30308 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Proposed Rules 

programs, specifying therein the 

grounds and effective date for such 

revocations; or 

(b) Give any sponsor of such programs 

not less than 30 days’ written notice of 

its denial of the sponsor’s application 

for redesignation, specifying therein the 

grounds for such denial and effective 

date of such denial. Revocation of 

designation or denial of redesignation 

on the above-specified grounds for a 

class of designated programs is the final 

decision of the Department. 

§ 62.63 Responsibilities of the sponsor 

upon termination or revocation. 

Upon termination or revocation of its 

program designation, a sponsor must: 

(a) Fulfill its responsibilities to all 

exchange visitors who are in the United 

States at the time of the termination or 

revocation; and 

(b) Notify exchange visitors who have 

not entered the United States that the 

program has been terminated unless a 

transfer to another designated program 

can be obtained. 

Dated: 23, 2007. 

Stanley S. Colvin, 

Director, Office of Exchange Coordination 

and Designation, Bureau of Educational and 

Cultural Affairs, Department of State. 

[FR Doc. E7–10505 Filed 5–30–07; 8:45 am] 

BILLING CODE 4710–05–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Parts 4006 and 4007 

RIN 1212–AB11 

Premium Rates; Payment of 

Premiums; Variable-Rate Premium; 

Pension Protection Act of 2006 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Proposed rule. 

SUMMARY: This is a proposed rule to 

amend PBGC’s regulations on Premium 

Rates and Payment of Premiums. The 

amendments would implement 

provisions of the Pension Protection Act 

of 2006 (Pub. L. 109–280) that change 

the variable-rate premium for plan years 

beginning on or after January 1, 2008, 

and make other changes to the 

regulations. (Other provisions of the 

Pension Protection Act of 2006 that deal 

with PBGC premiums are the subject of 

separate rulemaking proceedings.) 

DATES: Comments must be submitted on 

or before July 30, 2007. 

ADDRESSES: Comments, identified by 

Regulatory Information Number (RIN) 

1212–AB11, may be submitted by any of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the Web 

site instructions for submitting 

comments. 

• E-mail: reg.comments@pbgc.gov. 

• Fax: 202–326–4224. 

• Mail or Hand Delivery: Legislative 

and Regulatory Department, Pension 

Benefit Guaranty Corporation, 1200 K 

Street, NW., Washington, DC 20005–

4026. 

All submissions must include the 

Regulatory Information Number for this 

rulemaking (RIN 1212–AB11). 

Comments received, including personal 

information provided, will be posted to 

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

comments may also be obtained by 

writing to Disclosure Division, Office of 

the General Counsel, Pension Benefit 

Guaranty Corporation, 1200 K Street, 

NW., Washington, DC 20005–4026, or 

calling 202–326–4040 during normal 

business hours. (TTY and TDD users 

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

connected to 202–326–4040.) 

FOR FURTHER INFORMATION CONTACT: John 

H. Hanley, Director, Legislative and 

Regulatory Department; or Catherine B. 

Klion, Manager, or Deborah C. Murphy, 

Attorney, Regulatory and Policy 

Division, Legislative and Regulatory 

Department, Pension Benefit Guaranty 

Corporation, 1200 K Street, NW., 

Washington, DC 20005–4026; 202–326–

4024. (TTY/TDD users may call the 

Federal relay service toll-free at 1–800–

877–8339 and ask to be connected to 

202–326–4024.) 

SUPPLEMENTARY INFORMATION: 

Background 

Pension Benefit Guaranty Corporation 

(PBGC) administers the pension plan 

termination insurance program under 

Title IV of the Employee Retirement 

Income Security Act of 1974 (ERISA). 

Pension plans covered by Title IV must 

pay premiums to PBGC. The flat-rate 

premium applies to all covered plans; 

the variable-rate premium applies only 

to single-employer plans. Section 4006 

of ERISA deals with premium rates, 

including the computation of premiums. 

Section 4007 of ERISA deals with the 

payment of premiums, including 

premium due dates and interest and 

penalties on premiums not timely paid, 

and with recordkeeping and audits. 

On August 17, 2006, the President 

signed into law the Pension Protection 

Act of 2006, Pub. L. 109–280 (PPA 

2006). PPA 2006 makes changes to the 

funding rules in Title I of ERISA and in 

the Internal Revenue Code of 1986 

(Code) on which the variable-rate 

premium is based. Section 401(a) of 

PPA 2006 amends the variable-rate 

premium provisions of section 4006 of 

ERISA to conform to those changes in 

the funding rules and to eliminate the 

full-funding limit exemption from the 

variable-rate premium. This proposed 

rule would amend PBGC’s regulations 

on Premium Rates (29 CFR part 4006) 

and Payment of Premiums (29 CFR part 

4007) to implement the amendment to 

ERISA section 4006 made by PPA 2006. 

(PPA 2006 also includes other 

provisions affecting PBGC premiums 

that are not addressed in this rule, 

including provisions that cap the 

variable-rate premium for certain plans 

of small employers, make permanent the 

new ‘‘termination premium’’ (created by 

the Deficit Reduction Act of 2005) that 

is payable in connection with certain 

distress and involuntary plan 

terminations, and authorize PBGC’s 

payment of interest on refunds of 

overpaid premiums. Those provisions 

are or will be the subject of other 

rulemaking actions.) 

Overview of Proposed Regulatory 

Changes 

For purposes of determining a plan’s 

variable-rate premium (VRP) for a 

premium payment year beginning after 

2007, the proposed rule would require 

unfunded vested benefits (UVBs) to be 

measured as of the funding valuation 

date for the premium payment year. The 

asset measure underlying the UVB 

calculation would be determined for 

premium purposes the same way it is 

determined for funding purposes, 

except that any averaging method 

adopted for funding purposes would be 

disregarded. The liability measure 

underlying the UVB calculation would 

be determined for premium purposes 

the same way it is determined for 

funding purposes, except that only 

vested benefits would be included and 

a special premium discount rate 

structure would be used. Filers would 

be able to make an election (irrevocable 

for five years) to use funding discount 

rates for premium purposes instead of 

the special premium discount rates. 

The proposed rule would revise the 

premium due date and penalty structure 

to give some plans more time to file and 

others the ability to make estimated VRP 

filings and then follow up with adjusted 

final filings without penalty. Three 

special relief rules for VRP filers would 

be eliminated as no longer appropriate 

or necessary, and two new relief rules 

would be added. 

The proposed rule would also explain 

when certain benefits are considered 

‘‘vested’’ and would make some other 

changes unrelated to PPA 2006. For 

example, the proposed regulation would 


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Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Proposed Rules 30309 

provide explicitly that (in the absence of 

an exemption) a premium filing made 

on paper or in any other manner other 

than the prescribed electronic filing 

method (applicable to all plans for plan 

years beginning after 2006) does not 

satisfy the requirement to file. It would 

also clarify and strengthen 

recordkeeping and audit provisions. 

A more detailed discussion follows. 

Variable-Rate Premium Determination 

Dates 

Under ERISA section 4006(a)(3)(E)(i) 

and (ii), a plan’s per-participant VRP for 

a plan year is generally—

$9.00 for each $1,000 (or fraction thereof) 

of unfunded vested benefits [‘‘UVBs’’] under 

the plan as of the close of the preceding plan 

year 

divided by the plan’s participant count 

as of the close of the preceding plan 

year. (Under ERISA section 

4006(a)(3)(H), added by section 405 of 

PPA 2006, the per-participant VRP is 

capped at $5 times the participant count 

as of the close of the prior plan year for 

certain plans of small employers. The 

cap provision is the subject of another 

rulemaking.) Under ERISA section 

4006(a)(3)(A)(i), the per-participant VRP 

is multiplied by the number of 

participants ‘‘in [the] plan during the 

plan year’’ to yield the total VRP. The 

existing premium rates regulation treats 

all of these provisions as referring to a 

single determination date. In most cases, 

this is the last day of the prior plan year; 

it is the first day of the premium 

payment year (the plan year for which 

the premium is being paid) for two 

categories of plans: new and newly 

covered plans (which are not in 

existence as covered plans on the last 

day of the prior plan year) and certain 

plans involved in plan spinoffs and 

mergers as of the beginning of the 

premium payment year (which 

otherwise would double-count or not 

count certain participants and UVBs for 

premium purposes). 

The term ‘‘unfunded vested benefits’’

(‘‘UVBs’’) is defined in ERISA section 

4006(a)(3)(E)(iii). In pre-PPA section 

4006(a)(3)(E)(iii), ‘‘UVBs’’ is defined as 

unfunded current liability (a term found 

in the funding provisions of the Code 

and Title I of ERISA) determined by 

counting only vested benefits and using 

a special interest rate and (under certain 

circumstances) a special measure of 

plan assets. PPA 2006 changes the 

funding rules for single-employer plans, 

eliminating the concept of current 

liability for plan years beginning after 

2007. (As discussed below, certain plans 

will not use the new funding rules until 

a later date.) To conform to this change, 

PPA 2006 changes the definition of 

UVBs in ERISA section 

4006(a)(3)(E)(iii). As amended by PPA 

2006, for plan years beginning after 

2007, section 4006(a)(3)(E)(iii) provides 

that ‘‘UVBs’’—

Means, for a plan year, the excess (if any) 

of * * * the funding target of the plan as 

determined under [ERISA] section 303(d) 

[corresponding to Code section 430(d)] for 

the plan year by only taking into account 

vested benefits and by using the interest rate 

described in [ERISA section 

4006(a)(3)(E)(iv)], over * * * the fair market 

value of plan assets for the plan year which 

are held by the plan on the valuation date. 

