Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 13547 

3A copy of the EEOC’s Final Plan for 

Retrospective Analysis of Existing Regulations is 

available at http://www.eeoc.gov/laws/regulations/

retro_review_plan_final.cfm (last visited Oct. 5, 

2012). 

4This error was brought to the EEOC’s attention 

by attorneys inquiring about the requirements for 

settling a charge of age discrimination. 

ADEA is not currently a priority for 

regulatory review, the Commission is 

taking this action, consistent with the 

EEOC Plan for Retrospective Analysis of 

Existing Rules,3 based on stakeholder 

input and efforts to enhance clarity in 

the EEOC’s regulations.4

Regulatory Procedures 

The Commission finds that public 

notice-and-comment on this rule is 

unnecessary, because the revision 

makes no substantive change; it merely 

corrects an internal cross-referencing 

error. The rule is therefore exempt from 

the notice-and-comment requirements 

of 5 U.S.C. 553(b) under 5 U.S.C. 

553(b)(B). This technical correction also 

is not ‘‘significant’’ for purposes of 

Executive Order 12866, as reaffirmed by 

E.O. 13563, and therefore is not subject 

to review by Office of Management and 

Budget. 

Regulatory Analysis 

Since this technical correction 

contains no substantive changes to the 

law, EEOC certifies that it contains no 

new information collection 

requirements subject to review by the 

Office of Management and Budget under 

the Paperwork Reduction Act (44 U.S.C. 

chapter 35), it requires no formal costbenefit analysis pursuant to E.O. 12866, 

it creates no significant impact on small 

business entities subject to review under 

the Regulatory Flexibility Act, and it 

imposes no new economic burden 

requiring further analysis under the 

Unfunded Mandates Reform Act of 

1995. 

Congressional Review Act 

This correction is defined as a rule 

under the Congressional Review Act, 

but not as a major rule. As a result, it 

was provided to Congress and the 

General Accountability Office pursuant 

to the requirements of 5 U.S.C. 801 as 

interpreted by Office of Management 

and Budget Memorandum M–99–13. 

List of Subjects in 29 CFR Part 1625 

Advertising, Age, Employee benefit 

plans, Equal employment opportunity, 

and Retirement. 

For the reasons stated in the 

preamble, the Equal Employment 

Opportunity Commission amends 29 

CFR Part 1625 as follows: 

PART 1625—AGE DISCRIMINATION IN 

EMPLOYMENT ACT 

■ 1. The authority citation for 29 CFR 

Part 1625 is revised to read as follows: 

Authority: 29 U.S.C. 621–634; 5 U.S.C. 

301; Pub. L. 99–502, 100 Stat. 3342; 

Secretary’s Order No. 10–68; Secretary’s 

Order No. 11–68; sec. 2, Reorg. Plan No. 1 of 

1978, 43 FR 19807; Executive Order 12067, 

43 FR 28967. 

■ 2. Revise § 1625.22(g)(3) to read as 

follows: 

§ 1625.22 Waivers of rights and claims 

under the ADEA. 

* * * * * 

(g) * * * 

(3) The standards set out in 

paragraphs (b), (c), and (d) of this 

section for complying with the 

provisions of section 7(f)(1)(A)–(E) of 

the ADEA also will apply for purposes 

of complying with the provisions of 

section 7(f)(2)(A) of the ADEA. 

* * * * * 

Dated: March 5, 2014. 

For the Commission. 

Jacqueline A. Berrien, 

Chair. 

[FR Doc. 2014–05274 Filed 3–10–14; 8:45 am] 

BILLING CODE 6570–01–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4000, 4006, 4007, and 

4047 

RIN 1212–AB26 

Premium Rates; Payment of 

Premiums; Reducing Regulatory 

Burden 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Final rule. 

SUMMARY: The Pension Benefit 

Corporation (PBGC) is making its 

premium rules more effective and less 

burdensome. Based on its regulatory 

review under Executive Order 13563 

(Improving Regulation and Regulatory 

Review), PBGC proposed to simplify 

due dates, coordinate the due date for 

terminating plans with the termination 

process, make conforming and clarifying 

changes to the variable-rate premium 

rules, give small plans more time to 

value benefits, provide for relief from 

penalties, and make other changes. 

PBGC recently finalized the part of the 

proposal that eliminated the early 

payment requirement for large plans’ 

flat-rate premiums. This action finalizes 

the rest of the proposal. 

DATES: Effective April 10, 2014. The 

changes are generally applicable for 

plan years starting on or after January 1, 

2014. See Applicability later in the 

preamble for details. 

FOR FURTHER INFORMATION CONTACT: 

Catherine B. Klion, Assistant General 

Counsel for Regulatory Affairs 

(klion.catherine@pbgc.gov), or Deborah 

C. Murphy, Deputy Assistant General 

Counsel for Regulatory Affairs 

(murphy.deborah@pbgc.gov), Office of 

the General Counsel, Pension Benefit 

Guaranty Corporation, 1200 K Street 

NW., Washington, DC 20005–4026; 202– 

326–4024. (TTY and TDD users may call 

the Federal relay service toll-free at 

800–877–8339 and ask to be connected 

to 202–326–4024.) 

SUPPLEMENTARY INFORMATION: 

Executive Summary—Purpose of the 

Regulatory Action 

This rulemaking is needed to make 

PBGC’s premium rules more effective 

and less burdensome. The rule 

simplifies and streamlines due dates, 

coordinates the due date for terminating 

plans with the termination process, 

makes conforming changes to the 

variable-rate premium rules, clarifies 

the computation of the premium 

funding target, reduces the maximum 

penalty for delinquent filers that selfcorrect, and expands premium penalty 

relief. 

PBGC’s legal authority for this action 

comes from section 4002(b)(3) of the 

Employee Retirement Income Security 

Act of 1974 (ERISA), which authorizes 

PBGC to issue regulations to carry out 

the purposes of title IV of ERISA, and 

section 4007 of ERISA, which gives 

PBGC authority to set premium due 

dates and to assess late payment 

penalties. 

Executive Summary—Major Provisions 

of the Regulatory Action 

Due Date Changes 

In recent years, premium due dates 

have generally depended on plan size. 

Large plans have paid the flat-rate 

premium early in the premium payment 

year and the variable-rate premium later 

in the year. Mid-size plans have paid 

both the flat- and variable-rate 

premiums by that same later due date. 

Small plans have paid the flat- and 

variable-rate premiums in the following 

year. PBGC recently eliminated the early 

due date for large plans’ flat-rate 

premiums. PBGC is now completing the 

process of simplifying the due-date 

rules by making small plans’ premiums 

due at the same time as large and midsize plans’ premiums. However, because 

of a transition rule that gives small 

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13548 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

1See http://www.pbgc.gov/documents/plan-forregulatory-review.pdf. 2There is also a termination premium, which is 

unaffected by this final rule. 

plans more time to adjust to the new 

provisions, the due dates will not be 

completely uniform until 2015. The 

following table shows how due dates 

differ under the previous and the new 

due date rules for calendar-year plans 

for 2014 (the transition year) and 2015 

(the year full uniformity is achieved). 

Plan size 

2014 2015 

Old rules New rules Old rules New rules 

Flat-rate 

premium 

Variable-rate 

premium 

Entire 

premium 

Flat-rate 

premium 

Variable-rate 

premium 

Entire 

premium 

Large ........................................................ 2/28/2014 10/15/2014 10/15/2014 2/28/2015 10/15/2015 10/15/2015 

Mid-size .................................................... 10/15/2014 10/15/2014 10/15/2014 10/15/2015 10/15/2015 10/15/2015 

Small ........................................................ 4/30/2015 4/30/2015 2/15/2015 4/30/2016 4/30/2016 10/15/2015 

For the special case of a plan 

terminating in a standard termination, 

the final premium might come due 

months after the plan closed its books 

and thus be forgotten. Correcting such 

defaults has been inconvenient for both 

plans and PBGC. To forestall such 

problems, PBGC is setting the final 

premium due date no later than the date 

when the post-distribution certification 

is filed. PBGC is also making 

conforming changes to other special 

case due date rules. 

Variable-Rate Premium Changes 

Some small plans determine funding 

levels too late in the year to be able to 

use current-year figures for the variablerate premium by the new uniform due 

date. To address this problem, PBGC is 

providing that small plans generally use 

prior-year figures for the variable-rate 

premium (with a provision for opting to 

use current-year figures). 

To facilitate the due date changes, a 

plan will generally be exempt from the 

variable-rate premium for the year in 

which it completes a standard 

termination or (if it is small) for the first 

year of coverage. 

In response to inquiries from pension 

practitioners, PBGC is clarifying the 

computation of the premium funding 

target for plans in ‘‘at-risk’’ status for 

funding purposes. 

Penalty Changes 

PBGC assesses late premium payment 

penalties at 1 percent per month for 

filers that self-correct and 5 percent per 

month for those that do not. The 

differential is to encourage and reward 

self-correction. But both penalty 

schedules have had the same cap—100 

percent of the underpayment—and once 

the cap was reached, the differential 

disappeared. To preserve the selfcorrection incentive and reward for 

long-overdue premiums, PBGC is 

reducing the 1-percent penalty cap from 

100 percent to 50 percent. 

PBGC is also codifying in its 

regulations the penalty relief policy for 

payments made not more than seven 

days late that it established in a Federal 

Register notice in September 2011 and 

is giving itself more flexibility in 

exercising its authority to waive 

premium penalties. 

Other Changes 

PBGC is also amending its regulations 

to accord with the Moving Ahead for 

Progress in the 21st Century Act and the 

Bipartisan Budget Act of 2013 and to 

avoid retroactivity of PBGC’s rule on 

plan liability for premiums in distress 

and involuntary terminations. 

Background 

PBGC administers the pension plan 

termination insurance program under 

title IV of the Employee Retirement 

Income Security Act of 1974 (ERISA). 

Under ERISA sections 4006 and 4007, 

plans covered by the program must pay 

premiums to PBGC. PBGC’s premium 

regulations—on Premium Rates (29 CFR 

part 4006) and on Payment of Premiums 

(29 CFR part 4007)—implement ERISA 

sections 4006 and 4007. 

On January 18, 2011, the President 

issued Executive Order 13563, 

‘‘Improving Regulation and Regulatory 

Review,’’ to ensure that Federal 

regulations seek more affordable, less 

intrusive means to achieve policy goals, 

and that agencies give careful 

consideration to the benefits and costs 

of those regulations. In response to and 

in support of the Executive Order, PBGC 

on August 23, 2011, promulgated its 

Plan for Regulatory Review,1 noting 

several regulatory areas—including 

premiums—for immediate review. 

PBGC reviewed its premium 

regulations and identified a number of 

ways to simplify and clarify the 

regulations, reduce burden, provide 

penalty relief, and generally make the 

regulations work better. On July 23, 

2013 (at 78 FR 44056), PBGC published 

a proposed rule to replace the system of 

three premium due dates (based on plan 

size and premium type) with a single 

due date corresponding to the Form 

5500 extended due date, to coordinate 

the due date for terminating plans with 

the termination process, to make 

conforming and clarifying changes to 

the variable-rate premium rules, to 

provide for relief from penalties, and to 

make other changes. 

PBGC received comments on its 

proposed rule from six commenters— 

two employer associations, two 

associations of pension practitioners, an 

actuarial firm, and an individual 

actuary. All of the commenters 

approved of the proposal, and one 

specifically urged that it be made 

effective for 2014. The commenters also 

had suggestions for additional changes 

PBGC might make in its premium 

regulations or procedures. Those 

suggestions are discussed below with 

the topics they relate to. In response to 

the comments, PBGC has made changes 

both to the regulatory text and to its 

premium forms and instructions. 

Changes have also been made to reflect 

adoption of the Bipartisan Budget Act of 

2013 and a minor due-date 

simplification that PBGC introduced on 

its own initiative (also discussed 

below). 

Because the proposed change in the 

large-plan flat-rate due date was timesensitive (and received only positive 

comments from the public), PBGC 

expedited a final rule limited to that 

change (and related changes in penalty 

provisions). That final rule was 

published January 3, 2014 (at 79 FR 

347). 

Current and Historical Context 

There are two kinds of annual 

premiums.2 The flat-rate premium is 

based on the number of plan 

participants, determined as of the 

participant count date. The participant 

count date is generally the last day of 

the plan year preceding the premium 

payment year; in some cases, however 

(such as for plans that are new or are 

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Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 13549 

3See PBGC final rule at 63 FR 68684 (Dec. 14, 

1998). 

4See Exemption for Standard Terminations, 

below. 

5See Uniform Due Dates under Executive Orders 

12866 and 13563, below, for detailed discussion of 

costs and benefits. 

6 In the transition year for the old due date 

system, small plans made no premium payments. 

involved in certain mergers or spinoffs), 

the participant count date is the first 

day of the premium payment year. The 

variable-rate premium (which applies 

only to single-employer plans) is based 

on a plan’s unfunded vested benefits 

(UVBs)—the excess of its premium 

funding target over its assets. The 

premium funding target and asset values 

are determined as of the plan’s UVB 

valuation date, which is the same as the 

valuation date used for funding 

purposes. In general, the UVB valuation 

date is the beginning of the plan year, 

but some small plans (with fewer than 

100 participants) may have UVB 

valuation dates as late as the end of the 

year. 

Section 4007 of ERISA authorizes 

PBGC to set premium due dates and 

assess penalties for failure to pay 

premiums timely. Beginning in 1999,3

PBGC set the variable-rate premium due 

date for plans of all sizes as 91⁄2 calendar 

months after the beginning of the 

premium payment year (October 15 for 

calendar-year plans). This was done so 

that the due date would correspond 

with the extended due date for the 

annual report for the prior year that is 

filed on Form 5500. Coordination of the 

premium and Form 5500 due dates 

promotes consistency and simplicity 

and avoids confusion and 

administrative burden. In 2008, 

however, to conform to changes made 

by the Pension Protection Act of 2006 

(PPA 2006), small-plan due dates were 

extended to 16 months after the 

beginning of the premium payment year 

(April 30 of the following year for 

calendar-year plans). 

Flat-rate premiums for large plans 

(those with 500 or more participants) 

were previously due two calendar 

months after the beginning of the 

premium payment year (the end of 

February for calendar-year plans). PBGC 

recently eliminated that early due date, 

and large plans’ flat-rate premiums are 

now due at the same time as variablerate premiums. 

Under ERISA section 4007, premiums 

accrue until plan assets are distributed 

in a standard termination or a failing 

plan is taken over by a trustee. A plan 

undergoing a standard termination is 

exempt from the variable-rate premium 

for any plan year after the year in which 

the plan’s termination date falls.4

Late payment penalties accrue at the 

rate of 1 percent or 5 percent per month 

of the unpaid amount, depending on 

whether the underpayment is ‘‘selfcorrected’’ or not. Self-correction refers 

to payment of the delinquent amount 

before PBGC gives written notice of a 

possible delinquency. Penalties are 

capped by statute at 100 percent of the 

unpaid amount. 

The changes to the premium 

regulations affecting due dates, variablerate premiums, and penalties are 

discussed below in that order. 

New Due Date Rules 

Uniform Due Dates for Plans of All Sizes 

PBGC is setting the premium due date 

for small plans as 91⁄2 months after the 

beginning of the premium payment year 

(subject to a one-year transition rule, 

discussed below). This date corresponds 

with the extended due date for the 

annual report for the prior year that is 

filed on Form 5500. (For calendar-year 

plans, the due date will be October 15.) 

Having recently made the same change 

for large plans’ flat-rate premium due 

date, PBGC has now eliminated the 

system of three premium due dates tied 

to plan size and premium type and 

replaced it with a uniform due date 

system for both flat- and variable-rate 

premiums of plans of all sizes. 

For small plans, the new unified due 

date raises a timing issue. Unlike large 

plans, which by statute must value 

benefits at the beginning of the year, 

small plans are permitted by statute to 

value benefits as late as the end of the 

year and thus might be unable to 

calculate variable-rate premiums by a 

due date within the year using currentyear data. (For example, a small 

calendar-year plan that valued benefits 

as of December 31 could not determine 

the premium by the preceding October 

15.) PBGC’s solution to this timing 

problem is for small plans to determine 

the variable-rate premium using data, 

assumptions, and methodology for the 

year before the premium payment year. 

(This solution also accommodates 

situations where (although timely action 

might be possible) sponsors prefer to 

put off giving plan actuaries information 

for plan valuations until after other 

close-of-the-year matters are dealt with.) 

A more detailed discussion of this 

provision is set forth below under the 

heading ‘‘Look-Back’’ Rule for Small 

Plans, below. 

These changes mean that plan 

consultants can do all premium and 

Form 5500 filing chores at one time, 

once a year. PBGC will receive all 

premium filings for each plan year at 

one time, specific to that year, and will 

be able to process a plan’s entire annual 

premium in a single operation. Going 

from three due dates to one will be 

simpler for all concerned—even for 

mid-size plans, whose due date is not 

changing. Simpler rules mean shorter 

and simpler filing instructions— 

instructions that PBGC must update 

annually and that plan administrators of 

plans of all sizes must read, understand, 

and follow. Less complexity means less 

chance for mistakes and the time and 

expense of correcting them. Moving to 

one uniform due date will also simplify 

PBGC’s premium processing systems 

and save PBGC money on future 

periodic changes to those systems 

(because it is less expensive to modify 

simpler systems). 

In short, PBGC believes that this 

change will produce a significant 

reduction in administrative burden for 

both plans and PBGC. It will also shift 

the earnings on premium payments 

between plans and PBGC for the time 

between the old and new due dates, but 

overall, plans will gain.5

However, shifting immediately from 

the old to the new due date schedule 

would result in two premium due dates 

for small plans in the transition year: 

using a calendar-year plan as an 

example, the 2013 premium would be 

due at the end of April 2014, and the 

2014 premium would be due in midOctober 2014.6 This ‘‘doubling up’’ of 

premiums for one year prompted one 

commenter to express concern about 

potential cash flow problems for some 

small plan sponsors and to recommend 

that PBGC permit payment of the 

transition-year premium in three annual 

installments. Another commenter 

requested transition rules generally. 

Although PBGC is not persuaded that 

the due date change poses a significant 

cash flow problem for most small plan 

sponsors (in part because premiums can 

be paid from plan assets), the fact that 

a comment raised this issue indicates 

that it may exist in some cases. But 

PBGC believes that a regime of 

installment payments is more complex 

than is necessary to deal with the 

problem. Instead, PBGC is addressing 

this concern by extending the transition 

year due date by four months (from 

October 15, 2014, to February 15, 2015, 

for calendar-year plans) for small plans 

that would otherwise have two 

premium due dates in the transition 

year. With this one-time extension, a 

small plan’s transition-year premium 

and its premiums for the preceding and 

following plan years can be spaced 

about equally over a 171⁄2-month period 

(from April 30, 2014, to October 15, 

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13550 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

7A calendar-year filer that wanted to pay the 

second premium halfway between the due dates for 

the first and third premiums would pay it in late 

January 2015. The extension to mid-February 

provides some leeway. 

8The waiver is available if timely payment of a 

premium would cause substantial hardship but 

payment can be made within 60 days. See section 

4007(b) of ERISA and § 4007.8(b) of the premium 

payment regulation. 

9See 29 CFR 4041.28(b). 

10See p. 3 of the Standard Termination Filing 

Instructions, http://www.pbgc.gov/documents/500_

instructions.pdf. 

11See Final-Year Variable-Rate Premium 

Exemption, below. 

12See Final-Year Due Date under Executive 

Orders 12866 and 13563, below, for detailed 

discussion of costs and benefits. 

2015, for calendar-year plans), with 

about eight or nine months between 

each two payments.7

In addition, a 60-day penalty waiver 

is available in cases of financial 

hardship,8 which could extend the 

171⁄2-month period to 191⁄2 months. And 

case-by-case relief from late-payment 

penalties is also available. In 

combination with the transition-year 

due date extension, PBGC believes these 

provisions adequate to relieve any cashflow problems caused by transition-year 

due-date bunching. 

Terminating Plans’ Due Date 

The foregoing discussion focuses on 

the normal due dates for annual 

premiums. There are also special due 

date rules for new and newly covered 

plans and for plans that change plan 

year. But there has been no special due 

date provision for terminating plans— 

and yet such plans have posed a special 

problem, because their final premium 

due date might come months after all 

benefits were distributed and their 

books were closed. Although the 

standard termination rules require that 

provision be made for PBGC premiums,9

PBGC’s experience has been that once 

the sometimes-difficult process of 

distributing benefits was over—and 

with the premium due date often 

months in the future—plan 

administrators might simply forget 

about premiums and consider their 

work done. Months later, when PBGC 

contacted them after they failed to make 

the final premium filing, it was typically 

an inconvenience, and sometimes an 

annoyance, to go back to (or reconstruct) 

the records to calculate and pay 

premium—and interest and penalties, 

because the due date had been missed. 

With a view to ensuring that finalyear premiums are routinely paid for 

plans winding up standard 

terminations, PBGC is changing the due 

date for such plans to bring it within the 

standard termination timeline.10 The 

final event in the standard termination 

timeline is the filing of the postdistribution certification under 

§ 4041.29 of PBGC’s regulation on 

Termination of Single-Employer Plans 

(29 CFR part 4041). The plan 

administrator of a terminating plan must 

file the certification (on PBGC Form 

501) within 30 days after the last benefit 

distribution date, but no late filing 

penalty is assessed if the filing is no 

later than 90 days after the distribution 

deadline under § 4041.28(a) of the 

termination regulation (the ‘‘penaltyfree zone’’). The proposed rule provided 

that the premium due date for a 

terminating plan’s final year would be 

the earliest of (1) the normal premium 

due date, (2) the end of the penalty-free 

zone, or (3) the date when the postdistribution certification is actually 

filed. In the interest of simplicity, the 

final rule eliminates the second of these 

three dates and sets the due date for 

such final filings as the earlier of (1) the 

normal premium due date and (2) the 

date when the post-distribution 

certification is actually filed. 

Thus plans will in effect have at least 

90 days after distributions are complete 

to make the final year premium filing. 

And since in addition the normal 

unified premium due date is nine-anda-half months after the plan year begins, 

only plans closing out in the first sixand-a-half months of the final year will 

face an accelerated premium deadline. 

For plans closing out in the last fiveand-a-half months of the final year, the 

normal premium due date will come 

before the end of the penalty-free zone. 

The 90 days (or more) between the 

completion of final distributions and the 

accelerated premium deadline will also 

give a plan at least that much time to 

determine the flat-rate premium (which 

is based on the participant count at the 

end of the prior year). For a terminating 

plan, counting participants should be 

relatively easy. Because it is in the 

process of providing benefits for (or for 

the survivors of) each participant, a 

terminating plan must necessarily have 

a roster of all participants. By simply 

subtracting from the roster the 

participants who received distributions 

before the participant count date, the 

plan can determine the participant 

count. 

Computing a variable-rate premium in 

three months might be more 

challenging, but under this final rule it 

will not be necessary. If the termination 

date for a standard termination is before 

the beginning of the final plan year, the 

regulation already provides an 

exemption from the variable-rate 

premium for the final year. PBGC is 

expanding this exemption to apply to a 

plan’s final year, even if the termination 

date comes during that year.11 Thus, the 

final-year premium will be flat-rate 

only. This change will provide relief for 

the significant number of plans that 

close out in the same year in which 

their termination dates fall (as indicated 

by PBGC data on the number of plans 

that pay variable-rate premiums for the 

final year). 

Advancing the premium due date for 

some terminating plans will shift 

earnings on the premiums from those 

plans to PBGC. But some of those plans 

should enjoy reduced administrative 

expenses (and possibly save on late 

charges) because the advanced deadline 

will prompt them to prepare premium 

filings while files are open for paying 

benefits. And some plans will avoid 

paying a final-year variable-rate 

premium under PBGC’s expansion of 

the exemption for plans doing standard 

terminations.12 On balance, PBGC 

expects there to be no significant net 

cost to plans and significant 

administrative benefits for PBGC. 

One commenter recommended that 

the new terminating plan due date be 

extended by 30 days so that the finalyear premium filing would not have to 

be made at the same time as the postdistribution certification (Form 501), 

citing the time necessary to prepare 

Form 501. PBGC believes that the 

simplicity of making the final flat-rateonly premium filing, as discussed 

above, suggests that plan administrators 

will typically be able to avoid 

simultaneous filing of the premium and 

post-distribution certification forms by 

simply filing the premium form before 

the deadline. If circumstances make that 

difficult, the seven-day penalty waiver 

(see Codification of Seven-Day Penalty 

Waiver Rule, below) will provide relief 

from late payment penalties. If, in an 

unusual situation, preparation of the 

premium filing takes more than a week, 

case-by-case relief from late-payment 

penalties is also available. (See 

Expansion of Penalty Waiver Authority, 

below). 

New Plan Due Date Modifications 

As noted above, the premium 

payment regulation already includes a 

special due date provision for new and 

newly covered plans. PBGC is making 

two technical modifications to this 

provision in support of the primary 

changes in this rulemaking. 

The first modification is to restore— 

for newly covered plans—the alternative 

due date of 90 days after title IV 

coverage begins. This alternative was 

available before the PPA 2006 

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Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 13551 

13See ‘‘Look-Back’’ Rule for Small Plans, below. 

14See First-Year Variable-Rate Premium 

Exemption, below. 

15To give any plan with a deferred due date 

adequate time to reconcile an estimated variablerate premium, the reconciliation date keys off the 

due date rather than the premium payment year 

commencement date. For a normal due date, the 

reconciliation date remains the same. 

16This revives a concept that was in the premium 

regulations before PPA 2006: the alternative 

calculation method, which permitted plans to 

determine UVBs by ‘‘rolling forward’’ prior-year 

data using a set of complex formulae. No ‘‘rolling 

forward’’ or other modification of prior-year data is 

involved in the approach that PBGC is now taking. 

amendments to the premium 

regulations, but those amendments set 

newly covered plans’ normal due date 

four months after the end of the 

premium payment year—and thus more 

than 90 days after the latest possible 

coverage date. This made the alternative 

due date superfluous, and it was 

removed. Now that PBGC is returning 

the normal due date to 21⁄2 months 

before the end of the plan year, it will 

again be possible for a plan’s coverage 

date to be too late in the premium 

payment year to make filing by the 

normal due date feasible. Hence the 

restoration of this alternative due date. 

The second modification is to provide 

a due date extension for a subset of 

plans that are excluded from the normal 

rule that small plans base the variablerate premium on prior-year data.13 This 

subset consists of new small plans 

resulting from non-de minimis 

consolidations and spinoffs. These 

plans will have to pay a variable-rate 

premium based on current-year data.14

But being small, a plan in this subset 

might have a UVB valuation date too 

late in the premium payment year to 

enable the plan to meet the normal 

filing deadline. This second 

modification to the new-plan due date 

provision extends the due date for such 

plans until 90 days after the UVB 

valuation date, to give them time to 

calculate the variable-rate premium.15

One commenter recommended that 

PBGC adopt a very different due date 

rule for new plans and some newly 

covered plans. The suggestion was 

basically to provide for filing by the 

following year’s normal due date in 

situations where one of the 90-day 

extension rules would otherwise apply. 

The commenter indicated that the 

suggested change would not apply to 

newly covered plans that had 

previously gone in and out of coverage, 

but even without this complication, 

PBGC is not persuaded that the change 

would be an improvement. The 

commenter argued that the existing rule 

is likely to result in missed filings, but 

the 90-day extension has been in the 

regulation for years, and no significant 

problems with it have come to PBGC’s 

attention. Thus PBGC’s concern would 

be that changing this long-standing 

pattern of due date extensions would be 

more likely to cause than cure problems. 

Furthermore, the commenter’s 

recommendation for the new and newly 

covered plan due date would put plans 

in the position of owing two years’ 

premiums on the same day, a result that 

the same commenter was concerned 

with in connection with the transition 

to the new unified due date for small 

plans (see Uniform Due Dates for Plans 

of All Sizes, above). Accordingly, PBGC 

is not adopting this suggestion. 

Variable-Rate Premium Changes 

‘‘Look-Back’’ Rule for Small Plans 

As noted in the discussion of the 

unified due date above, some small 

plans value benefits too late in the 

premium payment year to be able to 

compute variable-rate premiums by the 

new uniform due date, which is 21⁄2

months before the end of the premium 

payment year. (As also noted, some 

small-plan sponsors prefer to defer plan 

valuation matters until after year-end.) 

To solve this problem, small plans will 

determine UVBs, on which variable-rate 

premiums are based, by looking back to 

data for the prior year.16 Because a new 

plan does not have a prior year to look 

back to, new small plans will generally 

be exempt from the variable-rate 

premium. This new variable-rate 

premium exemption is discussed in 

more detail under First-Year VariableRate Premium Exemption below. 

The term ‘‘UVB valuation year’’ is 

used in the text of the regulation to 

mean the year that the plan 

administrator looks to for the UVBs 

used to calculate the variable-rate 

premium for the premium payment 

year. As a general rule, the UVB 

valuation year is the plan year 

preceding the premium payment year 

for small plans, and is the premium 

payment year for other plans. (Using the 

term ‘‘UVB valuation year’’ avoids the 

need to have the regulation describe two 

versions of all the UVB determination 

rules—one version for small plans and 

a second version for the others.) 

This ‘‘look-back’’ rule applies only to 

the variable-rate premium, not to the 

flat-rate premium. The participant count 

on which the flat-rate premium is based 

is determined not as of the UVB 

valuation date but as of the participant 

count date. This date is still the same as 

it was before PPA 2006, when small 

plans’ premium due date was the 

historical date that this final rule 

reinstates for them (October 15 for 

calendar-year plans). From the 

perspective of the flat-rate premium, the 

final rule returns small plans to their 

situation before PPA 2006, and no 

special accommodation is needed. 

Plans Subject to Look-Back Rule 

In general, the look-back rule applies 

to any plan with a participant count for 

the premium payment year of up to 100, 

or a funding valuation date that is not 

at the beginning of the premium 

payment year. Thus the ‘‘small plans’’ to 

which the look-back rule applies are a 

slightly different group, compared to the 

‘‘small plans’’ whose premium due date 

under the PPA 2006 amendment is four 

months after the end of the plan year. 

The difference in approach reflects the 

difference in the implications of plan 

size under the old and new premium 

payment regulations. Heretofore, all 

plans had the same UVB valuation year, 

and plan size determined due date; 

under the amended regulation, all plans 

have the same due date, and plan size 

generally determines UVB valuation 

year (i.e., whether the look-back rule 

applies). 

Until now, the regulation based plan 

size on the participant count for the year 

before the premium payment year, so 

that plans could determine well in 

advance whether they were large and 

thus required to pay the flat-rate 

premium early in the year. New plans 

(which have no prior year) were treated 

as small, which meant that they paid 

their first-year premiums according to 

the small-plan payment schedule, 

regardless of size. Newly covered plans 

were grouped with new plans. If a new 

or newly covered plan in fact covered 

more than 100 participants, it enjoyed 

the luxury of the delayed small-plan 

due date for its first year, but the most 

PBGC could be said to have ‘‘lost’’ was 

61⁄2 months’ interest on the premium. 

Under the new rules, in contrast, if a 

new plan covering more than 100 

participants were treated as small, PBGC 

would lose not just interest but (because 

of the new variable-rate premium 

exemption for new small plans) the 

whole variable-rate premium. For some 

new plans—particularly those created 

by consolidation or spinoff—this could 

be a very substantial sum. To avoid this 

unintended consequence of the lookback rule, which is meant for plans that 

are genuinely small, the small-plan 

category is based on the participant 

count for the premium payment year 

rather than the preceding year. This 

change is possible because PBGC’s 

elimination of the early flat-rate 

premium due date for large plans has 

eliminated the pressure to determine 

plan size early in the premium payment 

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13552 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

17The old small-plan category corresponds only 

approximately with the category of plans permitted 

by statute to use non-first-day-of-the-plan-year 

valuation dates. See preamble to PBGC’s final PPA 

2006 premium rule, 73 FR 15065 at 15069 (Mar. 21, 

2008). 18ERISA section 303(g)(2)(B) provides that ‘‘if, on 

each day during the preceding plan year, a plan had 

100 or fewer participants, the plan may designate 

any day during the plan year as its valuation date 

for such plan year and succeeding plan years. For 

purposes of this subparagraph, all defined benefit 

plans which are single-employer plans and are 

maintained by the same employer (or any member 

of such employer’s controlled group) shall be 

treated as 1 plan, but only participants with respect 

to such employer or member shall be taken into 

account.’’ ERISA section 303(g)(2)(C) provides 

additional rules dealing with predecessor 

employers and providing that a plan may qualify as 

‘‘small’’ for its first year based on reasonable 

expectations about its participant count during that 

year. 19PBGC also considered having the look-back 

rule apply only to plans that actually have non-firstday-of-the-plan-year valuation dates, or only to 

plans eligible to elect such dates under the statute. 

PBGC rejected the former course because it believes 

that small plans generally will prefer the look-back 

rule. PBGC rejected the latter course because of the 

complexity of the statutory description of plans 

eligible to make the valuation date election. 

20As discussed above, new plans resulting from 

non-de minimis consolidations and spinoffs are 

excluded from the look-back provision. 

21See ERISA section 4006(a)(8) as added by the 

Moving Ahead for Progress in the 21st Century Act 

(Pub. L. No. 112–141) and amended by the 

Bipartisan Budget Act of 2013 (Pub. L. No. 113–67). 

22See p. 5 of PBGC’s Plan for Regulatory Review. 

23Future years are used in this and the following 

table to avoid confusion relating to the small-plan 

due-date phase-in provision. 

year. By the time a plan needs to know 

whether it is small (and thus subject to 

the look-back rule), it will have had 

plenty of time to determine its currentyear participant count. 

Changing from the prior year’s to the 

current year’s participant count brings 

PBGC’s definition of ‘‘small plan’’ into 

closer alignment with the category of 

plans eligible by statute to use non-firstday-of-the-year valuation dates.17 The 

somewhat complex statutory provision 

is based on participant-count data from 

the prior year,18 and PBGC’s participant 

count date for the current year is 

generally the last day of the prior year. 

To improve the correspondence with 

the statutory provision, PBGC is 

changing the small-plan numerical size 

range from fewer than 100 participants 

to 100 or fewer participants (the 

numerical size range of plans permitted 

by statute to use non-first-day-of-theplan-year valuation dates). 

As a general matter, PBGC wants 

every plan that in fact has a non-firstday-of-the-plan-year valuation date to be 

included in the definition of ‘‘small 

plan’’ that the look-back rule applies to. 

But because of the complexity of the 

statutory category of plans eligible to 

use non-first-of-the-year valuation dates, 

PBGC has not matched its ‘‘small plan’’ 

definition closely to every aspect of that 

statutory category. Instead, PBGC is 

combining a simple ‘‘small plan’’ 

concept with a ‘‘catch-all’’ clause.19 The 

look-back rule thus applies to any plan 

that has a participant count of 100 or 

fewer for the premium payment year or 

that in fact has a funding valuation date 

for the premium payment year that is 

not the first day of the year.20

One commenter argued that small 

plans with first-day-of-the-plan-year 

valuation dates should be allowed to opt 

out of the look-back rule. The 

commenter noted that such plans would 

have plenty of time to compute the 

variable-rate premium based on a UVB 

valuation date in the premium payment 

year. Because the same can be said of a 

plan whose valuation date is the second 

day of the plan year, or indeed any day 

up to shortly before the due date 

(depending on the plan actuary’s 

diligence), equity would seem to suggest 

that the proposed scope of the option 

would be too narrow and that the 

proposal should be evaluated on the 

assumption that it would apply to a 

much larger category of plans. 

The commenter supported the 

proposal to permit opt-outs by observing 

that year-old data would not include 

prior-year contributions made to 

improve plans’ funded status. PBGC is 

aware that some small-plan sponsors 

make additional contributions to reduce 

the variable-rate premium and that 

under the look-back rule, reductions 

would come a year later than if the lookback rule did not apply. Other 

correspondence and comments made at 

meetings have noted the importance of 

this opportunity for some small-plan 

sponsors (especially in view of the 

recent increase in the variable-rate 

premium 21). While PBGC doesn’t know 

how many such plan sponsors there are, 

evidence suggests that there may be 

enough to warrant the introduction of 

some flexibility in the application of the 

look-back rule. 

Accordingly, to accommodate these 

concerns, the final rule contains a 

special exception allowing for a 

procedure to be provided in PBGC’s 

premium instructions whereby a small 

plan may opt out of the look-back rule 

and instead base the variable-rate 

premium on current-year UVBs. Details 

will be incorporated in the premium 

instructions and may be modified over 

time in response to experience or 

suggestions from the public.22

Effects of Due Date and Look-Back Rules 

PBGC’s look-back rule has the 

advantage that it permits use of a more 

convenient premium due date, and it 

avoids the use of complicated 

mathematical manipulations aimed at 

making the prior-year figures more 

reflective of current conditions. For 

small plans, the combination of the new 

due date and the look-back rule means 

not only that the premium due date 

aligns with the Form 5500 due date (as 

typically extended), but that the due 

dates that align correspond to the same 

valuation. The following table 

illustrates, for filings due October 15, 

2016,23 how the alignment of valuations 

and due dates for small plans differ 

from the alignment for other plans. 

Premium payment 

year 

UVB valuation 

year 

5500 valuation 

year 

Small Plans ................................................................................................................ 2016 2015 2015 

Other Plans ................................................................................................................ 2016 2016 2015 

Thus, not only do small plans enjoy the 

convenience of a convergence between 

the premium and Form 5500 due dates, 

but the due dates that converge are tied 

to the same valuation. This 

accommodates the desire of many small 

plan sponsors to defer the plan 

valuation until after the beginning of the 

year following the valuation date, when 

profits and taxes can be computed. 

For small plans, the combination of 

the new due date and the look-back rule 

has basically the same result as if the 

old small-plan due date (four months 

after the end of the premium payment 

year) were extended for 51⁄2 months 

without a look-back. For example, 

consider the following table comparing 

the final rule with a 51⁄2-month due date 

extension (without a look-back) for a 

calendar-year plan: 

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24Newly covered plans are often not subject to 

the funding rules, on which the premium rules are 

based, for the year that would be their look-back 

year. It is possible for a newly covered plan to have 

been in existence as a covered plan for a portion 

of the preceding year. Such a plan would have a 

look-back year and would not need an exemption 

from the variable-rate premium. In the interest of 

simplicity, PBGC’s first-year variable-rate premium 

exemption ignores this rare possible situation. 

25Between 2008 and 2011, about 65 new small 

plans per year paid total average variable-rate 

premiums of a little over $82,000—less than 2 

percent of total average annual new-plan variablerate premiums. 

26See Exemption for Standard Terminations, 

below. 

27See Final-Year Due Date under Executive 

Orders 12866 and 13563, below, for detailed 

discussion of costs and benefits. 

Premium payment 

year 

UVB valuation 

year Due date 

Final rule ................................................................................................................... 2016 2015 October 15, 2016. 

Due date extension without look-back ..................................................................... 2015 2015 October 15, 2016. 

In both cases, the premium due October 

15, 2016, is based on UVBs determined 

for 2015. The difference is that under 

the amended regulation, the premium is 

being paid for 2016, whereas if the due 

date had been extended 51⁄2 months, the 

premium would be for 2015. 

PBGC in fact considered the 

alternative of extending the due date 51⁄2

months for small plans. But premium 

filings contain, in addition to premium 

data, other data that PBGC uses to help 

determine the magnitude of its exposure 

in the event of plan termination, to help 

track the creation of new plans and 

transfer of participants and plan assets 

and liabilities among plans, and to keep 

PBGC’s insured-plan inventory up to 

date. It is important that these data be 

as current as possible. Furthermore, 

PBGC decided it was administratively 

simpler to have all premium filings for 

a year be due in that year—avoiding (for 

example) the need to determine whether 

a filing made October 15, 2016, was for 

2016 or 2015. 

The comparison of the advanced and 

deferred due date approaches shows 

why it is not clear how to analyze the 

financial impact of the final rule. On the 

one hand, the change can be viewed as 

a simple acceleration of the premium 

due date, with small plans losing 61⁄2

months’ interest on their annual 

premium payments. On the other hand, 

it can be viewed as a deferral of the due 

date (with small plans gaining 51⁄2

months’ interest on their premiums each 

year) preceded by a one-time ‘‘extra’’ 

premium in the transition year. For 

purposes of the analyses in this 

preamble of the effects of the changes 

for small plans, PBGC views the due 

date as being accelerated rather than 

deferred. 

Under the look-back rule, small plans 

pay variable-rate premiums based on 

year-old data. Plans may view this 

either positively or negatively, 

depending on whether UVBs are 

trending up or down; using year-old 

data to compute variable-rate premiums 

shifts by one year the effect of changes 

in those data, which are typically 

modest but may at times be dramatic. 

And for the first year to which the lookback rule applies, small plans’ variablerate premiums are based on the same 

UVBs as for the year before, which each 

small plan may consider either 

beneficial or detrimental depending on 

its circumstances. 

First-Year Variable-Rate Premium 

Exemption 

The look-back rule faces the 

difficulty, noted above, that a new plan 

does not have a prior year to look back 

to. The typical new plan has no vested 

benefits, and so would owe no variablerate premium with or without the lookback rule. But some new plans do have 

UVBs—for example, newly created 

plans that grant past-service credits. 

This circumstance creates a dilemma: a 

new small plan cannot look back to 

prior-year UVBs (because it has no prior 

year), but it may be unable to base its 

first year’s premium on its first year’s 

UVBs (because its valuation date may be 

too late in the year). To resolve this 

problem, PBGC is providing an 

exemption from the variable-rate 

premium for most small plans that are 

new or newly covered.24 PBGC 

considers it reasonable to forgo variablerate premiums from a few new small 

plans in the interest of greatly 

simplifying its premium due date 

structure.25

However, PBGC considers plans 

created by consolidation or spinoff to be 

new plans. To avoid creating an 

incentive to sponsors of underfunded 

small plans to turn them (in effect) into 

new plans by spinoff or consolidation, 

simply to avoid paying variable-rate 

premiums, PBGC is excluding from this 

variable-rate premium exemption any 

new small plan that results from a nonde minimis consolidation or spinoff. 

These consolidated or spunoff plans are 

not subject to the look-back rule, but 

instead base their variable-rate 

premiums on current-year data, with an 

extended due date available (as 

discussed above) to provide time to 

calculate the premium where the UVB 

valuation date is late in the premium 

payment year. 

Final-Year Variable-Rate Premium 

Exemption 

Although the premium rates 

regulation exempts a plan in a standard 

termination from the variable-rate 

premium for any plan year beginning 

after the plan’s termination date,26 it is 

possible to carry out a standard 

termination so that the termination date 

and final distribution come within the 

same plan year. In that case, the plan is 

subject to the variable-rate premium— 

based on underfunding of vested 

benefits—for the very year in which it 

demonstrates, by closing out, that its 

assets are sufficient to satisfy not merely 

all vested benefits but all non-vested 

benefits as well. 

As mentioned above, PBGC is 

expanding the exemption from the 

variable-rate premium to include the 

year in which a plan closes out, 

regardless of when the termination date 

is. Like the existing exemption, the new 

exemption is conditioned on 

completion of a standard termination. If 

the exemption is claimed in a premium 

filing made before (but in anticipation 

of) close-out, and close-out does not in 

fact occur by the end of the plan year, 

the exemption is lost, and the variablerate premium is owed for that year (with 

applicable late charges). 

As previously noted, variable-rate 

premium amounts not owed because of 

this change in the variable-rate premium 

exemption will significantly offset costs 

attributable to the revised final-year due 

date rule for plans in standard 

terminations, to which this change is 

related.27

Premium Funding Target for Plans in 

At-Risk Status for Funding Purposes 

ERISA section 4006(a)(3)(E) makes the 

funding target in ERISA section 303(d) 

(with modifications) the basis for the 

premium funding target. The definition 

of ‘‘funding target’’ in section 303(d) in 

turn incorporates the provisions of 

ERISA section 303(i)(1), dealing with 

‘‘at-risk’’ plans. (A plan is in ‘‘at-risk’’ 

status if it fails certain funding-status 

tests.) ERISA section 303(i)(5) provides 

for phasing in changes between normal 

and at-risk funding targets over five 

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13554 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

28PBGC took a step in this direction with its 

policy notice of February 9, 2012 (see discussion 

under Background above). However, the waiver of 

all penalties announced in that notice applied only 

for a limited time and only to plans that had never 

paid premiums. 

years and thus ameliorates the effects of 

section 303(i)(1). Although neither 

section 303(d) nor section 303(i)(1) 

refers explicitly to section 303(i)(5), 

PBGC believes that section 303(i)(5) 

clearly applies to the determination of 

the premium funding target. PBGC is 

adding a provision to the premium rates 

regulation clarifying this point. 

ERISA section 303(i)(1)(A)(i) requires 

the use of special actuarial assumptions 

in calculating an at-risk plan’s funding 

target, and section 303(i)(1)(A)(ii) 

requires that a ‘‘loading factor’’ be 

included in the funding target of an atrisk plan that has been at-risk for two of 

the past four plan years. The loading 

factor, described in section 303(i)(1)(C), 

is the sum of (i) an additional amount 

equal to $700 times the number of plan 

participants and (ii) an additional 

amount equal to 4 percent of the 

funding target determined as if the plan 

were not in at-risk status. 

In response to inquiries from pension 

practitioners, PBGC is amending the 

premium rates regulation to clarify the 

application of the loading factor to the 

calculation of the premium funding 

target for plans in at-risk status. 

The statutory variable-rate premium 

provision refers explicitly to the defined 

term ‘‘funding target,’’ which for at-risk 

plans clearly includes the section 

303(i)(1) modifications. PBGC thus 

considers it clear that all of the at-risk 

modifications must be reflected in the 

premium funding target. And 

considering that the funding target and 

the premium funding target are so 

closely analogous, it seems natural that 

for premium purposes, the 4 percent 

increment referred to in section 

303(i)(1)(C)(ii) should be taken to mean 

4 percent of the premium funding target 

determined as if the plan were not in atrisk status. 

But for premium purposes, the term 

‘‘participant’’ in the loading factor 

provision is ambiguous. Because the 

premium funding target reflects only 

vested benefits, while the funding target 

reflects all accrued benefits, there is a 

suggestion that the term ‘‘participant’’ 

should in the premium context be 

understood to refer to vested 

participants. But many participants are 

partially vested (as in plans with graded 

vesting) or are vested in one benefit but 

not another (for example, vested in a 

lump-sum death benefit but not in a 

retirement annuity) and thus are not 

clearly either vested or non-vested. 

Furthermore (putting vesting aside), the 

premium regulations (§ 4006.6 of the 

premium rates regulation) and the 

Internal Revenue Service’s regulation on 

special rules for plans in at-risk status 

(26 CFR 1.430(i)–1(c)(2)(ii)(A)) count 

participants differently. 

PBGC is resolving the statutory 

ambiguity by providing that the 

participant count to use in calculating 

the loading factor to be reflected in the 

premium funding target is the same 

participant count used to compute the 

load for funding purposes. This solution 

has the advantage that it avoids 

introducing new participant-counting 

rules and does not impose on filers the 

burden of determining two different 

participant counts for two similar 

purposes. 

One commenter argued that the 

loading factor should not be included in 

the premium funding target. The 

commenter noted that ERISA section 

4006 could have referred to both ERISA 

sections 303(d) and 303(i), but refers 

only to section 303(d). However, as the 

commenter notes, section 303(d) refers 

to section 303(i). Thus section 4006, by 

referring to section 303(d), is referring to 

section 303(i) as well. 

The commenter also supported the 

argument against incorporation of the 

loading factor by appealing to the 

difference in the purposes of sections 

303 and 4006, the former dealing with 

plan funding and taking unvested 

benefits into account, the latter dealing 

with PBGC premiums and not taking 

unvested benefits into account. PBGC 

acknowledges these differences, but 

points out that the two sections are 

linked, in that section 4006 refers to 

section 303 for the methodology for 

calculating premiums. In fact, section 

4006(a)(3)(E)(iii)(I) specifies how the 

premium methodology differs from the 

funding methodology. Two differences 

are noted: disregarding unvested 

benefits and using different interest 

assumptions. The load is not 

mentioned. PBGC thus believes that the 

statutory language adequately supports 

the applicability of the loading factor to 

the calculation of premiums. 

Finally, the commenter claimed that 

participants in at-risk plans are better 

off if funds are devoted to benefits 

rather than premiums. But even if each 

dollar spent on pension insurance 

premiums is a dollar not spent on 

benefits, pension insurance is for the 

protection of those very benefits. PBGC 

insurance would appear to be even more 

valuable for participants in at-risk plans 

than in plans not in at-risk status. 

Finding none of the commenter’s 

reasoning persuasive, PBGC continues 

to hew to the position that the loading 

factor applies to the premium funding 

target. 

Penalties 

Lowering the Self-Correction Penalty 

Cap 

The difference between the normal 

penalty rate of 5 percent per month and 

the self-correction rate of 1 percent per 

month provides an incentive to selfcorrect and reflects PBGC’s judgment 

that those that come forward voluntarily 

to correct underpayments deserve more 

lenient treatment than those that PBGC 

ferrets out through its premium 

enforcement programs. But because of a 

penalty cap of 100 percent of the 

underpayment, regardless of the rate it 

accrues at, a plan that self-corrects after 

100 months pays the same penalty as if 

it had been tracked down by PBGC. 

PBGC occasionally encounters 

situations in which—typically when 

there is a change in plan sponsor or plan 

actuary—a plan with a long history of 

underpaying or not paying premiums 

‘‘comes in from the cold.’’ PBGC 

believes that in fairness to such filers 

(and to persuade others to emulate 

them), the maximum penalty for selfcorrectors should be substantially less 

than that for those that do not selfcorrect.28

To preserve the self-correction 

penalty differential for long-overdue 

premiums, PBGC is capping the selfcorrection penalty at 50 percent of the 

unpaid amount. While this will reduce 

PBGC’s penalty income in these cases, 

acceptance of the reduction is consistent 

with the view of penalties as a means to 

encourage compliance, rather than as a 

source of revenue. 

Expansion of Penalty Waiver Authority 

The premium payment regulation and 

its appendix include many specific 

penalty waiver provisions that provide 

guidance to the public about the 

circumstances in which PBGC considers 

waivers appropriate—circumstances 

such as reasonable cause and mistake of 

law. To deal with unanticipated 

situations that nevertheless seem to 

warrant penalty relief, § 4007.8(d) refers 

to the policy guidelines in the appendix, 

and § 21(b)(5) of the appendix says that 

PBGC may waive all or part of a 

premium penalty if it determines that it 

is appropriate to do so, and that PBGC 

intends to exercise this waiver authority 

only in narrow circumstances. 

