51284 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 

(h) Other FAA AD Provisions 

The following provisions also apply to this 

AD: 

(1) Alternative Methods of Compliance 

(AMOCs): The Manager, New York ACO 

Branch, FAA, has the authority to approve 

AMOCs for this AD, if requested using the 

procedures found in 14 CFR 39.19. In 

accordance with 14 CFR 39.19, send your 

request to your principal inspector or 

responsible Flight Standards Office, as 

appropriate. If sending information directly 

to the manager of the certification office, 

send it to ATTN: Program Manager, 

Continuing Operational Safety, FAA, New 

York ACO Branch, 1600 Stewart Avenue, 

Suite 410, Westbury, NY 11590; telephone 

516–228–7300; fax 516–794–5531. Before 

using any approved AMOC, notify your 

appropriate principal inspector, or lacking a 

principal inspector, the manager of the 

responsible Flight Standards Office. 

(2) Contacting the Manufacturer: For any 

requirement in this AD to obtain instructions 

from a manufacturer, the instructions must 

be accomplished using a method approved 

by the Manager, New York ACO Branch, 

FAA; or Transport Canada Civil Aviation 

(TCCA); or Bombardier, Inc.’s TCCA Design 

Approval Organization (DAO). If approved by 

the DAO, the approval must include the 

DAO-authorized signature. 

(i) Related Information 

(1) Refer to Mandatory Continuing 

Airworthiness Information (MCAI) TCCA AD 

CF–2021–06, dated February 26, 2021, for 

related information. This MCAI may be 

found in the AD docket at https://

www.regulations.gov by searching for and 

locating Docket No. FAA–2021–0787. 

(2) For more information about this AD, 

contact Chirayu Gupta, Aerospace Engineer, 

Mechanical Systems and Administrative 

Services Section, FAA, New York ACO 

Branch, 1600 Stewart Avenue, Suite 410, 

Westbury, NY 11590; telephone 516–228– 

7300; fax 516–794–5531; email 9-avs-nyacocos@faa.gov. 

(3) For service information identified in 

this AD, contact Bombardier, Inc., 200 CoˆteVertu Road West, Dorval, Que ́bec H4S 2A3, 

Canada; North America toll-free telephone 1– 

866–538–1247 or direct-dial telephone 1– 

514–855–2999; email ac.yul@

aero.bombardier.com; internet https://

www.bombardier.com. You may view this 

service information at the FAA, 

Airworthiness Products Section, Operational 

Safety Branch, 2200 South 216th St., Des 

Moines, WA. For information on the 

availability of this material at the FAA, call 

206–231–3195. 

Issued on September 9, 2021. 

Lance T. Gant, 

Director, Compliance & Airworthiness 

Division, Aircraft Certification Service. 

[FR Doc. 2021–19814 Filed 9–14–21; 8:45 am] 

BILLING CODE 4910–13–C 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2520 

RIN 1210–AB97 

Annual Reporting and Disclosure 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Proposed rule. 

SUMMARY: This document contains 

proposed amendments to Department of 

Labor (DOL) regulations relating to 

annual reporting requirements under 

Title I of the Employee Retirement 

Income Security Act of 1974, as 

amended (ERISA). The proposed 

amendments contained in this 

document would conform these DOL 

reporting regulations to proposed 

revisions under Title I of ERISA and the 

Internal Revenue Code (Code) to the 

Form 5500 Annual Return/Report of 

Employee Benefit Plan and Form 5500– 

SF Short Form Annual Return/Report of 

Small Employee Benefit Plan being 

published in this issue of the Federal 

Register in a separate Notice of 

Proposed Forms Revisions (NPFR) 

prepared jointly by DOL, the Internal 

Revenue Service (IRS), and the Pension 


khammond on DSKJM1Z7X2PROD with PROPOSALSEP15SE21.002</GPH>

Bombardier 

Airplane AFMTitle AFM Revision Model/Serial 

Number 

Sub-sub section B., Wing Anti-ice System, of 

sub-section 4., Operation in Icing Conditions, 

CL-600-2B 16 of Section 02-04, Operating Limitations, ~f Revision 54, Chapter 2 -LIMITATIONS; and sub-sectl~n (Variant 604) 5701 dated M., Icing Conditions During Flight, of Sect10n through 5988 December 18, 04-14 Ice and Rain Protection, of Chapter 4 - inclusive 2019 NORMAL PROCEDURES; of Bombardier 

Challenger 605 CL-600-2B 16 AFM, PSP 

605-1 

Sub-sub section B., Wing Anti-ice System, of 

sub-section 4., Operation in Icing Conditions, 

CL-600-2B 16 of Section 02-04, Operating Limitations, ~f Revision 19, Chapter 2 - LIMITATIONS; ~d sub-sectl~n (Variant 604) 6050 dated M., Icing Conditions During Fhght, of Sect10n through 6153 December 18, 04-14 Ice and Rain Protection, of Chapter 4 - inclusive 2019 NORMAL PROCEDURES; of Bombardier 

Challenger 650 CL-600-2B16 AFM, PSP 

650-1 
Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 51285 

1References to the ‘‘Form 5500 Annual Return/ 

Report’’ may include depending on the context, the 

Form 5500, the Form 5500–SF, and the Form 5500– 

EZ, Annual Return of One Participant (Owners and 

Their Spouses) Retirement Plan (Form 5500–EZ). 

The Form 5500–EZ is a return that is required only 

to satisfy the Code. Form 5500–EZ filers are not 

subject to Title I of ERISA. 

2Estimates are based on 2019 Form 5500 filings. 

DOL notes that welfare plans with less than 100 

participants that are unfunded or insured (do not 

hold assets in trust) are generally exempt from filing 

a Form 5500. Therefore, while DOL estimates there 

are 2.5 million health plans and 885,000 non-health 

welfare plans, respectively only 69,000 and 91,000 

of these plans filed a 2019 Form 5500. 

Benefit Guaranty Corporation (PBGC) 

(collectively ‘‘Agencies’’). Those 

proposed form changes and these 

proposed regulatory amendments 

primarily implement statutory changes 

enacted as part of the Setting Every 

Community Up for Retirement 

Enhancement Act of 2019 (SECURE 

Act). Conforming changes also are being 

proposed to the requirements for the 

summary annual report. The proposed 

regulatory amendments 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: 

Comment due date: Comments are 

due on or before November 1, 2021. 

Proposed applicability dates: If 

adopted, the proposed regulatory 

amendments to implement the SECURE 

Act’s amendment of section 103(g) 

would apply to 2021 plan year 

reporting. All other proposed regulatory 

amendments would apply to reporting 

for plan years beginning on or after 

January 1, 2022. 

ADDRESSES: You may submit written 

comments, identified by RIN 1210– 

AB97, by one of the following methods: 

Federal eRulemaking Portal: http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

Mail: Office of Regulations and 

Interpretations, Employee Benefits 

Security Administration, Room N–5655, 

U.S. Department of Labor, 200 

Constitution Ave. NW, Washington, DC 

20210, Attention: Proposed Revision of 

Annual Information Return/Reports RIN 

1210–AB97. 

Instructions: All submissions must 

include the agency name and Regulatory 

Identifier Number (RIN) for this 

rulemaking. The DOL will share any 

comment submitted in response to this 

regulatory proposal with the IRS and the 

PBGC. To avoid unnecessary 

duplication of effort, the Agencies also 

will treat public comments submitted in 

response to this notice of proposed 

rulemaking as public comments on the 

Notice of Proposed Forms Revisions to 

the extent they include information 

relevant to the proposed regulatory 

amendments. If you submit comments 

electronically, do not submit paper 

copies. Comments will be available to 

the public, without charge, online at 

http://www.regulations.gov and http://

www.dol.gov/agencies/ebsa and at the 

Public Disclosure Room, Employee 

Benefits Security Administration, Suite 

N–1513, 200 Constitution Ave. NW, 

Washington, DC 20210. 

Warning: Do not include any 

personally identifiable or confidential 

business information that you do not 

want publicly disclosed. Comments are 

public records posted on the internet as 

received and can be retrieved by most 

internet search engines. 

FOR FURTHER INFORMATION CONTACT: 

Janet Song or Colleen Brisport Sequeda, 

Office of Regulations and 

Interpretations, Employee Benefits 

Security Administration, U.S. 

Department of Labor, (202) 693–8500 

(this is not a toll-free number), for 

questions related to these proposed 

amendments to the DOL regulations. 

Customer service information: 

Individuals interested in obtaining 

information from the DOL concerning 

Title I of ERISA may call the EBSA TollFree Hotline at 1–866–444–EBSA (3272) 

or visit the DOL’s website 

(www.dol.gov/agencies/ebsa). 

SUPPLEMENTARY INFORMATION: 

A. Legislative and Regulatory Reporting 

Framework 

Titles I and IV of ERISA and the 

Internal Revenue Code (Code), generally 

require pension and other employee 

benefit plans to file annual returns/ 

reports concerning, among other things, 

the financial condition and operations 

of the plan. Filing a Form 5500 Annual 

Return/Report of Employee Benefit Plan 

(Form 5500) or, if eligible, a Form 5500– 

SF Short Form Annual Return/Report of 

Small Employee Benefit Plan (Form 

5500–SF), together with any required 

schedules and attachments (together 

‘‘the Form 5500 Annual Return/ 

Report’’),1 in accordance with their 

instructions, generally satisfies these 

annual reporting requirements. 

ERISA section 103 broadly sets out 

annual financial reporting requirements 

for employee benefit plans under Title 

I of ERISA. The Form 5500 Annual 

Return/Report for Title I purposes is 

promulgated pursuant to DOL 

regulations under the ERISA provisions 

authorizing 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. The Form 5500 

Annual Return/Report, and related 

instructions and regulations, are also 

promulgated under the DOL’s general 

regulatory authority in ERISA sections 

109 and 505. 

In addition to being an important 

disclosure document for plan 

participants and beneficiaries, the Form 

5500 Annual Return/Report is a critical 

enforcement, compliance, and research 

tool for the DOL, the Internal Revenue 

Service (IRS), and the Pension Benefit 

Guaranty Corporation (PBGC) (together 

‘‘Agencies’’). The Form 5500 Annual 

Return/Report is also an important 

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. In the United States, there are 

an estimated 2.5 million health plans, 

an estimated 885,000 other welfare 

plans, and nearly 772,000 private 

pension plans. These plans cover 

roughly 154 million private sector 

workers, retirees, and dependents, and 

have estimated assets of $12.2 trillion. 

The Form 5500 Annual Return/Report 

serves as the principal source of 

information and data available to the 

Agencies concerning the operations, 

funding, and investments of 

approximately 843,000 pension and 

welfare benefit plans that file.2

Accordingly, the Form 5500 Annual 

Return/Report is essential to each 

Agency’s enforcement, research, and 

policy formulation programs, as well for 

the regulated community, which makes 

increasing use of the information as 

more capabilities develop to interact 

with the data electronically. The data is 

also an important 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 for 

monitoring the operations of plans by 

participating employers in multiple 

employer plans and other group 

arrangements, plan participants and 

beneficiaries, and by the public. 

The forms, schedules, and 

instructions, also serve to help the DOL 

carry out its statutory directives under 

sections 506 and 513 of ERISA. 

Specifically, section 506(a) of ERISA 

authorizes the Secretary of Labor to 

coordinate with other Agencies to avoid 

unnecessary expense and duplication of 

functions among Government agencies. 

The Agencies designed the Form 5500 


khammond on DSKJM1Z7X2PROD with PROPOSALS
51286 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 

3The SECURE Act was enacted on December 20, 

2019, as Division O of the Further Consolidated 

Appropriations Act, 2020 (Pub. L. 116–94). 

4See NPFR for detailed discussion of the 

proposed Schedule MEP and Schedule DCG. 

Annual Return/Report so that it could 

be used simultaneously to satisfy annual 

return/report requirements to the 

Agencies, and to help the Agencies 

more effectively and efficiently (from 

both the public’s and the Agencies’ 

perspectives) provide oversight, assist 

with compliance, and enforce the 

provisions of ERISA and the Code. 

Section 506(b) gives the DOL 

responsibility for detecting and 

investigating civil and criminal 

violations of Title I of ERISA. The Form 

5500 Annual Return/Report is one of the 

important tools the DOL uses to carry 

out its responsibility to detect and 

investigate such violations. Section 

513(b)(2) of ERISA specifically directs 

DOL to undertake research studies 

relating to pension plans, including but 

not limited to (A) the effects of this 

subchapter upon the provisions and 

costs of pension plans, (B) the role of 

private pensions in meeting the 

economic security needs of the nation, 

and (C) the operation of private pension 

plans including types and levels of 

benefits, degree of reciprocity or 

portability, and financial and actuarial 

characteristics and practices, and 

methods of encouraging the growth of 

the private pension system. 

Recent legislative and regulatory 

changes affecting multiple employer 

pension plans (MEPs) and similar 

arrangements are spurring the current 

need to update the Form 5500 Annual 

Return/Report and related regulations. 

Specifically, as discussed in more detail 

in the NPFR, the Setting Every 

Community Up for Retirement 

Enhancement Act of 2019 (SECURE 

Act),3 included various provisions 

designed to improve the private 

employer-based retirement system. 

Among other things, the SECURE Act 

included changes designed to simplify 

retirement plan administration for 

certain eligible defined contribution 

plans and added provisions to the Code 

relating to MEPs, including MEPs with 

pooled plan providers, and adopted 

provisions under Title I of ERISA that 

designated these MEPs with pooled plan 

providers as pooled employer plans. 

The NPFR published concurrently in 

this issue of the Federal Register sets 

forth a discussion of form and 

instruction changes that relate to these 

proposed regulations. These proposed 

revisions to the DOL’s reporting 

regulations are needed for the DOL to 

implement the forms revisions proposed 

in the three-agency (DOL, IRS, and 

PBGC) Notice of Proposed Forms 

Revisions (NPFR). 

B. Discussion of the Proposed Revisions 

to 29 CFR Part 2520 

1. Section 2520.103–1(a)(2) 

Section 2520.103–1 generally 

describes the content of the Form 5500 

Annual Return/Report as a limited 

exemption and alternative method of 

compliance for ERISA-covered 

employee benefit plans to satisfy annual 

reporting requirements under Title I. 

The proposal adds a reference to 

‘‘section 202 of the SECURE Act’’ to 

paragraph (a)(2) of § 2520.103–1 to set 

forth the authority for prescribing a 

consolidated report alternative method 

of compliance for certain groups of 

defined contribution retirement plans 

under proposed §§ 2520.103–14 and 

2520.104–51, discussed below, relating 

to defined contribution group (DCG) 

reporting arrangements. 

2. Sections 2520.103–1(b)(1) and 

2520.103–1(c)(1) 

Paragraphs (b) and (c) of § 2520.103– 

1 generally describes the contents of the 

annual report for large plans (generally 

those with 100 or more participants) 

and small plans (generally those with 

fewer than 100 participants). The 

proposal would amend § 2520.103– 

1(b)(1) to add a proposed multiple 

employer plan (MEP) schedule (titled 

Schedule MEP) to the list of schedules 

and attachments required to be included 

with the Form 5500 for large MEPs. A 

parallel update is being proposed to 

§ 2520.103–1(c)(1) to add the Schedule 

MEP as a schedule that small MEPs 

must include with the Form 5500.4

2. Section 2520.103–1(c)(2)(ii) 

Paragraph (c) of § 2520.103–1 

describes the conditions under which 

an eligible small plan (generally with 

fewer than 100 participants) may file the 

Form 5500–SF. The proposal would add 

§ 2520.103–1(c)(2)(ii)(F) to state that 

MEPs, which include pooled employer 

plans, as well as MEPs described in the 

DOL’s regulation at § 2510.3–55 

(association retirement plans and 

professional employer organization 

(PEO) MEPs), are not permitted to use 

the Form 5500–SF regardless of whether 

the plan meets the size and other 

requirements for filing a Form 5500–SF. 

A similar prohibition applies under the 

current regulation to MEWA plans 

required to file the Form M–1 and to 

multiemployer plans. The proposal 

would also add a new § 2520.103– 

1(c)(2)(ii)(G) to provide a similar 

prohibition on filing the Form 5500–SF 

for DCG reporting arrangements. As 

described below in proposed 

§§ 2510.103–14 and 104–51, DCG 

reporting arrangements must file the 

aggregated annual report for 

participating plans using the Form 5500, 

including the schedules and 

attachments that are generally required 

for large retirement plans and Direct 

Filing Entities (DFEs) as well as a 

Schedule DCG (Individual Plan 

Information) for each plan whose 

reporting obligation is being satisfied by 

the DCG filing. 

3. Amendments to § 2520.103–10 

Section 2520.103–10 identifies 

financial schedules that are required to 

be included as part of the Form 5500 

Annual Return/Report depending on the 

characteristics and operations of the 

plan. The listed schedules include the 

‘‘Schedule of Assets Held for 

Investment’’ and ‘‘Schedule of Assets 

Acquired and Disposed within the Plan 

Year.’’ Paragraph (b) of § 2520.103–10 

sets forth the content requirements for 

these schedules. The NPFR being 

published concurrently with this NPRM 

includes proposed additions and 

clarifications to the content of the 

‘‘Schedules of Assets Held for 

Investment’’ and the ‘‘Schedule of 

Assets Acquired and Disposed within 

the Plan Year’’ that are designed to 

improve the consistency, transparency, 

and usability of the information 

reported regarding plan investments. 

The proposed changes to the contents 

and format of the schedule are described 

in detail in the NPFR and also set forth 

in the proposed amendment to the 

regulatory text in paragraph (b)(1)(i) of 

§ 2520.103–10. Currently, filers 

typically file the schedule as a PDF. Of 

particular note, the proposal specifies 

that the schedules would have to be 

filed electronically through the ERISA 

Filing Acceptance System II (EFAST2) 

electronic filing system in a structured 

format in accordance with the EFAST2 

requirements and the Form 5500’s 

instructions. 

4. New §§ 2520.103–14, 2520.104–51 

and 2520.104a–9—Consolidated Form 

5500 as an Alternative Method of 

Compliance for Plans Participating in a 

DCG Reporting Arrangement 

The proposal would amend the ERISA 

annual reporting regulations to 

implement the SECURE Act section 202 

directive to the Secretary of Labor to 

jointly with the Secretary of the 

Treasury provide for a single, aggregated 

Form 5500 option that would satisfy the 

annual reporting obligations for the 

defined contribution pension plans 


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Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 51287 

5The proposal is modeled to some extent on the 

existing annual reporting rules for fully insured 

welfare benefit plans that participate in a group 

insurance arrangement (GIA) and for investment 

entities that file as a Direct Filing Entity. See 29 

CFR 2520.103–2, 2520.103–12, 2520.104–21, and 

2520.104–43. 

6See NPFR for detailed description of the 

proposed Schedule DCG. A separate Schedule DCG 

would be required for each individual participating 

plan. In the case of an existing plan that joins a DCG 

filing arrangement, the identifying information 

regarding the plan and employer/plan sponsor that 

was used in prior filings for the plan must be used 

to identify the plan and the employer/plan sponsor 

on the Schedule DCG for the plan. 

7See NPFR for a more detailed discussion of the 

content requirements for DCG Form 5500. 

participating in the group. Under the 

proposal, several conditions relating to 

the DCG reporting arrangement, the 

participating plans, and the content of 

the Form 5500 filing would have to be 

satisfied before the aggregated filing 

would satisfy the annual reporting 

requirements of the separate 

participating plans. The NPFR describes 

those conditions in detail. The 

conditions also are set forth in a 

proposed new 29 CFR 2520.103–14 and 

2520.104–51.5

With respect to the content 

requirements for a DCG consolidated 

Form 5500 filing, proposed paragraph 

(b) of § 2520.103–14 provides that the 

consolidated DCG report would be 

required to include a Form 5500 

‘‘Annual Return/Report of Employee 

Benefit Plan’’ and various statements or 

schedules based on the characteristics 

and operations of the participating 

plans, including Schedule A (Insurance 

Information), Schedule C (Service 

Provider Information), Schedule D 

(DFE/Participating Plan Information), 

Schedule G (Financial Transaction 

Schedules), Schedule H (Financial 

Information), Schedule R (Retirement 

Plan Information), Schedule DCG 

(Individual Plan Information),6

supplemental schedules referred to in 

29 CFR 2520.103–10 with information 

aggregated for all the participating 

plans, the report and opinion of an 

independent qualified public 

accountant (IQPA) for the DCG trust, 

and an IQPA report and opinion for any 

individual participating plans with 100 

or more participants that would be 

subject to the audit requirement if filing 

a separate Form 5500. This would 

include separate financial statements, if 

such financial statements are prepared 

in order for the independent qualified 

public accountant to form the required 

opinions on the DCG trust required 

under the proposal and the individual 

participating large plans required by 

section 103(a)(3)(A) of the Act and 

§ 2520.103–2(b)(5).7

Proposed paragraph (d) would make 

clear that the DCG reporting 

arrangement must comply with the 

electronic filing requirements that apply 

to all plan filers and direct filing entities 

(DFE). See § 2520.104a–2 and the 

instructions for the Form 5500 Annual 

Return/Report for electronic filing 

requirements. In addition, the proposed 

paragraph emphasizes that the common 

plan administrator of all the 

participating plans that is filing the 

consolidated Form 5500 must maintain 

an original copy, with all required 

signatures, as part of its records (which 

also would be treated as records of each 

of the participating plans). 

The proposed new § 2520.104–51 

would authorize the DCG consolidated 

report as an alternative method of 

compliance under ERISA section 110 for 

defined contribution pension plans that 

participate in DCG reporting 

arrangements. Specifically, filing of a 

complete and accurate consolidated 

Form 5500 for the DCG reporting 

arrangement would relieve the 

administrator of each individual 

participating defined contribution 

pension plan that meets the 

requirements of paragraph (b) of 

§ 2520.104–51 of the obligation to file an 

individual annual report under Title I of 

ERISA. This alternative method of 

compliance would be available only for 

a defined contribution pension plan in 

a plan year in which (i) such plan 

participates in a DCG reporting 

arrangement that meets the conditions 

of paragraph (c) of this proposed 

§ 2520.104–51; and (ii) the DCG 

reporting arrangement has filed with the 

Secretary of Labor in accordance with 

proposed § 2520.104a–9, a complete and 

accurate consolidated annual report that 

meets the content requirements under 

proposed § 2520.103–14. To make clear 

that the DCG reporting arrangement is a 

direct filing entity (DFE) that is 

submitting the aggregated Form 5500 on 

behalf of the participating plans, 

proposed § 2520.104–51(b)(2) provides 

that that the term ‘‘DCG reporting 

arrangement’’ shall be used in place of 

the term ‘‘plan’’ where it appears in 

§§ 2520.103–3, 2520.103–4, 2520.103–6, 

2520.103–8, 2520.103–9, and 2520.103– 

10 and elsewhere in subparts C and D 

of 29 CFR part 2520, as applicable. 

Proposed § 2520.104–51 would also 

provide that the reporting relief for 

individual plans would apply only if all 

plans participating in the DCG reporting 

arrangement (i) are individual account 

plans or defined contribution plans; (ii) 

have—(A) the same trustee (‘‘common 

trustee’’) and same trust holding the 

assets of the participating plans 

(‘‘common trust’’); (B) the same one or 

more named fiduciaries, except the 

proposal would allow for the employer/ 

plan sponsor to be a named fiduciary of 

each employer’s own plan provided that 

the other named fiduciaries under the 

plans are the same and common to all 

plans (‘‘common named fiduciaries’’); 

(C) a designated administrator that is the 

same plan administrator for all the 

participating plans (‘‘common plan 

administrator’’); (D) plan years 

beginning on the same date (‘‘common 

plan year’’); (iii) provide the same 

investments or investment options to 

participants and beneficiaries 

(‘‘common investments or investment 

options’’); (iv) have the investment 

assets held in a single trust of the DCG 

reporting arrangement; (v) not hold any 

employer securities; (vi) be 100% 

invested in certain secure, easy to value 

assets that meet the definition of 

‘‘eligible plan assets’’ (see the 

instructions for line 6a of the Form 

5500–SF), such as mutual fund shares, 

investment contracts with insurance 

companies and banks valued at least 

annually, publicly traded securities held 

by a registered broker dealer, cash and 

cash equivalents, and plan loans to 

participants; (vii) be audited by an IQPA 

or be eligible for the waiver of the 

annual examination and report of an 

IQPA under 29 CFR 2520.104–46, but 

not by reason of enhanced bonding; and 

(viii) may not be a multiemployer plan 

or a MEP (including association 

retirement plans, pooled employer plans 

and professional employer organization 

plans (PEO plans)). 

Proposed § 2520.104–51 would also 

expressly state that the alternative 

method of complying with the Title I 

annual reporting requirements would 

not relieve the administrator of the 

individual participating plans from any 

other requirement of Title I of the Act, 

including, for example, the provisions 

that require that plan administrators 

furnish copies of the summary plan 

description to participants and 

beneficiaries (ERISA section 104(b)(1)), 

furnish certain documents to the 

Secretary of Labor upon request (ERISA 

section 104(a)(6)), and furnish a copy of 

a Summary Annual Report (SAR) to 

participants and beneficiaries of the 

plan (ERISA section 104(b)(3)). 

Proposed § 2520.104–51(c)(2)(iii) 

provides that all plans participating in 

a DCG reporting arrangement must have 

a designated common plan 

administrator that is the same plan 

administrator for all the participating 

plans. The SECURE Act was not explicit 

on whether this was intended to require 

the same person to be the plan 

administrator under ERISA section 


khammond on DSKJM1Z7X2PROD with PROPOSALS
51288 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 

8Under the somewhat similar consolidated 

reporting provisions applicable to GIAs, the GIA is 

permitted to use the IRS Form 5558 to apply for an 

extension of time the GIA consolidated report on 

behalf of the plans participating in the GIA. 

9Regulatory Planning and Review, 58 FR 51735 

(Oct. 4, 1993). 

10 Improving Regulation and Regulatory Review, 

76 FR 3821 (Jan. 18, 2011). 

11 44 U.S.C. 3506(c)(2)(A) (1995). 

12 5 U.S.C. 601 et seq. (1980). 

13 2 U.S.C. 1501 et seq. (1995). 

14Federalism, 64 FR 153 (Aug. 4, 1999). 

15 5 U.S.C. 804(2) (1996). 

3(16)(A) for the purpose of meeting the 

annual reporting requirements for each 

participating plan or was intended to 

require that the same person be the plan 

administrator of each participating plan 

for all purposes under ERISA. The 

proposal requires that the same person 

sign the DCG filing as the plan 

administrator for each participating 

plan. The Department solicits comments 

on whether the final rule should address 

whether individual plans participating 

in a DCG may have a separate statutory 

administrator responsible for other 

duties ERISA assigns to the plan 

administrator (e.g., distribution of 

summary plan descriptions). 

Finally, proposed new § 2520.104a–9 

provides that, as would be the case for 

all of the participating plans in the DCG 

reporting arrangement if they were filing 

individually, the aggregated Form 5500 

for the DCG is due no later than the end 

of the 7th month after the end of the 

common plan year that all the plans 

must have in order to participate in a 

DCG reporting arrangement pursuant to 

the requirement in section 202 of the 

SECURE Act and the proposed 

regulation at § 2520.104–51. Because the 

DCG filing is an alternative to each 

participating plan filing its own Form 

5500, that would mean that each plan 

would have to submit its own IRS Form 

5558 to extend the plan’s due date, and, 

as a consequence, extend the due date 

for the DCG filing. A plan that did not 

submit a timely Form 5558 and that 

participated in a DCG filing that was 

submitted after the 7th month normal 

due date would be treated as having 

filed late. Public comments are 

specifically solicited on how the filing 

extension process should be structured 

for DCGs, including whether DCG 

reporting arrangements should be able 

to file a single Form 5558 to obtain an 

extension for filing the DCG 

consolidated report on behalf of the 

participating plans as an alternative to 

having each individual plan file a Form 

5558 for there to be an extension for the 

reporting group as a whole.8

As noted above, section 110 of ERISA 

permits the DOL 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 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 DOL 

believes that the proposal on DCG 

reporting arrangements meets those 

conditions, especially given the 

statutory direction in the SECURE Act 

to create such a reporting option, but 

also specifically solicits comments on 

the required findings under section 110. 

As also discussed in the NPFR, the 

DOL expects that cost savings for plans 

relying on a DCG filing compared to 

plans filing separately will generally 

require the DCG to collectively exceed 

an aggregate participant count of 100 

participants. In other words, the DOL 

does not expect a DCG filing to provide 

meaningful cost savings for plans 

compared to filing their own annual 

report in the case of DCG arrangements 

with an aggregate participant count of 

under 100 participants. Rather, we 

expect in such cases that the individual 

plans would likely qualify for filing the 

Form 5500–SF and that they will likely 

find it more cost effective to file their 

own separate Form 5500–SF. 

Accordingly, this proposal does not 

include an option under which such a 

‘‘small’’ DCG could file as a small plan. 

Nonetheless, the DOL solicits comments 

regarding the merit of those 

expectations and assumption and 

whether the rules should provide a 

simplified reporting option for ‘‘small’’ 

DCG reporting arrangements. 

5. Section 2520.104b–10 

Section 2520.104b–10 sets forth the 

requirements for the Summary Annual 

Report (SAR) appendix and prescribes 

formats for such reports. The DOL 

proposes updating this section to reflect 

the new filing option for DCG reporting 

arrangements and the addition of the 

new Schedule MEP and Schedule DCG 

to the 5500 Annual Report/Return. The 

proposal includes adding to the existing 

model language in the DOL’s regulation 

new text that plans would use to 

provide a brief description of the plan 

based on the plan characteristic codes 

listed for the plan on the Form 5500, 

including whether it is a defined 

contribution or defined benefit plan, 

and whether the plan is a pooled 

employer plan, another type of multiple 

employer plan, a single employer plan, 

or a plan participating in a DCG 

reporting arrangement, respectively. The 

proposed new regulatory language also 

includes text for plans to use that states 

a copy of the Schedule DCG and the 

Schedule MEP are available on request, 

as applicable. For plans participating in 

a DCG reporting arrangement, the new 

language advises that a statement of the 

aggregate assets and liabilities of all the 

plans in the DCG reporting arrangement 

and accompanying notes, a statement of 

aggregate income and expenses of the 

DCG reporting arrangement and 

accompanying notes, and a copy of the 

audit report filed for the trust of the 

DCG reporting arrangement are available 

on request. Finally, the new SAR 

language would state that a copy of the 

Form 5500 annual report filed for the 

plan or DCG is available online from 

EBSA via a DOL website at 

www.efast.dol.gov. 

C. Applicability Dates 

If adopted, the proposed amendments 

to implement the SECURE Act’s 

amendment of section 103(g) would 

apply to reporting for plan years 

beginning on or after January 1, 2021. 

The other proposed rules, including 

those under section 202 of the SECURE 

Act and structuring the schedules of 

assets held for investment, generally 

would apply to reporting for plan years 

beginning on or after January 1, 2022. 

The NPFR published concurrently in 

this issue of the Federal Register sets 

forth a comprehensive discussion of 

form and instruction changes that relate 

to these proposed regulations. 

D. Regulatory Impact Analysis 

The following is a discussion of the 

DOL’s examination of the effects of this 

rule as required by Executive Order 

12866,9 Executive Order 13563,10 the 

Paperwork Reduction Act of 1995,11 the 

Regulatory Flexibility Act,12 section 202 

of the Unfunded Mandates Reform Act 

of 1995,13 Executive Order 13132,14 and 

the Congressional Review Act.15

1.1. Executive Orders 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, select regulatory approaches 

that maximize net benefits (including 

potential economic, environmental, 

public health and safety effects; 

distributive impacts; and equity). 

Executive Order 13563 emphasizes the 


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16Regulatory Planning and Review, 58 FR 51735 

(Oct. 4, 1993). 

17 In 2019, the plans required to file the Form 

5500 included any benefit plan or a welfare benefit 

plan that covered 100 or more participants as of the 

beginning of the plan year and a Form 5500 filed 

for a master trust investment account (MTIA), 

common/collective trust (CCT), pooled separate 

account (PSA), 103–12 investment entity (103–12 

IE), or GIA. However, fully insured, unfunded, or 

a combination of unfunded/insured welfare plans 

and fully insured pension plans that meet the 

Continued 

importance of quantifying costs and 

benefits, reducing costs, harmonizing 

rules, and promoting flexibility. 

Under Executive Order 12866, 

‘‘significant’’ regulatory actions are 

subject to review by the Office of 

Management and Budget (OMB).16

Section 3(f) of the Executive order 

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 a 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. 

A full regulatory impact analysis must 

be prepared for major rules with 

economically significant effects (for 

example, $100 million or more in any 1 

year), and the Office of Management and 

Budget (OMB) reviews ‘‘significant’’ 

regulatory actions. It has been 

determined that this rule is not 

economically significant within the 

meaning of section 3(f)(1) of the 

Executive order. Pursuant to the terms 

of the Executive order, OMB has 

determined, however, that this action is 

‘‘significant’’ within the meaning of 

section 3(f)(4) of the Executive order. 

Therefore, the DOL has provided an 

assessment of the potential costs, 

benefits, and transfers associated with 

this proposed rule. In accordance with 

the provisions of Executive Order 

12866, this proposed rule was reviewed 

by OMB. Pursuant to the Congressional 

Review Act, OMB has designated this 

proposed rule as not a ‘‘major rule,’’ as 

defined by 5 U.S.C. 804(2). 

1.2. Introduction and Need for 

Regulation 

The Form 5500 Annual Return/Report 

is the principal source of information 

and data available to the Agencies 

concerning the operations, funding, and 

investments of pension and welfare 

benefit plans covered by ERISA and the 

Code. Accordingly, the Form 5500 

Annual Return/Report is essential to 

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 the operations of plans can be 

monitored by plan participants and 

beneficiaries and the general public. 

As discussed earlier in this document 

and the related NPFR publishing 

concurrently with this proposal, the 

SECURE Act included various 

provisions designed to improve the 

private employer-based retirement 

system by seeking to make it easier for 

businesses to offer retirement plans, and 

for individuals to save for retirement, 

through the creation of new plan 

structure and reporting options. These 

new structures will require new annual 

reporting, which has resulted in the 

need to update the Form 5500 Annual 

Return/Report and related regulations. 

Pooled Employer Plans and Other 

MEPs: The SECURE Act amended 

ERISA and the Code to address certain 

MEPs administered by pooled plan 

providers. Under section 3(43) of ERISA 

such plans are called pooled employer 

plans. The proposed regulation would 

add a new Schedule MEP to the Form 

5500 annual report to collect 

information on employers participating 

in MEPs and to gather compliance 

information on pooled employer plans. 

Some of the information on the 

proposed Schedule MEP is currently 

reported on the Form 5500 Annual 

Return/Report by MEPs, but it is 

reported on a nonstandard attachment. 

Only an image or picture of the 

attachment is available through the 

EFAST2 public disclosure function. 

Making the information data-capturable 

by including it on the proposed 

Schedule MEP would improve the 

uniformity and accuracy of the data and 

increase its usability. 

‘‘Defined Contribution Group (DCG) 

Reporting Arrangement’’: Section 202 of 

the SECURE Act directs the Secretary of 

the Treasury and the Secretary of Labor 

(together ‘‘Secretaries’’) to modify the 

returns required under section 6058 of 

the Code and the reports required by 

section 104 of the ERISA, respectively, 

so that all members of a group of 

defined contribution individual account 

plans that meet certain conditions may 

file a single aggregated annual return/ 

report satisfying the requirements of 

both such sections. The SECURE Act 

provides that to constitute an eligible 

group of plans, all of the plans in the 

group must be either individual account 

plans or defined contribution plans, 

must have the same trustee, the same 

named fiduciaries, the same 

administrator, plans years beginning on 

the same date, and must provide the 

same investments or investment options 

to participants and beneficiaries. The 

proposed rule would establish the 

conditions, including the SECURE Act 

conditions, under which filing a single, 

aggregated Form 5500 Annual Return/ 

Report by a ‘‘defined contribution group 

(DCG) reporting arrangement’’ would 

satisfy the individual, annual reporting 

obligations for each of the plans 

participating in the group. As discussed 

in more detail in the NPFR, the 

proposed rule also includes adding a 

new Schedule DCG (Individual Plan 

Information) to provide individual planlevel information for plans covered by a 

DCG consolidated Form 5500 filing. 

In addition, although not directly 

implementing SECURE Act changes, 

some of the changes being proposed in 

this document are intended to ensure 

that annual reporting by pooled 

employer plans, other MEPs, and DCGs 

provides appropriate financial and 

operational transparency and 

accountability. Certain proposed 

changes would benefit workers in plans 

other than pooled employer plans and 

DCGs would apply more broadly, e.g., 

improving the quality of financial 

reporting. Other changes being proposed 

relate to efforts to improve compliance 

and oversight with respect to the Code 

issues and defined benefit plans subject 

to the PBGC insurance program under 

Title IV of ERISA. 

Schedule H, Schedule of Assets Held 

for Investment, and Schedule of Assets 

Acquired and Disposed of Within the 

Year: As discussed in the NPFR, the 

Agencies are proposing structural, data 

element, and instruction changes to the 

current Schedule H, Line 4i Schedules 

of Assets. Current Line 4i would be 

broken into two items to identify the 

existing schedules separately: Line 4i(1) 

would identify the Schedule of Assets 

Held for Investment at End of Year, and 

Line 4i(2) would identify the Schedule 

of Assets Acquired and Disposed of 

Within Year (together ‘‘Schedules of 

Assets’’). The current regulations and 

instructions require most large plans 

and DFEs to attach the Schedules of 

Assets to the Form 5500, Schedule H.17


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requirements of 29 CFR 2520.104–44 are exempt. If 

a Schedule I was filed for the plan for the 2018 plan 

year or a Form 5500–SF and the plan covered fewer 

than 121 participants as of the beginning of the 

2019 plan year, the Schedule I may be completed 

instead of a Schedule H. Plans that file a Form 

5500–SF for the 2019 plan year are not required to 

file a Schedule H for that year. 

18Private Pensions: Targeted Revisions Could 

Improve Usefulness of Form 5500 Information, at 

17. 

19 Id. 

20See EBSA Needs to Provide Additional 

Guidance and Oversight to ERISA Plans Holding 

Hard-to-Value Alternative Investments at 17, 

September 30, 2013. https://www.oig.dol.gov/ 

public/reports/oa/2013/09-13-001-12-121.pdf; 

Private Pensions: Targeted Revisions Could 

Improve Usefulness of Form 5500 Information, at 

37. June 5, 2014. https://www.gao.gov/products/ 

gao-14-441. 

21See August 23, 2010 Comment Letter from 

Ryan Alfred, President, BrightScope, Inc. Re: 

Proposed Extension of Information Collection, Form 

5500 http://www.reginfo.gov/public/do/ 

PRAViewDocument?ref_nbr=201009-1210-002). 

22PGBC 2018 Pension Insurance Data Tables. 

https://www.pbgc.gov/sites/default/files/2018_

pension_data_tables.pdf. 

They are the only place on the Form 

5500 Annual Return/Report where plans 

are required to list individual plan 

investments identified by major 

characteristics, such as issue, maturity 

date, interest rate, cost and current 

value. As such, they are the only part of 

the Form 5500 Annual Return/Report 

useful to evaluate the year-to-year 

performance, liquidity, and risk 

characteristics of a plan’s individual 

investments. 

The current reported information 

suffers from several shortcomings. First, 

filers currently submit this information 

as non-standard attachments to filers’ 

electronic Form 5500 Annual Return/ 

Report filings, so only an image or 

picture of the attachments is available 

through the EFAST2 public disclosure 

function. A survey panel of plan 

sponsors, service providers, 

representatives of plan participants, and 

researchers was conducted in 2014 as 

part of a Government Accountability 

Office (GAO) report; 11 of 31 

respondents indicated that having no 

standard reporting format was a very or 

extremely significant challenge. GAO 

reported that attachments to the form 

may be as long as 400 pages, making it 

particularly difficult for users to find 

information.18 Second, filers do not 

always provide the Line 4i Schedules of 

Assets in the same place in each annual 

return/report. For example, the Line 4i 

Schedules of Assets are often 

incorporated in the larger audit report of 

the plan’s IQPA that itself is filed as a 

nonstandard attachment to the Form 

5500 Annual Return/Report. Third, the 

schedules do not require a standardized 

method for identifying and describing 

assets on the Line 4i Schedules. 

Different filings may identify the same 

stock or mutual fund with various 

different names or abbreviations. In the 

aforementioned GAO survey, most 

researchers indicated that a lack of a 

standard reporting format or unique 

identifier for plan assets was a major 

challenge, while representatives of plan 

sponsors and service providers did 

not.19

Data capturability of the Line 4i 

Schedules of Assets would make it 

much easier and more efficient to 

monitor plan holdings as computer 

programs can read and analyze the data 

much more efficiently. Currently, 

entities expend considerable resources 

collecting the data and presenting it in 

a usable format, to which they then sell 

access. Making the information data 

capturable at the submission stage of the 

process would be more cost effective as 

it removes the need for a second entity 

to gather the information, and allow 

more entities access to the data at a 

lower overall cost. The DOL’s Office of 

Inspector General (‘‘DOL–OIG’’) and the 

GAO have both recommended that 

EBSA implement changes to create more 

detailed and structured Schedules of 

Assets.20 It would also allow the 

Agencies and the interested public, 

including the participants and 

beneficiaries in impacted plans, to 

better monitor a larger number of 

pension plans and their asset 

allocations. A number of private entities 

have been using the information 

reported on Line 4i Schedule of Assets 

Held for Investment in larger pension 

plan Form 5500 Annual Return/Report 

filings into data-capturable information 

and have been using it to compare plan 

investment menus and investment 

allocations. The DOL believes this 

development is evidence that plans 

sponsors and their service providers are 

interested in having access to these data. 

For example, one company that uses the 

Schedules of Assets data sent a letter to 

DOL stating that they believe that the 

information on the Form 5500 Annual 

Return/Report is very useful in ‘‘helping 

the agency understand the performance 

and design of retirement plans in the 

market place’’ and that the data 

availability fosters ‘‘third party data 

collection and evaluation efforts that in 

turn help protect retirement plan 

participants.’’ 21 Plan sponsors can use 

this information to see better how their 

investment menus compare to similarly 

situated plans and service providers use 

this information to identify plans with 

underperforming investments in order 

to attract new business. This can lead to 

more competition and improved plan 

performance, which would ultimately 

benefit plan participants and 

beneficiaries. 

Defined Benefit Pension Plan/ERISA 

Title IV Additions: The Form 5500 

collects information from defined 

benefit pension plans in Schedules MB, 

SB, and R. The PBGC has determined 

that it needs more detail in these 

schedules accurately to project defined 

benefit pension plan and PBGC 

insurance program liabilities. The 

PBGC’s proposed changes to the 

information required to be reported by 

PBGC-insured defined benefit plans 

would remedy the deficiencies of the 

current Form 5500 filings and better 

protect participants. There are 23,371 

single employer defined benefit plans 

and 1,373 multiemployer defined 

benefit plans that are covered by the 

PBGC and would be impacted by these 

changes.22

Internal Revenue Code Compliance 

Additions: Prior to 2009, Schedule E, 

ESOP Annual Information, Schedule P, 

Annual Return of Fiduciary of 

Employee Benefit Trust, and Schedule 

T, Qualified Pension Plan Coverage 

Information, were required as part of the 

annual return under section 6058(a) of 

the Code and associated regulations, but 

they were not information collections of 

the DOL or the PBGC. Beginning in 

2009, DOL mandated electronic filing of 

Form 5500, Annual Return/Report of 

Employee Benefit Plan, and Form 5500– 

SF, Short Form Annual Return/Report 

of Small Employee Benefit Plan. At that 

time limitations on the IRS’ authority to 

require electronic filing of annual 

returns resulted in the removal of the 

‘‘IRS-only’’ schedules from the Form 

5500 filing requirements. The lack of 

information from these schedules has 

negatively impacted the IRS’s ability to 

focus effectively on specific factors of 

noncompliance when selecting 

retirement plans for examination. Rather 

than reinstating the Schedules E, P, and 

T, the IRS is proposing to add new 

questions to the 2022 Form 5500 

designed to assist the IRS in identifying 

plans that are non-compliant relating to 

Code section 410(b) coverage, Code 

section 401(a)(4) non-discrimination, 

and Code section 401(k) nondiscrimination testing. Additionally, 

IRS is proposing to add a question that 

would help it identify whether adopters 

of pre-approved plans have been 

updated timely for changes in the law. 

Affected Entities 

Major portions of this proposal relate 

to SECURE Act statutory changes that 


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23Employee Benefits Security Administration. 

‘‘Private Pension Plan Bulletin, Abstract of 2018 

Form 5500 Annual Report.’’ (2020). The 2018 Form 

5500 data set is the most recent available because 

Form 5500 filings for the 2018 reporting year 

generally are not required to be filed for calendar 

year plans until July through October of 2019, and 

the deadline for fiscal year plans may extend well 

into 2020. The User Guide for the 2018 Form 5500 

Private Pension Plan Research File includes a 

discussion of the creation of the annual data set and 

timing of data extraction. See www.dol.gov/sites/ 

dolgov/files/EBSA/researchers/data/retirement/ 

pension-user-guide-2018.pdf (Accessed July 21, 

2021). 

24 Id. 

25See, e.g., 2020 Form 5500 instructions at 14. 

26Employee Benefits Security Administration. 

‘‘Private Pension Plan Bulletin, Abstract of 2018 

Form 5500 Annual Reports.’’ (June 2020). 

27National Association of Professional Employee 

Organizations, Industry Statistics (Accessed 6/28/ 

2021), https://www.napeo.org/what-is-a-peo/aboutthe-peo-industry/industry-statistics. NAPEO had 

previously reported 904 PEOs but revised its 

methodology. An explanation of the revision is 

included on the NAPEO website. See The PEO 

Industry Footprint 2021, Laurie Bassi and Dan 

McMurrer, McBassi & Company at page 4 (May 

2021) (available at www.napeo.org/docs/defaultsource/white-papers/2021-white-paperfinal.pdf?sfvrsn=6dde35d4_2. 

28 85 FR 72934, 72949 (Nov. 16, 2016). 

29 Department of Labor. Form PR. https://

www.dol.gov/agencies/ebsa/employers-andadvisers/plan-administration-and-compliance/ 

reporting-and-filing/form-pr. 

(1) recognized a new type of multiple 

employer plan under Title I of ERISA 

called pooled employer plans; and (2) 

called for the Secretaries to establish a 

new consolidated annual report for 

certain groups of defined contribution 

pension plans (herein called DCG 

reporting arrangements). The SECURE 

Act amendments first authorized pooled 

employer plans to begin operating 

beginning on January 1, 2021; even early 

adopted pooled employer plans 

generally will not file a Form 5500 

before July 2022. Similarly, DCG 

reporting arrangements are a new filing 

option starting with the 2022 plan year; 

such consolidated filings will not begin 

until July 2023. Thus, there is no 

historical Form 5500 information that 

the DOL can use reliably to evaluate the 

number of affected entities. As a result, 

there is significant uncertainty regarding 

the DOL’s ability to measure costs and 

benefits that may result from this 

proposal. The DOL nonetheless is 

presenting below an overview of 

potentially affected entities and an 

approach to evaluating the possible 

impacts of this proposal. In evaluating 

costs and benefits, the DOL took 

account of the fact that various types of 

plans could be affected by more than 

one proposed revision. DOL is also 

soliciting data relevant to an evaluation 

of costs and benefits and comments on 

alternative methodologies and 

assumptions for evaluating the costs and 

benefits. 

Defined Contribution Pension Plans: 

In 2018, there were 675,007 defined 

contribution plans with 105.8 million 

total participants and 83.4 million 

active participants. Plans with fewer 

than 100 total participants (small plans) 

account for 87.4 percent of plans.23

Defined Contribution Group (DCG) 

Reporting Arrangement: As this is a new 

type of annual reporting method, the 

DOL does not have data on how many 

DCGs would be created nor the number 

of plans that would choose to satisfy 

their individual filing obligations by 

meeting the requirements for being part 

of a DCG, including the filing of a 

consolidated Form 5500 Annual Return/ 

Report by the common plan 

administrator. We note that in 2018 

there were 499,234 small defined 

contribution plans that reported the 

plan characteristic code 3D in their 

Form 5500–SF to indicate that they are 

intended to operate as pre-approved 

plans under sections 401, 403(a), and 

4975(e)(7) of the Code. The DOL 

assumes that a DCG reporting option 

may suit their existing plan and 

business models and that, therefore, 

some fraction of these plans may find it 

advantageous to join a DCG for filing 

purposes. 

Defined Benefit Pension Plans: In 

2018, there were 46,869 defined benefit 

plans with 34.0 million total 

participants and 13.1 million active 

participants. There were 45,275 singleemployer defined benefit plans and 

1,388 multiemployer defined benefit 

plans.24

Multiple Employer Pension Plans: A 

MEP, for Form 5500 reporting purposes, 

generally is a retirement plan 

maintained by two or more employers 

that are not members of the same 

controlled group or affiliated service 

group under Code section 414(b), (c), or 

(m), and which is not a multiemployer 

plan.25 In 2018, there were 4,730 MEPs 

filing a Form 5500, of which 207 were 

defined benefit pension plans and 4,523 

were defined contribution pension 

plans. There were 6.9 million 

participants reported as covered by 

these plans.26 The proposal, if finalized, 

would establish a new Schedule MEP to 

report information specific to pension 

MEPs. While the new Schedule MEP 

would retain ERISA section 103(g) 

participating employer information that 

MEPs must currently file as a nonstandardized attachment, it also would 

add the SECURE Act requirement for 

pension MEPS to report aggregate 

account balances information for each 

participating employer in the MEP. 

Schedule MEP would also include 

questions intended to focus on SECURE 

Act issues and compliance for pooled 

employer plans. 

Association Retirement Plan. An 

association retirement plan is a defined 

contribution MEP, sponsored by a bona 

fide group or association of employers 

that meets the conditions under 29 CFR 

2510.3–55(b). The DOL does not have 

information on how many reporting 

MEPs are association retirement plans 

or otherwise to estimate the number of 

association retirement plans (a sub-class 

of MEPs) that currently exist. 

Professional Employer Organizations 

(PEOs) Plan: A PEO MEP is a defined 

contribution pension plan sponsored by 

a bona fide PEO that meets the 

conditions under 29 CFR 2510.3–55(c). 

According to the National Association 

of Professional Employer Organizations, 

there are 487 PEOs in the United 

States.27 The DOL does not have 

information on how many PEOs 

currently meet the conditions under 29 

CFR 2510.3–55(c) to sponsor defined 

contribution MEPs for their clients, but 

assumes a substantial percentage of 

PEOs do sponsor MEPs, including 

defined contribution MEPs. 

Pooled Employer Plans. The SECURE 

Act amended section 3(2) of ERISA and 

added section 3(43) to ERISA to 

authorize a new type of ERISA covered 

defined contribution MEP referred to as 

a ‘‘pooled employer plan’’ to be 

operated by a ‘‘pooled plan provider.’’ 

In its 2020 final rule on Registration 

Requirements for Pooled Plan Providers, 

the DOL noted the uncertainty 

surrounding the number of pooled 

employer plans that could be created 

based on the final rule, the number of 

employers that would participate in 

such plans, and the number of 

participants and beneficiaries that 

would be covered by them.28

Approximately 50 pooled plan 

providers have filed an initial Form PR 

Pooled Plan Provider Registration (Form 

PR) and registered with the DOL.29

The DOL does not have 

comprehensive data on how many 

employers are participating in pooled 

employer plans or the number of 

participants covered by the plans until 

the pooled employer plans file their first 

Forms 5500 in 2022 for their 2021 

reporting year. The DOL attempted to 

review available public information on 

pooled employer plans by looking at 

information included in the filed Forms 

PR, and by examining news articles and 

statements on the pooled plan 

provider’s websites. That review 

indicated that that there are a variety of 

approaches in how pooled employer 

plans are offered, and a variation in the 


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30 IRS website at https://www.irs.gov/retirementplans/pre-approved-retirement-plans (last updated 

Apr 2, 2021). 

31These figures are based on calculations from 

2018 Form M–1 filing data. 

number of employers that have joined a 

pooled employer plan. While pooled 

plan providers are required to update 

the Form PR to advise the DOL and the 

IRS about the establishment and offering 

of new pooled employer plans, the Form 

PR does not collect information on the 

number of employers participating in 

their pooled employer plans or the 

number of employees covered by each 

plan. One pooled plan provider was 

reported in another source as having 

2,000 employers joined their pooled 

employer plan, whereas other providers 

reported five to 10 employers had joined 

their pooled employer plans. As part of 

the request for comments, the DOL is 

seeking information on the number of 

employers that have already joined a 

pooled employer plan and the number 

of employees covered by the plan in 

total and broken down by employer. 

Pre-approved Pension Plans: These 

are plans that reported plan 

characteristics code 3D when filing the 

Form 5500 Annual Return/Report. The 

code 3D indicates ‘‘A pre-approved plan 

under sections 401, 403(a), and 

4975(e)(7) of the Code that is subject to 

a favorable opinion letter from the IRS.’’ 

A pre-approved retirement plan is a 

plan offered to employers by financial 

institutions and others that are 

authorized to sponsor pre-approved 

plans. The pre-approved plan provider 

then makes the IRS-approved plan 

available to adopting employers. 

Providers must make reasonable and 

diligent efforts to ensure that adopting 

employers of the plan have actually 

received and are aware of all plan 

amendments and that such employers 

complete and sign new plans when 

necessary.30 Of the 611,568 defined 

contribution pension plans that reported 

code 3D, 544,090 are reported as small 

plans, as they report having fewer than 

100 participants each. