The introductory text of 

redesignated paragraph (a)(9) is 

amended by removing the word 

‘‘information’’ and adding in its place 

the words ‘‘information for that plan 

year’’. 

g. Paragraph (v) of redesignated 

paragraph (a)(9) is redesignated as 

paragraph (xii) of redesignated 

paragraph (a)(9). 

h. Redesignated paragraph (a)(9)(xii) 

is amended by removing the words 

‘‘retirement factors’’ and adding in their 

place the words ‘‘retirement factors; in 

the case of a plan that provides lump 

sums, other than de minimis lump 

sums, the summary must include 

information on how annuity benefits are 

converted to lump sum amounts (for 

example, whether early retirement 

subsidies are reflected)’’. 

i. Paragraph (b) introductory text is 

amended by removing the figures 

‘‘(a)(5)’’ and adding in their place the 

figures ‘‘(a)(9)’’. 

j. Paragraphs (b)(1) and (b)(2) are 

amended by removing the words ‘‘the 

PBGC’’ (which appear once in each 

paragraph) and adding in their place the 

word ‘‘PBGC’’. 

k. Paragraph (b)(2) is further amended 

by removing the figures ‘‘(a)(6)’’ and 

adding in their place the figures 

‘‘(a)(10)’’. 

l. Paragraphs (c)(1) and (c)(2) are 

redesignated as paragraphs (c)(2) and 

(c)(3) respectively. 

m. Redesignated paragraph (c)(2) is 

amended by removing the words ‘‘Has 

received’’ and adding in their place the 

words ‘‘The plan has received’’; and by 

removing the words ‘‘section 302 of 

ERISA or section 412 of the Code’’ and 

adding in their pace the words ‘‘ERISA 

sections 302 and 303 and Code sections 

412 and 430’’. 

n. Redesignated paragraph (c)(3) is 

amended by removing the words ‘‘Has 

no’’ and adding in their place the words 

‘‘The plan has no’’; and by removing the 

words ‘‘§ 4010.4(e) of this part’’ and 

adding in their place the figures 

‘‘§ 4010.4(a)(3)’’. 

o. Paragraph (d)(3) is amended by 

removing the words ‘‘section 302(d) of 

ERISA or section 412(l) of the Code’’

and adding in their place the words 

‘‘section 303 of ERISA (without regard 

to the at-risk assumption of section 

303(i) of ERISA)’’. 

p. Paragraphs (i), (ii), (iii), (iv), (vi), 

(vii), and (viii) of redesignated 

paragraph (a)(9), paragraph (c) 

introductory text, and paragraph (d)(2) 

are revised, and a new introductory note 

before paragraph (a), new paragraphs 

(5), (6), (7), and (8) of paragraph (a), new 

paragraphs (v), (ix), (x), (xi), (xiii), and 

(xiv) of redesignated paragraph (a)(9), 

new paragraph (c)(1), and new 

paragraphs (e), (f), and (g) are added, to 

read as follows: 

§ 4010.8 Plan actuarial information. 

The requirements described in 

paragraphs (a) and (b) of § 4010.8 prior 

to their amendment to comply with the 

changes made to ERISA section 4010 by 

the Pension Protection Act of 2006 

(rather than those described in 

paragraphs (a) and (b) of this section) 

are applicable to plan years beginning 

before 2008. 

(a) Required information. * * * 

* * * * * 

(5) The funding target (as of the 

valuation date) for the plan year ending 

within the information year determined 

in accordance with ERISA section 303(i) 

as if the plan has been in at-risk status 

for a consecutive period of at least 5 

plan years; 

(6) The funding target attainment 

percentage (as of the valuation date) for 

the plan year ending within the 

information year; 

(7) The adjusted funding target 

attainment percentage as defined in 

ERISA section 206(g)(9)(B); 

(8) Whether the plan, at any time 

during the plan year, was subject to any 

of the limitations described in ERISA 

section 206(g) and, if so, which 

limitations applied, when such 

limitations applied, and when (if 

applicable) they were lifted; 

(9) * * * 

(i) The funding target calculated 

pursuant to ERISA section 303 without 

regard to subsection 303(i)(1), setting 

forth separately the value of the 

liabilities attributable to retirees and 

beneficiaries receiving payment, 

terminated vested participants, and 

active participants (showing vested and 

nonvested benefits separately); 