New ERISA section 303(g) says that 

with certain exceptions not relevant 

here, ‘‘all determinations under this 

section [which includes the definition 

of ‘‘funding target’’ in section 303(d)(1)] 

for a plan year shall be made as of the 

valuation date of the plan for such plan 

year.’’ Thus PBGC concludes that the 

‘‘valuation date’’ for plan assets referred 

to in new section 4006(a)(3)(E)(iii) is the 

valuation date determined under section 

303(g)(2). In general (under section 

303(g)(2)(A)), the valuation date for a 

plan year is the first day of the plan 

year, but certain small plans may 

designate a different valuation date 

(under section 303(g)(2)(B)), which may 

be any day in the plan year. 

The change in the definition of UVBs 

thus creates ambiguity about the date as 

of which UVBs are to be measured. 

Section 4006(a)(3)(E)(ii), which was not 

changed by PPA 2006, refers to two plan 

years—the ‘‘plan year’’ for which the 

VRP is being paid (the premium 

payment year) and the ‘‘preceding plan 

year,’’ at the close of which UVBs are to 

be measured. New section 

4006(a)(3)(E)(iii) refers only to the ‘‘plan 

year’’ in defining UVBs. And a plan’s 

funding target and assets—the elements 

of UVBs—are to be measured as of the 

valuation date, which need not be the 

close of the plan year and which for 

many plans (those not small enough to 

elect otherwise) must be the beginning 

of the plan year. 

Accordingly, PBGC must resolve the 

statutory ambiguity by adopting a rule 

regarding the date as of which UVBs are 

to be measured. In view of the following 

considerations, PBGC proposes to 

require that UVBs be measured as of the 

valuation date in the premium payment 

year rather than a date in the prior plan 

year. 

Historical data indicate that most 

premium filers use beginning-of-theplan-year valuation dates for funding 

purposes; under PPA 2006 many of 

them will be required to do so. 

Although funding valuations don’t 

themselves produce UVB numbers that 

can be used for VRP purposes, they 

involve the gathering of the same basic 

data for analysis, and the valuations are 

done in the same way, simply using 

different assumptions. It would be 

burdensome and impractical to require 

plans that must do funding valuations 

as of the first day of a plan year to do 

separate valuations as of the last day for 

VRP purposes. 

Requiring that a funding valuation 

done as of the first day of the prior plan 

year be ‘‘rolled forward’’ to the last day 

of the prior plan year is likewise 

burdensome and impractical. 

Instructions for ‘‘roll-forwards’’ would 

necessarily be complex, especially in 

light of the new ‘‘segment rate’’ interest 

assumption under section 303(h)(2)(C) 

of PPA 2006 and section 

4006(a)(3)(E)(iv) of ERISA. And ‘‘rolledforward’’ valuations would tend to be 

inaccurate because correcting for the 

many changes in circumstances that can 

occur during the course of a year 

involves a significant element of 

estimation. 

Furthermore, basing the VRP on a 

valuation done in the premium payment 

year reflects a plan’s current funding 

status much better than basing it on a 

valuation done in the prior year, 

especially a valuation done as of the 

first day of the prior year. And with 

some changes in PBGC’s premium due 

date and penalty rules, there will be 

adequate time for plans to compute 

premiums based on a premium payment 

year valuation. 

Accordingly, this proposed rule 

requires that UVBs be measured as of 

the valuation date for the premium 

payment year (referred to as the ‘‘UVB 

valuation date’’) and adjusts premium 

due dates and penalty rules to 

accommodate the fact that this UVB 

valuation date is later (by at least a day 

and in some cases perhaps as much as 

a year) than ‘‘the close of the preceding 

plan year,’’ the date used under pre-PPA 

section 4006(a)(3)(E). (No change is 

proposed in the date as of which 

participants are counted, which the 

revised regulations refer to as the 

‘‘participant count date.’’) 

Variable-Rate Premium Computation 

As noted above, UVBs under PPA 

2006 are based on a plan’s funding 

target and the market value of its assets. 

Under new ERISA section 303(d)(1), as 

set forth in section 102 of PPA 2006, 

‘‘the funding target of a plan for a plan 

year is the present value of all benefits 

accrued or earned under the plan as of 

the beginning of the plan year.’’ But new 

ERISA section 303(g) makes clear that 

the funding target is to be determined as 

of the valuation date, which for small 


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30310 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Proposed Rules 

plans may not be the beginning of the 

plan year. PBGC thus believes that what 

ERISA section 303(d)(1) requires is that 

the benefits to be valued as of the 

valuation date are those accrued as of 

the beginning of the plan year. If the 

valuation date is later than the first day 

of the plan year, accruals after the 

beginning of the plan year are to be 

ignored. 

The situation regarding assets is 

similar. New ERISA section 

4006(a)(3)(E)(iii)(II) refers to ‘‘the fair 

market value of plan assets for the plan 

year which are held by the plan on the 

valuation date.’’ Under new ERISA 

section 303(g)(4)(B), however, plan 

assets as of a valuation date later than 

the first day of the plan year do not 

include contributions for the plan year 

made during the plan year but before 

the valuation date or interest thereon. 

PBGC interprets section 

4006(a)(3)(E)(iii)(II) as incorporating this 

rule, as well as the corresponding rule 

for prior-year contributions in section 

303(g)(4)(A). Thus for a valuation date 

later than the first day of the plan year, 

UVBs would reflect neither accruals nor 

contributions for the plan year. 

In general, a plan’s funding target and 

the value of its assets would be 

determined for premium purposes the 

same way they are for funding purposes 

except as new ERISA section 

4006(a)(3)(E)(iii) and (iv) provides 

otherwise. In order to distinguish the 

funding target used for premium 

purposes from that used for funding 

purposes, the proposed regulation 

introduces the term ‘‘premium funding 

target.’’ In general, this means the 

funding target determined by taking 

only vested benefits into account and by 

using the special segment rates 

described in new ERISA section 

4006(a)(3)(E)(iv) (the ‘‘standard 

premium funding target’’). Those special 

segment rates are ‘‘spot rates’’ (based on 

bond yields for a single recent month), 

as opposed to the 24-month average 

segment rates used for funding 

purposes. 

But in certain circumstances 

(described below), PBGC proposes to 

permit filers to use an ‘‘alternative 

premium funding target’’ that may be 

less burdensome to use than the 

standard premium funding target. A 

plan’s alternative premium funding 

target would be the vested portion of the 

plan’s funding target under ERISA 

section 303(d)(1) that is used to 

determine the plan’s minimum 

contribution under ERISA section 303 

for the premium payment year—that is, 

an amount calculated using the same 

assumptions as are used to calculate the 

plan’s funding target under ERISA 

section 303(d)(1), but based only on 

vested benefits, rather than all benefits. 

Although instructions for post-PPA 

annual reports on Form 5500 series are 

not final, PBGC expects plans to be 

required to compute the vested portion 

of the funding target (broken down by 

participant category) for Form 5500 

filings. PBGC also expects that the final 

instructions will permit or require 

benefits to be categorized as vested or 

non-vested in a manner consistent with 

the provisions of the proposed rule 

(discussed below) that explain when 

certain benefits are considered vested 

for premium purposes. The advantage to 

a filer of using the alternative premium 

funding target would be that, if the plan 

determined the vested portion of its 

funding target for purposes of the 

annual report (Form 5500 series) in a 

manner consistent with PBGC’s rules, it 

could use the same number for premium 

purposes and thus avoid having to do a 

second calculation for premium 

purposes alone. 

Under the proposal, the alternative 

premium funding target could be used 

where the plan made an election to do 

so that would be irrevocable for a period 

of five years. As financial markets 

fluctuate, the averaged rates used for the 

alternative premium funding target will 

fluctuate above and below the spot rates 

used for the standard premium funding 

target. Locking in the election for five 

years will keep plans from calculating 

the premium funding target both ways 

each year and using the smaller number; 

the reason for permitting use of the 

alternative premium funding target is to 

reduce not premiums but the burden of 

computing premiums. PBGC expects 

that normal interest rate fluctuations 

will make premiums computed with the 

alternative premium funding target—on 

average, over time—approximately 

equal to premiums calculated with the 

standard premium funding target. 

Requiring a five-year commitment to use 

of the alternative premium funding 

target will give this averaging process 

time to work. 

Since new ERISA section 

4006(a)(3)(E)(iii)(II) speaks explicitly of 

the ‘‘fair market value’’ of assets, PBGC 

concludes that it would be inconsistent 

with the statute to permit or require the 

use of the averaging process described 

in new ERISA section 303(g)(3)(B) or the 

reduction of assets by the prefunding 

and funding standard carryover 

balances described in new ERISA 

section 303(f)(4). (The existing premium 

rates regulation also provides that credit 

balances do not reduce assets for 

premium purposes.) 

As noted above, however, PBGC 

believes that adjustments must be made 

for contributions as described in new 

ERISA section 303(g)(4). Similar 

adjustments are required under the 

current premium rates regulation. For 

simplicity, PBGC proposes that the 

adjustments be made using the effective 

interest rates determined for funding 

purposes, rather than effective interest 

rates computed on the basis of the 

premium segment rates. This will mean 

that the adjustments do not have to be 

calculated twice (once for funding 

purposes and again for premium 

purposes), and plans can use for 

premium purposes a figure for the value 

of assets that they are expected to be 

entering in the annual report (Form 

5500 series). PBGC anticipates that the 

differences between funding and 

premium rates and the periods of time 

over which these rates are applied for 

this purpose will be small enough to 

justify this simplification. And as 

funding rates fluctuate above and below 

premium rates, the differences in each 

direction should cancel out over time. 

PBGC’s proposal does not include an 

‘‘alternative calculation method’’ for 

rolling forward prior year values to the 

current year. The alternative calculation 

method (ACM) in § 4006.4(c) of the 

current premium rates regulation was 

instituted when much actuarial 

valuation work was done using hand 

calculators and tables of factors. Highspeed, high-memory computers are now 

the norm for handling both data and 

mathematical computations. Actuarial 

valuations are thus much faster now. 

Furthermore, the segment rate 

methodology for valuing benefits does 

not lend itself to the kind of formulaic 

transformation process exemplified by 

the existing ACM. PBGC accordingly 

believes that an alternative calculation 

method is both unnecessary and 

impracticable under PPA 2006. 

Due Dates and Penalty Rules 

PBGC expects that most plans that are 

required (or choose) to do funding 

valuations as of the beginning of the 

plan year (and whose UVB valuation 

date is thus the first day of the premium 

payment year) will be able to determine 

their UVBs by the VRP due date 

currently provided for in PBGC’s 

premium payment regulation (generally, 

ten and a half months after the 

beginning of the plan year). But there 

are some circumstances that can make 

timely determination of the VRP 

difficult or impossible: For example, use 

of a valuation date after the beginning 

of the plan year (applicable to small 

plans only) or difficulty in collecting 

data (e.g., because of the occurrence of 

unusual events during the preceding 

year). To deal with such circumstances, 


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PBGC proposes to revise its due date 

and penalty structure to give smaller 

plans more time to file and larger plans 

the ability to make estimated VRP 

filings and then correct them without 

penalty. The following detailed 

discussion of the proposed due date and 

penalty structure is followed by a 

summary table. 

PBGC’s current due date structure for 

flat- and variable-rate premiums is 

based on two categories of plans: those 

that owed premiums for 500 or more 

participants for the plan year preceding 

the premium payment year (‘‘large’’

plans) and those that did not. The new 

structure is based on three categories. 

The large-plan category remains the 

same. A new ‘‘mid-size’’ category will 

consist of plans that owed premiums for 

100 or more, but fewer than 500, 

participants for the plan year preceding 

the premium payment year. A category 

of ‘‘small’’ plans will include all other 

plans. The participant count for this 

purpose will continue to be the prior 

year’s count; the proposed rule provides 

uniform language for determining both 

single- and multiemployer plans’

participant counts for determining due 

dates, eliminating a slight language 

difference in the existing regulation. 

The 100-participant break-point 

between the small and mid-size 

categories approximates the break-point 

in the PPA 2006 funding rules between 

plans that are required to use beginningof-the-year valuation dates under ERISA 

section 303(g)(2)(A) and those permitted 

to use another date under ERISA section 

303(g)(2)(B). The correspondence with 

the valuation date provision is only 

approximate. Under the valuation date 

provision, PPA 2006 counts participants 

on each day of a plan year and 

aggregates plans within controlled 

groups; under its premium due date 

rules, PBGC counts participants in one 

plan on one day. Furthermore, PPA 

2006 funding rules look back to the plan 

year preceding the valuation year; the 

PBGC participant count for the plan 

year preceding the premium payment 

year is typically as of the last day of the 

plan year before that. Accordingly, there 

may be plans that are eligible to elect 

valuation dates other than the first day 

of the plan year but that do not fall into 

PBGC’s new small-plan category. But 

most plans that use valuation dates 

other than the first day of the plan year 

are expected to be ‘‘small’’ under the 

new due date structure, and there is 

enough flexibility in the due date rules 

for large and mid-size plans to make 

premium filing manageable in most 

cases even for plans with valuation 

dates after the beginning of the plan 

year. In unusual cases, where a plan 

with a valuation date late in the year 

finds itself in the large or mid-size 

category, PBGC has authority to waive 

late premium penalties. 

Small Plans 

For plans in the ‘‘small’’ category, 

PBGC proposes to make all premiums 

due on the last day of the sixteenth 

month that begins on or after the first 

day of the premium payment year (for 

calendar-year plans, April 30 of the year 

following the premium payment year). 

This will give any small plan at least 

four months to determine UVBs. 

The same due date will apply to both 

variable- and flat-rate premiums. While 

there is no reason these small plans 

cannot determine the flat-rate premium 

by the current due date (the 15th day of 

the tenth month that begins on or after 

the first day of the premium payment 

year), PBGC wants to avoid requiring 

them to make two filings per year. And 

for simplicity, PBGC is making no 

distinction for due date purposes 

between single-employer plans that pay 

the VRP and single-employer (and 

multiemployer) plans that do not. Small 

single-employer plans that qualify for an 

exemption from the VRP and small 

multiemployer plans (which are not 

subject to the VRP) will have the same 

deferred due date as small singleemployer plans that owe a VRP. 

Mid-Size Plans 

For mid-size plans, PBGC proposes to 

retain the current premium due date—

the 15th day of the tenth month that 

begins on or after the first day of the 

premium payment year (October 15th 

for calendar-year plans)—for both flatand variable-rate premiums. With rare 

exceptions, these plans will perform 

valuations as of the first day of the 

premium payment year, and in most 

cases should be able to calculate UVBs 

by the current due date. However, in 

recognition of the possibility that 

circumstances might make a final UVB 

determination by the due date difficult 

or impossible, PBGC proposes to permit 

estimated VRP filings and to provide a 

penalty-free ‘‘true-up’’ period to correct 

an erroneous VRP estimate. 

Under this provision, the VRP penalty 

would be waived for a period of time 

after the VRP due date if, by the VRP 

due date, the plan administrator submits 

an estimate of the VRP that meets 

certain requirements and pays the 

estimated amount. The waiver of the 

penalty would cover the period from the 

VRP due date until the small-plan due 

date or, if earlier, the filing of the final 

VRP. Interest would not be suspended; 

if the VRP estimate fell short of the 

correct amount, interest would accrue 

on the amount of the underpayment 

from the date when the payment was 

due to the date the shortfall was paid, 

just as with the existing ‘‘safe harbor’’

rule for large plans’’ flat-rate premium 

payments. 

The requirements for the VRP 

estimate would be that it be based on (1) 

a final determination of the market 

value of the plan’s assets and (2) a 

reasonable estimate of the plan’s 

premium funding target for the 

premium payment year that takes into 

account the most current data available 

to the plan’s enrolled actuary and is 

determined in accordance with 

generally accepted actuarial principles 

and practices. The estimate of the 

premium funding target would have to 

be certified by the enrolled actuary and, 

like other premium information filed 

with PBGC, would be subject to audit. 

PBGC needs a good estimate of its VRP 

income for inclusion in its annual 

report, which is prepared during 

October (because its fiscal year ends 

September 30), when most plans (those 

with calendar plan years) submit VRP 

filings. Thus, it is important to have 

assurance that the estimate of the 

premium funding target has been 

prepared in good faith. 

Since this penalty relief is based on 

the plan’s reporting a final figure for the 

value of assets by the VRP due date, the 

relief would be lost if there were a 

mistake in the assets figure so reported, 

whether the mistaken figure was lower 

or higher than the true figure. PBGC 

would consider a request for an 

appropriate penalty waiver in such a 

situation and in acting on the request 

would consider such facts and 

circumstances as the reason for the 

mistake, whether assets were over- or 

understated, and, if assets were 

overstated, the extent of the 

overstatement. 

Large Plans 

The due date and penalty structure for 

‘‘large’’ plans would be the same as for 

‘‘mid-size’’ plans except that the early 

due date for the flat-rate premium under 

the existing regulation would be 

retained, along with the related ‘‘safe 

harbor’’ penalty rules. However, there 

would be a change in the ‘‘safe harbor’’

rules to accommodate the unlikely event 

that a plan might be in the small-plan 

category for one year but in the largeplan category for the next year. Under 

§§ 4007.8(f) and (g)(2)(ii) of the existing 

premium payment regulation, a plan 

may be entitled to safe harbor relief if 

its flat-rate filing is consistent with its 

reported participant count for the prior 

plan year, even if the reported count is 

later determined to be wrong. But under 


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the new rules, a plan that is small for 

one year and large for the next year 

would not have to report its participant 

count for the first year until after the 

flat-rate due date for the second year. 

Thus, to get the benefit of these special 

safe-harbor rules, a plan in such 

circumstances would have to make its 

final filing for the first year two months 

before it was due. To alleviate this 

problem, PBGC proposes to provide 

safe-harbor relief for any plan whose 

flat-rate due date for the plan year 

preceding the premium payment year is 

later than the large-plan flat-rate due 

date for the premium payment year. 

Due Date Table 

The following table shows the 

relevant premium due dates for small, 

mid-size, and large calendar year plans 

(as described above) for the 2008 

premium payment year: 

Small plans 

(under 100 

participants) 

Mid-size plans 

(100–499 participants) 

Large plans 

(500 or more participants) 

Flat-rate premium due ............................. April 30, 2009 ... October 15, 2008 ................................... February 29, 2008 See flat-rate premium safe harbor rules. 

Flat-rate premium reconciliation due ....... N/A ................... N/A ......................................................... October 15, 2008. 

Variable-rate premium due ...................... April 30, 2009 ... October 15, 2008 Estimate may be filed 

and paid. See rules on correcting 

VRP without penalty.

October 15, 2008 Estimate may be filed 

and paid. See rules on correcting 

VRP without penalty. 

Latest VRP penalty starting date. If certain conditions are met, penalty is 

waived until this date or, if earlier, the 

date the final VRP is filed.

N/A ................... April 30, 2009 ......................................... April 30, 2009. 

Special Variable-Rate Premium Rules 

The existing premium rates regulation 

includes a number of special 

‘‘exemption’’ or ‘‘relief’’ rules for VRP 

filers. One of these—the full-funding 

limit exemption, which was created by 

statute—has been eliminated by PPA 

2006. Three others—created by PBGC 

regulation in 1988—have lost their 

justification, as explained below, and 

PBGC proposes to eliminate them as 

well. PBGC is also introducing two new 

‘‘relief’’ rules. 

The three regulatory special rules to 

be eliminated are (1) the rule that a plan 

with fewer than 500 participants for the 

premium payment year is exempt from 

reporting its VRP information if the plan 

has no UVBs (the ‘‘small well-funded 

plan rule’’), (2) the rule that a plan with 

500 or more participants may report 

(and compute its VRP on the basis of) 

accrued rather than vested benefits (the 

‘‘large plan accrued benefit rule’’), and 

(3) the rule that a plan may value 

benefits using the funding interest rate 

rather than the variable-rate premium 

interest rate if the funding rate is less 

than the premium rate (the ‘‘funding 

interest rate rule’’). All three represent 

compromises between the need for 

accuracy in the determination of the 

VRP and the reporting of VRP data on 

the one hand and the need to reduce the 

burden of compliance on the other. 

PBGC needs accurate data about UVBs 

and assets—now as in 1988—to verify 

the correctness of the reported VRP and 

for financial projections. But whereas 

the cost of determining this information 

20 years ago could be very significant, 

because much actuarial valuation work 

was done using hand calculators and 

tables of factors, valuations are now 

computerized and thus cost less. PBGC’s 

need for accurate data now outweighs 

the burden of determining and reporting 

the data. The elimination of these three 

special rules reflects that change in the 

balance between need and burden. 

Furthermore, both the ‘‘large plan 

accrued benefit rule’’ and the ‘‘funding 

interest rate rule’’ overstate UVBs and 

are used by very few plans—fewer than 

three dozen plans used each of these 

two special rules for the 2004 filing year 

(the last year for which data are 

available). 

In addition, one of the two new 

‘‘relief’’ rules that PBGC is 

introducing—the new alternative 

premium funding target provision 

discussed above—would provide relief 

for filers that might otherwise have used 

any of these three special rules. The 

alternative premium funding target 

provision permits the use of funding 

rates for premium purposes (like the 

‘‘funding interest rate rule’’) without the 

need for a comparison of rates (albeit 

with a requirement for a five-year 

commitment). And by using the 

alternative premium funding target 

provision, plans that might have used 

the ‘‘large plan accrued benefit rule’’ or 

the ‘‘small well-funded plan rule’’ may 

be able to base premium reporting on 

figures that are computed for and 

included in the annual report (Form 

5500 series). 

PBGC’s second new ‘‘relief’’ rule—in 

addition to the alternative premium 

funding target provision—is a reporting 

relief provision for certain smallemployer plans. Section 405 of PPA 

2006 caps the VRP for certain plans of 

small employers, a provision that is the 

subject of another PBGC rulemaking 

proceeding. This proposed rule would 

exempt plans that qualify for the VRP 

cap and pay the full amount of the cap 

from determining or reporting UVBs. 

Meaning of ‘‘Vested’’

As discussed above, the 

determination of UVBs—under pre-PPA 

law as well as under PPA 2006—

requires that only vested benefits be 

taken into account. PBGC believes that 

there is some uncertainty among 

pension practitioners as to the meaning 

of the term ‘‘vested’’ as used in ERISA 

section 4006(a)(3)(E). With a view to 

reducing uncertainty and promoting 

consistency in the VRP determination 

process, PBGC proposes to explain—for 

premium purposes only—when certain 

benefits are considered vested. 

The proposal would specify two 

circumstances that do not prevent a 

benefit of a participant from being 

vested for premium purposes. One 

circumstance is that the benefit is not 

protected under Code section 411(d)(6) 

and thus may be eliminated or reduced 

by the adoption of a plan amendment or 

by the occurrence of a condition or 

event (such as a change in marital 

status). PBGC considers such a benefit 

to be vested (if the other conditions of 

entitlement have been met) so long as 

the benefit has not actually been 

eliminated or reduced. The other 

circumstance—applicable to certain 

benefits payable upon a participant’s 

death—is that the participant is living. 

The benefits to which this would apply 

are (1) a qualified pre-retirement 

survivor annuity, (2) a post-retirement 

survivor annuity such as the annuity 

paid after a participant’s death under a 

joint and survivor or certain and 

continuous option, and (3) a benefit that 

returns a participant’s accumulated 


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mandatory employee contributions. 

PBGC considers such benefits to be 

vested (if the other conditions of 

entitlement have been met) 

notwithstanding that the participant is 

alive. 

Recordkeeping and Audits 

PBGC proposes to clarify and 

strengthen its rules on recordkeeping 

and audits. Most of the changes simply 

reflect existing recordkeeping and audit 

practices. 

In describing the premium records to 

be kept, the current premium payment 

regulation mentions explicitly only 

those prepared by enrolled actuaries 

and insurance carriers. The proposal 

broadens this to include plan sponsors 

and employers required to contribute to 

a plan for their employees and clarifies, 

with a list of examples of relevant 

records, that PBGC interprets the term 

‘‘records’’ broadly. Similarly, the 

proposal refers explicitly to records 

supporting the amount of premiums that 

were required to be paid and the 

premium-related information that was 

required to be reported (rather than just 

what was actually paid or reported). 

Where a premium or premium-related 

information is determined through the 

use of a manual or automated system, 

the proposal allows PBGC to require 

that the operation of the system be 

demonstrated so that its effectiveness, 

and the reliability of the results 

produced, can be assessed. In addition, 

in situations where plan records are 

deficient, the proposal broadens the 

categories of data on which PBGC may 

rely to establish the amount of 

premiums due to include not just 

participant count data but UVB data. 

The proposal also makes clear that the 

45 days permitted for producing records 

under § 4007.10(c) applies to records 

sent to PBGC, not to records audited onsite (which PBGC expects to be 

produced much more promptly). And 

PBGC proposes to broaden the 

circumstances in which it can require 

faster submission of records. The 

existing regulation limits such 

circumstances to those where collection 

of money may be jeopardized. This 

would be changed to authorize shorter 

response times where the interests of 

PBGC may be prejudiced by delay—

such as where PBGC has reason to fear 

that records might be destroyed or 

manipulated. 

Miscellaneous Provisions 

Plans Not Immediately Subject to New 

Funding Rules 

Sections 104, 105, and 106 of PPA 

2006 defer the effective date of the 

funding amendments for certain plans 

described in those sections, which in 

general deal with plans of cooperatives, 

plans affected by settlement agreements 

with PBGC, and plans of government 

contractors. Section 402 of PPA 2006 

applies special funding rules to certain 

plans of commercial passenger airlines 

and airline caterers. None of these 

provisions affects the applicability of 

the amendments to ERISA section 4006 

regarding the determination of the VRP. 

The proposed rule provides explicitly 

that plans in this small group must 

determine UVBs in the same manner as 

all other plans. 

New and Newly Covered Plans 

The proposed rule would eliminate 

confusing language in the existing 

regulations that raised questions about 

the determination of due dates, 

participant count dates, and premium 

proration for new and newly covered 

plans in certain circumstances. The new 

language would make clear that the first 

day of a new plan’s first plan year for 

premium purposes is the effective date 

of the plan. This change will obviate the 

need for plan administrators to choose 

between the effective date and the 

adoption date as the first day of the plan 

year for premium filing. 

Electronic Filing Requirement 

Effective July 1, 2006, PBGC amended 

its regulations to require that annual 

premium filings be made electronically 

(71 FR 31077, June 1, 2006). 

(Exemptions from the e-filing 

requirement may be granted for good 

cause in appropriate circumstances.) In 

order for PBGC’s premium processing 

systems to work effectively and 

efficiently, information must be 

received in an electronic format 

compatible with those systems; the 

burden of reformatting information 

received on paper or in other 

incompatible formats is significant, and 

the reformatting process gives rise to 

data errors. PBGC therefore proposes to 

provide explicitly in the premium 

payment regulation that, in the absence 

of an exemption, premium filing on 

paper or in any other manner other than 

the prescribed electronic filing method 

does not satisfy the requirement to file. 

Thus, a penalty under ERISA section 

4071 could be assessed for the period 

from the due date of the premium filing 

until it was made electronically, even if 

a timely paper filing was made. 

Billing ‘‘Grace Period’’ for Interest 

PBGC proposes to consolidate 

paragraphs (b) and (c) of § 4007.7, both 

of which deal with the ‘‘grace period’’

for interest on premium underpayments 

where a bill is paid within 30 days. No 

substantive change is intended. 

VRP Rate 

ERISA section 4006(a)(3)(E)(ii) sets 

the variable-rate premium at $9 for each 

$1,000 (or fraction thereof) of UVBs. 

Section 4006.3(b) of the existing 

premium rates regulation omits the 

phrase ‘‘(or fraction thereof).’’ The 

requirement is made clear in PBGC’s 

premium instructions, but PBGC 

proposes to add this phrase to the 

regulatory text. 

Pre-1996 Penalty Accrual Rules 

PBGC proposes to eliminate the pre1996 penalty accrual rules as 

anachronistic. 

Other Changes 

The proposal includes a number of 

clarifying and editorial changes. 

Applicability 

The regulatory changes made by this 

rule would apply to plan years 

beginning after 2007. 

Compliance With Rulemaking 

Guidelines 

E.O. 12866 

The PBGC has determined, in 

consultation with the Office of 

Management and Budget, that this rule 

is a ‘‘significant regulatory action’’

under Executive Order 12866. The 

Office of Management and Budget has 

therefore reviewed this notice under 

E.O. 12866. Pursuant to section 1(b)(1) 

of E.O. 12866 (as amended by E.O. 

13422), PBGC identifies the following 

specific problems that warrant this 

agency 

• There is ambiguity in ERISA section 

4006(a)(3)(E) regarding the date as of 

which UVBs are to be measured. This 

problem is significant because, unless 

the statutory ambiguity is resolved, it 

will be unclear what date UVBs are to 

be measured as of. 

• The statute lacks clarity and 

specificity in describing how UVBs are 

calculated. This problem is significant 

because, unless clarity and specificity 

are provided, it will be unclear how to 

compute UVBs. 

• The statute does not expressly 

provide for an alternative premium 

funding target as described above. This 

problem is significant because the 

standard premium funding target 

provided for in the statute is more 

burdensome to use than the alternative 

premium funding target described above 

without generating significantly 

different premium revenue than the less 

burdensome alternative premium 

funding target. 


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• PBGC’s existing premium due date 

and penalty rules do not accord well 

with the new rules for the date as of 

which and manner in which UVBs are 

to be determined. This problem is 

significant because, without changes in 

the due date and penalty rules, some 

plans may experience difficulties in 

paying premiums timely and without 

late payment penalties. 

• Some existing PBGC VRP relief 

rules are anachronistic and some new 

relief provisions are warranted by 

statutory changes. This problem is 

significant because the outmoded relief 

rules detract from accuracy in 

determining the VRP and deprive PBGC 

of VRP data without significantly 

reducing burden, while statutory 

changes have made it possible to grant 

new relief without significant adverse 

consequences for the PBGC insurance 

program. 

• There is uncertainty as to the 

meaning of the term ‘‘vested’’ that is 

used in the statute to describe benefits 

taken into account in determining the 

VRP. This problem is significant 

because, without improved clarity in the 

meaning of ‘‘vested’’ as applied to VRP 

determinations, those determinations 

may be inconsistent. 

• PBGC’s current recordkeeping and 

audit rules do not match current 

recordkeeping and audit practices in 

scope and specificity, and provide 

relatively narrow circumstances in 

which PBGC may require expedited 

submission of records. This problem is 

significant because inadequate 

recordkeeping and audit rules could 

compromise PBGC’s ability to enforce 

the premium rules in the statute and 

PBGC’s regulations thereunder. 

• PBGC’s existing premium payment 

regulation does not provide explicitly 

that, in the absence of an exemption, 

premium filing on paper or in any other 

manner other than the prescribed 

electronic filing method does not satisfy 

the requirement to file. This problem is 

significant because, in the absence of an 

explicit statement, filers might believe 

they had a basis for taking the position 

that penalties for late filing would not 

apply if they timely filed on paper or in 

some other non-approved manner. 

Regulatory Flexibility Act 

PBGC certifies under section 605(b) of 

the Regulatory Flexibility Act (5 U.S.C. 

601 et seq.) that the amendments in this 

proposed rule would not have a 

significant economic impact on a 

substantial number of small entities. 

Accordingly, as provided in section 605 

of the Regulatory Flexibility Act (5 

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

do not apply. 

Most of the amendments would 

implement statutory changes made by 

Congress. They would provide 

procedures for calculating, 

substantiating, and paying the 

premiums prescribed by statute and 

impose no significant burden beyond 

the burden imposed by statute. To the 

extent that this rule would make 

changes that are outside the explicit 

scope of the statute, they would affect 

primarily the requirement to perform 

and manner of performing VRP 

calculations. When the VRP provisions 

were added to PBGC’s regulations 

nearly 20 years ago, these calculations 

were mostly done using actuarial tables 

and hand calculators. Today they are 

almost universally done using highmemory, high-speed computers. The 

VRP calculations parallel funding 

calculations that must be done 

independently of PBGC premium 

requirements. Thus, the VRP 

calculations can be done for the most 

part by plugging in different parameters 

(such as interest rates) to computer 

programs that are used for funding 

purposes. The incremental cost of such 

calculations for entities of any size is 

insignificant. Not including a 

computation option like the existing 

alternative computation method (ACM) 

in the new rules would not significantly 

affect compliance costs because such an 

option would itself be complex and thus 

burdensome to use and because a 

simplified computation method is no 

longer needed in the current 

environment of computerized actuarial 

computations. 

Changes that would tend to increase 

compliance costs (e.g., elimination of 

the VRP exemption for well-funded 

small plans) would be offset by changes 

tending to reduce compliance costs (e.g., 

the introduction of the reporting 

exemption for plans of small employers 

paying the maximum capped VRP). 

The shift from prior-year to currentyear data and the deferral of the due 

date for small plans (those with fewer 

than 100 participants) should not affect 

the cost of compliance. Under existing 

rules, UVBs are determined as of the 

end of the prior year (or in some cases 

the beginning of the current year) and 

the VRP is due 91⁄2 months later. Under 

the new rules, UVBs would be 

determined as of the UVB valuation 

date, which for most small plans may be 

any day in the current year. For plans 

that choose a valuation date at the 

beginning of the year, the VRP would 

now be due 16 months later. For those 

that choose a valuation date at the end 

of the year, the VRP would now be due 

4 months later. For a plan that chooses 

a mid-year valuation date, the VRP 

would be due 10 months later, 

providing about the same time for datagathering and computations as under 

the existing rules. But even a 4-month 

period between the valuation date and 

the due date should be adequate for the 

data-gathering and UVB computations 

of small plans, and the change in timing 

should not affect the cost of compliance. 

PBGC believes that the changes to the 

recordkeeping requirements in general 

simply codify existing practices. The 

changes to the audit rules will not affect 

a significant number of plans of any 

size. 

Paperwork Reduction Act 

PBGC is submitting the information 

requirements under this proposed rule 

to the Office of Management and Budget 

for review and approval under the 

Paperwork Reduction Act. The OMB 

control number for this collection of 

information is 1212–0009. Copies of 

PBGC’s request may be obtained free of 

charge by contacting the Disclosure 

Division of the Office of the General 

Counsel of PBGC, 1200 K Street, NW., 

Washington, DC 20005, 202–326–4040. 

PBGC is proposing the following 

changes to the information requirements 

under the premium rates and premium 

payment regulations (except for 2008 

estimated flat-rate premium filings, as 

noted below): 

• Filers will be required to include in 

the addresses of the plan sponsor and 

plan administrator the countries where 

the addresses are located (if other than 

the United States). 

• Filers will no longer be required to 

report coverage status. 

• Filers will be required to provide an 

e-mail address for the plan contact. 

• Filers will no longer be required to 

provide information on participant 

notices under ERISA section 4011 (that 

requirement having been eliminated by 

PPA 2006). 

• Filers will be required to report if 

they qualify for premium proration (for 

a short plan year) and if so, to report the 

number of months in the proration 

period. Proration will be reported 

separately from credits. (This change 

will not apply to 2008 estimated flatrate premium filings.) 

• Filers will be required to report 

plan size (small, mid-size, or large) 

based on the prior year’s participant 

count (or report that the plan is new). 

• Filers will have an opportunity to 

make alternative premium funding 

target elections as part of the premium 

filing. 

• Filers will be required to report the 

participant count date. 

• Most existing VRP information 

items will be eliminated in connection 


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with the implementation of the new 

VRP rules. Items retained will be the 

identification of any applicable VRP 

exemption and the amount of UVBs. 

• New VRP data required will be 

qualification for the VRP cap for certain 

plans of small employers, the UVB 

valuation date, the premium funding 

target as of the UVB valuation date, the 

premium funding target method 

(standard or alternative), whether the 

reported premium funding target is an 

estimate, the segment rates used to 

compute the premium funding target (or 

indication that the full yield curve was 

used), the market value of assets as of 

the UVB valuation date, the 

(unprorated) VRP cap (for plans eligible 

for the cap), and the (unprorated) 

uncapped VRP (for plans not eligible for 

the cap). 

• For a final filing, filers will be 

required to report the date and type of 

event that results in the cessation of the 

filing obligation. 

• The existing item on transfers from 

disappearing plans will be replaced by 

two new items: Information about 

transfers from other plans (whether 

disappearing or not) and information 

about transfers to other plans. (This 

change will not apply to 2008 estimated 

flat-rate premium filings.) 

• For frozen plans, filers will be 

required to identify the type of freeze 

and its effective date. 

• For amended filings, filers will be 

required to report any change in the 

beginning and ending dates of the plan 

year being reported and any change in 

the plan identifying numbers being 

reported from those in the original 

filing. 

PBGC needs this information to 

identify the plan for which premiums 

are paid to PBGC, to verify the 

determination of the premium, and to 

help the PBGC determine the magnitude 

of its exposure in the event of plan 

termination. 

PBGC estimates that it will receive 

annual premium filings from about 

28,409 plan administrators each year 

and that the total annual burden of the 

collection of information will be about 

9,002 hours and $47,037,645. 

Comments on the paperwork 

provisions under this proposed rule 

should be sent to the Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, 

Attention: Desk Officer for Pension 

Benefit Guaranty Corporation, via 

electronic mail at 

OIRA_DOCKET@omb.eop.gov or by fax 

to (202) 395–6974. Although comments 

may be submitted through July 30, 2007, 

the Office of Management and Budget 

requests that comments be received on 

or before July 2, 2007 to ensure their 

consideration. Comments may address 

(among other things)—

• Whether the proposed collection of 

information is needed for the proper 

performance of PBGC’s functions and 

will have practical utility; 

• The accuracy of PBGC’s estimate of 

the burden of the proposed collection of 

information, including the validity of 

the methodology and assumptions used; 

• Enhancement of the quality, utility, 

and clarity of the information to be 

collected; and 

• Minimizing the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submission of 

responses. 

List of Subjects 

29 CFR Part 4006 

Pension insurance, Pensions. 

29 CFR Part 4007 

Penalties, Pension insurance, 

Pensions, Reporting and recordkeeping 

requirements. 

For the reasons given above, PBGC 

proposes to amend 29 CFR parts 4006 

and 4007 as follows. 

PART 4006—PREMIUM RATES 

1. The authority citation for part 4006 

continues to read as follows: 

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

1307. 

2. In § 4006.2, the definition of ‘‘short 

plan year’’ is revised, and four new 

definitions are added, to read as follows: 

§ 4006.2 Definitions. 

* * * * * 

Participant count of a plan for a plan 

year means the number of participants 

in the plan on the participant count date 

of the plan for the plan year. 

Participant count date of a plan for a 

plan year means the date provided for 

in § 4006.5(c), (d), or (e) as applicable. 

Premium funding target has the 

meaning described in § 4006.4(b)(1). 

* * * * * 

Short plan year means a plan year of 

coverage that is shorter than a normal 

plan year. 

UVB valuation date of a plan for a 

plan year means the plan’s funding 

valuation date for the plan year 

determined in accordance with ERISA 

section 303(g)(2). 

3. In § 4006.3: 

a. Paragraph (a) introductory text is 

amended by removing the words ‘‘last 

day of the plan year preceding the 

premium payment year,’’ and adding in 

their place the words ‘‘participant count 

date’’. 

b. Paragraph (b) is amended by 

removing the words ‘‘$1,000 of a singleemployer plan’s unfunded vested 

benefits’’ and adding in their place the 

words ‘‘$1,000 (or fraction thereof) of a 

single-employer plan’s unfunded vested 

benefits for the premium payment 

year’’. 

4. Section 4006.4 is revised to read as 

follows: 

§ 4006.4 Determination of unfunded vested 

benefits. 

(a) In general. Except as provided in 

the exemptions and special rules under 

§ 4006.5, the amount of a plan’s 

unfunded vested benefits for the 

premium payment year is the excess (if 

any) of the plan’s premium funding 

target for the premium payment year 

(determined under paragraph (b) of this 

section) over the fair market value of the 

plan’s assets for the premium payment 

year (determined under paragraph (c) of 

this section). Unfunded vested benefits 

for the premium payment year must be 

determined as of the plan’s UVB 

valuation date for the premium payment 

year, based on the plan provisions and 

the plan’s population as of that date. 

The determination must be made in a 

manner consistent with generally 

accepted actuarial principles and 

practices. 

(b) Premium funding target—(1) In 

general. A plan’s premium funding 

target is its standard premium funding 

target under paragraph (b)(2) of this 

section or, if an election to use the 

alternative premium funding target 

under § 4006.5(g) is in effect, its 

alternative premium funding target. 

(2) Standard premium funding target. 

A plan’s standard premium funding 

target under this section is the plan’s 

funding target as determined under 

ERISA section 303(d) (or 303(i), if 

applicable) for the premium payment 

year using the same assumptions that 

are used for funding purposes, except 

that—

(i) Only vested benefits are taken into 

account, and 

(ii) The interest rates to be used are 

the segment rates for the month 

preceding the month in which the 

premium payment year begins that are 

determined in accordance with ERISA 

section 4006(a)(3)(E)(iv). These are the 

rates that would be determined under 

ERISA section 303(h)(2)(C) if ERISA 

section 303(h)(2)(D) were applied by 

using the monthly yields for the month 

preceding the month in which the 

premium payment year begins on 


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investment grade corporate bonds with 

varying maturities and in the top 3 

quality levels rather than the average of 

such yields for a 24-month period. 

(c) Value of assets. The fair market 

value of a plan’s assets under this 

section is determined in the same 

manner as for funding purposes under 

ERISA section 303(g)(3) and (4), except 

that averaging as described in ERISA 

section 303(g)(3)(B) must not be used 

and prior year contributions are 

included only to the extent received by 

the plan by the date of a premium filing. 

Contribution receipts must be accounted 

for as described in ERISA section 

303(g)(4), using effective interest rates 

determined under ERISA section 

303(h)(2)(A) (not rates that could be 

determined based on the segment rates 

described in paragraph (b)(2) of this 

section). 

(d) ‘‘Vested.’’ For purposes of ERISA 

section 4006(a)(3)(E), this part, and part 

4007 of this chapter, a benefit otherwise 

vested does not fail to be vested merely 

because of the following circumstances: 

(1) The circumstance that the 

participant is living, in the case of the 

following death benefits: 

(i) A qualified pre-retirement survivor 

annuity (as described in ERISA section 

205(e)), 

(ii) A post-retirement survivor annuity 

that pays some or all of the participant’s 

benefit amount for a fixed or contingent 

period (such as a joint and survivor 

annuity or a certain and continuous 

annuity), and 

(iii) A benefit that returns the 

participant’s accumulated mandatory 

employee contributions (as described in 

ERISA section 204(c)(2)(C)). 

(2) The circumstance that the benefit 

may be eliminated or reduced by the 

adoption of a plan amendment or by the 

occurrence of a condition or event (such 

as a change in marital status). 

(e) Plans for which new funding rules 

are not immediately effective. In the 

case of a plan to which the funding 

rules as amended by subtitles A and B 

of Title I of the Pension Protection Act 

of 2006 do not apply for a plan year, 

unfunded vested benefits must be 

determined for that plan year as if those 

funding rules did apply. 

5. In § 4006.5: 

a. Paragraph (a) introductory text is 

amended by removing the words 

‘‘paragraphs (a)(1)–(a)(5)’’ and adding in 

their place the words ‘‘paragraphs 

(a)(1)–(a)(3)’’; and by removing the 

words ‘‘determine its unfunded vested 

benefits’’ and adding in their place the 

words ‘‘determine or report its 

unfunded vested benefits’’. 

b. Paragraphs (a)(1) and (a)(5) are 

removed. 

c. Paragraphs (a)(2), (a)(3), and (a)(4) 

are redesignated as paragraphs (a)(1), 

(a)(2), and (a)(3) respectively. 

d. Redesignated paragraph (a)(1) is 

amended by removing the words 

‘‘benefit liabilities’’ from the heading 

and adding in their place the word 

‘‘participants’’; by removing the word 

‘‘did’’ and adding in its place the word 

‘‘does’’; and by removing the words 

‘‘last day of the plan year preceding the 

premium payment year’’ and adding in 

their place the words ‘‘UVB valuation 

date’’. 

e. Redesignated paragraph (a)(2) is 

amended by removing the figures 

‘‘412(i)’’ where they appear once in the 

heading and once in the body of the 

paragraph and adding in their place the 

figures ‘‘412(e)(3)’’; by removing the 

word ‘‘was’’ and adding in its place the 

word ‘‘is’’; and by removing the words 

‘‘last day of the plan year preceding the 

premium payment year’’ and adding in 

their place the words ‘‘UVB valuation 

date’’. 

f. Redesignated paragraph (a)(3)(ii) is 

amended by removing the words ‘‘last 

day of the plan year preceding the 

premium payment year’’ and adding in 

their place the words ‘‘UVB valuation 

date’’. 

g. The heading of paragraph (e) is 

amended by removing the words 

‘‘Special determination date rule for’’

and adding in their place the words 

‘‘Participant count date;’’. 

h. Paragraph (e)(2) is amended by 

removing the words ‘‘paragraph (e)(2) 

if’’ and adding in their place the words 

‘‘paragraph (e)(2) for a plan year if’’. 

i. Paragraph (e)(2)(ii) is amended by 

removing the words ‘‘on the first day of 

the plan’s premium payment year’’ and 

adding in their place the words ‘‘at the 

beginning of the plan year’’. 

j. Paragraph (f) introductory text is 

amended by removing the words ‘‘year 

as described’’ and adding in their place 

the words ‘‘year described’’. 

k. Paragraphs (b), (c), (d), (e)(1), and 

(f)(1) are revised, and paragraph (g) is 

added, to read as follows: 

§ 4006.5 Exemptions and special rules. 

* * * * * 

(b) Reporting exemption for plans 

paying capped variable-rate premium. A 

plan that qualifies for the variable-rate 

premium cap described in ERISA 

section 4006(a)(3)(H) is not required to 

determine or report its unfunded vested 

benefits under § 4006.4 if it reports that 

it qualifies for the cap and pays a 

variable-rate premium equal to the 

amount of the cap. 

(c) Participant count date; in general. 

Except as provided in paragraphs (d) 

and (e) of this section, the participant 

count date of a plan for a plan year is 

the last day of the prior plan year. 

(d) Participant count date; new and 

newly-covered plans. The participant 

count date of a new plan or a newlycovered plan for a plan year is the first 

day of the plan year. For this purpose, 

a new plan’s first plan 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 for a plan year is the first day 

of the plan year. 

* * * * * 

(f) Proration for certain short plan 

years. * * * 

(1) New or newly covered plan. A new 

plan becomes effective less than one full 

year before the beginning of its second 

plan year, or a newly-covered plan 

becomes covered on a date other than 

the first day of its plan year. (Cessation 

of coverage before the end of a plan year 

does not give rise to proration under 

this section.) 

* * * * * 

(g) Alternative premium funding 

target. A plan’s alternative premium 

funding target is the vested portion of 

the plan’s funding target under ERISA 

section 303(d)(1) that is used to 

determine the plan’s minimum 

contribution under ERISA section 303 

for the premium payment year, that is, 

the amount that would be determined 

under ERISA section 303(d)(1) if only 

vested benefits were taken into account. 

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 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 must specify the first 

plan year to which it applies and must 

be filed before the end of that plan year. 

The first plan year to which the election 

applies must begin at least five years 

after the first plan year to which a 

revocation of a prior election applied. 

The election will be effective—

(i) For the plan year for which made 

and for all plan years that begin less 

than five years thereafter, and 


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(ii) For all succeeding plan years until 

the first plan year to which a revocation 

of the election applies. 

(2) A revocation of an election under 

this paragraph (g) to use the alternative 

premium funding target must specify 

the first plan year to which it applies 

and must be filed before the end of that 

plan year. The first plan year to which 

the revocation applies must begin at 

least five years after the first plan year 

to which the election applied. 

6. In paragraph (c) of § 4006.6: 

a. Example 1 is amended by removing 

the words ‘‘July 1, 2000’’ and adding in 

their place the words ‘‘July 1, 2008’’; by 

removing the words ‘‘December 31, 

2000’’ where they appear twice and 

adding in their place the words 

‘‘December 31, 2008’’; by removing the 

words ‘‘snapshot date’’ and adding in 

their place the words ‘‘participant count 

date’’; and by removing the words ‘‘2001 

premium’’ where they appear twice and 

adding in their place the words ‘‘2009 

premium’’. 

b. Example 2 is amended by removing 

the words ‘‘February 1, 2002’’ where 

they appear twice and adding in their 

place the words ‘‘February 1, 2010’’; by 

removing the words ‘‘July 1, 2000’’ and 

adding in their place the words ‘‘July 1, 

2008’’; by removing the words ‘‘July 1, 

2001’’ and adding in their place the 

words ‘‘July 1, 2009’’; by removing the 

words ‘‘December 31, 2002’’ and adding 

in their place the words ‘‘December 31, 

2010’’; by removing the words 

‘‘snapshot date’’ and adding in their 

place the words ‘‘participant count 

date’’; and by removing the words ‘‘2003 

premium’’ where they appear twice and 

adding in their place the words ‘‘2011 

premium’’. 

c. Example 3 is amended by removing 

the words ‘‘January 1, 2004’’ and adding 

in their place the words ‘‘January 1, 

2012’’; by removing the words 

‘‘December 30, 2005’’ where they appear 

twice and adding in their place the 

words ‘‘December 30, 2013’’; by 

removing the words ‘‘January 9, 2006’’

and adding in their place the words 

‘‘January 9, 2014’’; by removing the 

words ‘‘December 31, 2005’’ and adding 

in their place the words ‘‘December 31, 

2013’’; by removing the words 

‘‘snapshot date’’ and adding in their 

place the words ‘‘participant count 

date’’; and by removing the words ‘‘2006 

premium’’ where they appear twice and 

adding in their place the words ‘‘2014 

premium’’. 

d. Example 4 is amended by removing 

the words ‘‘January 1, 2006’’ and adding 

in their place the words ‘‘January 1, 

2014’’; by removing the words 

‘‘December 31, 2005’’ and adding in 

their place the words ‘‘December 31, 

2013’’; and by removing the words 

‘‘2006 premium’’ and adding in their 

place the words ‘‘2014 premium’’. 

PART 4007—PAYMENT OF PREMIUMS 

7. The authority citation for part 4007 

continues to read as follows: 

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

1306, 1307. 

8. In § 4007.2: 

a. Paragraph (a) is amended by 

removing the word ‘‘insurer,’’; and by 

removing the words ‘‘multiemployer 

plan,’’. 

b. Paragraph (b) is amended by 

removing the words ‘‘participant, 

premium payment year’’ and adding in 

their place the words ‘‘participant, 

participant count, premium funding 

target, premium payment year’’. 

9. In § 4007.3: 

a. The first three sentences (ending 

with the words ‘‘prescribed in the 

instructions.’’) of the text of § 4007.3 are 

designated as paragraph (a), and the 

remainder of the text (beginning with 

the words ‘‘Information must be filed 

electronically’’) is designated as 

paragraph (b). 

b. Newly designated paragraph (a) is 

amended by adding the heading ‘‘In 

general.’’; and by removing the words 

‘‘estimation, declaration, reconciliation, 

and payment’’ and adding in their place 

the words ‘‘estimation, determination, 

declaration, and payment’’. 

c. Newly designated paragraph (b) is 

amended by adding the heading 

‘‘Electronic filing.’’; by removing the 

words ‘‘requirement to file 

electronically does not apply’’ and 

adding in their place the words 

‘‘requirement to file electronically 

applies to all estimated and final flatrate and variable-rate premium filings 

(including amended filings) but does 

not apply’’; and by adding two new 

sentences to the end of the paragraph to 

read as follows: 

§ 4007.3 Filing requirement; method of 

filing. 

* * * * * 

(b) Electronic filing. * * * Unless an 

exemption applies, filing on paper or in 

any other manner other than by a 

prescribed electronic filing method does 

not satisfy the requirement to file. 

Failure to file electronically as required 

is subject to penalty under ERISA 

section 4071. 

10. In § 4007.7, paragraph (c) is 

removed, and paragraph (b) is revised to 

read as follows: 

§ 4007.7 Late payment interest charges. 

* * * * * 

(b) With respect to any PBGC bill for 

a premium underpayment and/or 

interest thereon, interest will accrue 

only until the date of the bill, provided 

the premium underpayment and interest 

billed are paid within 30 days after the 

date of the bill. 

11. In § 4007.8: 

a. Paragraph (a) introductory text is 

amended by adding at the end of the 

paragraph the words ‘‘The penalty rate 

is—’’. 

b. Paragraph (a)(1) introductory text 

and paragraph (a)(2) are removed, and 

paragraphs (a)(1)(i) and (a)(1)(ii) are 

redesignated as paragraphs (a)(1) and 

(a)(2) respectively. 

c. Paragraph (f) is amended by 

removing the figures 

‘‘§ 4007.11(a)(2)(iii)’’ and adding in their 

place the figures ‘‘§ 4007.11(a)(3)(iii)’’; 

by removing the words ‘‘filing is due if 

fewer’’ and adding in their place the 

words ‘‘filing is due if either—Fewer’’; 

by removing the period at the end of 

paragraph (f) and adding in its place ‘‘, 

or’’; and by designating as paragraph 

(f)(1) the portion of the text of paragraph 

(f) that begins with the words ‘‘Fewer 

than 500’’. 

d. Paragraph (i) is amended by 

removing the figures 

‘‘§ 4007.11(a)(2)(iii)’’ and adding in their 

place the figures ‘‘§ 4007.11(a)(3)(iii)’’. 

e. New paragraphs (f)(2) and (j) are 

added to read as follows: 

§ 4007.8 Late payment penalty charges. 

* * * * * 

(f) Safe-harbor relief for certain large 

plans. * * * 

* * * * * 

(2) The due date for paying the flatrate premium for the plan year 

preceding the premium payment year is 

later than the due date for paying the 

flat-rate premium for the premium 

payment year. 

* * * * * 

(j) Variable-rate premium penalty 

relief. This waiver applies in the case of 

a plan for which a reconciliation filing 

is required under § 4007.11(a)(2)(ii) or 

(a)(3)(iv). PBGC will waive the penalty 

on any underpayment of the variablerate 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)(2)(i) or (a)(3)(ii)—

(1) The plan administrator reports—

(i) The fair market value of the plan’s 

assets for the premium payment year, 

and 

(ii) An estimate of the plan’s premium 

funding target for the premium payment 

year that is certified by an enrolled 

actuary to be a reasonable estimate that 


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30318 Federal Register / Vol. 72, No. 104 / Thursday, May 31, 2007 / Proposed Rules 

takes into account the most current data 

available to the enrolled actuary and 

that has been determined in accordance 

with generally accepted actuarial 

principles and practices; and 

(2) The plan administrator pays at 

least the amount of variable-rate 

premium determined from the value of 

assets and estimated premium funding 

target so reported. 

12. In § 4007.10: 

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

removing the words ‘‘that collection of 

unpaid premiums (or any associated 

interest or penalties) would otherwise 

be jeopardized’’ and adding in their 

place the words ‘‘that the interests of 

PBGC may be prejudiced by a delay in 

the receipt of the information (e.g., 

where collection of unpaid premiums 

(or any associated interest or penalties) 

would otherwise be jeopardized)’’. 

b. Paragraphs (a)(1), (b), and (c)(1) are 

revised, and paragraph (a)(3) is added, 

to read as follows: 

§ 4007.10 Recordkeeping; audits; 

disclosure of information. 

(a) Retention of records to support 

premium payments—(1) In general. The 

plan administrator must retain, for a 

period of six years after the premium 

due date, all plan records that are 

necessary to establish, support, and 

validate the amount of any premium 

required to be paid and any information 

required to be reported (‘‘premiumrelated information’’) under this part 

and part 4006 of this chapter and under 

PBGC’s premium filing instructions. 

Records that must be retained pursuant 

to this paragraph include, but are not 

limited to, records that establish the 

number of plan participants and that 

support and demonstrate the calculation 

of unfunded vested benefits. 

* * * * * 

(3) Records (i) Records that must be 

retained pursuant to paragraph (a)(1) of 

this section include, but are not limited 

to, records prepared by the plan 

administrator, a plan sponsor, an 

employer required to contribute to the 

plan with respect to its employees, an 

enrolled actuary performing services for 

the plan, or an insurance carrier issuing 

any contract to pay benefits under the 

plan. 

(ii) For purposes of this section, 

‘‘records’’ include, but are not limited 

to, plan documents; participant data 

records; personnel and payroll records; 

actuarial tables, worksheets, and 

reports; records of computations, 

projections, and estimates; benefit 

statements, disclosures, and 

applications; financial and tax records; 

insurance contracts; records of plan 

procedures and practices; and any other 

records, whether in written, electronic, 

or other format, that are relevant to the 

determination of the amount of any 

premium required to be paid or any 

premium-related information required 

to be reported. 

(iii) When a record to be produced for 

PBGC inspection and copying exists in 

more than one format, it must be 

produced in the format specified by 

PBGC. 

(b) PBGC audit—(1) In general. In 

order to determine the correctness of 

any premium paid or premium-related 

information reported or to determine the 

amount of any premium required to be 

paid or any premium-related 

information required to be reported, 

PBGC may—

(i) Audit any premium filing, 

(ii) Inspect and copy any records that 

are relevant to the determination of the 

amount of any premium required to be 

paid and any premium-related 

information required to be reported, 

including (without limitation) the 

records described in paragraph (a) of 

this section, and 

(iii) Require disclosure of any manual 

or automated system used to determine 

any premium paid or premium-related 

information reported, and 

demonstration of its operation in order 

to permit PBGC to determine the 

effectiveness of the system and the 

reliability of information produced by 

the system. 

(2) Deficiencies found on audit. If, 

upon audit, the PBGC determines that a 

premium due under this part was 

underpaid, late payment interest and 

penalty charges will apply as provided 

for in this part. If, upon audit, PBGC 

determines that required information 

was not timely and accurately reported, 

a penalty may be assessed under ERISA 

section 4071. 

(3) Insufficient records. In 

determining the premium due, if, in the 

judgment of the PBGC, the plan’s 

records fail to establish the participant 

count or (for a single-employer plan) the 

plan’s unfunded vested benefits for any 

premium payment year, the PBGC may 

rely on data it obtains from other 

sources (including the IRS and the 

Department of Labor) for presumptively 

establishing the participant count and/ 

or unfunded vested benefits for 

premium computation purposes. 

(c) Providing record information—(1) 

In general. The plan administrator shall 

make the records retained pursuant to 

paragraph (a) of this section available to 

the PBGC promptly upon request for 

inspection and photocopying (or, for 

electronic records, inspection, 

electronic copying, and printout) at the 

location where they are kept (or another, 

mutually agreeable, location). If PBGC 

requests in writing that records retained 

pursuant to paragraph (a) of this section, 

or information in such records, be 

submitted to PBGC, the plan 

administrator must submit the requested 

materials to PBGC either electronically 

or by hand, mail, or commercial 

delivery service within 45 days of the 

date of PBGC’s request therefor, or by a 

different time specified in the request. 

* * * * * 

13. In § 4007.11, paragraphs (a), (b), 

and (c) are revised to read as follows: 

§ 4007.11 Due dates. 

(a) In general. The premium filing due 

date for small plans is prescribed in 

paragraph (a)(1) of this section, the 

premium filing due date for mid-size 

plans is prescribed in paragraph (a)(2) of 

this section, and the premium filing due 

dates for large plans are prescribed in 

paragraph (a)(3) of this section. 

(1) Small plans. If the plan had fewer 

than 100 participants for whom 

premiums were payable for the plan 

year preceding the premium payment 

year, the due date is the last day of the 

sixteenth full calendar month following 

the end of the plan year preceding the 

premium payment year. 

(2) Mid-size plans. If the plan had 100 

or more but fewer than 500 participants 

for whom premiums were payable for 

the plan year preceding the premium 

payment year: 

(i) The due date is the fifteenth day of 

the tenth full calendar month following 

the end of the plan year preceding the 

premium payment year. 

(ii) If the premium funding target is 

not known by the date specified in 

paragraph (a)(2)(i) of this section, a 

reconciliation filing and any required 

premium payment must be made by the 

last day of the sixteenth full calendar 

month following the end of the plan 

year preceding the premium payment 

year. 

(3) Large plans. If the plan had 500 or 

more participants for whom premiums 

were payable for the plan year 

preceding the premium payment year: 

(i) The due date for the flat-rate 

premium required by § 4006.3(a) of this 

chapter is the last day of the second full 

calendar month following the close of 

the plan year preceding the premium 

payment year. 

(ii) The due date for the variable-rate 

premium required by § 4006.3(b) of this 

chapter for single-employer plans is the 

fifteenth day of the tenth full calendar 

month following the end of the plan 

year preceding the premium payment 

year. 

(iii) If the participant count is not 

known by the date specified in 


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paragraph (a)(3)(i) of this section, a 

reconciliation filing and any required 

premium payment must be made by the 

date specified in paragraph (a)(3)(ii) of 

this section. 

(iv) If the premium funding target is 

not known by the date specified in 

paragraph (a)(3)(ii) of this section, a 

reconciliation filing and any required 

premium payment must be made by the 

last day of the sixteenth full calendar 

month following the end of the plan 

year preceding the premium payment 

year. 

(b) Due dates for plans that change 

plan years. For any plan that changes its 

plan year, the due date or due dates for 

the short plan year are as specified in 

paragraph (a)(1), (a)(2), (a)(3), or (c) of 

this section (whichever applies). For the 

plan year that follows a short plan year, 

each due date is the later of—

(i) The applicable due date specified 

in paragraph (a)(1), (a)(2), or (a)(3) of 

this section, or 

(ii) 30 days after the date on which 

the amendment changing the plan year 

was adopted. 

(c) Due dates for new and newly 

covered plans. Notwithstanding 

paragraph (a) of this section, the due 

date for the first plan year of coverage 

of any new plan or newly covered plan 

is the latest of—

(1) The last day of the sixteenth full 

calendar month that began on or after 

the first day of the premium payment 

year (the effective date, in the case of a 

new plan), 

(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. 

* * * * * 

Issued in Washington, DC, this 24th day of 

May, 2007. 

Vincent K. Snowbarger, 

Interim Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. E7–10412 Filed 5–30–07; 8:45 am] 

BILLING CODE 7709–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R07–OAR–2007–0383; FRL–8318–7] 

Approval and Promulgation of 

Implementation Plans; State of 

Missouri 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA proposes to approve a 

request to amend the Missouri State 

Implementation Plan (SIP) to include 

the base year inventory for the Missouri 

portion of the St. Louis 8-hour ozone 

national ambient air quality standard 

(NAAQS) nonattainment area and a 

demonstration of Missouri’s emissions 

statement authority. The Missouri 

portion of the St. Louis nonattainment 

area consists of the City of St. Louis and 

Franklin, Jefferson, St. Charles and St. 

Louis Counties. The nonattainment area 

also includes four counties in Illinois. 

This amendment would fulfill 

Missouri’s obligation, as a moderate 

nonattainment area, to submit a base 

year inventory for the 8-hour ozone 

NAAQS and to demonstrate adequate 

authority to address the emissions 

statement requirement under Section 

182(a)(1) and Section 182(a)(3)(B) of the 

Clean Air Act (CAA), respectively. 

DATES: Comments on this proposed 

action must be received in writing by 

July 2, 2007. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R07–

OAR–2007–0383 by one of the following 

methods: 

1. http://www.regulations.gov: Follow 

the on-line instructions for submitting 

comments. 

2. E-mail: rios.shelly@epa.gov. 

3. Mail: Shelly Rios-LaLuz, 

Environmental Protection Agency, Air 

Planning and Development Branch, 901 

North 5th Street, Kansas City, Kansas 

66101. 

4. Hand Delivery or Courier. Deliver 

your comments to: Shelly Rios-LaLuz, 

Environmental Protection Agency, Air 

Planning and Development Branch, 901 

North 5th Street, Kansas City, Kansas 

66101. Such deliveries are only 

accepted during the Regional Office’s 

normal hours of operation. The Regional 

Office’s official hours of business are 

Monday through Friday, 8 to 4:30, 

excluding legal holidays. 

Please see the direct final rule which 

is located in the Rules section of this 

Federal Register for detailed 

instructions on how to submit 

comments. 

FOR FURTHER INFORMATION CONTACT: 

Shelly Rios-LaLuz at (913) 551–7296, or 

by e-mail at rios.shelly@epa.gov. 

SUPPLEMENTARY INFORMATION: In the 

final rules section of the Federal 

Register, EPA is approving the state’s 

SIP revision as a direct final rule 

without prior proposal because the 

Agency views this as a noncontroversial 

revision amendment and anticipates no 

relevant adverse comments to this 

action. A detailed rationale for the 

approval is set forth in the direct final 

rule. If no relevant adverse comments 

are received in response to this action, 

no further activity is contemplated in 

relation to this action. If EPA receives 

relevant adverse comments, the direct 

final rule will be withdrawn and all 

public comments received will be 

addressed in a subsequent final rule 

based on this proposed action. EPA will 

not institute a second comment period 

on this action. Any parties interested in 

commenting on this action should do so 

at this time. Please note that if EPA 

receives adverse comment on part of 

this rule and if that part can be severed 

from the remainder of the rule, EPA may 

adopt as final those parts of the rule that 

are not the subject of an adverse 

comment. For additional information, 

see the direct final rule which is located 

in the rules section of this Federal 

Register. 

Dated: May 14, 2007. 

John B. Askew, 

Regional Administrator, Region 7. 

[FR Doc. E7–10233 Filed 5–30–07; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R07–OAR–2007–0124; FRL–8320–2] 

Approval and Promulgation of 

Implementation Plans; State of Iowa 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA proposes to approve the 

State Implementation Plan (SIP) 

revision submitted by the state of Iowa 

for the purpose of revising the general 

emission rate for particulate matter. 

DATES: Comments on this proposed 

action must be received in writing by 

July 2, 2007. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R07–

OAR–2007–0124 by one of the following 

methods: 

1. http://www.regulations.gov: Follow 

the on-line instructions for submitting 

comments. 

2. E-mail: Hamilton.heather@epa.gov. 

3. Mail: Heather Hamilton, 

Environmental Protection Agency, Air 

Planning and Development Branch, 901 

North 5th Street, Kansas City, Kansas 

66101. 

4. Hand Delivery or Courier. Deliver 

your comments to Heather Hamilton, 

Environmental Protection Agency, Air 

Planning and Development Branch, 901 

North 5th Street, Kansas City, Kansas 


cprice-sewell on PRODPC61 with PROPOSALS