71562 Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 

responsibilities on any state; nor does it 

diminish the power of any state to 

enforce its own laws. Accordingly, this 

action does not have federalism 

implications warranting the application 

of Executive Order 13132. 

The Deputy Administrator hereby 

certifies that this action will have no 

significant impact upon small entities 

whose interests must be considered 

under the Regulatory Flexibility Act, 5 

U.S.C. 601 et seq. The establishment of 

aggregate production quotas for 

schedules I and II controlled substances 

is mandated by law and by international 

treaty obligations. The quotas are 

necessary to provide for the estimated 

medical, scientific, research and 

industrial needs of the United States, for 

export requirements and the 

establishment and maintenance of 

reserve stocks. While aggregate 

production quotas are of primary 

importance to large manufacturers, their 

impact upon small entities is neither 

negative nor beneficial. Accordingly, the 

Deputy Administrator has determined 

that this action does not require a 

regulatory flexibility analysis. 

This action meets the applicable 

standards set forth in Sections 3(a) and 

3(b)(2) of Executive Order 12988 Civil 

Justice Reform. 

This action will not result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $118,000,000 or more 

in any one year, and will not 

significantly or uniquely affect small 

governments. Therefore, no actions were 

deemed necessary under the provisions 

of the Unfunded Mandates Reform Act 

of 1995. 

This action is not a major rule as 

defined by Section 804 of the Small 

Business Regulatory Enforcement 

Fairness Act of 1996. This action will 

not result in an annual effect on the 

economy of $100,000,000 or more; a 

major increase in costs or prices; or 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

companies to compete with foreignbased companies in domestic and 

export markets. 

Dated: December 1, 2006. 

Michele M. Leonhart, 

Deputy Administrator. 

[FR Doc. E6–20920 Filed 12–8–06; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

PENSION BENEFIT GUARANTY 

CORPORATION 

RIN 1210–AB14 

Proposed Revision of Annual 

Information Return/Reports 

AGENCIES: Employee Benefits Security 

Administration, Labor, Internal Revenue 

Service, Treasury, Pension Benefit 

Guaranty Corporation. 

ACTION: Notice of Supplemental 

Proposed Forms Revisions. 

SUMMARY: This document contains a 

proposal to make changes required by 

the Pension Protection Act of 2006 

(PPA) to the Form 5500 Annual Return/ 

Report filed for employee benefit plans 

under the Employee Retirement Income 

Security Act of 1974 (ERISA) and the 

Internal Revenue Code (Code). The 

proposed changes supplement proposed 

revisions to the Form 5500 Annual 

Return/Report published, prior to the 

enactment of the PPA, by the 

Department of Labor, the Internal 

Revenue Service, and the Pension 

Benefit Guaranty Corporation (Agencies) 

in the Federal Register on July 21, 2006, 

at 71 FR 41616 (July 2006 Proposal). 

This supplemental proposal replaces the 

Schedule B, ‘‘Actuarial Information,’’

with separate actuarial schedules for 

single-employer plans (Schedule SB) 

and multiemployer plans (Schedule 

MB) to reflect PPA changes in funding 

and annual reporting requirements; 

adds new questions to the Schedule R, 

‘‘Retirement Plan Information,’’ to 

collect additional information regarding 

single and multiemployer defined 

benefit pension plans required by the 

PPA; and proposes having the Form 

5500–SF Annual Return/Report (Short 

Form 5500) included in the July 2006 

Proposal serve as the simplified report 

required by the PPA for plans with 

fewer than 25 participants. The 

revisions are being proposed for 2008 

plan year filings and would affect 

employee pension and welfare benefit 

plans, plan sponsors, administrators, 

and service providers to plans subject to 

annual reporting requirements under 

ERISA and the Code. 

DATES: Written comments must be 

received by the Department of Labor on 

or before January 10, 2007. 

ADDRESSES: Commenters are encouraged 

to submit comments electronically to 

http://www.regulations.gov (follow 

instructions for submission) or eORI@dol.gov. Comments also may be 

addressed to the Office of Regulations 

and Interpretations, Employee Benefits 

Security Administration, Room N–5669, 

U.S. Department of Labor, 200 

Constitution Avenue, NW., Washington, 

DC 20210, Attn: Supplemental Form 

5500 Revision (RIN 1210–AB14). If 

comments are submitted electronically, 

paper submissions are not necessary. 

Comments will be available to the 

public at http://www.dol.gov/ebsa and 

http://www.regulations.gov. Comments 

also will be available for public 

inspection at the Public Disclosure 

Room, N–1513, Employee Benefits 

Security Administration, 200 

Constitution Avenue, NW., Washington, 

DC 20210. 

FOR FURTHER INFORMATION CONTACT: Ann 

Junkins, Internal Revenue Service (IRS), 

(202) 283–0722, for questions relating to 

Schedules SB, MB, and Schedule R, as 

well as general questions relating to 

reporting under the Internal Revenue 

Code; Amy Viener, Pension Benefit 

Guaranty Corporation (PBGC), (202) 

326–4080 for questions relating to 

Schedules SB and MB, and Michael 

Packard, PBGC, 202 326–4080 for 

questions relating to the Schedule R, as 

well as questions relating to the general 

reporting requirements under Title IV of 

ERISA; Elizabeth A. Goodman or 

Yolanda Wartenberg, Employee Benefits 

Security Administration (EBSA), U.S. 

Department of Labor, (202) 693–8523, 

for questions relating to the Short Form 

5500–SF, as well as general reporting 

requirements under Title I of ERISA. 

The telephone numbers referenced 

above are not toll-free numbers. 

To enable the public to better evaluate 

the proposed changes, the Department is 

making available on its Web site at 

http:// www.dol.gov/ebsa, mock ups of 

the Schedules SB, MB and R. Copies of 

the mock ups may also be obtained by 

calling the EBSA’s Public Disclosure 

Room at 1.866.444.EBSA (3272). 

SUPPLEMENTARY INFORMATION:

A. Background 

Sections 101 and 104 of Title I and 

section 4065 of Title IV of the Employee 

Retirement Income Security Act of 1974 

(ERISA), as amended, sections 6058(a) 

and 6059(a) of the Internal Revenue 

Code of 1986 (Code), as amended, and 

the regulations issued under those 

sections, impose certain annual 

reporting and filing obligations on 

pension and welfare benefit plans, as 

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Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 71563 

1Other filing requirements not within the scope 

of this proposal may apply to certain employee 

benefit plans and multiple employer welfare 

arrangements under ERISA or to other benefit 

arrangements under the Code. 

2The term ‘‘July 2006 Proposal’’ used throughout 

this Notice refers to two documents: The Notice of 

the Proposed Revision of Annual Information 

Return/Reports contained at 71 FR 41615 (July 21, 

2006) (sometimes referred to as ‘‘July 2006 Notice’’); 

and the proposed rule regarding Annual Reporting 

and Disclosure contained at 71 FR 41392 (July 21, 

2006) (sometimes referred to as ‘‘July 2006 

Proposed Rules’’), which were necessary to conform 

the annual reporting and disclosure regulations to 

the proposed revisions. 

3Unlike multiemployer plans within the meaning 

of ERISA sections 3(37) and 4001(a)(3) to which 

Continued 

well as on certain other entities.1 The 

Department of Labor’s (Department) 

annual reporting regulations, including 

29 CFR 2520.103–1, are promulgated 

under the provisions of ERISA that 

authorize the creation of limited 

exemptions and simplified reporting 

and disclosure for welfare plans under 

ERISA section 104(a)(3), simplified 

annual reports under ERISA section 

104(a)(2)(A) for pension plans that cover 

fewer than 100 participants, and 

alternative methods of compliance for 

all pension plans under ERISA section 

110(a). Plan administrators, employers, 

and others generally satisfy these annual 

reporting obligations by the filing of the 

Form 5500 ‘‘Annual Return/Report of 

Employee Benefit Plan,’’ together with 

any required attachments and schedules 

(Form 5500 Annual Return/Report), in 

accordance with the instructions and 

related regulations. 

The Form 5500 Annual Return/Report 

is the principal source of information 

and data available to the Department, 

the IRS, and the PBGC (Agencies) 

concerning the operations, funding, and 

investments of more than 800,000 

pension and welfare benefit plans. 

These plans cover an estimated 150 

million participants and hold an 

estimated $4.3 trillion in assets. 

Accordingly, the Form 5500 Annual 

Return/Report necessarily constitutes an 

integral part of each Agency’s 

enforcement, research, and policy 

formulation programs, and is a source of 

information and data for use by other 

federal agencies, Congress, and the 

private sector in assessing employee 

benefit, tax, and economic trends and 

policies. The Form 5500 Annual Return/ 

Report also serves as the primary means 

by which plan operations can be 

monitored by participants and 

beneficiaries and by the general public. 

The Pension Protection Act of 2006, 

Pub. L. 109–280, 120 Stat. 780 (2006) 

(PPA), enacted on August 17, 2006, 

changed certain annual reporting rules 

under ERISA and funding requirements 

under ERISA and the Code for pension 

plans. The PPA also required the 

Treasury Department/IRS and the 

Department to provide a simplified 

annual return for certain retirement 

plans that cover fewer than 25 

participants. The Form 5500 Annual 

Return/Report, therefore, needs to be 

updated to reflect these PPA changes. 

The changes proposed in this document 

are limited to those needed to reflect the 

PPA annual reporting requirements and 

do not attempt to address comments 

received in connection with the July 

2006 Proposal.2 One exception, 

however, is the movement of proposed 

asset allocation questions for certain 

large defined benefit plans to the 

Schedule R in conjunction with the 

proposal to eliminate the existing 

Schedule B and create two new 

Schedules—the Schedule SB and the 

Schedule MB. 

B. Need To Expedite Adoption of 

Supplemental Proposed Revisions 

These supplemental proposed 

revisions to the Form 5500 Annual 

Return/Report, as well as the July 2006 

Proposal, are part of the Agencies’ move 

to a fully electronic filing and 

processing system to replace the 

existing paper-based ERISA Filing 

Acceptance System (EFAST). As part of 

that initiative, the Department 

published a final rule in the Federal 

Register on July 21, 2006, establishing 

an electronic filing requirement for the 

Form 5500 Annual Return/Report for 

plan years beginning on or after January 

1, 2008 (Electronic Filing Rule). 71 FR 

41359. The Department also published a 

Request for Proposal on September 1, 

2006, seeking bids to develop the new 

wholly electronic system, known as 

EFAST2, to electronically receive, 

process, store, publicly disclose, 

distribute, and archive the Form 5500 

Annual Return/Report filings that will 

be submitted electronically starting with 

2008 plan year filings. See Solicitation 

Number DOL069RP20266 for EFAST2 at 

http://www.fedbizopps.gov 

(FedBizOpps.gov is the single 

government point-of-entry for federal 

government procurement opportunities 

over $25,000). In order for supplemental 

form revisions to be incorporated into 

the EFAST2 procurement process in a 

timely fashion, the supplemental form 

changes need to be finalized by the 

February 2007 target for finalizing the 

July 2006 Proposal. 

Furthermore, in light of the time 

constraints, the Agencies are publishing 

in this Notice charts listing the line item 

data elements on the new actuarial 

schedules (Schedule SB and Schedule 

MB) and the new line item data 

elements for the Schedule R, as well as 

an indication of which items on the 

Schedule SB and Schedule MB are the 

same, similar to, or different from 

existing Schedule B data items. To 

enable the public to better evaluate the 

proposed changes, the Department is 

also making available on its Web site at 

http://www.dol.gov/ebsa, mock ups of 

the Schedules SB, MB and R (copies of 

the mock ups may also be obtained by 

calling the EBSA’s Public Disclosure 

Room at 1.866.444.EBSA (3272)). The 

Agencies believe the information being 

published will provide an adequate 

basis for public comments on the 

supplemental proposed form changes. 

The instructions for the new Schedules 

SB and MB and the new Schedule R 

questions will be subject to a later 

publication so that they can be 

developed based on guidance to be 

issued by the IRS or PBGC 

implementing the PPA requirements 

underlying the Form 5500 Annual 

Return/Report data elements. For 

example, guidance may explain the 

manner in which the employer makes 

elections with respect to the carryover 

and/or prefunding balances. 

C. Discussion of Supplemental 

Proposed Revisions 

1. Replacing Schedule B With Separate 

Schedules for Single-Employer Plans 

(Schedule SB) and Multiemployer Plans 

(Schedule MB) 

The PPA significantly changed the 

funding requirements applicable to 

defined benefit pension plans. These 

changes rendered the existing Schedule 

B largely obsolete, especially for singleemployer defined benefit pension plans. 