(ii) A summary of the actuarial 

assumptions and methods used for 

purposes of ERISA section 303 and any 

change in those assumptions and 

methods since the previous valuation 

and justifications for any change; in the 

case of a plan that provides lump sums, 

other than de minimis lump sums, the 

summary must include the assumptions 

on which participants are assumed to 

elect a lump sum and how lump sums 

are valued; 

(iii) The effective interest rate (as 

defined in ERISA section 303(h)(2)(A)); 

(iv) The target normal cost calculated 

pursuant to ERISA section 303 without 

regard to subsection 303(i)(2); 

(v) For the plan year and the four 

preceding plan years, a statement as to 

whether the plan was in at-risk status 

for that plan year; 

(vi) In the case of a plan that is in atrisk status, the target normal cost 

calculated pursuant to ERISA section 

303 as if the plan has been in at-risk 

status for 5 consecutive years; 

(vii) The value of the plan’s assets 

(reflecting any averaging method) as of 

the valuation date and the fair market 

value of the plan’s assets as of the 

valuation date; 

(viii) The funding standard carryover 

balance and the prefunding balance 


rwilkins on PROD1PC63 with PROPOSALS
9252 Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 

(maintained pursuant to ERISA section 

303(f)(1)) as of the beginning of the plan 

year and a summary of any changes in 

such balances in the past year (e.g., 

amounts used to offset minimum 

funding requirement, amounts reduced 

in accordance with any elections under 

ERISA section 303(f)(5) or Code section 

430(f)(5), interest credited to such 

balances, and excess contributions used 

to increase such balances); 

(ix) A list of amortization bases 

(shortfall and waiver) under ERISA 

section 303, including the year the base 

was established, the original amount, 

the installment amount, and the 

remaining balance at the beginning of 

the plan year; 

(x) An age/service scatter for active 

participants including average 

compensation information for payrelated plans and average account 

balance information for hybrid plans 

presented in a format similar to that 

described in the instructions to the 

Form 5500 schedule for single-employer 

defined benefit plan actuarial 

information; 

(xi) Expected disbursements (benefit 

payments and expenses) during the plan 

year; 

* * * * * 

(xiii) Details of any special funding 

rules that apply to the determination of 

the plan’s minimum required 

contribution (e.g., special amortization 

schedules or interest rate assumptions 

applicable to certain plans of 

commercial airlines, or provisions for 

certain plans of rural cooperatives, 

defense contractors, or employers with 

PBGC settlement agreements); and 

(xiv) Any other similar information as 

specified in instructions on PBGC’s Web 

site; and 

* * * * * 

(c) Exempt plan. The actuarial 

information specified in this section is 

not required with respect to a plan if—

(1) The plan—

(i) Has fewer than 500 participants as 

of the end of the plan year ending 

within the information year and has a 

4010 funding shortfall for the plan year 

ending within the information year that 

is not in excess of $15 million, or 

(ii) Has benefit liabilities as of the end 

of the plan year ending within the filers’

information year (determined in 

accordance with paragraph (d) of this 

section) equal to or less than the fair 

market value of the plan’s assets; 

* * * * * 

(d) Value of benefit liabilities. * * * 

* * * * * 

(2) Actuarial assumptions and 

methods. The value of benefit liabilities 

shall be determined using the 

assumptions and methods prescribed in 

§§ 4044.51 through 4044.57 of this 

chapter. In addition to the assumptions 

described in §§ 4044.51 through 

4044.57, the following rules apply: 

(i) Assumptions not included in 

§§ 4044.51 through 4044.57. A filer may 

choose whether to include assumptions 

for pre-retirement decrements other 

than mortality (such as turnover or 

disability assumptions), provided that if 

such pre-retirement decrements are 

used, the assumptions used are the same 

as those used to determine the 

minimum required contribution under 

ERISA section 303 for the plan year 

ending within the filer’s information 

year. Any other assumptions used to 

determine the minimum required 

contribution that are not overridden by 

§§ 4044.51 through 4044.57 (assumed 

marital status, cost-of-living increase, if 

applicable, etc.) must be used when 

determining benefit liabilities. 

(ii) Benefits to be valued. The value of 

benefit liabilities includes liabilities for 

all benefits accrued under the plan 

(including benefits that are not 

protected from the anti-cutback 

provisions of Code section 411(d)(6)) as 

of the end of the plan year ending 

within the filer’s information year. 

(iii) Future service. Future service 

expected to be accrued by an active 

participant in an ongoing plan during 

future employment (based on the 

assumptions used to determine the 

value of benefit liabilities) must be 

reflected when determining the earliest 

retirement age at valuation (ERA) and 

unreduced retirement age (URA) used to 

determine expected retirement age 

(XRA). (For this purpose, ERA, URA, 

and XRA have the meaning as provided 

in § 4044.2.) Such expected future 

service in an ongoing plan (at 

decrement) is also included in 

determining an active participant’s 

entitlement to early retirement subsidies 

and supplements at XRA. (See the 

examples in paragraph (e) of this 

section.) 

* * * * * 

(e) Examples. The following examples 

demonstrate how expected retirement 

age (XRA) is determined and applied for 

purposes of determining benefit 

liabilities under paragraph (d) of this 

section: 

(1) Example 1—(i) Facts. Plan X has 

a normal retirement age of 65, but 

allows benefits to commence as early as 

age 55 for participants who complete at 

least 10 years service before 

termination. Early retirement benefits 

are reduced (from age 65) for 

participants with fewer than 25 years of 

service. Employee A is an active 

participant who is age 40 and has 

completed 5 years of service. Assume 

the ‘‘medium’’ XRA look-up table 

applies and that for purposes of 

§ 4010.8(d), the filer has decided not to 

take pre-retirement decrements other 

than mortality into account as permitted 

under § 4010.8(d)(2)(i). 

(ii) Determination of XRA. If A 

continues working, the earliest age A 

could start receiving benefits is age 55. 

Therefore, A’s ERA is 55. Because the 

earliest that A can receive an unreduced 

benefits is when A completes 25 years 

of service (at age 60), A’s URA is age 60. 

Under the medium XRA look-up table, 

A’s XRA is 58. 

(iii) Determination of benefit 

liabilities. The benefit liability is the 

present value of A’s benefit accrued as 

of the measurement date assuming A 

retires at age 58 and elects to have 

payments commence immediately. 

Since A will not be eligible to receive 

unreduced benefits at that time, the 

accrued benefit is reduced in 

accordance with the plan’s early 

retirement reduction provisions, 

including any subsidies to which A 

would be entitled under the assumption 

that A works until age 58. 

(2) Example 2. Employee B is also an 

active participant in plan X and is age 

40 with 15 years of service. B will 

complete 25 years of service at age 50. 

However, because the plan does not 

allow for benefit commencement before 

age 55, B’s ERA, URA and thus, XRA are 

all age 55. (Note: the XRA tables in 

Appendix D to part 4044 do not show 

URA’s below age 60, but links to 

extended tables can be found on the 

PBGC’s Web site at the bottom of 

http://www.pbgc.gov/practitioners/lawregulations-informal-guidance/content/ 

page14763.html.) The benefit liability is 

the present value of B’s benefit accrued 

as of the measurement date assuming B 

retires at age 55 and elects to commence 

benefits immediately. Since B will be 

eligible to receive an unreduced benefit 

at that time, the full unreduced benefit 

amount is valued. 

(3) Example 3—(i) Facts. Assume the 

same facts as in Example 1, except that 

for purposes of § 4010.8(d), the filer has 

decided to take pre-retirement 

decrements other than mortality into 

account as permitted under 

§ 4010.8(d)(2)(i). For the sake of 

simplicity, assume the only preretirement decrement other than 

mortality is turnover. The plan’s 

turnover rates go from age 21 to age 54, 

and the retirement rates go from age 55 

to age 65. 

(ii) Determination of XRA. If A 

terminates employment at or before age 

45, A will not be eligible to receive 


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Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 9253 

benefits until age 65. Therefore, the 

portion of Employee A that is assumed 

to terminate before age 45 has an ERA, 

URA, and XRA of 65. The portion of A 

that remains in service to age 45, after 

the application of the applicable 

turnover decrements, and then 

terminates at or after age 45, but before 

age 55, will be entitled to receive a 

reduced benefit as early as 55. 

Therefore, the portion of A that is 

assumed to terminate during this period 

has an ERA of 55, a URA of 65 and an 

XRA of 60. Since the turnover rates stop 

at age 55, the portion of A that remains 

in service to age 55 is assumed to 

remain in service until the XRA for that 

portion of A. For that portion of A, the 

ERA is 55, the URA is 60 and the XRA 

is 58. Note that for purposes of 

§ 4010.8(d), the plan’s assumed 

retirement rates are replaced by the 

XRAs. 