In reviewing the circumstances where 

it has exercised its waiver authority, 

PBGC has concluded that the term 

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Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 13555 

29See preamble to final rule, 54 FR 28950 (July 

10, 1989). 

30As discussed above, PBGC is broadening the 

scope of this exemption to include the year in 

which a standard termination is completed, 

regardless of the timing of the termination date. 

‘‘narrow’’ may not capture well the 

scope of that exercise and may thus be 

misleading. To avoid an implication 

that PBGC considers its waiver authority 

more narrowly circumscribed than in 

fact it does, the sentence about narrow 

circumstances is being removed from 

the appendix. 

Codification of Seven-Day Penalty 

Waiver Rule 

On September 15, 2011 (at 76 FR 

57082), PBGC published a policy notice 

announcing (among other things) that 

for plan years beginning after 2010, it 

would waive premium payment 

penalties assessed solely because 

premium payments were late by not 

more than seven calendar days. 

In applying this policy, PBGC 

assumes that each premium payment is 

made seven calendar days before it is 

actually made. All other rules are then 

applied as usual. If the result of this 

procedure is that no penalty would 

arise, then any penalty assessed on the 

basis of the actual payment dates is 

waived. 

PBGC is codifying this policy in the 

premium payment regulation. 

One commenter complained that by 

the time PBGC notifies a late filer that 

an expected filing has not been 

received, the seven-day grace period has 

expired, and the filer becomes liable for 

a five percent penalty. The commenter 

requested that tardy filers in such 

circumstances be given an additional 15 

days to pay and incur a one-percent 

penalty or that PBGC notify plans 

immediately when expected filings are 

not received, to give them the full 

benefit of the seven-day grace period 

within which to file. 

Plan administrators are expected to 

know the law and to be capable of 

setting up tickler files and computerized 

reminders for legal obligations they may 

otherwise forget to fulfill. Nonetheless, 

PBGC does offer a reminder service. 

Reminders are sent shortly after the 

beginning of each month to practitioners 

who have signed up for reminders for 

that month. Plan administrators may 

sign up for reminders at http://

www.pbgc.gov/prac/pg/other/

practitioner-filing-reminders.html. 

PBGC believes no modification of its 

premium regulations is called for to 

accommodate this comment. 

Small-Plan Penalty Relief for VariableRate Premium Estimates 

The premium payment regulation 

provides an option for paying an 

estimate of the variable-rate premium at 

the due date and ‘‘truing up’’ within 61⁄2

months without penalty. The 

availability of this option has been 

restricted to mid-size and large plans. 

With the elimination of different due 

dates based on plan size, the option is 

being made available to plans of any 

size. PBGC expects that very few small 

plans will take advantage of the option, 

since in virtually all cases, the variablerate premium will be known by the 

uniform due date. But the only 

comment PBGC received on this issue 

was in favor of making the option 

available to small plans. 

Other Changes 

Variable-Rate Premium Cap 

Before amendment to conform to 

statutory changes made by PPA 2006, 

PBGC’s premium regulations used the 

same date for counting participants for 

purposes of the flat-rate premium and 

for determining UVBs for purposes of 

the variable-rate premium. This date 

was (generally) ‘‘the last day of the plan 

year preceding the premium payment 

year.’’ 

When PBGC amended the premium 

regulations to conform to PPA 2006, the 

amendments provided that in general, 

UVBs were to be determined as of a 

different date from the date used to 

count participants. Thus references in 

the regulations to ‘‘the last day of the 

plan year preceding the premium 

payment year’’ in some cases were 

changed to refer to ‘‘the participant 

count date’’ and in other cases were 

changed to refer to ‘‘the UVB valuation 

date.’’ 

The regulatory provision dealing with 

the variable-rate premium cap for plans 

of small employers includes two 

references to ‘‘the last day of the plan 

year preceding the premium payment 

year’’ that should have been amended to 

refer to ‘‘the participant count date’’ but 

were overlooked. PBGC is correcting the 

variable-rate premium cap provision to 

remedy this oversight. 

Exemption for Standard Terminations 

When PBGC added to the premium 

regulations the exemption from the 

variable-rate premium for plans 

terminating in standard terminations, it 

stated that the exemption would apply 

to ‘‘a standard termination with a 

proposed termination date during a plan 

year preceding the premium payment 

year.’’ 29 This reflects the provision in 

Rev. Rul. 79–237 (1979–2 C.B. 190) that 

minimum funding standards apply only 

until the end of the plan year that 

includes the termination date. In the 

text of the regulation, this requirement 

was expressed by requiring that the 

proposed termination date be on or 

before ‘‘the last day of the plan year 

preceding the premium payment year’’ 

— the same words used to identify the 

date as of which participants were to be 

counted for purposes of the flat-rate 

premium and the date as of which UVBs 

were to be determined for purposes of 

the variable-rate premium. 

When PBGC amended the premium 

regulations to conform to statutory 

changes made by PPA 2006, as 

described above, the phrase ‘‘the last 

day of the plan year preceding the 

premium payment year’’ in the standard 

termination exemption from the 

variable-rate premium should have been 

left unchanged. Instead, it was 

inadvertently amended to read ‘‘the 

UVB valuation date.’’ PBGC is 

correcting the exemption to require that 

the proposed termination date be 

‘‘before the beginning of the premium 

payment year,’’ which also makes the 

provision clearer and simpler.30

Liability for Premiums in Distress and 

Involuntary Terminations 

The premium payment regulation 

provides that a single-employer plan 

does not have an obligation to pay 

premiums if the plan is the subject of 

distress or involuntary termination 

proceedings, with a view to conserving 

plan assets in such situations. The 

premium payment obligation then falls 

solely on the plan sponsor’s controlled 

group. Heretofore, the regulation 

focused on the plan year for which a 

premium is due; the plan’s obligation 

was tolled with respect to premiums for 

the year in which the termination was 

initiated and future years. 

PBGC has encountered cases in which 

plan administrators have used plan 

assets to pay premiums for which the 

plans had no obligation because 

termination proceedings began later in 

the plan year, after payment was made. 

To address this problem, PBGC is 

revising the regulation so that a plan’s 

obligation to pay premiums ceases when 

termination proceedings begin—an 

event of which the plan administrator 

will have notice—at which time the 

premium payment obligation falls solely 

on the plan sponsor’s controlled group. 

This change does not affect the 

amount of premiums due. It simply 

reduces administrative burden by 

making it easier for a plan administrator 

to determine whether the plan has an 

obligation to make a premium payment. 

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13556 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

31Technical Update 12–1, http://www.pbgc.gov/

res/other-guidance/tu/tu12-1.html provides 

guidance on the effect of MAP–21 on PBGC 

premiums. 

32See 73 FR 15069 (emphasis supplied). 

33The alternative calculation method is also 

described in the premium filing instructions for 

years to which it applies. 

Definition of Newly Covered Plan 

The current definition of newly 

covered plan excludes new plans. In 

rare cases, a new plan might not 

initially be covered by title IV of ERISA 

and might then become covered later in 

its first year of existence. PBGC is 

revising the definition to remove the 

exclusion of new plans so that in the 

rare case described, the plan will be a 

newly covered plan (as well as a new 

plan) and thus entitled to prorate its 

premium based on its coverage date (as 

newly covered plans are permitted to 

do) rather than its effective date (as new 

plans are permitted to do). 

Changes Related to MAP–21 and BBA 

2013 

On July 6, 2012, and December 26, 

2013 (respectively), the President signed 

into law the Moving Ahead for Progress 

in the 21st Century Act (MAP–21) (Pub. 

L. No. 112–141) and the Bipartisan 

Budget Act of 2013 (BBA 2013) (Pub. L. 

No. 113–67). MAP–21 and BBA 2013 

included provisions about PBGC 

premiums that, without the need for 

implementing action by PBGC, have 

already become effective.31 PBGC is 

amending the premium rates regulation 

in accordance with MAP–21 and BBA 

2013. 

Under sections 40221 and 40222 of 

MAP–21, effective for plan years 

beginning after 2012, each flat or 

variable premium rate has a different 

annual inflation adjustment formula, 

and the variable-rate premium is limited 

by a cap (the ‘‘MAP–21 cap’’) with its 

own annual inflation adjustment. BBA 

2013 added more adjustment 

provisions. Because of the multiplicity 

and complexity of the adjustment 

formulas, PBGC has concluded that it is 

not useful to repeat the statutory 

premium rate rules in the premium rates 

regulation. Instead, PBGC is replacing 

existing premium rate provisions with 

statutory references and will simply 

announce each year the new rates 

generated by the statutory rate formulas. 

Effective for plan years beginning 

after 2011, section 40211 of MAP–21 

establishes a ‘‘segment rate 

stabilization’’ corridor for certain 

interest assumptions used for funding 

purposes but provides (in section 

40211(b)(3)(C)) for disregarding rate 

stabilization in determining PBGC 

variable-rate premiums. PBGC is 

revising the description of the 

alternative premium funding target to 

make clear that it is determined using 

discount rates unconstrained by the 

segment rate stabilization rules of MAP– 

21. 

Editorial Changes 

PBGC is revising the language that 

describes the ‘‘reconciliation’’ date— 

associated with the penalty waiver for 

underestimation of the variable-rate 

premium—to clarify that the waiver 

does not require a particular state of 

mind (of the plan administrator, 

sponsor, actuary, or other person) 

regarding the correctness or ‘‘finality’’ of 

the estimate. This clarification is not 

substantive but merely reflects the fact 

that (as noted in the 2008 preamble to 

the PPA 2006 amendment to the 

regulation) the waiver is provided ‘‘in 

recognition of the possibility that 

circumstances might make a final UVB 

determination by the due date difficult 

or impossible’’.32

PBGC is also making some other nonsubstantive editorial changes, including 

provision of an additional example, 

deletion of anachronistic text, and 

addition of a definitional crossreference. 

Conforming Changes to Other 

Regulations 

PBGC’s regulation on Restoration of 

Terminating and Terminated Plans (29 

CFR part 4047) has a cross-reference to 

§ 4006.4(c) of the premium rates 

regulation, which used to describe the 

alternative calculation method for 

determining the variable-rate 

premium 33 but no longer does so. To 

avoid confusion, PBGC is removing the 

obsolete cross-reference. 

PBGC is deleting from its regulation 

on Filing, Issuance, Computation of 

Time, and Record Retention (29 CFR 

part 4000) a provision that parallels 

anachronistic text that is being deleted 

from the premium rates regulation. 

Comments Unrelated to Proposed 

Regulatory Changes 

De Minimis Plan Transactions 

One commenter proposed a change to 

the ‘‘merger-spinoff rule.’’ That 

provision applies where there is a plan 

merger or spinoff at the very beginning 

of the premium payment year (the 

‘‘stroke of midnight’’ between the prior 

year and the premium payment year). 

The provision shifts the participant 

count date from the day before the 

premium payment year begins to the 

first day of the premium payment year 

for certain plans involved in such 

mergers or spinoffs. The participant 

count date shifts for the transferee plan 

in a non-de minimis merger and for the 

transferor plan in a non-de minimis 

spinoff. Participants for whom the 

transferor plan in a merger will pay no 

premiums get picked up in the 

transferee plan’s participant count, and 

participants for whom the transferee 

plan in a spinoff will pay premiums get 

dropped from the transferor plan’s 

participant count. In general, a 

transaction is de minimis if the 

liabilities of one of the two plans 

involved in the transaction are less than 

three percent of the other plan’s assets. 

The commenter suggested that the 

exception for de minimis transactions be 

eliminated. PBGC believes 

consideration of this suggestion should 

be deferred. The suggestion deals with 

a feature of the premium rates 

regulation not directly focused on by the 

proposed rule. While the suggestion 

would tend to lower premiums for 

transferor plans in de minimis spinoffs, 

it would tend to raise premiums for 

transferee plans in de minimis mergers. 

For both types of transaction, it would 

mean counting participants on a 

different date, which might be 

inconvenient. And PBGC notes that de 

minimis transactions are also 

disregarded in determining whether a 

plan is a continuation plan for purposes 

of applying the due date and look-back 

rules. There is a question whether de 

minimis transactions should be taken 

account of for that purpose too or 

whether de minimis transactions should 

be treated in different ways for the two 

different purposes. Thus PBGC is taking 

no action on this suggestion now. 

Post-Filing Events 

PBGC’s premium filing instructions 

require that a plan making its final 

premium filing report the reason why 

the filing is the plan’s final filing. But 

when the event that leads to the 

cessation of the filing requirement— 

such as a plan merger or 

consolidation—occurs after the 

premium filing is made, the instructions 

say no amended filing is required. To 

avoid the need for correspondence to 

clarify why a plan has stopped filing, 

the instructions recommend contacting 

PBGC in such cases unless a 

termination, merger, or consolidation is 

involved. 

One commenter complained that 

PBGC requires amended filings in finalfiling circumstances where its premium 

instructions say amended filings are not 

required. (PBGC assumes the comment 

reflects informal guidance provided by 

PBGC’s premium information call 

center.) 

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Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 13557 

34PBGC assumes for this purpose that enrolled 

actuaries charge about $350 per hour. 

PBGC’s position on amended filings 

in such cases is as stated in its filing 

instructions. Amended filings are not 

required for post-filing events that lead 

to cessation of the premium filing 

requirement, although voluntary 

informal reporting is encouraged. 

Where informal guidance from a 

PBGC source seems to conflict with 

other PBGC guidance (such as premium 

filing instructions), PBGC encourages 

filers to contact PBGC’s Problem 

Resolution Officer (Practitioners) as 

described in item 7 of appendix 2 to 

PBGC’s premium filing instructions, 

available on PBGC’s Web site 

(www.pbgc.gov). 

This issue appears not to implicate 

anything in PBGC’s premium 

regulations. 

Penalty Relief for Premium Estimates 

Two comments requested that PBGC 

modify the premium forms and 

instructions to permit a plan to take 

advantage of the penalty waiver for 

underestimation of the variable-rate 

premium without the need to declare 

the initial filing an estimate by checking 

a box. Since the introduction of this 

waiver, the instructions have required 

that a plan that checks the box make a 

reconciliation filing even when the 

estimated variable-rate premium turns 

out to be correct, and plans that fail to 

make the required second filing have 

been contacted by PBGC to enforce the 

requirement. Eliminating the check box 

would obviate the burden of making a 

second filing when there is no change 

in the premium and would conserve 

PBGC resources by eliminating the need 

for correspondence with such plans. 

Although PBGC is always interested 

in simplifying the premium filing 

process, it is not taking action on this 

suggestion at this time. PBGC is not 

convinced that it has an adequate basis 

for concluding that the burden of the 

checkbox procedure outweighs the 

utility of the checkbox. For example, for 

2012, only about 70 plans checked the 

estimated-filing checkbox; about 40 

filed timely reconciliations and 30 did 

not. About another 30 plans made 

amended filings by the reconciliation 

deadline and might have qualified for 

penalty relief if they had checked the 

box to indicate that their initial filings 

were estimated. One commenter’s 

assertion that plans routinely check the 

estimated-filing checkbox to preserve 

the option to amend without penalty 

seems unsupported by these data. Nor 

do the data bear out the hypothesis that 

many plans fail to qualify for the 

penalty waiver simply because they 

neglect to check the box. In short, so few 

plans seem to be affected by the 

checkbox requirement that PBGC 

believes other options, such as 

providing more guidance or cautions in 

PBGC’s electronic premium filing 

interface, could ameliorate the 

commenters’ concerns. PBGC thinks it 

prudent to explore such other options 

and to gather and analyze further data 

before deciding whether to take the 

checkbox off the electronic premium 

filing form. 

PBGC welcomes further public 

comment on this suggestion. 

Applicability 

Except as indicated below, the 

amendments in this final rule are 

applicable for 2014 and later plan years. 

The change in the due date and the 

exemption from the variable-rate 

premium for a plan closing out in a 

standard termination are applicable to 

plans that complete distribution of 

assets in satisfaction of all plan benefits 

under the single-employer termination 

regulation on or after the effective date 

of this final rule. 

The change in the date when a plan 

ceases to be liable for premiums in a 

distress or involuntary termination is 

applicable to terminations with respect 

to which the plan administrator issues 

the first notice of intent to terminate, or 

the PBGC issues a notice of 

determination, on or after the effective 

date of this final rule. 

MAP–21 became effective on July 6, 

2012. BBA 2013 is effective for plan 

years beginning after 2013. The changes 

to premium rates in this final rule apply 

to plan years beginning after 2012 (to 

the extent attributable to MAP–21) or 

after 2013 (to the extent attributable to 

BBA 2013). The clarification to the 

definition of the alternative premium 

funding target after MAP–21 applies to 

plan years beginning after 2011. 

Executive Orders 12866 and 13563 

PBGC has determined, in consultation 

with the Office of Management and 

Budget, that this rulemaking is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866. 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. This final 

rule is associated with retrospective 

review and analysis in PBGC’s Plan for 

Regulatory Review issued in accordance 

with Executive Order 13563. 

In accordance with OMB Circular A– 

4, PBGC has examined the economic 

and policy implications of this final rule 

and has concluded that the action’s 

benefits justify its costs. That 

conclusion is based on the following 

analysis of the impact of the due date 

changes in this rule. (The other changes 

have essentially no cost-benefit impact.) 

Uniform Due Dates 

PBGC estimates that the reduction in 

administrative burden attributable to 

adoption of the new unified due date 

translates into average annual savings of 

1.2 hours for each small plan. (PBGC 

arrived at this estimate on the basis of 

inquiries made to pension 

practitioners.) The dollar equivalent of 

this saving for the roughly 15,000 small 

plans is about $400 per plan.34

Adoption of the uniform due date also 

shifts the earnings on premium 

payments between plans and PBGC for 

the time between the old and new due 

dates. Because earning rates differ 

between PBGC and plans, the losses and 

gains will not balance out exactly. But 

the earnings shift for small plans will be 

virtually negligible. The analysis is not 

straightforward because of the 

concomitant shift from current-year to 

prior-year data. See the discussion 

under the heading Combined Effects of 

Due Date and Look-Back Proposals, 

above. But based on 2011 data, and 

assuming aggregate small-plan 

premiums of about $36 million, a 61⁄2- 

month advance in the small-plan due 

date, and a plan earnings rate of 6 

percent, small plans in the aggregate 

will lose about $1.2 million a year—on 

average, about $85 per plan. A plan’s 

lost interest earnings will be 

proportional to its premium; the 

premium may vary widely among plans, 

and thus the loss may do the same. 

Accordingly, PBGC foresees an 

average net benefit (in dollar terms) 

from adoption of the new uniform due 

date of about $315 for each small plan— 

about $400 in administrative cost 

savings offset by about $85 in lost 

interest earnings. 

PBGC’s gain will be about one-third 

the amount lost by plans. PBGC 

estimates its rate of return, from 

investment in U.S. Government 

securities, at about 2 percent. PBGC 

estimates plans’ rate of return at 6 

percent. The following table shows the 

estimated average interest earnings 

calculated with four rates: Two percent 

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13558 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

35For 2011, only about 7 percent of standard 

terminations involved plans with more than 100 

participants. 

36This discussion and the discussion of variablerate premium savings below are based on 

(increased) 2014 premium rates applied to 2010 

data on plans, participants, and unfunded vested 

benefits. 

37See, e.g., ERISA section 104(a)(2), which 

permits the Secretary of Labor to prescribe 

simplified annual reports for pension plans that 

cover fewer than 100 participants. 

38See, e.g., Code section 430(g)(2)(B), which 

permits plans with 100 or fewer participants to use 

valuation dates other than the first day of the plan 

year. 39See, e.g., DOL’s final rule on Prohibited 

Transaction Exemption Procedures, 76 Fed. Reg. 

66,637, 66,644 (Oct. 27, 2011). 40See PBGC 2010 pension insurance data table S– 

31, http://www.pbgc.gov/Documents/pensioninsurance-data-tables-2010.pdf. 

(our best estimate for PBGC’s rate of 

return), six percent (our best estimate 

for plans’ rate of return), and three and 

seven percent (the discount rates 

recommended by OMB Circular A–4). 

Approximate average interest earnings per small plan at— 

2 percent 3 percent 6 percent 7 percent 

$30 ................................................................................................................................................................. $40 $85 $95 

Final-Year Due Date 

Advancing the premium due date for 

some terminating plans will also shift 

earnings on the premiums from plans to 

PBGC. Since plans that do standard 

terminations are almost all small,35 the 

amounts involved are also small. 

On average (over the period 2001– 

2010), about 1,300 plans terminate each 

year. About half of them will have their 

final-year due dates advanced by an 

average of about 100 days; for the other 

half, the due date will not be advanced. 

Thus on average, this rule requires 

payment of the premium about 50 days 

early. The average single-employer flatrate premium is about $950 for small 

plans and about $176,000 for larger 

plans.36 At a rate of 6 percent, 50 days’ 

interest on an average small-plan flatrate premium of $950 is about $8. For 

larger plans, the average figure using the 

same methodology is about $1,450. But 

so few larger plans do standard 

terminations that the weighted average 

earnings loss for plans of all sizes will 

be only about $110 per plan, or an 

aggregate estimated earnings loss of 

$143,000. 

On the other hand, there should be 

some savings to plans arising from 

calculating and paying the final-year 

premium while plan books and records 

are still open and in use for paying 

benefits—as opposed to later, when they 

would have to be found and reopened. 

If one-tenth of final-year filers (130 

plans) each save one hour of actuarial 

time at an average of $350 per hour, the 

total savings will be over $45,500 (or, if 

averaged over all terminating plans, 

about $35 per plan). 

Further, historical data indicate that 

plans doing standard terminations could 

be expected to pay an aggregate of about 

$117,000 in variable-rate premiums in 

their final year. This represents an 

estimate of the savings to plans under 

the expansion of the standard 

termination variable-rate premium 

exemption. The savings will of course 

be realized only by the small minority 

of terminating plans that would owe 

variable-rate premium in their final year 

in the absence of this final rule. 

Averaged over all plans closing out in 

a year, however, the savings will be 

about $90 per plan. 

Accordingly, PBGC foresees no 

significant economic impact from the 

due date change for terminating plans 

because the loss of earnings on flat-rate 

premiums paid earlier (about $110 per 

plan) will be offset by the gain from 

variable-rate premiums not paid (about 

$90 per plan) and cost reductions from 

improvement in administrative 

procedures (about $35 per plan). 

Regulatory Flexibility Act 

The Regulatory Flexibility Act 

imposes certain requirements with 

respect to rules that are subject to the 

notice and comment requirements of 

section 553(b) of the Administrative 

Procedure Act. Unless an agency 

determines that a final rule is not likely 

to have a significant economic impact 

on a substantial number of small 

entities, section 604 of the Regulatory 

Flexibility Act requires that the agency 

present a final regulatory flexibility 

analysis at the time of the publication of 

the final rule describing the impact of 

the rule on small entities and steps 

taken to minimize the impact. Small 

entities include small businesses, 

organizations and governmental 

jurisdictions. 

Small Entities 

For purposes of the Regulatory 

Flexibility Act requirements with 

respect to this final rule, PBGC 

considers a small entity to be a plan 

with fewer than 100 participants. This 

is substantially the same criterion used 

to determine what plans would be 

subject to the look-back rule under the 

proposal, and is consistent with certain 

requirements in title I of ERISA 37 and 

the Internal Revenue Code,38 as well as 

the definition of a small entity that the 

Department of Labor (DOL) has used for 

purposes of the Regulatory Flexibility 

Act.39 Using this proposed definition, 

about 64 percent (16,700 of 26,100) of 

plans covered by title IV of ERISA in 

2010 were small plans.40

Further, while some large employers 

may have small plans, in general most 

small plans are maintained by small 

employers. Thus, PBGC believes that 

assessing the impact of the proposal on 

small plans is an appropriate substitute 

for evaluating the effect on small 

entities. The definition of small entity 

considered appropriate for this purpose 

differs, however, from a definition of 

small business based on size standards 

promulgated by the Small Business 

Administration (13 CFR 121.201) 

pursuant to the Small Business Act. In 

its proposed rule, therefore, PBGC 

requested comments on the 

appropriateness of the size standard 

used in evaluating the impact of the 

proposed rule on small entities. No 

comments were received. 

Certification 

On the basis of its definition of small 

entity, PBGC certifies under section 

605(b) of the Regulatory Flexibility Act 

(5 U.S.C. 601 et seq.) that the 

amendments in this final rule will not 

have a significant economic impact on 

a substantial number of small entities. 

Accordingly, as provided in section 605 

of the Regulatory Flexibility Act, 

sections 603 and 604 do not apply. This 

certification is based on PBGC’s 

estimate (discussed above) that the 

change to uniform due dates will create 

an average annual net economic benefit 

for each small plan of about $315. This 

is not a significant impact. 

Paperwork Reduction Act 

PBGC is submitting the information 

requirements under this final rule for 

approval by the Office of Management 

and Budget under the Paperwork 

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Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 13559 

Reduction Act (OMB control number 

1212–0009; expires February 29, 2016). 

An agency may not conduct or sponsor, 

and a person is not required to respond 

to, a collection of information unless it 

displays a currently valid OMB control 

number. 

PBGC is making only small changes in 

the data filers are required to submit. A 

plan’s filing will be required to state 

whether the plan is a new small plan 

created by non-de minimis 

consolidation or spinoff (to which 

special rules apply) and to indicate if an 

exemption from the variable-rate 

premium is claimed under one of the 

new exemption rules. The participant 

count will have to be broken down into 

active, terminated, and retired 

categories. Changes to the filing 

instructions clarify how to calculate 

premiums, set forth the new due date 

rules, and deal with other routine 

matters such as updating examples and 

premium rates. 

PBGC needs the information in a 

premium filing to identify the plan for 

which the premium is paid to PBGC, to 

verify the amount of the premium, to 

help PBGC determine the magnitude of 

its exposure in the event of plan 

termination, to help PBGC track the 

creation of new plans and the transfer 

of plan assets and liabilities among 

plans, and to keep PBGC’s inventory of 

insured plans up to date. PBGC receives 

premium filings from about 25,700 

respondents each year and estimates 

that the total annual burden of the 

collection of information will be about 

8,000 hours and $53,255,000. 

In comparison with the burden that 

OMB had approved for this information 

collection before PBGC’s recent final 

rule eliminating the early due date for 

large plans’ flat-rate premiums, this 

burden estimate reflects both a decrease 

in burden attributable to changes in the 

premium due dates (under both the 

large-plan final rule and this final rule) 

and an increase in burden attributable to 

a re-estimate of the existing premium 

filing burden. The increase in burden 

due to re-estimation is about 31,300 

hours, and the decrease due to the due 

date changes is about 35,000 hours 

(about 17,000 hours for large plans and 

about 18,000 hours for small plans), a 

net decrease of about 3,700 hours from 

the burden approved before the largeplan final rule (about 163,600 hours). 

PBGC assumes that about 95 percent of 

the work is contracted out at $350 per 

hour, so the 35,000-hour decrease 

attributable to the two final rules is 

equivalent to about 1,750 hours of inhouse labor and about $11,600,000 of 

contractor costs. 

The burden for which PBGC sought 

OMB approval in connection with the 

recent final rule eliminating the early 

due date for large plans’ flat-rate 

premiums was about 178,000 hours 

(about 8,900 in-house hours plus about 

$59,250,000 in contractor costs for the 

remaining 169,100 hours). This burden 

estimate reflected both the increase due 

to re-estimation and the decrease due to 

the large-plan flat-rate due date change. 

In comparison with the 178,000-hour 

burden estimate, the new burden 

estimate reflects a decrease of about 

18,000 hours, attributable to the due 

date change for small plans. Since PBGC 

assumes that about 95 percent of the 

work is contracted out at $350 per hour, 

this 18,000-hour decrease is equivalent 

to about 900 hours of in-house labor and 

about $6 million of contractor costs. 

List of Subjects 

29 CFR Part 4000 

Pension insurance, Pensions, 

Reporting and recordkeeping 

requirements. 

29 CFR Part 4006 

Employee benefit plans, Pension 

insurance. 

29 CFR Part 4007 

Employee benefit plans, Penalties, 

Pension insurance, Reporting and 

recordkeeping requirements. 

29 CFR Part 4047 

Employee benefit plans, Pension 

insurance. 

In consideration of the foregoing, 

PBGC amends 29 CFR parts 4000, 4006, 

4007, and 4047 as follows: 

PART 4000—FILING, ISSUANCE, 

COMPUTATION OF TIME, AND 

RECORD RETENTION 

■ 1. The authority citation for part 4000 

continues to read as follows: 

Authority: 29 U.S.C. 1082(f), 1302(b)(3). 

§ 4000.3 [Amended] 

■ 2. In § 4000.3(b): 

■ a. Paragraph (b)(1)(i) is removed. 

■ b. Paragraphs (b)(1)(ii), (b) (1)(iii), and 

(b)(1)(iv) are redesignated as paragraphs 

(b)(1)(i), (b)(1)(ii), and (b)(1)(iii) 

respectively. 

PART 4006—PREMIUM RATES 

■ 3. The authority citation for part 4006 

continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1306, 

1307. 

■ 4. In § 4006.2: 

■ a. The introductory text is amended 

by removing the words ‘‘and singleemployer plan’’ and adding in their 

place the words ‘‘single-employer plan, 

and termination date’’. 

■ b. The definition of participant count 

is amended by removing the words ‘‘for 

a plan year’’ and by removing the words 

‘‘for the plan year’’. 

■ c. The definition of participant count 

date is amended by removing the words 

‘‘for a plan year’’. 

■ d. The definition of UVB valuation 

date is amended by removing the words 

‘‘for a plan year’’; and by removing the 

words ‘‘plan year determined’’ and 

adding in their place the words ‘‘UVB 

valuation year, determined’’. 

■ e. The definition of newly-covered 

plan is revised, and new definitions of 

continuation plan, small plan, and UVB 

valuation year are added, in 

alphabetical order, to read as follows: 

§ 4006.2 Definitions. 

* * * * * 

Continuation plan means a new plan 

resulting from a consolidation or spinoff 

that is not de minimis pursuant to the 

regulations under section 414(l) of the 

Code. 

* * * * * 

Newly covered plan means a plan that 

becomes covered by title IV of ERISA 

during the premium payment year and 

that existed as an uncovered plan 

immediately before the first date in the 

premium payment year on which it was 

a covered plan. 

* * * * * 

Small plan means a plan— 

(1) Whose participant count is not 

more than 100, or 

(2) Whose funding valuation date for 

the premium payment year, determined 

in accordance with ERISA section 

303(g)(2), is not the first day of the 

premium payment year. 

* * * * * 

UVB valuation year of a plan means— 

(1) In general,— 

(i) The plan year preceding the 

premium payment year, if the plan is a 

small plan other than a continuation 

plan, or 

(ii) The premium payment year, in 

any other case; or 

(2) For a small plan that so opts 

subject to PBGC premium instructions, 

the premium payment year. 

■ 5. In § 4006.3: 

■ a. Paragraphs (c) and (d) are removed. 

■ b. A sentence is added to the end of 

the introductory text, and paragraphs (a) 

and (b) are revised, to read as follows: 

§ 4006.3 Premium rate. 

* * * Premium rates (and the MAP– 

21 cap rate referred to in paragraph 

(b)(2) of this section) are subject to 

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13560 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

change each year under inflation 

indexing provisions in section 4006 of 

ERISA. 

(a) Flat-rate premium. The flat-rate 

premium for a plan is equal to the 

applicable flat premium rate multiplied 

by the plan’s participant count. The 

applicable flat premium rate is the 

amount prescribed for the calendar year 

in which the premium payment year 

begins by the applicable provisions of— 

(1) ERISA section 4006(a)(3)(A), (F), 

and (G) for a single-employer plan, or 

(2) ERISA section 4006(a)(3)(A), (H), 

and (J) for a multiemployer plan. 

(b) Variable-rate premium. 

(1) In general. Subject to the cap 

provisions in paragraphs (b)(2) and 

(b)(3) of this section, the variable-rate 

premium for a single-employer plan is 

equal to a specified dollar amount for 

each $1,000 (or fraction thereof) of the 

plan’s unfunded vested benefits as 

determined under § 4006.4 for the UVB 

valuation year. The specified dollar 

amount is the applicable variable 

premium rate prescribed by the 

applicable provisions of ERISA section 

4006(a)(8) for the calendar year in 

which the premium payment year 

begins. 

(2) MAP–21 cap. The variable-rate 

premium for a plan is not more than the 

applicable MAP–21 cap rate multiplied 

by the plan’s participant count. The 

applicable MAP–21 cap rate is the 

amount prescribed by the applicable 

provisions of ERISA section 

4006(a)(3)(E)(i)(II), (E)(i)(III), (K), and (L) 

for the calendar year in which the 

premium payment year begins. 

(3) Small-employer cap. (i) In general. 

If a plan is described in paragraph 

(b)(3)(ii) of this section for the premium 

payment year, the variable-rate 

premium is not more than $5 multiplied 

by the square of the participant count. 

For example, if the participant count is 

20, the variable-rate premium is not 

more than $2,000 ($5 × 202 = $5 × 400 

= $2,000). 

(ii) Plans eligible for cap. A plan is 

described in paragraph (b)(3)(ii) of this 

section for the premium payment year if 

the aggregate number of employees of 

all employers in the plan’s controlled 

group on the first day of the premium 

payment year is 25 or fewer. 

(iii) Meaning of ‘‘employee.’’ For 

purposes of paragraph (b)(3)(ii) of this 

section, the aggregate number of 

employees is determined in the same 

manner as under section 410(b)(1) of the 

Code, taking into account the provisions 

of section 414(m) and (n) of the Code, 

but without regard to section 410(b)(3), 

(4), and (5) of the Code. 

■ 6. In § 4006.4: 

■ a. Paragraph (a) is amended by 

removing the words ‘‘for the premium 

payment year’’ where they appear five 

times in the paragraph and adding in 

their place the first four times (but not 

the fifth time) the words ‘‘for the UVB 

valuation year’’. 

■ b. Paragraph (b)(2) introductory text is 

amended by removing the words 

‘‘premium payment year’’ and adding in 

their place the words ‘‘UVB valuation 

year’’. 

■ c. Paragraph (b)(2)(ii) is amended by 

removing the words ‘‘premium payment 

year’’ where they appear twice in the 

paragraph and adding in their place (in 

both places) the words ‘‘UVB valuation 

year’’. 

■ d. New paragraph (b)(3) is added to 

read as follows: 

§ 4006.4 Determination of unfunded vested 

benefits. 

* * * * * 

(b) * * * 

(3) ‘‘At-risk’’ plans; transition rules; 

loading factor. The transition rules in 

ERISA section 303(i)(5) apply to the 

determination of the premium funding 

target of a plan in at-risk status for 

funding purposes. If a plan in at-risk 

status is also described in ERISA section 

303(i)(1)(A)(ii) for the UVB valuation 

year, its premium funding target reflects 

a loading factor pursuant to ERISA 

section 303(i)(1)(C) equal to the sum 

of— 

(i) Per-participant portion of loading 

factor. The amount determined for 

funding purposes under ERISA section 

303(i)(1)(C)(i) for the UVB valuation 

year, and 

(ii) Four percent portion of loading 

factor. Four percent of the premium 

funding target determined as if the plan 

were not in at-risk status. 

* * * * * 

■ 7. In § 4006.5: 

■ a. Paragraph (a) introductory text is 

amended by removing the reference 

‘‘paragraphs (a)(1)–(a)(3) of this section’’ 

and adding in its place the reference 

‘‘paragraphs (a)(1)–(a)(4) of this 

section’’. 

■ b. Paragraph (a)(3) introductory text is 

amended by removing the words 

‘‘described in this paragraph if’’ and 

adding in their place the words 

‘‘described in this paragraph if it makes 

a final distribution of assets in a 

standard termination during the 

premium payment year or if’’. 

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

removing the words ‘‘on or before the 

UVB valuation date’’ and adding in their 

place the words ‘‘before the beginning of 

the premium payment year’’. 

■ d. Paragraph (e)(2)(ii) is amended by 

removing the words ‘‘plan year’’ and 

adding in their place the words 

‘‘premium payment year’’. 

■ e. Paragraph (f)(1) is amended by 

removing the words ‘‘newly-covered’’ 

(with a hyphen) and adding in their 

place the words ‘‘newly covered’’ 

(without a hyphen). 

■ f. Paragraph (a)(4) is added, and 

paragraphs (c), (d), (e)(1), and (g) are 

revised, to read as follows: 

§ 4006.5 Exemptions and special rules. 

* * * * * 

(a) * * * 

(4) Certain small new and newly 

covered plans. A plan is described in 

this paragraph if— 

(i) It is a small plan other than a 

continuation plan, and 

(ii) It is a new plan or a newly covered 

plan. 

* * * * * 

(c) Participant count date; in general. 

Except as provided in paragraphs (d) 

and (e) of this section, the participant 

count date of a plan is the last day of 

the plan year preceding the premium 

payment year. 

(d) Participant count date; new and 

newly covered plans. The participant 

count date of a new plan or a newly 

covered plan is the first day of the 

premium payment year. For this 

purpose, a new plan’s premium 

payment year begins on the plan’s 

effective date. 

(e) Participant count date; certain 

mergers and spinoffs. (1) The 

participant count date of a plan 

described in paragraph (e)(2) of this 

section is the first day of the premium 

payment year. 

* * * * * 

(g) Alternative premium funding 

target. A plan’s alternative premium 

funding target is determined in the same 

way as its standard premium funding 

target except that the discount rates 

described in ERISA section 

4006(a)(3)(E)(iv) are not used. Instead, 

the alternative premium funding target 

is determined using the discount rates 

that would have been used to determine 

the funding target for the plan under 

ERISA section 303 for the purpose of 

determining the plan’s minimum 

contribution under ERISA section 303 

for the UVB valuation year if the 

segment rate stabilization provisions of 

ERISA section 303(h)(2)(iv) were 

disregarded. A plan may elect to 

compute unfunded vested benefits using 

the alternative premium funding target 

instead of the standard premium 

funding target described in 

§ 4006.4(b)(2), and may revoke such an 

election, in accordance with the 

provisions of this paragraph (g). A plan 

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Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 13561 

must compute its unfunded vested 

benefits using the alternative premium 

funding target instead of the standard 

premium funding target described in 

§ 4006.4(b)(2) if an election under this 

paragraph (g) to use the alternative 

premium funding target is in effect for 

the premium payment year. 

(1) An election under this paragraph 

(g) to use the alternative premium 

funding target for a plan must specify 

the premium payment year to which it 

first applies and must be filed by the 

plan’s variable-rate premium due date 

for that premium payment year. The 

premium payment year to which the 

election first applies must begin at least 

five years after the beginning of the 

premium payment year to which a 

revocation of a prior election first 

applied. The election will be effective— 

(i) For the premium payment year for 

which made and for all plan years that 

begin less than five years thereafter, and 

(ii) For all succeeding plan years until 

the premium payment year to which a 

revocation of the election first applies. 

(2) A revocation of an election under 

this paragraph (g) to use the alternative 

premium funding target for a plan must 

specify the premium payment year to 

which it first applies and must be filed 

by the plan’s variable-rate premium due 

date for that premium payment year. 

The premium payment year to which 

the revocation first applies must begin 

at least five years after the beginning of 

the premium payment year to which the 

election first applied. 

§ 4006.7 [Amended] 

■ 8. In § 4006.7, paragraph (b) is 

amended by removing the words ‘‘under 

section 4048 of ERISA’’. 

PART 4007—PAYMENT OF PREMIUMS 

■ 9. The authority citation for part 4007 

continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1303(A), 

1306, 1307. 

§ 4007.2 [Amended] 

■ 10. In § 4007.2: 

■ a. Paragraph (a) is amended by 

removing the words ‘‘and singleemployer plan’’ and adding in their 

place the words ‘‘single-employer plan, 

and termination date’’. 

■ b. Paragraph (b) is amended by 

removing the words ‘‘new plan’’ and 

adding in their place the words 

‘‘continuation plan, new plan’’; and by 

removing the words ‘‘and short plan 

year’’ and adding in their place the 

words ‘‘short plan year, small plan, and 

UVB valuation date’’. 

■ 11. In § 4007.3: 

■ a. Paragraph (b) is amended by 

removing the words ‘‘the PBGC’’ and 

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

and by removing the second sentence 

(which begins ‘‘The requirement . . .’’ 

and ends ‘‘. . . after 2006’’). 

■ b. Paragraph (a) is revised to read as 

follows: 

§ 4007.3 Filing requirement; method of 

filing. 

(a) In general. The estimation, 

determination, declaration, and 

payment of premiums must be made in 

accordance with the premium 

instructions on PBGC’s Web site 

(www.pbgc.gov). Subject to the 

provisions of § 4007.13, the plan 

administrator of each covered plan is 

responsible for filing prescribed 

premium information and payments. 

Each required premium payment and 

related information, certified as 

provided in the premium instructions, 

must be filed by the applicable due date 

specified in this part in the manner and 

format prescribed in the instructions. 

* * * * * 

■ 12. In § 4007.8: 

■ a. Paragraph (a) introductory text is 

amended by removing the words ‘‘the 

PBGC’’ and adding in their place the 

word ‘‘PBGC’’; and by removing the 

second sentence (which begins ‘‘The 

charge . . .’’ and ends ‘‘. . . unpaid 

premium’’). 

■ b. Paragraphs (f), (g), (h), and (i) are 

removed, and paragraph (j) is 

redesignated as paragraph (g). 

■ c. Paragraphs (a)(1) and (a)(2) and the 

introductory text of redesignated 

paragraph (g) are revised, and new 

paragraph (f) is added, to read as 

follows: 

§ 4007.8 Late payment penalty charges. 

(a) * * * 

(1) For any amount of unpaid 

premium that is paid on or before the 

date PBGC issues a written notice to any 

person liable for the premium that there 

is or may be a premium delinquency 

(for example, a premium bill, a letter 

initiating a premium compliance 

review, a notice of filing error in 

premium determination, or a letter 

questioning a failure to make a premium 

filing), 1 percent per month, to a 

maximum penalty charge of 50 percent 

of the unpaid premium; or 

(2) For any amount of unpaid 

premium that is paid after that date, 5 

percent per month, to a maximum 

penalty charge of 100 percent of the 

unpaid premium. 

* * * * * 

(f) Filings not more than 7 days late. 

PBGC will waive premium payment 

penalties that arise solely because 

premium payments are late by not more 

than seven calendar days, as described 

in this paragraph (f). In applying this 

waiver, PBGC will assume that each 

premium payment with respect to a 

plan year was made seven calendar days 

before it was actually made. All other 

rules will then be applied as usual. If 

the result of this procedure is that no 

penalty would arise for that plan year, 

then any penalty that would apply on 

the basis of the actual payment date(s) 

will be waived. 

(g) Variable-rate premium penalty 

relief. PBGC will waive the penalty on 

any underpayment of the variable-rate 

premium for the period that ends on the 

earlier of the date the reconciliation 

filing is due or the date the 

reconciliation filing is made if, by the 

date the variable-rate premium for the 

premium payment year is due under 

§ 4007.11(a)(1),— 

* * * * * 

■ 13. Section 4007.11 is revised to read 

as follows: 

§ 4007.11 Due dates. 

(a) In general. In general: 

(1) The flat-rate and variable-rate 

premium filing due date is the fifteenth 

day of the tenth calendar month that 

begins on or after the first day of the 

premium payment year. 

(2) If the variable-rate premium paid 

by the premium filing due date is 

estimated as described in 

§ 4007.8(g)(1)(ii), a reconciliation filing 

and any required variable-rate premium 

payment must be made by the end of the 

sixth calendar month that begins on or 

after the premium filing due date. 

(3) Small plan transition rule. 

Notwithstanding paragraph (a)(1) of this 

section, if a plan had fewer than 100 

participants for whom flat-rate 

premiums were payable for the plan 

year preceding the last plan year that 

began before 2014, then the plan’s due 

date for the first plan year beginning 

after 2013 is the fifteenth day of the 

fourteenth calendar month that begins 

on or after the first day of that plan year. 

(b) Plans that change plan years. For 

a plan that changes its plan year, the 

flat-rate and variable-rate premium 

filing due date for the short plan year is 

as specified in paragraph (a) of this 

section. For the plan year that follows 

a short plan year, the due date is the 

later of — 

(1) The due date specified in 

paragraph (a) of this section, or 

(2) 30 days after the date on which the 

amendment changing the plan year was 

adopted. 

(c) New and newly covered plans. For 

a new plan or newly covered plan, the 

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13562 Federal Register / Vol. 79, No. 47 / Tuesday, March 11, 2014 / Rules and Regulations 

flat-rate and variable-rate premium 

filing due date for the first plan year of 

coverage is the latest of— 

(1) The due date specified in 

paragraph (a) of this section, or 

(2) 90 days after the date of the plan’s 

adoption, or 

(3) 90 days after the date on which the 

plan became covered by title IV of 

ERISA, or 

(4) In the case of a small plan that is 

a continuation plan, 90 days after the 

plan’s UVB valuation date. 

(d) Terminating plans. For a plan that 

terminates in a standard termination, 

the flat-rate and variable-rate premium 

filing due date for the plan year in 

which all plan assets are distributed 

pursuant to the plan’s termination is the 

earlier of— 

(1) The due date specified in 

paragraph (a) of this section, or 

(2) The date when the postdistribution certification under 

§ 4041.29 of this chapter is filed. 

(e) Continuing obligation to file. The 

obligation to make flat-rate and variablerate premium filings and payments 

under this part continues through the 

plan year in which all plan assets are 

distributed pursuant to a plan’s 

termination or in which a trustee is 

appointed under section 4042 of ERISA, 

whichever occurs earlier. 

■ 14. Section 4007.12 is amended by 

revising paragraph (b) to read as follows: 

§ 4007.12 Liability for single-employer 

premiums. 

* * * * * 

(b) After a plan administrator issues 

(pursuant to section 4041(a)(2) of 

ERISA) the first notice of intent to 

terminate in a distress termination 

under section 4041(c) of ERISA or PBGC 

issues a notice of determination under 

section 4042(a) of ERISA, the obligation 

to pay the premiums (and any interest 

or penalties thereon) imposed by ERISA 

and this part for a single-employer plan 

shall be an obligation solely of the 

contributing sponsor and the members 

of its controlled group, if any. 

§ 4007.13 [Amended] 

■ 15. Section 4007.13 is amended by 

removing the words ‘‘under section 

4048 of ERISA’’ where they appear once 

in paragraph (a)(1) introductory text, 

once in paragraph (a)(2) introductory 

text, once in paragraph (d)(1), once in 

paragraph (e)(3) introductory text, once 

in paragraph (e)(4) introductory text, 

once in paragraph (e)(4)(i), and once in 

paragraph (f) introductory text. 

Appendix to Part 4007 [Amended] 

■ 16. In the Appendix to part 4007: 

■ a. Section 21(b)(1) is amended by 

removing the words ‘‘for waivers if 

certain ‘safe harbor’ tests are met, and’’; 

and by removing the words ‘‘30 days 

after the date of the bill’’ and adding in 

their place the words ‘‘30 days after the 

date of the bill, and for waivers in 

certain cases where you pay not more 

than a week late or where you estimate 

the variable-rate premium and then 

timely correct any underpayment’’. 

■ b. Section 21(b)(5) is amended by 

removing the second sentence (which 

begins ‘‘We intend . . .’’ and ends ‘‘. . . 

narrow circumstances’’). 

PART 4047—RESTORATION OF 

TERMINATING AND TERMINATED 

PLANS 

■ 17. The authority citation for part 

4047 continues to read as follows: 

Authority: 29 U.S.C. 1302(b)(3), 1347. 

§ 4047.4 [Amended] 

■ 18. In § 4047.4, paragraph (c) is 

amended by removing the words ‘‘in 

§ 4006.4(c) of this chapter’’. 

Issued in Washington, DC, this 5th day of 

March 2014. 

Joshua Gotbaum, 

Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 2014–05212 Filed 3–10–14; 8:45 am] 

BILLING CODE 7709–02–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 117 

[USCG–2014–0048] 

Drawbridge Operation Regulations; 

Saugatuck River, CT 

AGENCY: Coast Guard, DHS. 

ACTION: Notice of temporary deviation 

from regulations. 

SUMMARY: The Commander, First Coast 

Guard District, has issued a temporary 

deviation from the regulations 

governing the operation of the Metro 

North (SAGA) Bridge. The deviation is 

necessary to facilitate replacement of 

timber ties at the bridge. This deviation 

allows the Metro North SAGA Bridge, 

across Saugatuck River, mile 1.1, at 

Saugatuck, Connecticut, to require an 

advance notice for bridge openings for 

15 days at various times. 

DATES: This deviation is effective from 

March 17, 2014 through March 31, 2014. 

ADDRESSES: The docket for this 

deviation, [USCG–2014–0048] is 

available at http://www.regulations.gov. 

Type the docket number in the 

‘‘SEARCH’’ box and click ‘‘SEARCH.’’ 

Click on Open Docket Folder on the line 

associated with this deviation. You may 

also visit the Docket Management 

Facility in Room W12–140, on the 

ground floor of the Department of 

Transportation West Building, 1200 

New Jersey Avenue SE., Washington, 

DC, 20590, between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this temporary 

deviation, call or email Ms. Judy LeungYee, Project Officer, First Coast Guard 

District, judy.k.leung-yee@uscg.mil, or 

(212) 668–7165. If you have questions 

on viewing the docket, call Cheryl 

Collins, Program Manager, Docket 

Operations, telephone 202–366–9826. 

SUPPLEMENTARY INFORMATION: 

The Metro North SAGA Bridge, across 

Saugatuck River, mile 1.1, at Saugatuck, 

Connecticut, has a vertical clearance of 

13 feet at mean high water in the closed 

position. The existing drawbridge 

operating regulations are listed at 33 

CFR 117.221(b). 

The Saugatuck River is transited 

primarily by seasonal recreational 

vessels of various sizes. 

The Connecticut Department of 

Transportation requested a temporary 

deviation to facilitate replacement of 

railroad ties at the bridge. 

Under this temporary deviation the 

Metro North SAGA Bridge will require 

a two hour advance notice for bridge 

openings from March 17, 2014 through 

March 31, 2014, between 8:10 a.m. and 

4 p.m., Monday through Friday and 

between 7 a.m. and 4 p.m., on Saturday 

and Sunday. Vessels that can pass under 

the closed draw may do so at all times. 

In accordance with 33 CFR 117.35(e), 

the bridge must return to its regular 

operating schedule immediately at the 

end of the designated deviation period. 

This deviation from the operating 

regulations is authorized under 33 CFR 

117.35. 

Dated: February 20, 2014. 

C.J. Bisignano, 

Supervisory Bridge Management Specialist, 

First Coast Guard District. 

[FR Doc. 2014–05098 Filed 3–10–14; 8:45 am] 

BILLING CODE 9110–04–P 

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