While the PPA changes for 

multiemployer defined benefit pension 

plans allowed for continued use of a 

reporting scheme similar to the existing 

Schedule B, a number of Schedule B 

changes were required even for 

multiemployer plans. The Agencies 

believe that the appropriate way to 

address the PPA changes is to eliminate 

the existing Schedule B and create two 

new Schedules—the Schedule SB, 

‘‘Single-employer Defined Benefit Plan 

Actuarial Information,’’ and the 

Schedule MB, ‘‘Multiemployer Defined 

Benefit Plan and Money Purchase Plan 

Actuarial Information.’’

a. New Schedule SB ‘‘Actuarial 

Information Single-Employer Defined 

Benefit Plans’’

The proposed Schedule SB would be 

filed by all single-employer defined 

benefit plans (including multipleemployer defined benefit plans).3 The 

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71564 Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 

more than one employer is required to contribute, 

which must be maintained pursuant to one or more 

collective bargaining agreements between one or 

more employee organization and more than one 

employer, and which must satisfy other 

requirements prescribed in regulations issued by 

the Department of Labor at 29 CFR 2510.3–37, 

multiple-employer plans are plans that cover the 

employees of two or more unrelated employers but 

are treated as single-employer plans for various 

purposes under ERISA. 

4 It is also included on Part I, Line 2c, of Schedule 

MB. 

Schedule SB will capture identifying 

information about the plan and plan 

sponsor, the type of plan, and number 

of participants. It will have basic 

information about plan assets, number 

of participants, and funding target 

information. Like the existing Schedule 

B, it will have a statement by an 

enrolled actuary, modified to reflect that 

the enrolled actuary no longer will be 

certifying as to the reasonableness of 

certain actuarial assumptions, which are 

prescribed by statute or regulation. 

The remaining data elements are to be 

in a similar format to the current 

Schedule B and consist of basic 

actuarial worksheets designed to allow 

the Agencies to evaluate the plan’s 

compliance with the funding 

requirements as amended by sections 

101, 102, 111, and 112 of the PPA, and 

to ensure that the reporting 

requirements under ERISA, as amended 

by section 503 of the PPA, are included 

on the schedule. The material is divided 

into sections consisting of ‘‘Basic 

Information,’’ ‘‘Beginning of Year 

Carryover and Prefunding Balances,’’

‘‘Funding Percentages,’’ ‘‘Contributions 

and Liquidity Shortfalls,’’

‘‘Assumptions Used to Determine 

Funding Target and Target Normal 

Cost,’’ ‘‘Miscellaneous Items,’’

‘‘Reconciliation of Unpaid Minimum 

Required Contributions for Prior Years,’’

and ‘‘Minimum Required Contribution 

for Current Year.’’ Plans for which the 

effective date of the new PPA funding 

rules is delayed (e.g., airlines that have 

frozen pension plans electing the 

alternate funding schedule, PBGC 

settlement plans, certain defense 

contractors, certain rural electrical 

cooperatives, etc.) will not be required 

to fill out all of these sections. Instead, 

additional information related to the 

applicable funding rules for such plans 

will be provided as an attachment. In 

addition to the supplemental schedules 

required in the past, additional 

attachments may be required as a result 

of the PPA. For example, if a plan is in 

at-risk status, additional information 

(e.g., whether the expense load applies, 

a breakdown by category of the at-risk 

funding target without regard to the 

five-year phase-in) may be required. 

Section 107 of the PPA amended 

section 103(d)(11) of ERISA to require 

disclosure of the ratio of the current 

value of the assets of the plan to (A) the 

plan’s funding target (as defined in 

section 303(d)(1) of the PPA, in the case 

of a single-employer plan), or (B) the 

plan’s current liability (as defined in 

section 304(c)(6)(D) of the PPA, in the 

case of a multiemployer plan), if that 

ratio is less than 70 percent. This 

requirement is included in Part III, Line 

17, of Schedule SB.4 The Agencies also 

concluded that, although the PPA did 

not amend section 103(d)(3) or section 

103(d)(7), the proposal would eliminate 

the requirement to report ‘‘normal 

costs,’’ ‘‘accrued liabilities,’’ and 

‘‘certification of the contribution 

necessary to reduce the accumulated 

funding deficiency to zero’’ for singleemployer plans because these terms do 

not have continued relevance after the 

PPA amendments to ERISA. Instead, 

Schedule SB requires reporting the 

‘‘funding target,’’ ‘‘target normal cost,’’

and the ‘‘amount of unpaid minimum 

required contribution,’’ which are the 

post-PPA terms that most closely relate 

to the information required by section 

103(d)(3) and 103(d)(7). 

b. New Schedule MB, ‘‘Actuarial 

Information Multiemployer Defined 

Benefit Plans and Money Purchase 

Plans’’

Because the PPA changes to the 

actuarial information reporting 

requirements were less substantial for 

multiemployer plans and money 

purchase plans, the Agencies are 

proposing to use the existing Schedule 

B as the structure for the proposed new 

Schedule MB, which is to be used for 

multiemployer defined benefit pension 

plans and all money purchase plans 

(single-employer and multiemployer). 

The proposed Schedule MB would use 

the same basic identifying information 

as on the existing Schedule B, although 

revising the check boxes for type of 

plans and eliminating the check box 

that in the past was used to indicate 

whether the plan had 100 or fewer 

participants in the prior year. The 

statement of the enrolled actuary would 

be modified to reflect that the actuarial 

assumptions must be individually 

reasonable. 

Lines 1 through 3 of the existing 

Schedule B would remain essentially 

the same, except for the addition of a 

new element 1c(3) to report accrued 

liability under the unit credit cost 

method. To comply with section 503 of 

the PPA, the existing line 4 would be 

deleted and replaced with a new line 4 

to identify information about whether 

the plan is in endangered, seriously 

endangered, or critical status, and, if so, 

whether the plan is complying with the 

applicable requirements for its funding 

improvement or rehabilitation plan. The 

current line 5 identifying the actuarial 

cost method would be revised to 

incorporate alternative methods 

available only to multiemployer plans, 

which were previously reported under 

item 8b, and to reflect additional 

information required by section 503 of 

the PPA for plans using the shortfall 

method. Similarly, the Schedule MB 

would incorporate most of Schedule B 

current lines 6 through 9, but would 

eliminate information on the weighted 

average retirement age and annual 

withdrawal rates. New items would be 

added to Item 8 to reflect information 

required under section 503 of the PPA 

pertaining to extensions of periods to 

amortize bases and the use of the 

shortfall method. In addition, the 

requirement to provide a schedule of 

active participant data would be 

extended to multiemployer plans. With 

respect to Item 9, lines pertaining to 

additional interest charges due to late 

quarterly contributions, and any 

adjusted funding charges would be 

eliminated. Schedule MB would also 

revise the questions regarding the bases 

for which amortization periods are 

extended and revise the questions to 

conform to sections 201, 202, 211, and 

212 of the PPA the questions on the 

reconciliation account. The Part II of the 

current Schedule B, which does not 

relate to multiemployer plans, would be 

deleted. 

2. Additional Schedule R Questions for 

Single-employer and Multiemployer 

Defined Benefit Pension Plans 

Section 503 of the PPA amended 

ERISA by adding ERISA section 

103(f)(2), which requires multiemployer 

plans to report the amount of assets 

transferred in a multiemployer plan 

merger, information on withdrawing 

employers and their withdrawal 

liability, information on employers 

contributing to multiemployer plans, 

and information on participants for 

whom no employers made 

contributions. 

The Agencies’ July 2006 Proposal 

required plan administrators to identify 

major contributing employers to 

multiemployer defined benefit pension 

plans so that the PBGC could improve 

its ability to assess the financial 

condition of the plan and the financial 

risk posed to the plan by the financial 

collapse or withdrawal of one or more 

contributing employers. For these 

employers, the plan would be required 

to report on Schedule R: (1) Name of the 

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Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 71565 

5The PPA provision requiring a simplified report 

for plans that cover fewer than 25 participants only 

applies to plans that meet the minimum coverage 

requirements of Code section 410(b) without being 

combined with any other plan that covers business’

employees; does not cover a business that is a 

member of an affiliates service group, a controlled 

group of corporations, or a group of businesses 

under common control; and does not cover a 

business that uses leased employees (within the 

meaning of section 414(n) of such Code). Since 

these PPA conditions focus on tax qualification 

rules under the Code, and because the PPA did not 

prohibit the Department of providing those plans 

with a simplified report pursuant to its general 

authority under ERISA section 104(a)(2)(A) to 

establish simplified reports for pension plans that 

cover fewer than 100 participants, the Department 

concluded that it did not need to restrict the 

simplified report being proposed under Title I of 

ERISA with those conditions. The Department also 

notes the elimination of IRS-only schedules from 

the Form 5500 and from the Short Form 5500 as a 

part of the Department’s adoption of a wholly 

electronic filing requirement under Title I of ERISA 

diminishes the relevance of the above PPA 

conditions to Form 5500 filings under EFAST. 

However, as explained in the Department’s 

Electronic Filing Final Rule, 71 FR 41359 (July 21, 

2006), the IRS intends to permit plans that cover 

only sole proprietors or partners (and their spouses) 

that are not subject to Title I of ERISA but file the 

Form 5500–EZ to satisfy the annual reporting and 

Continued 

contributing employer; (2) the employer 

identification number (EIN); (3) dollar 

amount contributed; (4) contribution 

rate; (5) type of base units for the 

contribution; and (6) expiration date for 

the collective bargaining agreement 

pursuant to which contributions are 

required to be made to the plan. These 

questions are shown here on the new 

Schedule R because they are now also 

required by section 503 of the PPA. To 

conform the language of the questions to 

that of the PPA, the question now 

requires identification of those 

employers contributing more than five 

percent, rather than those contributing 

five percent or more, as in the July 2006 

proposal. In addition, the July 2006 

Proposal would have added a question 

on the Form 5500 seeking the total 

number of contributing employers to 

multiemployer plans as well as all other 

types of plans, a data item now also 

required by section 503 of the PPA. 

Several additional new questions 

would be added to the Schedule R to 

comply with section 503 of the PPA. 

The Schedule R, new Part V, under this 

proposal, would now be expanded to 

provide more information on 

multiemployer defined benefit plans. It 

would ask for information regarding 

participants for whom no employer 

contributions were made for the current 

plan year and the two preceding plan 

years and information regarding the 

number of employers withdrawing from 

the plan and the assessed and estimated 

withdrawal liability. A new Part VI 

would be added to Schedule R to collect 

funded percentage information for 

single-employer and multiemployer 

defined benefit pension plans with 

liabilities arising from mergers or 

transfers of assets during the plan year. 

This proposal also moves to Part VI of 

Schedule R the asset allocation 

questions for large defined benefit plans 

(1000 or more participants) included on 

the Schedule B in the July 2006 

Proposal. Under this supplemental 

proposal, the Schedule R would include 

a new section requiring such plans to 

report the percentage of total plan assets 

held as stock; debt (with break-outs for 

government, investment-grade, and high 

yield debt); real estate; and other. The 

plan would also be required to provide 

a Macaulay duration of aggregate debt 

investments. As part of the development 

of the new Schedules SB and MB, the 

Agencies decided to move these 

questions to the Schedule R from the 

Schedule B (where they appeared in the 

July 2006 Proposal) because the 

Agencies concluded that this essentially 

financial information should not be 

subject to the enrolled actuary 

certification requirement applicable to 

other Schedule SB and MB information. 

This supplemental proposal to include 

these asset distribution questions for 

certain large defined benefit plans on 

the Schedule R should not be construed 

as a determination by the Agencies 

regarding public comments received in 

response to the July 2006 Proposal on 

the substance of the proposed questions 

themselves. 

3. Simplified Annual Reporting for 

Plans With Fewer Than 25 Participants 

Section 1103(b) of the PPA requires 

the Secretary of the Treasury/IRS and 

the Secretary of Labor to provide for the 

filing of a simplified annual return for 

any retirement plan which covers fewer 

than 25 participants on the first day of 

the plan year and which (1) meets the 

minimum coverage requirements of 

section 410(b) of the Code without being 

combined with any other plan of the 

business that covers the employees of 

the business; (2) does not cover a 

business that is a member of an 

affiliated service group, a controlled 

group of corporations, or a group of 

businesses under common control; and 

(3) does not cover a business that uses 

the services of leased employees (within 

the meaning of section 414(n) of the 

Code). The PPA provision does not 

include specific requirements as to the 

form or content of the simplified filing. 

As noted above, the July 2006 

Proposal included, among other 

changes: (1) The establishment of a 

Form 5500–SF Annual Return/Report 

(Short Form or Short Form 5500) as a 

new simplified report for certain small 

plans. The Short Form is a new twopage form for small plans (generally, 

plans with fewer than 100 participants) 

with secure and easy to value 

investment portfolios. As set forth in 

greater detail in the July 2006 Proposal, 

a plan would be eligible to file the Short 

Form if the plan: (1) Covers fewer than 

100 participants or would be eligible to 

file as a small plan under the 80 to 120 

rule in 29 CFR 2520.103–1(d); (2) is 

eligible for the small plan audit waiver 

under 29 CFR 2520.104–46 (but not by 

virtue of enhanced bonding); (3) holds 

no employer securities; and (4) has 

100% of its assets in investments that 

have a readily ascertainable fair market 

value. Because the Agencies believe that 

all multiemployer plans should be 

required to answer newly proposed 

questions on the Form 5500 Annual 

Return/Report and the Schedule R 

regarding contributing employers, as 

proposed, multiemployer plans were 

not to be eligible to file the Short Form. 