(iii) Determination of benefit 

liabilities. The benefit liability for A is 

the sum of the present value of A’s full 

accrued benefit at age 65 for the portion 

of A that terminates between age 40 and 

age 45, the present value of A’s accrued 

benefit reduced for commencement at 

age 60 for the portion of A that 

terminates between age 45 and age 54, 

and the present value of A’s accrued 

benefit reduced for commencement at 

age 58 for the portion of A that remains 

employed until age 55. 

(4) Example 4. Assume the same facts 

as in Example 3, except that Employee 

B, the sole active participant, is age 40 

with 15 years of service. The portion of 

B that is assumed to terminate before 

age 50 would be entitled to receive a 

reduced benefit as early as age 55 or an 

unreduced benefit at age 65. That 

portion of B has an ERA of 55, a URA 

of 65, and an XRA of 60. The benefit 

liability for that portion of B is the 

present value of B’s benefit accrued as 

of the measurement date assuming B 

commences a reduced benefit at age 60. 

The portion of B that survives to age 50 

would be entitled to receive an 

unreduced benefit as early as age 55. 

That portion of B has an ERA, URA and 

XRA of 55. The benefit liability for this 

portion of B is the present value of B’s 

benefit accrued as of the measurement 

date assuming B retires and commences 

unreduced payments at age 55. 

(f) Multiple employer plans. If, with 

respect to a multiple employer plan, the 

actuarial information required under 

this section 4010 for the plan year 

ending within the filer’s information 

year has been filed under part 4010 by 

another filer, the filer may include this 

actuarial information by reference. The 

filer must include a comment in the 

submission reporting the name, EIN and 

plan number of the multiple employer 

plan and the name of the other filer that 

submitted this information. The filer is 

not relieved of responsibility for the 

filing of the actuarial information. If the 

information filed by the other filer is 

incomplete or erroneous, PBGC may 

assess a filing penalty against the filer. 

(g) Previous filing for plan year. If the 

actuarial information for the plan year 

as required under this § 4010.8 has been 

submitted by the filer in a previous 4010 

submission, the filing may include that 

actuarial information by reference to the 

previous submission. 

10. In § 4010.9: 

a. Paragraph (a) is amended by 

removing the words ‘‘the PBGC’s’’ and 

adding in their place the word 

‘‘PBGC’s’’. 

b. Paragraph (d) is amended by 

removing the words ‘‘the PBGC’’ where 

they appear three times and adding in 

their place each time the word ‘‘PBGC’’. 

c. New paragraph (f) is added at the 

end of the section to read as follows: 

§ 4010.9 Financial information. 

* * * * * 

(f) Multiple employer plans. A filer 

that is a contributing sponsor of a 

multiple employer plan need not 

provide financial information for 

another contributing sponsor of the 

multiple employer plan if that other 

contributing sponsor is not a member of 

the filer’s controlled group. 

11. Section 4010.10 is amended by 

removing the words ‘‘the PBGC’’ where 

they appear once in the section heading, 

once in paragraph (a), once in paragraph 

(b), twice in paragraph (c), twice in 

paragraph (d), and once in paragraph 

(e), and adding in their place each time 

the word ‘‘PBGC’’. 

12. In § 4010.11: 

a. The existing text of the section is 

redesignated as paragraph (b). 

b. Redesignated paragraph (b) is 

amended by adding the paragraph 

heading ‘‘Other waiver authority.’’; by 

removing the words ‘‘the PBGC’’ where 

they appear three times and adding in 

their place each time the word ‘‘PBGC’’; 

by removing the word ‘‘must’’ where it 

appears twice and adding in its place 

each time the word ‘‘should’’; and by 

removing the words ‘‘of this part’’ where 

they appear twice. 

c. The section heading is revised, and 

new paragraphs (a), (c), (d), and (e) are 

added, to read as follows: 

§ 4010.11 Waivers, extensions, and 

exclusions. 

(a) Aggregate underfunding not in 

excess of $15 million. Unless reporting 

is required by § 4010.4(a)(2) or (a)(3), 

reporting is waived for an information 

year if, for the plan years ending within 

the information year, the aggregate 4010 

funding shortfall for all plans (including 

any exempt plans) maintained by the 

members of the contributing sponsor’s 

controlled group (disregarding those 

plans with no 4010 funding shortfall) 

does not exceed $15 million. 

* * * * * 

(c) 4010 funding shortfall for waivers 

and exemptions—(1) General. Except as 

provided in paragraph (c)(2) of this 

section, a plan’s 4010 funding shortfall 

for a plan year equals the funding 

shortfall as provided under ERISA 

section 303(c)(4) determined as of the 

valuation date for the plan year, except 

that the value of plan assets is 

determined without regard to the 

reduction under ERISA section 

303(f)(4)(b). 

(2) Transition rule for plan years 

beginning before 2008. For plan years 

beginning before 2008, a plan’s 4010 

funding shortfall for a plan year equals 

the excess, if any, of the plan’s current 

liability over the value of plan assets. 

For this purpose, both current liability 

and plan assets are determined in the 

manner provided in § 4010.4(b)(3), 

except that assets are not reduced by the 

credit balance in the funding standard 

account. 

(3) Multiple employer plans. For 

purpose of § 4010.8(c) and paragraph (a) 

of this section, the entire 4010 funding 

shortfall of any multiple employer plan 

for which the filer or any member of the 

filers controlled group is a contributing 

sponsor is included. 

(d) Reduced reporting for multiple 

employer plans—(1) In general. 

Reporting is waived for a contributing 

sponsor of a multiple employer plan if 

neither the contributing sponsor nor any 

member of the contributing sponsor’s 

controlled group is a contributing 

sponsor of any other plan, provided at 

least one contributing sponsor (or the 

plan administrator on behalf of a 

contributing sponsor) provides a timely 

filing under this part 4010 containing 

the following information: 

(i) Identifying information for each 

contributing sponsor of the multiple 

employer plan (as required under 

§ 4010.7) determined as of the plan year 

ending within the contributing 

sponsor’s information year; 

(ii) Actuarial information for the 

multiple employer plan (as required 

under § 4010.8) for the plan year ending 

within the contributing sponsor’s 

information year; and 

(iii) Financial information as required 

§ 4010.9 (or such reduced information 

as PBGC may provide on its Web site) 

for every contributing sponsor of the 


rwilkins on PROD1PC63 with PROPOSALS
9254 Federal Register / Vol. 73, No. 34 / Wednesday, February 20, 2008 / Proposed Rules 

multiple employer plan who, for a 

salary related plan formula, is one of the 

ten largest contributing sponsors based 

on required contributions for the plan 

year ending within the contributing 

sponsor’s information year, or, for an 

hourly plan formula, is one of the ten 

largest contributing sponsors based on 

number of participants for the plan year 

ending within the contributing 

sponsor’s information years (using the 

census data as determined under 

§ 4010.8(d)(1)). 

(2) Information year. For purposes of 

this paragraph (d) (including 

determining when a filing is due), if any 

two contributing sponsors report 

financial information on the basis of 

different fiscal years, the information 

year shall be the calendar year. 

(e) Terminated plans. A plan may be 

excluded for purposes of §§ 4010.4(a)(1) 

and (3), 4010.8, and 4010.11(a) and (d), 

if, on or before the last day of the 

information year, all of the assets 

(excluding excess assets) have been 

distributed pursuant to a standard 

termination under Subpart B of part 

4041 of this chapter. 

§ 4010.12 [Amended] 

13. Section 4010.12 is amended by 

removing the words ‘‘section 4010(c) of 

ERISA’’ and adding in their place the 

words ‘‘ERISA section 4010(c)’’; and by 

removing the words ‘‘the PBGC’’ and 

adding in their place the word ‘‘PBGC’’. 

§ 4010.13 [Amended] 

14. Section 4010.13 is amended by 

removing the words ‘‘section 4071 of 

ERISA’’ and adding in their place the 

words ‘‘ERISA section 4071’’; and by 

removing the words ‘‘the PBGC’’ where 

they appear twice and adding in their 

place each time the word ‘‘PBGC’’. 

Issued in Washington, DC, this 14th day of 

February, 2008. 

Charles E.F. Millard, 

Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. E8–3124 Filed 2–19–08; 8:45 am] 

BILLING CODE 7709–01–P 

DEPARTMENT OF COMMERCE 

Patent and Trademark Office 

37 CFR Part 1 

[Docket No.: PTO–P–2005–0027] 

RIN 0651–AB99 

Revision to the Time for Filing of a 

Biological Deposit and the Date of 

Availability of a Biological Deposit 

AGENCY: United States Patent and 

Trademark Office, Commerce. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: This notice proposes changes 

to the rules of practice to require that 

any deposit of biological material be 

made before publication of a patent 

application, and that all restrictions on 

access to the deposited material 

imposed by the depositor be removed 

upon publication. The proposed 

changes will provide that the public has 

access to biological materials referenced 

in the disclosure of a patent application 

to the same extent that access to the 

remainder of the disclosure is available. 

The public policy basis for allowing 

access to a referenced item is the same 

whether the item is another patent 

application or a deposited biological 

material. 

DATES: To be ensured of consideration, 

written comments must be received on 

or before April 21, 2008. No public 

hearing will be held. 

ADDRESSES: Comments should be sent 

by e-mail addressed to 

AB99.Comments@uspto.gov. Comments 

may also be submitted by mail 

addressed to: Mail Stop Comments—

Patents, Commissioner for Patents, P.O. 

Box 1450, Alexandria, VA, 22313–1450, 

or by facsimile to (571) 273–7754, 

marked to the attention of Kathleen 

Kahler Fonda. Although comments may 

be submitted by mail or facsimile, the 

Office prefers to receive comments via 

the Internet. If comments are submitted 

by mail, the Office prefers that the 

comments be submitted on a DOS 

formatted 31⁄2 inch disk accompanied by 

a paper copy. 

Comments may also be sent by e-mail 

via the Federal eRulemaking Portal. See 

the Federal eRulemaking Portal Web site 

(http://www.regulations.gov) for 

additional instructions on providing 

comments via the Federal eRulemaking 

Portal. 

The comments will be available for 

public inspection at the Office of the 

Commissioner for Patents, located in 

Madison East, Tenth Floor, 600 Dulany 

Street, Alexandria, Virginia, and will be 

available via the Office Internet Web site 

(address: http://www.uspto.gov). 

Because comments will be made 

available for public inspection, 

information that is not desired to be 

made public, such as an address or 

phone number, should not be included 

in the comments. 

FOR FURTHER INFORMATION CONTACT: 

Kathleen Kahler Fonda, Legal Advisor, 

Office of the Deputy Commissioner for 

Patent Examination Policy, by telephone 

at (571) 272–7754; by mail addressed to: 

Mail Stop Comments—Patents, 

Commissioner for Patents, P.O. Box 

1450, Alexandria, VA, 22313–1450; or 

by facsimile to (571) 273–7754, marked 

to the attention of Kathleen Kahler 

Fonda. 

SUPPLEMENTARY INFORMATION: Under 35 

U.S.C. 112, first paragraph, the 

disclosure of a patent application must 

contain a written description that 

enables a person skilled in the art to 

make and use the claimed invention. 

The Supreme Court has consistently 

recognized that, in exchange for the 

rights associated with a patent grant, an 

inventor must disclose his invention in 

such a manner that would allow the 

public to make and use it without 

undue experimentation. See Universal 

Oil Prods. Co. v. Globe Oil & Refining 

Co., 322 U.S. 471, 484, 61 USPQ 382, 

388 (1944) (‘‘But the quid pro quo is 

disclosure of a process or device in 

sufficient detail to enable one skilled in 

the art to practice the invention once the 

period of the monopoly has expired 

* * *.’’); Brenner v. Manson, 383 U.S. 

519, 534, 148 USPQ 689, 695 (1966) 

(‘‘The basic quid pro quo contemplated 

by the Constitution and the Congress for 

granting a patent monopoly is the 

benefit derived by the public from an 

invention with substantial utility.’’); 

J.E.M. AG Supply, Inc. v. Pioneer HiBred Int’l, Inc., 534 U.S. 124, 142, 60 

USPQ2d 1865, 1873 (2001) (‘‘The 

disclosure required by the Patent Act is 

‘the quid pro quo of the right to 

exclude.’ ’’ (quoting Kewanee Oil Co. v. 

Bicron Corp., 416 U.S. 470, 484, 181 

USPQ 673, 679 (1974))). 

The American Inventors Protection 

Act of 1999 (AIPA) (Title IV of the 

Intellectual Property and 

Communications Omnibus Reform Act 

of 1999 (S. 1948) as introduced in the 

106th Congress on November 17, 1999) 

was incorporated and enacted into law 

on November 29, 1999, by 1000(a)(9), 

Division B, of Public Law 106–113, 113 

Stat. 1501 (1999). The AIPA provided 

for publication of patent applications 

eighteen months after the earliest date 

for which priority benefit was sought 

(amending title 35 of the United States 

Code to add paragraph (b) to section 


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