Most Short Form filers would not be 

required to file any schedules, although 

defined benefit pension plans would 

continue to be required to file Schedule 

SB, where applicable. Those small plans 

not eligible to use the Short Form could 

still avail themselves of the current 

simplified reporting alternatives for 

small pension plans. 

The Agencies believe that the 

requirement in the PPA to provide 

‘‘simplified’’ reporting for plans with 

fewer than 25 participants is satisfied by 

the simplified reporting scheme in the 

July 2006 Proposal. The Agencies 

believe that the Short Form 5500, as 

proposed, was targeted to provide a 

simplified report for plans with fewer 

than 25 employees because we estimate 

that approximately 75% of all plans 

eligible to file the Short Form cover 

fewer than 25 participants. The 

Agencies propose to continue to 

prohibit plans that invest in employer 

securities or other hard to value assets 

and multiemployer plans from being 

eligible to use the Short Form 5500. The 

Agencies believe this conclusion is 

consistent with the PPA’s emphasis on 

increasing transparency, accurate 

measurement of assets, greater 

participant control over the disposition 

of employer securities in defined 

contribution plans, and expanding the 

annual reporting requirements for 

multiemployer plans. As under the July 

2006 Proposal, small plans not eligible 

to use the Short Form 5500 still would 

be able to avail themselves of the other 

simplified reporting options available to 

small plans under the Form 5500 

Annual Return/Report and its 

schedules.5

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71566 Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 

filing obligations imposed by the Code, to satisfy 

the requirement to file the Form 5500–EZ with the 

IRS or by filing the Form 5500–SF electronically 

with the EFAST system. 

A list of the proposed data elements 

for the Short Form 5500 and a mock-up 

of the Short Form and the instructions 

were published in the Federal Register 

as part of the July 2006 Proposal. The 

July 2006 Proposal can be viewed on the 

Department’s Web site at http:// 

www.dol.gov/ebsa. 

Section 1103(b) of the PPA requires a 

simplified report to be available for 

2007 plan year filings, i.e., filings for 

plan years beginning after December 31, 

2006. This proposal addresses the 

simplified report requirement for 2008 

plan years, i.e., those beginning after 

December 31, 2007. For the 2007 plan 

year, the Agencies will allow plans 

covering fewer than 25 participants that 

would meet the conditions for being 

eligible to file the Short Form 5500 if 

those conditions applied to 2007 filings 

to file an abbreviated version of the 

current Form 5500 Annual Return/ 

Report available for ‘‘small plan’’ filers. 

Specifically, the Department anticipates 

that the simplified report will to a large 

extent replicate within the context of 

the existing Form 5500 Annual Return/ 

Report structure the information that 

would be required to be reported on the 

proposed Short Form 5500 (Form 5500–

SF), possibly by allowing certain 

schedules to be excluded from the filing 

or requiring only certain line items to be 

completed on required schedules. The 

Department understands that some 

eligible small plan filers may want to 

wait until the 2008 plan year to file the 

Short Form in order to avoid having to 

implement changes to their annual 

reporting systems and procedures for 

their 2007 plan year filings and then 

adjust them again in 2008 to file the 

Short Form, and, accordingly, the 

Department intends that these plans 

will have the option of continuing to file 

in accordance with the normal rules for 

the 2007 plan year. Specific guidance 

regarding this simplified reporting 

option will be included in the 

instructions to the 2007 Form 5500. The 

Agencies currently anticipate posting 

information copies of the 2007 forms 

and instructions in July 2007. 

4. Electronic Filing and Web Site 

Display of Form 5500 Information 

Section 504 of the PPA requires that, 

for defined benefit pension plans, the 

basic plan identifying information and 

actuarial information included in the 

annual report must be filed with the 

Department in an electronic format that 

accommodates display on the Internet. 

As noted above, the Department has an 

ongoing initiative to move to a wholly 

electronic filing and processing system 

for all Form 5500 reports filed with the 

Department starting with reporting years 

beginning on or after January 1, 2008. 

The Department’s Request for Proposal 

on the EFAST2 system published on 

September 1st already calls for the 

system to be capable of electronic public 

disclosure of all Form 5500 filings. The 

Department intends that the new 

EFAST2 system and the Electronic 

Filing Rule will satisfy section 504 of 

the PPA’s requirement regarding 

electronic filing with and display of 

information by the Department. 

D. Findings on the Revised Form 5500 

Annual Return/Report (Including Short 

Form 5500) as a Limited Exemption and 

Alternative Method of Compliance 

Section 104(a)(2)(A) of ERISA 

authorizes the Secretary of Labor 

(Secretary) to prescribe by regulation 

simplified reporting for pension plans 

that cover fewer than 100 participants. 

Section 104(a)(3) authorizes the 

Secretary to exempt any welfare plan 

from all or part of the reporting and 

disclosure requirements of Title I of 

ERISA or to provide simplified 

reporting and disclosure if the Secretary 

finds that such requirements are 

inappropriate as applied to such plans. 

Section 110 permits the Secretary to 

prescribe for pension plans alternative 

methods of complying with any of the 

reporting and disclosure requirements if 

the Secretary finds that: (1) The use of 

the alternative method is consistent 

with the purposes of Title I of ERISA, 

provides adequate disclosure to plan 

participants and beneficiaries, and 

provides adequate reporting to the 

Secretary; (2) application of the 

statutory reporting and disclosure 

requirements would increase costs to 

the plan or impose unreasonable 

administrative burdens with respect to 

the operation of the plan; and (3) the 

application of the statutory reporting 

and disclosure requirements would be 

adverse to the interests of plan 

participants in the aggregate. For 

purposes of Title I of ERISA, the filing 

of a completed Form 5500 Return/ 

Report, including the filing of the 

proposed Short Form 5500, in 

accordance with the instructions and 

related regulations, generally would 

constitute compliance with the limited 

exemption and alternative method of 

compliance in 29 CFR 2520.103–1(b). 

The Department finds under sections 

104(a)(3) and 110 of ERISA that the use 

of the proposed Short Form 5500, the 

Schedule SB and MB to replace the 

Schedule B, and the revised Schedule R, 

along with the previously proposed 

revised Form 5500 Annual Return/ 

Report, is consistent with the purposes 

of Title I of ERISA and provides 

adequate disclosure to participants and 

beneficiaries and adequate reporting to 

the Secretary. While the information 

that would be required to be reported on 

or in connection with the revised Form 

5500 Annual Return/Report and the 

proposed Short Form 5500 deviates, as 

before, in some respects, from that 

delineated in section 103 of ERISA, the 

information essential to ensuring 

adequate disclosure and reporting under 

Title I is required to be included on or 

as part of the Form 5500 Annual Return/ 

Report, as proposed to be revised, and 

the proposed Short Form 5500. 

The use of the Form 5500 Annual 

Return/Report, as revised, or the 

proposed Short Form 5500 will relieve 

plans subject to the annual reporting 

requirements from increased costs and 

unreasonable administrative burdens by 

providing a standardized format that 

facilitates reporting, eliminates 

duplicative reporting requirements, and 

simplifies the content of the annual 

report in general. The Form 5500 

Annual Return/Report, under the 

proposed revision, including the 

proposed Short Form, is intended to 

further reduce the administrative 

burdens and costs attributable to 

compliance with the annual reporting 

requirements. 

Taking into account the above, the 

Department has determined that 

application of the statutory annual 

reporting and disclosure requirements 

without the availability of the Form 

5500 Annual Return/Report, including 

the proposed Short Form 5500, would 

be adverse to the interests of 

participants in the aggregate. The 

proposed revised Form 5500 Annual 

Return/Report provides for the reporting 

and disclosure of financial and other 

plan information described in section 

103 of ERISA in a uniform, efficient, 

and understandable manner, thereby 

facilitating the disclosure of such 

information to plan participants and 

beneficiaries. 

Finally, the Department has 

determined that the use of the Short 

Form 5500 is a simplified means of 

reporting for purposes of the 

requirements of section 1103 of the PPA 

that takes into account the appropriate 

balance of reducing filing burdens for 

plans with fewer than 25 participants 

without impairing enforcement, 

research, and policy needs, and 

providing adequate disclosure to 

participants and beneficiaries, which 

balance is required by section 104(a) of 

ERISA. 

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6The reduction in costs shown in Table 1 for 

plans with fewer than 25 participants represents a 

portion of the savings attributed to the Short Form 

5500 for plans with fewer than 100 participants in 

the July 2006 Proposal and supporting documents. 

This analysis uses the same methodology as used 

in the July 2006 Proposal to calculate the savings, 

although this analysis refines the result by breaking 

out the amount of savings attributed to plans with 

fewer than 25 participants from the total savings. 

7The $77 million figure reflects the cost 

reduction that would occur if this proposal alone 

were implemented. The $174 million cost reduction 

figure from the July 2006 Proposal represents the 

cost reduction that would occur if the July 2006 

Proposal alone were implemented. See July 2006 

Proposed Rule, 71 FR at 41396. 

8The Department will take into account all 

comments received in response to both this 

proposal and the July 2006 Proposal in connection 

with finalizing the forms revisions. 

E. Regulatory Impact Analysis 

Executive Order 12866 Statement 

Under Executive Order 12866, the 

Department must determine whether a 

regulatory action is ‘‘significant’’ and 

therefore subject to the requirements of 

the Executive Order and subject to 

review by the Office of Management and 

Budget (OMB). Section 3(f) of Executive 

Order 12866 defines a ‘‘significant 

regulatory action’’ as an action that is 

likely to result in a rule (1) having an 

annual effect on the economy of $100 

million or more, or adversely and 

materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. 

Pursuant to the terms of the Executive 

Order, it has been determined that this 

regulatory action raises novel legal or 

policy issues arising out of legal 

mandates and the President’s priorities. 

Therefore, this action is a ‘‘significant 

regulatory action’’ and subject to OMB 

review under section 3(f)(4) of Executive 

Order 12866. The Department 

accordingly has undertaken to assess the 

costs and benefits of this regulatory 

action in satisfaction of the applicable 

requirements of the Executive Order. 

In accordance with OMB Circular 

A–4 (available at http:// 

www.whitehouse.gov/omb/circulars/ 

a004/a-4.pdf), Table 1 below depicts an 

accounting statement showing the net 

cost associated with the provisions of 

this proposal. The Department believes 

that some employee benefit plans will 

see a decrease in costs (e.g., Short Form 

eligible plans and single-employer 

defined benefit pension plans) and 

others might see an increase in costs 

due to this proposal (e.g., 

multiemployer defined benefit pension 

plans).6 Further information about the 

amount of increase and decrease in 

costs for particular plan types is 

displayed in the cost section, below. On 

aggregate, the Department estimates a 

cost reduction of up to $77 million in 

the first year. 

Unless stated otherwise, this analysis 

describes the increases and decreases in 

benefits, costs, and burdens that this 

proposal alone would cause as 

compared to the costs, benefits, and 

burdens created by current law. Where 

this proposal modifies a forms revision 

included in the July 2006 Proposal, we 

attempt to explain the nature of the 

modification, but we have not attempted 

to quantify any differences in the 

respective economic analyses. 

TABLE 1.—ACCOUNTING STATEMENT: 

ESTIMATED COST REDUCTION FROM

THE CURRENT REPORTING REQUIREMENTS TO THE SUPPLEMENTAL PROPOSED FORMS REVISIONS

Category Net cost 

reduction 

Annualized Monetized Benefit.$77 million.7

Need for Regulatory Action 

The Form 5500 Annual Return/Report 

serves as the primary source of 

information concerning the operation, 

funding, assets, and investments of 

pension and other employee benefit 

plans. The Form 5500 Annual Return/ 

Report is an important disclosure 

document for participants and 

beneficiaries, an enforcement and 

research tool for the Department, and a 

source of information and data for use 

by other federal agencies, Congress, and 

the private sector in assessing employee 

benefit, tax, and economic trends and 

policies. To address changes required by 

the PPA, the Department has attempted 

in this supplemental proposal to 

balance the interests of participants, 

beneficiaries, the public, and the 

Department in the protection of ERISA 

rights and in the availability of 

information on benefit plans with plan 

administrators’ and sponsors’ interest in 

minimizing costs attendant with the 

reporting of information to the federal 

government. The Department believes 

that the proposed supplemental forms 

revisions’ benefits justify the costs. The 

basis for this conclusion is explained 

below. 

Regulatory Alternatives 

Executive Order 12866 directs federal 

agencies promulgating rules to evaluate 

regulatory alternatives. The Department 

has concluded that its proposal to 

substitute separate actuarial schedules 

for single-employer plans and 

multiemployer plans for the existing 

Schedule B and to add new questions to 

the Schedule R is appropriate as a 

means to collect additional information 

as required by the PPA. Further, the 

Department has concluded that the July 

2006 Proposal to make available the 

Short Form 5500 for plans with fewer 

than 100 participants would be an 

appropriate way to simplify reporting 

and reduce filer burden for plans with 

fewer than 25 participants, as required 

in section 1103 of the PPA, while still 

meeting the needs of participants, 

beneficiaries, the public, and the 

Department in full and adequate 

disclosure. 

In developing form revisions and 

implementing regulatory changes, as 

required by the PPA, the Department 

considered several alternatives. The 

Department’s consideration included, 

for example, different approaches to the 

Schedule B, R, and H changes as well 

as the eligibility criteria for the Short 

Form 5500. 

The public is invited to comment 

specifically on the decision points for 

the proposed revisions and on the 

adequacy of the models, assumptions, 

and data developed to evaluate 

regulatory burden. In considering these 

alternatives, the Department weighed 

the objective of reduced regulatory 

burden against the need for adequate 

reporting and disclosure, quantifying 

impacts where possible.8 For example: 

• Change and add new plan funding 

information on Actuarial Information 

Schedule (Currently Schedule B): 

Schedule B is filed currently by defined 

benefit pension plans subject to the 

minimum funding schedules. In 

developing this proposed supplemental 

revision, the Department considered 

how to balance the need for information 

to help participants, beneficiaries, and 

the PBGC evaluate the financial 

solvency of both single and 

multiemployer defined benefit plans 

with the potential burden on 

administrators of those plans of 

providing the additional information 

(see discussion in preamble to the July 

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71568 Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 

9Previously, in the July 2006 Proposed Rules, the 

Department estimated that 90% of non-403(b) plans 

would be eligible for filing the Short Form 5500. 71 

FR at 41397. The Department has revised this 

estimate to conclude that an estimate of 95% 

eligibility is a more accurate estimate. These 

numbers do not include any estimate regarding 

403(b) plans because this RIA, which is limited 

only to the changes required by the PPA, is based 

on current law. Using proposed forms revisions, 

403(b) plans are treated as having only limited 

reporting requirements of current law, but this 

supplemental notice should not be construed as a 

substantive determination in response to the 

comments received on the July 2006 Proposal. As 

noted before, the Department anticipates combining 

all changes to the 2008 Form 5500 proposed in the 

July 2006 Proposal and this supplement and 

addressing the comments on both comprehensively 

into a final notice. 

2006 Notice). The Department believes 

that a cost-effective way to gather the 

information required by the PPA is to 

replace the existing Schedule B with 

separate forms specifically tailored for 

single-employer and multiemployer 

plans, Schedules SB and MB 

respectively. Providing each type of 

plan with its own actuarial schedule 

will generate cost savings and 

efficiencies. The Department 

entertained the alternative of simply 

adding the additional questions 

required by the PPA for both types of 

plans to the existing Schedule B instead 

of separating the Schedule B into the 

Schedules SB and MB. However, 

differences in the statutory requirements 

for single-employer and multiemployer 

plans would cause some questions to 

have been filled out only by singleemployer plans and others only by 

multiemployer plans. Plan 

administrators would have had to spend 

additional time and effort to distinguish 

questions relevant for their plans. As 

can be seen in Table 2 below, collecting 

the information on a single Schedule B 

would result in a smaller reduction of 

burden than adopting the proposed 

separate Schedules SB and MB. 

TABLE 2.—CHANGE IN BURDEN BETWEEN SEPARATE ACTUARIAL INFORMATION SCHEDULES AS PROPOSED IN THE

SUPPLEMENTAL PROPOSED FORMS REVISIONS AND ONE EXPANDED SCHEDULE B 

Change in burden if separate 

Schedule Bs are 

established 

(as proposed) 

Change in burden if changes 

are made to single Schedule B 

(alternative) 

Total Change in Hours .................................................................................................................................... ¥17,000 ¥10,000 

Total Change in Costs (in Millions) ................................................................................................................. ¥$1.48 ¥$0.84 

• Establishment of a Short Form 5500 

for certain plans with fewer than 25 

participants: As discussed in more 

detail in the preamble of the July 2006 

Notice (under the heading ‘‘A. Short 

Form 5500 as New Simplified Report for 

Certain Small Plans,’’ 71 FR at 41618), 

the Department determined that most 

small plans, by virtue of their assets 

being held by regulated financial 

institutions and having a readily 

determinable fair market value, present 

reduced risks for their participants and 

beneficiaries and should be allowed a 

simplified annual report filing (i.e., the 

Short Form 5500). The Department 

estimates that 95% of non-403(b) plans 

would qualify to file the Short Form 

5500, 75% of which are plans with 

fewer than 25 participants.9 In 

considering how to provide the 

simplified filing required by the PPA, 

the Department considered allowing all 

plans with fewer than 25 participants, 

regardless of their investments, to file 

the Short Form 5500. The Department 

estimates that this would affect about 

29,000 plans. 

However, the Department continues 

to believe, as noted in the July 2006 

Proposal, that prohibiting use of the 

Short Form 5500 by plans with 

employer securities or other assets that 

are difficult to value is consistent with 

important policy objectives. The 

importance of those policies is 

underscored by the PPA’s emphasis on 

increasing plan transparency, accurate 

measurement of assets, greater 

participant control over the disposition 

of employer securities in defined 

contribution plans, and expanding the 

annual reporting requirements for 

multiemployer plans. All plans with 

fewer than 25 participants will be able 

to file a simplified annual return. In 

most cases that simplified return will be 

the Short Form 5500, but as under the 

July 2006 Proposal, small plans not 

eligible to use the Short Form 5500 still 

will be able to avail themselves of the 

other simplified reporting options 

available to small plans under the Form 

5500 Annual Return/Report and its 

schedules. 

• Additional data elements reported 

on Schedule R: Moving the asset 

distribution questions to Part VI of 

Schedule R presents an alternative to 

the treatment of these items in the July 

2006 Proposal, which placed them on 

Schedule B (now Schedules SB and 

MB). As noted earlier in the preamble, 

this proposal’s placement of these items 

on the Schedule R should not be 

construed as a determination by the 

Agencies regarding public comments on 

the substance of the questions received 

in response to the July 2006 Proposal. 

Benefits and Costs 

Benefits—The use of the Short Form 

5500 for eligible plans to satisfy the 

simplified reporting requirement in the 

PPA and of the Form 5500, Schedules 

SB and MB, and Annual Return/Report 

and Schedule R, as modified, to obtain 

the additional annual reporting required 

by the PPA, will provide a standardized, 

streamlined alternative means of 

compliance with applicable statutory 

reporting requirements, as well as 

providing appropriate simplified annual 

reports and exemptions under section 

104(a)(2) and (3) of ERISA. In so doing, 

they will both ease plan administrators’

burden of compliance with reporting 

requirements and enhance the utility 

and accessibility of information 

reported to the government, participants 

and beneficiaries, and others. In 

particular, the regulations and forms, 

together with the Department’s planned 

program for assisting filers in the 

preparation and electronic submission 

of filings, will give plan administrators 

clear guidance and a supportive, routine 

mechanism for satisfying the new 

reporting obligations. They also will 

make it possible to efficiently capture 

and assemble the information into an 

electronic data system, as also required 

by the PPA. The data will then be 

processed and analyzed in the service of 

many beneficial activities. These 

include monitoring compliance with 

ERISA’s reporting and other 

requirements; targeting and carrying out 

prompt and effective enforcement 

actions; informing participants and 

beneficiaries of the characteristics, 

operations, and financial status of their 

benefit plans; producing statistics on the 

employee benefit system, monitoring 

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Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 71569 

10For reasons explained in footnote 20 and in the 

technical appendix, the cost of current reporting 

requirements contained int his proosal is different 

from the cost calculated for the July 2006 Proposal. 

11These cost estimates take only the PPA changes 

into account. They take the changes included in the 

July 2006 Proposal into account only to the extent 

that the PPA also requires them. As noted before, 

the Department intends to consolidate all changes 

into the final revisions expected to be published in 

2007. 

trends therein, and informing the 

public; and assembling information and 

conducting research that advances 

knowledge and fosters the formulation 

of sound public policies toward 

employee benefits. The Department 

believes that the benefits of the 

proposed supplemental revisions justify 

the costs as further detailed below. 

Separate actuarial schedules for 

single-employer plans and 

multiemployer plans to reflect PPA 

changes in funding and annual 

reporting requirements: As noted below, 

this revision is expected to decrease 

reporting costs for single-employer 

plans and increase reporting costs for 

multiemployer plans. The Agencies 

believe, however, that the cost increases 

for multiemployer plans are justified by 

the need to better monitor plan funding. 

This information is needed by 

participants, beneficiaries, and the 

PBGC to improve their ability to assess 

the financial condition of the plan. 

Additional data elements reported on 

Schedule R: As noted below, this 

revision will increase reporting costs for 

affected plans. The PPA requires 

Multiemployer defined benefit plans to 

report additional information that is 

needed by participants, beneficiaries, 

and the PBGC to assess the financial risk 

posed to the plan by a financial collapse 

or withdrawal of one or more 

contributing employers. Some of the 

additional data elements are already 

included in the July 2006 Proposal and, 

as further described in the July 2006 

Proposed Rule (see discussion in 

preamble to the July 2006 Proposed 

Rule under the heading ‘‘Adding 

Multiemployer Plan Contributing 

Employer Information,’’ 71 FR at 

41398), where it was stated that the 

PBGC believes that it is prudent to begin 

monitoring companies that are major 

contributors to multiemployer plans, 

especially because the financial 

conditions of many multiemployer 

plans have been deteriorating. Similarly, 

multiemployer plan mergers, 

information on withdrawing employers 

and their withdrawal liability, and 

information on participants for whom 

no employer makes contributions are 

important. Identification of companies 

and plans affected by such changes and 

gathering additional information on 

their impact is essential to making 

accurate assessments of the potential 

risks to which these plans are exposed. 

Establishment of a Short Form 5500 

for certain small plans: The Agencies 

estimate that this change will result in 

a reduced burden on the affected small 

plans. As noted in the July 2006 

Proposal and as further described in the 

July 2006 Proposed Rule (see discussion 

in the preamble to the July 2006 

Proposed Rule under the heading 

‘‘Establishment of a Short Form 5500 for 

certain small plans,’’ 71 FR at 41397), 

the Short Form 5500 was being 

developed with the specific intent of 

reducing reporting costs while still 

collecting sufficient information to 

preserve ERISA protections and 

satisfying the enforcement, research, 

and regulatory needs of the Agencies, 

and the disclosure needs of participants 

and beneficiaries. The Agencies 

determined that less information is 

needed in the case of small plans that 

invest in secure assets issued by 

regulated financial institutions and 

having a fair market value that is easily 

determined. The Agencies believe that 

the eligibility conditions for Short Form 

5500 filers, including the requirements 

relating to security and valuation of the 

plan’s investments, ensure that the 

Short Form 5500 will provide adequate 

disclosure to the participants and 

beneficiaries in the plan and adequate 

annual reporting to the Agencies. Small 

plans that are not eligible to file the 

Short Form 5500 would continue to be 

able to file simplified reports as under 

the current system. 

Electronic Filing and Web site Display 

of Form 5500 Information: This will 

give participants and beneficiaries an 

additional option on how to monitor the 

financial status of their pension plans. 

They will be able to access important 

information instantaneously and 

without any additional costs involved, 

as plans must be capable of electronic 

public disclosure beginning with the 

2008 reporting years. 

Costs—The Supplemental Proposed 

Forms Revisions will reduce the burden 

for small plans eligible to file the Short 

Form 5500, but increase the burden for 

plans that must report additional 

information on Schedules SB or MB, R 

and H. As shown in Table 3, the 

aggregate cost of reporting under the 

existing rules is estimated to be $775 

million annually,10 shared across the 

780,000 filers subject to the filing 

requirement. The Department estimates 

that the supplemental proposed forms 

revisions, however, reduce the annual 

cost burden by $77 million.11

TABLE 3.—SUMMARY OF COSTS: CURRENT REQUIREMENTS VS. REQUIREMENTS UNDER THE SUPPLEMENTAL PROPOSED

REVISION

Total costs 

(in millions) 

Total burden 

hours 

(in millions) 

Current Reporting Requirements ................................................................................................................... $774 .8 9.42 

Change due to the Supplemental Proposed Revision .................................................................................. ¥77 ¥0.94 

Requirements under the Supplemental Proposed Revision ......................................................................... 698 8.48 

Note: Number of affected plans: 445,000. 

The Requirements under the Supplemental Proposed Revision do not include the reporting requirements that are included in the July 2006 

Proposal but not in the Supplemental Proposed Revisions. 

Similar to the July 2006 Proposal, the 

Department assumes that substantial 

revisions to the existing reporting 

requirements will entail some one-time 

transition costs, but that such costs are 

generally loaded into the prices paid by 

plans for affected services and products, 

spread both across plans and across the 

expected life of the service and product 

changes. The Department’s estimates 

provided here are therefore intended to 

reflect such spreading and loading of 

these transaction costs. 

In addition to estimating the total 

impact of the proposed revisions on 

aggregate costs, the Department has 

broken down the change in costs by 

individual revisions in the following 

way: 

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71570 Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 

12For purpose of the burden analysis, the 

Department assumes that 4% to 8% of the burden 

hours of Schedule B are incurred by the plan 

sponsors and 92% to 96% by service providers. The 

displayed numbers in the text might not multiply 

to the totals due to rounding. The labor rates were 

updated from the rates used in the July 2006 

Proposed Notice. See 71 FR at 41399. Please see the 

Technical Appendix for details. 

13For purpose of the burden analysis, the 

Department assumes that 29% to 32% of the burden 

hours of Schedule R are incurred by the plan 

sponsors and 68% to 71% by service providers. The 

displayed numbers in the text might not multiply 

to the totals due to rounding. 

14For purpose of the burden analysis, the 

Department assumes that 19% to 24% of the burden 

hours of the Short Form 5500 are incurred by the 

plan sponsors and 76% to 81% by service 

providers. The displayed numbers in the text might 

not multiply to the totals due to rounding. 

15Further detail can be found in the Technical 

Appendix. 

16The Mathematica report can be accessed at the 

Department’s Web site at http://www.dol.gov/ebsa. 

Further detail can be found in the Technical 

Appendix. 

1. Separate actuarial schedules for 

single-employer plans and 

multiemployer plans to reflect PPA 

changes in funding and annual 

reporting requirements. Under the 

Supplemental Proposed Forms 

Revisions the Schedule B will be 

separated into a Schedule SB for singleemployer and multiple-employer 

defined benefit plans and a Schedule 

MB for multiemployer defined benefit 

and money purchase plans. Relative to 

the current filing requirement, the 

establishment of Schedule SB will 

reduce the total annual burden for 

43,000 affected filers by a little more 

than 18,000 hours. Applying an hourly 

labor rate of $88 for service providers 

and $61 for plan sponsors, the 

Department estimates that this will 

lower the annual reporting cost by an 

estimated $1.59 million.12 On the other 

hand, the establishment of Schedule MB 

will increase the total annual burden for 

1,500 affected filers by 1,200 hours. 

Applying an hourly labor rate of $88 for 

service providers and $61 for plan 

sponsors, the Department estimates that 

this will increase the annual reporting 

cost by an estimated $105,000. On 

aggregate, the separation of the 

Schedule B will decrease the aggregate 

total annual burden by 17,000 hours, or 

by an estimated $1.48 million. 

2. Additional Data Elements on 

Schedule R. The provision of this 

information is anticipated to add an 

estimated additional annual cost of 

$1.07 million (13,000 hours) for 20,000 

affected filers when applying an hourly 

rate of $88 for service providers and $61 

for plan sponsors.13

3. Establishment of a Short Form 5500 

for certain small plans. A large majority 

of small plans, or 425,000 of the 629,000 

total small plan filers, are estimated to 

be eligible to use the Short Form 5500, 

thereby saving an estimated $77 million 

(942,000 hours) annually. Again, the 

Department is applying an hourly rate of 

$88 for service providers and $61 for 

plan sponsors.14

4. Electronic Filing and Web site 

Display of Form 5500 Information. This 

requirement is not anticipated to add 

any additional costs, as plans must be 

capable of electronic public disclosure 

beginning with the 2008 reporting year 

due to the Electronic Filing Rule. 

A summary of the changes in costs 

and burden hours that were allocated to 

the groups of proposed supplemental 

changes as outlined above, as well as 

the number of affected employee benefit 

plans, can be found in Table 4 below. 

TABLE 4.—SUMMARY OF SUPPLEMENTAL PROPOSED CHANGES TO THE REPORTING REQUIREMENTS: COSTS, BURDEN, 

AND AFFECTED PLANS

Supplemental proposed revisions for 2008 

Change in 

costs 

(in millions) 1

Change in burden hours 1Number of affected plans 1 2

Separate Schedule Bs ................................................................................................................. ¥$1.48 ¥17,000 44,500 

Short Form 5500 .......................................................................................................................... ¥76.75 ¥942,000 425,000 

Schedule R .................................................................................................................................. +1.07 +13,000 20,000 

Total ...................................................................................................................................... ¥77.17 ¥944,000 445,000 

1 Note: The displayed numbers might not sum up to the totals due to rounding. 

2Some plans are affected by more than one individual revision. Consequently, the total number of affected plans is lower than the summation 

of the number of plans affected by the three individual revisions. 

Assumptions, Methodology, and 

Uncertainty 

The cost and burden associated with 

the annual requirement for any given 

plan will vary according to a variety of 

factors, including the plan’s 

characteristics, practices, and 

operations, which in turn determine 

what information must be provided. A 

small, single-employer defined 

contribution pension plan filing a new 

Short Form 5500 generally will incur far 

lower costs than a large, multiemployer 

defined benefit plan that merges with 

another multiemployer plan and invests 

in employer securities or other hard to 

value assets. Therefore, as in the July 

2006 Proposal, in arriving at its 

aggregate cost estimates the Department 

separately considered the cost to 

different types of plans of providing 

different types of information. The basis 

for the Department’s estimates is the 

methodology designed and peer 

reviewed for the July 2006 Proposal and 

repeated below. 

Assumptions Underlying This 

Analysis—The Department’s analysis of 

the costs and benefits of these 

supplemental proposed revisions 

assumes that all benefits and costs will 

be realized in the first year of the 

reporting cycle to which the 

amendments apply and within each 

year thereafter. This assumption is 

based on the nature of the statutory 

reporting provisions, which require that 

each plan complete a filing within a 

yearly period. The Department has used 

a ‘‘status quo’’ baseline for this analysis, 

assuming that the world absent this 

proposal and absent the July 2006 

Proposal will resemble the present.15

Methodology—The underlying cost 

data was developed by Mathematica 

Policy Research, Inc. (MPR), and has 

been used by the Agencies in various 

burden estimates related to the Form 

5500 Annual Return/Report during 

recent years. See, 65 FR 21068, 21077–

78 (April 19, 2000); Borden, William S., 

‘‘Estimates of the Burden for Filing 

Form 5500: The Change in Burden from 

the 1997 to the 1999 Forms,’’

Mathematica Policy Research, submitted 

to the U.S. Dept. of Labor May 25, 

1999.16 It is grounded in surveys of 

filers and their service providers, which 

measured the unit cost burden of 

providing various types of information. 

Aggregate estimates were produced by 

interacting these unit cost measures 

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with historical counts of Form 5500 

Annual Return/Report filers. 

A new burden estimating model, 

based on the Form 5500 Burden Model 

that MPR most recently used for 

estimating burdens in October 2004, 

was assembled by Actuarial Research 

Corporation (ARC) for the July 2006 

Proposal and subsequent burden 

estimates. ARC assembled a simplified 

model, drawing on implied burdens 

associated with subsets of filer groups 

represented in the MPR model. The 

model used the level of detail consistent 

with reflecting burden differences 

associated with the various proposed 

forms revisions. In the following, the 

ARC model is described in broad terms. 

Further details about the model are 

explained in the Technical Appendix 

that can be accessed at the Department’s 

Web site at http://www.dol.gov/ebsa. 

To estimate aggregate burdens, the 

types of plans that have similar 

reporting requirements were grouped 

together. Thus, calculations were 

prepared for different subsets of types of 

plans as appropriate based on the 

specifics of the supplemental revisions 

to the reporting requirements. Table 5 

below shows the particular types of 

plans considered, the number of plans 

affected by the proposed revisions, as 

well as the aggregate costs under current 

and supplemental proposed 

requirements. As can be seen from the 

Total line in Table 5, aggregate cost 

under current and proposed regulations 

add up to $775 million and $698 

million, respectively. The universe of 

filers was divided into three basic plan 

types: defined benefit pension plans, 

defined contribution pension plans, and 

welfare plans, and each of these major 

plan types was further subdivided into 

multiemployer and single-employer 

plans. Defined contribution Code 

section 403(b) plans were treated 

separately from other defined 

contribution plans. Since the filing 

requirements differ substantially for 

small and large plans, the plan types 

were also divided by plan size. For large 

plans (100 or more participants), the 

defined benefit plans were further 

divided between very large (1000 or 

more participants) and other large plans 

(at least 100 participants, but less than 

1000 participants). Small plans were 

divided into very small (less than 25 

participants) and small (at least 25 

participants, but less than 100 

participants). For each of these sets of 

respondents, burden hours per 

respondent were estimated for the Form 

5500 Annual Return/Report itself and 

for up to eight schedules. 

TABLE 5.—NUMBER OF AFFECTED FILERS AND COST UNDER CURRENT VS. SUPPLEMENTAL PROPOSED REQUIREMENTS

Type of plan Number 

affected 

Aggregate cost 

under current requirements 

(in millions) 

Aggregate cost 

under supplemental proposed 

requirements 

(in millions) 

5500 Large Plans (> = 100 participants) ........................................................................... 151,800 

DB, ME, 100–1,000 participants ................................................................................ 600 $4 .67 $4 .78 

DB, ME, > 1,000 participants ..................................................................................... 900 6 .53 6 .84 

DB, SE, 100–1,000 participants ................................................................................. 7,000 51 .91 51 .54 

DB, SE, > 1,000 participants ...................................................................................... 3,400 25 .00 25 .49 

DC, ME, non-403(b) ................................................................................................... 1,700 8 .15 8 .15 

DC, ME, 403(b) .......................................................................................................... 100 0 .0035 0 .0035 

DC, SE, non-403(b) .................................................................................................... 57,400 261 .97 261 .96 

DC, SE, 403(b) ........................................................................................................... 7,200 0 .31 0 .31 

Welfare, ME ................................................................................................................ 4,100 7 .78 7 .78 

Welfare, SE ................................................................................................................ 69,200 92 .60 92 .60 

5500 Very Small Short Form Eligible (< 25 participants) .......................................... 428,700 

DB ............................................................................................................................... 28,600 33 .40 17 .84 

DC, non-403(b) ........................................................................................................... 396,200 145 .18 83 .28 

5500 Small Short Form Ineligible ............................................................................... 200,000 

DB ............................................................................................................................... 7,700 9 .91 9 .80 

DC, non-403(b) ........................................................................................................... 180,500 123 .68 123 .68 

DC, 403(b) .................................................................................................................. 8,900 0 .39 0 .39 

Welfare ....................................................................................................................... 6,800 3 .30 3 .30 

Total ..................................................................................................................... 780,450 774 .8 697 .74 

Note: The displayed numbers might not sum up to the totals due to rounding. 

DB—defined benefit plans. 

DC—defined contribution plans. 

SE—single-employer plans. 

ME—multi employer plans. 

Large plans—100 participants or more. 

Small plans—less than 100 participants. 

In addition to separating plans by 

type and size, costs were estimated 

separately for the form and for each 

schedule. When items on a Form 5500 

Annual Return/Report schedule are 

required by more than one Agency, the 

estimated burden associated with that 

schedule is allocated among the 

Agencies. This allocation is based on 

whether only a single item on a 

schedule is required by more than one 

agency or whether several or all of the 

items are required by more than one 

agency. Filers must read not only the 

instructions for particular items but also 

instructions pertaining to the general 

filing requirements, and the burden 

associated with reading the instructions 

is tallied and allocated accordingly. 

A plan’s reporting burden is estimated 

in light of the specific items and 

schedules it must complete as well as its 

size, funding method, and investment 

structures. For example, the annual 

report for a large fully insured welfare 

plan would consist of only a few 

questions on the Form 5500, Schedule 

A, and Schedules C and G, where 

applicable. The requirement that this 

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17While the July 2006 Proposal used burden 

estimates drawing from 2002 Form 5500 data, 2003 

Form 5500 data has become recently available and 

is used for making burden estimates for the 

Supplemental Proposed Revisions. 

18The current analysis uses the same 

methodology as was used in the July 2006 Proposal, 

except that the Department slightly updated some 

components. Information about the updates was 

included in the material given to the peer reviewer. 

The Department also used a newer data set (2003 

Form 5500 data, rather than 2002 data) to estimate 

the burden. Further information about these 

updates can be found in the section ‘‘Costs’’ above. 

plan provide very limited information 

on the Form 5500 Annual Return/Report 

is reflected in the estimates of reporting 

burden time. By contrast, a large defined 

benefit pension plan that is intended to 

be tax-qualified and that uses a trust 

fund and invests in insurance contracts 

would be required to submit an annual 

report completing almost all the line 

items of the Form 5500, plus Schedule 

A (Insurance Information), Schedule SB 

or MB (Actuarial Information), Schedule 

C (Service Provider Information), 

Schedule D (DFE/Participating Plan 

Information), Schedule G where 

applicable, Schedule H (Financial 

Information), and Schedule R 

(Retirement Plan Information), and 

would be required to submit an IQPA’s 

report and opinion. The Agencies’

methodology attempts to capture, 

through its categorization, these 

different reporting burdens, thereby 

providing meaningful estimates of 

significant differences in the burdens 

placed on different categories of filers. 

Burden estimates for each schedule 

were adjusted for the proposed 

revisions, reflecting the numbers of 

items added or deleted in each 

schedule, and the average burden 

currently attributable to items on each 

of the corresponding current schedules. 

The burden for the proposed Short Form 

5500 was built from the estimated 

current burden associated with the 

various line items included in it. 

The Department has not attributed a 

recordkeeping burden to the Form 5500 

Annual Return/Report either here or in 

its Paperwork Reduction Act analysis 

because it believes that plan 

administrators’ practice of keeping 

financial records necessary to complete 

the Form 5500 Annual Return/Report 

arises from usual and customary 

management practices that would be 

used by any financial entity, and does 

not result from ERISA or Code annual 

reporting and filing requirements. 

The aggregate baseline burden is the 

sum of the burden per form and 

schedule filed multiplied by the 

estimated aggregate number of forms 

and schedules. The simplified model 

draws on Form 5500 Annual Return/ 

Report data representing each plan’s 

filing for plan year 2003 (the most 

recent year for which complete data is 

available), both for estimating the 

impact of changes in the numbers of 

filings associated with the introduction 

of the Short Form 5500 for most small 

filers as well as for estimating the 

impact of changes in filing obligations 

associated with other schedules.17 In 

summary, the model estimates that due 

to $77 million in cost reductions the 

proposed revisions would lead to 

aggregate costs of $698 million. While 

there is a net reduction in costs, the 

Department estimates that some large 

plans might experience cost increases, 

while small plans will experience cost 

reductions. The total burden estimates, 

as well as the burden broken out by type 

of plan can be found in Table 5 above. 

Uncertainty within Estimates—The 

Department acknowledges that there are 

several areas of uncertainty that might 

affect the estimates, in particular the 

unit cost estimates. While the 

Department has a good sense for the 

filing universe and for the number of 

filers that file the different schedules of 

the Form 5500, the unit costs under the 

current requirements as well as the way 

they would change due to the proposed 

revisions are more uncertain. The 

Department has no direct measure for 

the unit costs, but rather uses a proxy 

adapted from the existing MPR model, 

which was developed in the late 1990s. 

Additional uncertainty is added due to 

the supplemental proposed revisions. 

Some of the revisions just move items 

from the current Schedule B to the 

single-employer or multiemployer 

schedule. The impact of these changes 

can be estimated more accurately than 

the impact of the revisions that require 

the reporting of new items. 

Consequently, the unit cost estimates 

would benefit from updated information 

and the Department welcomes 

comments that would provide 

information on this matter. 

Peer Review 

In December 2004, OMB issued a 

Final Information Quality Bulletin for 

Peer Review, 70 FR 2664 (January 14, 

2005) (Peer Review Bulletin), 

establishing that important scientific 

information shall be peer reviewed 

before it is disseminated by the Federal 

government. The Peer Review Bulletin 

applies to original data and formal 

analytic models used by the Department 

in Regulatory Impact Analyses. The 

Department determined that the data 

and methods employed in the regulatory 

analysis of the July 2006 Proposal 

constituted ‘‘influential scientific 

information’’ as defined in the Peer 

Review Bulletin. Accordingly, a peer 

review was conducted under Section II 

of the Bulletin. The peer review report 

concluded that the methodology and 

data generally were sound and 

produced plausible estimates. The 

current proposal uses the same 

methodology and, accordingly, the 

Department is relying on the Peer 

Review Report prepared in connection 

with the July 2006 Proposal for its 

proposed use of the Short Form 5500 to 

satisfy the simplified reporting 

requirement and additional reporting 

requirements for defined benefit 

pension plans contained in the PPA.18

The Peer Review Report can be accessed 

at the Department’s Web site at http:// 

www.dol.gov/ebsa. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) (RFA) imposes 

certain requirements with respect to 

Federal rules that are subject to the 

notice and comment requirements of 

section 553(b) of the Administrative 

Procedure Act (5 U.S.C. 551 et seq.) and 

that are likely to have a significant 

economic impact on a substantial 

number of small entities. Unless an 

agency certifies that a proposed rule 

will not, if promulgated, have a 

significant economic impact on a 

substantial number of small entities, 

section 603 of the RFA requires that the 

agency present an initial regulatory 

flexibility analysis at the time of the 

publication of the notice of proposed 

rulemaking describing the impact of the 

rule on small entities and seeking public 

comment on such impact. Small entities 

include small businesses, organizations, 

and governmental jurisdictions. 

For purposes of analysis under the 

RFA, EBSA proposes to continue to 

consider a small entity to be an 

employee benefit plan with fewer than 

100 participants. The basis of this 

definition is found in section 104(a)(2) 

of ERISA, which permits the Secretary 

to prescribe simplified annual reports 

for pension plans that cover fewer than 

100 participants. Under ERISA section 

104(a)(3), the Secretary may also 

provide for exemptions or for simplified 

reporting and disclosure for welfare 

benefit plans. Pursuant to the authority 

of ERISA section 104(a)(3), the 

Department has previously issued at 29 

CFR 2520.104–20, 2520.104–21, 

2520.104–41, 2520.104–46, and 

2520.104b–10 certain simplified 

reporting provisions and limited 

exemptions from reporting and 

disclosure requirements for small plans, 

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including unfunded or insured welfare 

plans, that cover fewer than 100 

participants and satisfy certain other 

requirements. 

Further, while some large employers 

may have small plans, in general small 

employers maintain most small plans. 

Thus, EBSA believes that assessing the 

impact of this 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 that is based on size 

standards promulgated by the Small 

Business Administration (SBA) (13 CFR 

121.201) pursuant to the Small Business 

Act (15 U.S.C. 631 et seq.). EBSA 

therefore requests comments on the 

appropriateness of the size standard 

used in evaluating the impact of this 

proposal on small entities. EBSA has 

consulted with the SBA Office of 

Advocacy concerning use of this 

participant count standard for RFA 

purposes. See 13 CFR 121.902(b)(4). The 

following seven subsections address 

specific requirements of the RFA. 

(1) The Department is proposing to 

revise the forms relating to the annual 

reporting and disclosure requirements 

of section 103 of ERISA to satisfy 

requirements of the PPA. 

The Department continually strives to 

tailor reporting requirements to 

minimize reporting costs while ensuring 

that the information necessary to secure 

ERISA rights is adequately available. 

The optimal design for reporting 

requirements to satisfy these objectives 

changes over time. Benefit plan designs 

and practices evolve over time in 

response to market trends, including 

trends in labor markets, financial 

markets, health care and insurance 

markets, and markets for various 

services used by plans. Partly as a result 

of those changes, the nature and mix of 

compliance issues and risks to ERISA 

rights change over time. Frequent 

amendments to ERISA, the Code, and to 

associated regulations also change the 

parameters of ERISA rights and the 

methods needed to protect those rights. 

In addition, the technologies available 

to manage and transmit information 

continually advance. It is incumbent on 

the Department to revise its reporting 

requirements from time to time to keep 

pace with such changes. The 

Department is proposing these forms 

revisions to readjust its reporting 

requirements to take into account the 

PPA as well as certain recent changes in 

markets, the law, and technology, many 

of which are referenced above in this 

preamble. 

(2) Section 103 of ERISA requires 

every employee benefit plan covered 

under part 1 of Subtitle B of Title I of 

ERISA to publish and file an annual 

report concerning, among other things, 

the financial conditions and operations 

of the plan. Section 109 of ERISA 

authorizes the Secretary to prescribe 

forms for the reporting of information 

that is required to be included in the 

annual report. Section 104(a)(2)(A) of 

ERISA authorizes the Secretary to 

prescribe by regulation simplified 

annual reporting for pension plans that 

cover fewer than 100 participants. 

Section 104(a)(3) of ERISA authorizes 

the Secretary to exempt any welfare 

plan from all or part of the reporting and 

disclosure requirements of Title I of 

ERISA or to provide simplified 

reporting and disclosure if the Secretary 

finds that such requirements are 

inappropriate as applied to such plans. 

Section 110 of ERISA permits the 

Secretary to prescribe for pension plans 

alternative methods of complying with 

any of the reporting and disclosure 

requirements if the Secretary finds that: 

(1) The use of the alternative method is 

consistent with the purposes of Title I 

of ERISA, and it provides adequate 

disclosure to plan participants and 

beneficiaries and adequate reporting to 

the Secretary; (2) application of the 

statutory reporting and disclosure 

requirements would increase costs to 

the plan or impose unreasonable 

administrative burdens with respect to 

the operation of the plan; and (3) the 

application of the statutory reporting 

and disclosure requirements would be 

adverse to the interests of plan 

participants in the aggregate. 

The Department proposes to find that 

use of the Form 5500 Annual Return/ 

Report, as revised, along with the 

proposed Short Form 5500, constitutes 

an alternative method of compliance, an 

exemption, and/or a simplified report, 

as applicable, consistent with these 

conditions. Generally, the Department 

believes that use of the revised Form 

5500 Annual Return/Report and the 

proposed Short Form 5500 would 

relieve plans of all sizes of increased 

costs and burdens by providing a 

standard format that facilitates reporting 

required by the statute, eliminating 

duplicative reporting requirements, and 

streamlining the content of the annual 

return/report. 

The objectives of these proposed 

supplemental forms revisions are to 

implement applicable provisions of the 

PPA, as well as to streamline reporting 

and reduce aggregate reporting costs, 

particularly for small plans, while 

preserving and enhancing protection of 

ERISA rights. These purposes are 

detailed above in this preamble. 

(3) These supplemental proposed 

forms revisions do not alter the number 

of small plans required to comply with 

the annual reporting requirements, but 

do implement a new Short Form 5500, 

which is designed specifically to further 

streamline the limited reporting 

requirements presently applicable to 

small plans. The Department estimates 

that more than six million small, 

private-sector employee pension and 

welfare benefit plans are covered under 

Title I of ERISA. However, a large 

majority of these are fully insured or 

unfunded welfare benefit plans, which 

currently are exempt from annual 

reporting requirements and will 

continue to be exempt under these 

proposed forms revisions. 

Approximately 629,000 small plans, 

including small pension plans and 

small funded welfare plans, currently 

are required to file annual reports and 

will continue to be so required under 

these supplemental forms revisions. Of 

these, under the supplemental forms 

revisions an estimated 425,000 small 

pension plans will be eligible to use the 

proposed new Short Form 5500. Use of 

the Short Form 5500 is expected to 

reduce these plans’ reporting costs 

while preserving or enhancing the 

protection of their participants’ ERISA 

rights. 

(4) The proposed reporting 

requirements applicable to small plans 

are detailed above. For a large majority 

of the 629,000 small plans subject to 

annual reporting requirements, or an 

estimated 396,000 pension plans, 

submission of the Short Form 5500 

alone will fully satisfy their annual 

reporting requirements. All of these 

plans are eligible for the waiver of audit 

requirements, and none are defined 

benefit pension plans. Therefore, for 

such plans satisfaction of their 

applicable annual reporting 

requirements is not expected to require 

the services of an IQPA or auditor, but 

will require the use of a mix of clerical 

and professional administrative skills. 

For an additional 29,000 small defined 

benefit pension plans that would be 

eligible to use the streamlined Short 

Form 5500, satisfaction of the reporting 

requirements also will require services 

of an actuary and submission of 

Schedule SB. The remaining 204,000 

small plans will not be eligible to use 

the Short Form 5500 under the PPA and 

will continue to be required to file the 

Form 5500 Annual Return/Report. Of 

these, 8,000 are defined benefit plans 

that must use an actuary and file 

Schedule SB or MB. All will require a 

mix of clerical and professional 

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administrative skills to satisfy their 

reporting requirements. 

Satisfaction of annual reporting 

requirements under these proposed 

forms revisions is not expected to 

require any additional recordkeeping 

that would not otherwise be part of 

normal business practices. 

The Table 6 below compares the 

Department’s estimates of small plans’

reporting costs under the current 

requirements with those under the 

supplemental proposed requirements 

for various classes of affected plans. As 

shown, costs under the supplemental 

proposed requirements will be lower on 

aggregate and for most classes of plans. 

These estimates take account of the 

quantity and mix of clerical and 

professional skills required to satisfy the 

reporting requirements for various 

classes of plans. 

TABLE 6.—SMALL PLAN REPORTING COSTS UNDER CURRENT VS. SUPPLEMENTAL PROPOSED REQUIREMENTS

Class of plan Number affected 

Aggregate cost 

under current 

requirements 

(in millions) 

Aggregate cost 

under supplemental proposed 

requirements 

(in millions) 

Defined Benefit Pension, Short Form eligible ........................................................... 29,000 $33.40 $17.84 

Defined Benefit Pension, Short Form ineligible ........................................................ 8,000 9.91 9.80 

Code Section 403(b), Short Form ineligible .............................................................. 9,000 0.39 0.39 

Other Defined Contribution, Short Form eligible ....................................................... 393,000 145.18 83.28 

Other Defined Contribution Pension, Short Form ineligible ...................................... 180,000 123.68 123.68 

Funded Welfare ......................................................................................................... 7,000 3.30 3.30 

Total for all affected small plans ........................................................................ 629,000 315.85 238.28

Note: The displayed numbers might not sum up to the totals due to rounding. 

The Department notes that the 

estimated reporting costs amount to less 

than $400 on average for each of the 

629,000 small plans subject to annual 

reporting requirements. This compares 

with roughly $3,000 on average for each 

of the 152,000 affected large filers. 

(5) Except for the July 2006 Proposal, 

the Department is unaware of any 

relevant federal rules for small plans 

that duplicate, overlap, or conflict with 

these proposed forms revisions. The 

July 2006 Proposal includes provisions 

that overlap and duplicate with some of 

the form changes proposed in this 

notice of supplemental proposed forms 

revisions. For example, the July 2006 

Proposal proposes the Short Form 5500 

not only for certain small pension plans 

with less than 25 participants, but also 

for certain small pension and welfare 

plans with less than 100 participants. 

As noted above, the Department 

anticipates combining the forms 

revisions under the July 2006 Proposal 

and the supplemental proposed forms 

revisions when it finalizes the forms 

revisions. 

(6) In developing the forms revisions, 

the Department considered a number of 

alternative provisions directed at small 

plans. For example, as discussed in the 

July 2006 Proposal, the Department 

considered both narrower and broader 

eligibility criteria for use of the Short 

Form 5500, settling on criteria that limit 

eligibility to plans holding relatively 

safe and protected assets, which 

nonetheless includes a large majority of 

small plans. The Department also 

considered the inclusion of more or 

fewer of the items of information 

formerly collected from small plans in 

the Form 5500 Annual Return/Report, 

retaining only those items it believes to 

be necessary and adequate to the 

protection of small plan participants’

ERISA rights. 

(7) The Department invites interested 

persons to submit comments regarding 

the impact on small plans of these 

Supplemental Proposed Forms 

Revisions, and on the Department’s 

assessment thereof. The Department 

also requests comments on the 

alternatives it considered and its 

conclusions regarding those 

alternatives; on any additional 

alternatives it should have considered; 

on what, if any, special problems small 

plans might encounter if the proposal 

were to be adopted; and what changes, 

if any, could be made to minimize those 

problems. 

Paperwork Reduction Act Statement 

As part of continuing efforts to reduce 

paperwork and respondent burden, the 

general public and Federal agencies are 

generally invited to comment on 

proposed and/or continuing collections 

of information in accordance with the 

Paperwork Reduction Act of 1995 (PRA 

95) (44 U.S.C. 3506(c)(2)(A)). This helps 

to ensure that requested data will be 

provided in the desired format, 

reporting burden (time and financial 

resources) will be minimized, collection 

instruments will be clearly understood, 

and the impact of collection 

requirements on respondents can be 

properly assessed. Concurrent with 

publication of the July 2006 Proposal, 

the Department submitted an 

information collection request (ICR) to 

OMB, in accordance with 44 U.S.C. 

3507(d), for its review of the 

Department’s proposed revisions to the 

information collections previously 

approved by OMB under OMB Control 

No. 1210–0110. 

On August 29, 2006, OMB issued a 

notice indicating that it would continue 

its approval of the information 

collections under Control No. 1210–

0110 as currently in effect, but would 

not approve the Department’s request 

for approval of the proposed revisions 

until after the Department considers 

public comment and promulgates a final 

rule describing and explaining any 

changes. The IRS and the PBGC 

indicated, in the July 2006 Proposal, 

that they intend to submit separate 

requests for OMB review and approval 

based upon the final forms revisions, 

and the Department now indicates its 

intention to do so as well. The 

Department solicits comments on any 

information collection burdens 

described in this Notice of 

Supplemental Proposed Forms 

Revisions. 

Congressional Review Act 

The notice of proposed forms 

revisions being issued here is subject to 

the Congressional Review Act 

provisions of the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (5 U.S.C. 801 et seq.) and, if 

finalized, will be transmitted to the 

Congress and the Comptroller General 

for review. 

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Unfunded Mandates Reform Act 

For purposes of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), as well as Executive Order 

12875, the proposal does not include 

any Federal mandate that may result in 

expenditures by state, local, or tribal 

governments in the aggregate of more 

than $100 million, or increased 

expenditures by the private sector of 

more than $100 million. 

Federalism Statement 

Executive Order 13132 (August 4, 

1999) outlines fundamental principles 

of federalism and requires adherence to 

specific criteria by federal agencies in 

the process of their formulation and 

implementation of policies that have 

substantial direct effects on the States, 

the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. This proposal 

does not have federalism implications 

because they would have no substantial 

direct effect on the States, on the 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Section 514 of 

ERISA provides, with certain exceptions 

specifically enumerated, that the 

provisions of Titles I and IV of ERISA 

supersede any and all laws of the States 

as they relate to any employee benefit 

plan covered under ERISA. The 

requirements implemented in this 

proposal does not alter the fundamental 

provisions of the statute with respect to 

employee benefit plans, and as such 

would have no implications for the 

States or the relationship or distribution 

of power between the national 

government and the States. 

Appendix A 

DATA ITEMS FOR 2008 (AND LATER) SCHEDULE SB (SINGLE-EMPLOYER DEFINED BENEFIT PLAN ACTUARIAL INFORMATION) 

Item 

Comparison 

with 2006 

Schedule B 

Identifying Information 

Plan year 

A. Name of plan ...................................................................................................................................................................................... Same. 

B. Plan number ....................................................................................................................................................................................... Same. 

C. Plan sponsor’s name .......................................................................................................................................................................... Same. 

D. EIN ...................................................................................................................................................................................................... Same. 

E. Type of plan (Single-Employer, Multiple-Employer) ........................................................................................................................... Similar. 

F. Prior year plan size (100 or fewer, 101–500, More than 500) ........................................................................................................... Similar. 

Part I—Basic Information 

1. Valuation date ..................................................................................................................................................................................... Same. 

2. Assets 

a. Market value ................................................................................................................................................................................ Same. 

b. Actuarial value ............................................................................................................................................................................. Similar. 

3. Funding target and participant count breakdown (separate participant count and funding target figures for: retired participants 

and beneficiaries receiving payment; terminated vested participants; active participants by nonvested benefits, vested benefits, 

and total active; and totals. 

a. Number of participants column .................................................................................................................................................... Same. 

b. Funding target column ................................................................................................................................................................. Similar. 

4. Additional information for plans that are at-risk 

a. Funding target disregarding prescribed at-risk assumptions ....................................................................................................... New. 

b. Funding target reflecting at-risk assumptions, but disregarding transition rule for plans that have been at risk for fewer than 

five consecutive years.

New. 

5. Effective interest rate .......................................................................................................................................................................... New. 

6. Target normal cost .............................................................................................................................................................................. Similar. 

Statement by Enrolled Actuary—To the best of my knowledge, the information supplied in this schedule and accompanying 

schedules, statements and attachments, if any, is complete and accurate. Each prescribed assumption was applied in accordance with applicable law and regulations. In my opinion, each other assumption is reasonable (taking into account the experience of the plan and reasonable expectations) and such other assumptions, in combination, offer my best estimate of anticipated experience under the plan.

Similar. 

Signature, Name, Date, Most recent enrolled actuary number, Firm name, Telephone number, Address of firm, and check box to 

indicate if actuary has not fully reflected any regulation or ruling promulgated under the statute in completing the schedule.

Similar. 

Part II—Beginning of Year Carryover/Prefunding Balance Reconciliation 

7. Balance at beginning of prior plan year after applicable adjustments (carryover balance and prefunding balance) ........................ Similar. 

8. Portion used to satisfy prior year’s funding requirement (carryover balance and prefunding balance) ............................................ New. 

9. Remaining amount (carryover balance and prefunding balance) ....................................................................................................... New. 

10. Interest earned during prior year (carryover balance and prefunding balance) ............................................................................... New. 

11. Prior year’s excess contributions to be added to prefunding balance (carryover balance and prefunding balance) ...................... New. 

a. Excess contributions .................................................................................................................................................................... New. 

b. Interest on (a) using prior year’s effective rate ............................................................................................................................ New. 

c. Total available at beginning of current plan year to add to prefunding balance ......................................................................... New. 

d. Portion of (c) to be added to prefunding balance ........................................................................................................................ New. 

12. Voluntary reduction (carryover balance and prefunding balance) .................................................................................................... New. 

13. Balance at beginning of current year = Item 9 + item 10 + item 11 ¥ item 12 (carryover balance and prefunding balance) ...... New. 

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71576 Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 

DATA ITEMS FOR 2008 (AND LATER) SCHEDULE SB (SINGLE-EMPLOYER DEFINED BENEFIT PLAN ACTUARIAL

INFORMATION)—Continued 

Item 

Comparison 

with 2006 

Schedule B 

Part III—Funding Percentages 

14. Funding Target Attainment Percentage ............................................................................................................................................ New. 

15. Adjusted Funding Target Attainment Percentage ............................................................................................................................. New. 

16. Prior year’s funding percentage for purposes of determining whether carryover/prefunding balance may be used to reduce current year’s funding requirement.New. 

17. If the current value of the assets of the plan is less than 70 percent of the funding target, enter such percentage. ..................... Similar. 

Part IV—Contributions and Liquidity Shortfalls 

18. Contributions made to the plan for the plan year by employer(s) and employees by (a) date, (b) amount paid by employer, and

(c) amount paid by employees.

Same. 

19. Discounted plan contributions ........................................................................................................................................................... New. 

a. Contributions allocated toward unpaid minimum required contribution from prior years ............................................................ New. 

b. Contributions made to avoid restrictions adjusted to valuation date ........................................................................................... New. 

c. Contributions allocated toward minimum required contribution for current year adjusted to valuation date .............................. New. 

20. Quarterly contributions and liquidity information 

a. Did the plan have a ‘‘funding shortfall’’ for the prior year? ......................................................................................................... New. 

b. If 20a is yes, were required quarterly installments for the current year made in timely manner ............................................... New. 

c. If 20a is yes, complete table showing liquidity shortfall as of the end of each quarter of the plan year .................................... Same. 

Part V—Assumptions 

21. Discount rate 

a. Segment rate(s) for 1st, 2nd and 3rd segments or indicate that full yield curve is used ........................................................... New. 

b. Applicable month ......................................................................................................................................................................... New. 

22. Weighted average retirement age .................................................................................................................................................... Same. 

23. Mortality table—indicate whether prescribed table(s) or substitute table used ................................................................................ New. 

Part VI—Miscellaneous items 

24. Has a change been made in the non-prescribed actuarial assumptions for the current plan year? If yes, see instructions for required attachment.Same. 

25. Has a method change been made for the current plan year? If yes, see instructions for required attachment ............................. Same. 

26. Is the plan required to provide a Schedule of Active Participants? If yes, see instructions for required attachment ..................... Same. 

27. If the plan is eligible for (and is using) alternative funding rules, enter applicable code. If yes, see instructions for required attachment.New. 

Part VII—Reconciliation of Unpaid Minimum Required Contributions for Prior Years 

28. Unpaid minimum required contribution for all prior years ................................................................................................................. New. 

29. Discounted employer contributions allocated toward unpaid minimum required contribution from prior years (Item 19a) ............. New. 

30. Remaining amount of unpaid minimum required contributions (item 28 minus item 29) ................................................................. New. 

Part VII—Minimum Required Contribution for Current Year 

31. Target normal cost (item 6) ............................................................................................................................................................... Similar. 

32. Amortization charges 

a. Net Shortfall amortization charges (and outstanding balance) ................................................................................................... Similar. 

b. Waiver amortization charges (and outstanding balance) ............................................................................................................ Similar. 

33. If a waiver has been approved for this plan year, enter the date of the ruling letter granting the approval and the waived 

amount.

Similar. 

34. Total funding requirement before reflecting carryover and prefunding balances (Item 31 + item 32a + item 32b ¥ item 33) ...... New. 

35. Enter Carryover and prefunding balance used to offset funding requirement ................................................................................. New. 

36. Additional cash requirement after reflecting carryover and prefunding balances (item 34 minus item 35) ..................................... New. 

37. Contributions allocated toward minimum required contribution for current year adjusted to valuation date (item 19c) .................. New. 

38. Excess contributions for current year (excess, if any, of item 37 over item 36) .............................................................................. New. 

39. Unpaid minimum required contribution for current year (excess, if any, of item 36 over item 37) .................................................. New. 

40. Unpaid minimum required contribution for all years ......................................................................................................................... New. 

Appendix B 

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Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 71577 

DATA ITEMS FOR 2008 (AND LATER) SCHEDULE MB (MULTIEMPLOYER DEFINED BENEFIT PLAN AND MONEY PURCHASE

PLAN ACTUARIAL INFORMATION) 

Item Comparison with 2006 

Schedule B 

Plan year ......................................................................................................................................... Same. 

A. Plan name .................................................................................................................................. Same as item A. 

B. Plan number ............................................................................................................................... Same as item B. 

C. Plan sponsor’s name .................................................................................................................. Same as item C. 

D. Employer identification number .................................................................................................. Same as item D. 

E. Type of plan (multiemployer DB plan, money purchase plan) ................................................... Similar to item E (item F deleted). 

1a Valuation date .......................................................................................................................... Same as line 1a. 

1b Assets: 

(1) Current value of assets ...................................................................................................... Same as line 1b(1). 

(2) Actuarial value of assets .................................................................................................... Same as line 1b(2). 

1c Accrued liability information: 

(1) Accrued liability for plans using immediate gain methods ................................................. Same as line 1c(1). 

(2) Information for plans using spread gain methods .............................................................. Same as line 1c(2). 

(3) Accrued liability under unit credit method .......................................................................... New. 

1d Information on current liabilities: 

(1) Amount excluded attributable to pre-participation service ................................................. Same as line 1d(1). 

(2) ‘‘RPA ‘94’’ information 

(a) Current liability ............................................................................................................. Same as line 1d(2)(a). 

(b) Expexted increase in current liability due to benefits accuring during the plan year Same as line 1d(2)(b). 

(c) Expexted release from ‘‘RPA ’94’’ current liability for the plan year .......................... Same as line 1d(2)(d) (line 1d(20(c) deleted). 

(3) Expected release from ‘‘RPA ’94’’ current liability for the plan year ................................. Same as line 1d(3). 

Statement by Enrolled Actuary—To the best of my knowledge, the information supplied in this 

schedule and accompanying schedules, statements and attachments, if any, is complete and 

accurate. Each prescribed assumption was applied in accordance with applicable law and 

regulations. In my opinion, each other assumption is reasonable (taking into account the experience of the plan and reasonable expectations) and such other assumptions in combination, offer my best estimate of anticipated experience under the plan.

Similar. 

2 Operational information as of beginning of the plan year 

2a Current value of assets .................................................................................................... Same as line 2a. 

2b (column 1). Participant count breakdown by category (terminated vested, retired, active).Same information as line 2b, column 1 except 

for amended format. 

2b (column 2). ‘‘RPA ‘94’’ current liability ............................................................................. Amended to incorporate information from line 

2b, columns 2 and 3 (column 3 deleted). 

2c Current liability funded percentage ................................................................................... Same as line 2c. 

3 Contributions (employer(s) and employees) ............................................................................. Same as item 3. 

4 Plan status—Code to indicate plan’s status in accordance with instructions for attachment 

of supporting evidence of plan’s status. For certain codes, the rest of line 4 is skipped. Funded percentage for monitoring plan’s status. Whether the plan is making the schedule 

progress with any applicable funding improvement or rehabilitation plan. If the plan is in critical status, whether any adjustable benefits were reduced, and if so, the reduction in liability 

resulting from the reduction in adjustable benefits, measured as of the valuation date.

New (replaces existing item 4). 

5 Information on actuarial cost method 

5a–g Actuarial cost method used—Check boxes to identify the actuarial cost method(s) 

used as the basis for this plan year’s funding standard account computations: Attained 

age normal, entry age normal, accrued benefit (unit credit), aggregate, frozen initial liability, individual level premium, individual aggregate, shortfall, reorganization, other 

(specify).

Similar to lines 5a–g. Note that multiple boxes 

may be checked. 

5h Shortfall method ............................................................................................................... New—previously addressed in line 8b and attachments for multiemployer plans. 

5i Reorganization ................................................................................................................... New—previously addressed in line 8b and attachments for multiemployer plans. 

5j Other (specify) ................................................................................................................... Same as line 5h. 

5k Period of use, shortfall method ........................................................................................ New, required under ERISA section 103(f) 

(2)(F). 

5l–n Change in funding method—Must state if there was a change in funding method for 

the plan year, and if so, whether it was made pursuant to Revenue Procedure 2000–40. 

If there was a change in funding method, but it was not made pursuant to Revenue Procedure 2000–40, then the date of the ruling letter (individual or class) approving the 

change in funding method must be entered.

Same as lines 5i–k except for updated line references. 

6 Actuarial assumptions 

6a Interest rate for current liability ......................................................................................... Same as line 6a (line 6b deleted). 

6b Rates specified in insurance or annuity contracts ........................................................... Same as line 6c. 

6c Mortality table (males, females) ....................................................................................... Same as line 6d. 

6d Valuation liability interest rate .......................................................................................... Same as line 6e. 

6e Expense loading ............................................................................................................... Same as line 6f (line 6g deleted). 

6f Salary scale ....................................................................................................................... Same as line 6h. 

6g–h Estimated investment return on assets ........................................................................ Same as lines 6i–j. 

7 Information on new amortization bases—(1) type of base (2) initial balance (3) amortization 

charge/credit.

Same as item 7. 

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71578 Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 

DATA ITEMS FOR 2008 (AND LATER) SCHEDULE MB (MULTIEMPLOYER DEFINED BENEFIT PLAN AND MONEY PURCHASE

PLAN ACTUARIAL INFORMATION)—Continued 

Item Comparison with 2006 

Schedule B 

8 Miscellaneous information 

8a Funding waiver—If a waiver of a funding deficiency has been approved for this plan 

year, enter the date of the ruling letter granting the approval..

Similar to line 8a, amended to apply only to 

funding waivers (line 8b deleted; information 

reflected in lines 5h–i). 

8b Schedule of Active Participant Data ................................................................................. New for multiemployer plans, same as line 8c 

for single-employer plans. 

8c Amortization extension under 304(d)—Are any of the plan’s amortization bases operating under an extension of time under section 412(e) (as in effect prior to 2008) or section 431(d)(1) of the Code? New. 

8d(1)–(2) Automatically-approved extensions—If yes, was an extension granted automatic approval under section 431(d)(1) of the Code? If yes, enter the number of years 

by which the amortization period was extended.

New. 

8d(3)–(5) IRS-approved extensions—Was an extension approved by the Internal Revenue Service under section 412(e) (as in effect prior to 2008) or 431(d) of the Code? If 

yes, enter the number of years by which the amortization period was extended (not including the number of years granted automatic approval under section 431(d)(1) of the 

Code), the date of the ruling letter approving the extension.

New. 

8d(6) Pre-PPA extensions—the amortization base eligible for amortization using interest 

rates applicable under section 6621(b) of the Code for years beginning after 2007.

New. 

8e Effect of shortfall method or amortization extension—If the shortfall method is used as 

the basis for this year’s funding standard account computations or any of the plan’s amortization bases are operating under an extension of time under section 412(e) (as in effect prior to 2008) or section 431(d)(1) of the Code, enter the difference between the 

minimum required contribution for the year and the minimum that would have been required without using the shortfall method or extending the amortization base(s).

New—required under 103(f)(2) (E) and (F). 

9 Funding standard account 

9a Prior year funding deficiency ............................................................................................ Same as line 9a. 

9b Normal cost ...................................................................................................................... Same as line 9b. 

9c Amortization charges ........................................................................................................ Similar to line 9c, but amended to distinguish 

between funding waivers and extended 

bases using the valuation interest rate 

versus the rate under section 6621(b) of the 

Code. 

9d Interest .............................................................................................................................. Same (lines 9e–f deleted). 

9e–n Funding standard account items .................................................................................. Same as lines 9g–p except for updated line 

references. 

9o Accumulated reconciliation account 

9o(1) Due to waived funding deficiencies and extended amortization bases, accumulated prior to the 2008 plan year.Based on line 9o(3), but amended to distinguish between funding waivers (pre-PPA) 

and extended amortization bases (lines 9o(1) 

and (2) deleted). 

9o(2) Adjustments for extended amortization bases ..................................................... Similar to line 9o(3), but amended to apply to 

extended amortization bases only. 

9o(3) Total accumulated reconciliation account ............................................................. Similar to line 9o(4). 

10 Contribution necessary to avoid an accumulated funding deficiency ..................................... Similar to line 10. 

11 Change in assumptions check box ......................................................................................... Same as line 11. 

Part II—Additional information for plans other than multiemployer plans ...................................... Deleted in its entirety. 

Appendix C 

ADDITIONAL INFORMATION FOR 2008 (AND LATER) SCHEDULE R (RETIREMENT PLAN INFORMATION) 

[Parts I–IV remain as proposed on July 21, 2006. Part V expanded and Part VI added] 

Part V—Additional Information for Multiemployer Defined Benefit Pension Plans 

13. Enter the following information for each employer who contributed more than 5% of total contributions to the plan during the plan year 

(measured in dollars). See instructions: Name of contributing employer, EIN, date collective bargaining agreement expires, dollar amount contributed, contribution rate, contribution base unit measure as hourly, weekly, unit of product or other (specify). Complete as many entries as 

needed to report all applicable employers. 

14. Enter the number of participants on whose behalf no contributions were made by an employer for: 14a current year, 14b the plan year immediately preceding the current plan year, and 14c the second preceding plan year. 

15. Provide the ratio of (a) item 14a to item 14b and (b) item 14a to item 14c. 

16. Information with respect to any employers who withdrew from the plan during the preceding plan year: 

a. Enter the number of employers who withdrew during the preceding plan year. 

b. If item 16a is greater than 0, enter the aggregate amount of withdrawal liability assessed or estimated to be assessed against such withdrawn employers. 

mstockstill on PROD1PC61 with NOTICES

Federal Register / Vol. 71, No. 237 / Monday, December 11, 2006 / Notices 71579 

ADDITIONAL INFORMATION FOR 2008 (AND LATER) SCHEDULE R (RETIREMENT PLAN INFORMATION)—Continued 

[Parts I–IV remain as proposed on July 21, 2006. Part V expanded and Part VI added] 

17. If assets and liabilities from another plan have been transferred to or merged with this plan during the plan year, check box and see instructions regarding supplemental information to be included as an attachment. 

Part VI—Additional Information for Single-Employer and Multiemployer Defined Benefit Pension Plans 

18. If any liabilities to participants or their beneficiaries under the plan as of the end of the plan year consist (in whole or in part) of liabilities to 

such participants and beneficiaries under two or more pension plans as of immediately before such plan year, check box and see instructions 

regarding supplemental information to be included as an attachment. 

19. If the total number of participants is 1,000 or more, complete items (a) through (c). 

a. Enter the percentage of plan assets held as Stock, Debt, Real Estate, Other. 

b. Provide the percentage held of each type of debt security: Government debt, Investment Grade Corporate Debt, and High-Yield Corporate Debt. 

c. Provide the Macaulay Duration for the total portfolio. 

Statutory Authority 

Accordingly, pursuant to the 

authority in sections 101, 103, 104, 109, 

110 and 4065 of ERISA and section 6058 

of the Code, the Form 5500 Annual 

Return/Report and the instructions 

thereto are proposed to be amended as 

set forth herein, including the addition 

of the proposed Short Form 5500. 

Signed at Washington, DC, this 6th day of 

December 2006. 

Bradford P. Campbell, 

Acting Assistant Secretary, Employee Benefits 

Security Administration, U.S. Department of 

Labor. 

Joseph H. Grant, 

Director, Employee Plans, Tax Exempt and 

Government Entities Division, Internal 

Revenue Service. 

Vincent K. Snowbarger, 

Interim Director, Pension Benefit Guaranty 

Corporation. 

[FR Doc. 06–9633 Filed 12–8–06; 8:45 am] 

BILLING CODE 4510–29–P 

MILLENNIUM CHALLENGE 

CORPORATION 

[MCC FR 06–22] 

Notice of Quarterly Report (July 1, 

2006–September 30, 2006) 

AGENCY: Millennium Challenge 

Corporation. 

SUMMARY: The Millennium Challenge 

Corporation (MCC) is reporting for the 

quarter July 1, 2006 through September 

30, 2006 with respect to both assistance 

provided under Section 605 of the 

Millennium Challenge Act of 2003 (Pub. 

L. 108–199, Division D (the Act)), and 

transfers of funds to other federal 

agencies pursuant to Section 619 of that 

Act. The following report shall be made 

available to the public by means of 

publication in the Federal Register and 

on the Internet Web site of the MCC 

(http://www.mcc.gov) in accordance 

with Section 612 (b) of the Act. 

ASSISTANCE PROVIDED UNDER SECTION 605 

Projects Obligated Objectives Quarterly 

disbursements Measures 

Country: Madagascar Year: 2006 Quarter 4 Total Obligation: $109,773,000 

Entity to which the assistance is provided: MCA Madagascar Total Quarterly Disbursement: $0 

Land Tenure Project ....... $37,803,000 Increase Land Titling 

and Security.

$0 Legislative proposal (‘‘loin de cadrage’’) reflecting 

the PNF submitted to Parliament and passed. 

Percentage of land documents inventoried, restored, and/or digitized. 

Average time and cost required to carry out property-related transactions at the local and/or national land services offices. Time/cost to respond to information request, issue titles and to 

modify titles after the first land right. 

Number of land disputes reported and resolved in 

the target zones and sites of implementation. 

Percentage of land in the zones that is demarcated and ready for titling. 

Promote knowledge and awareness of land tenure reforms among inhabitants in the zones 

(surveys). 

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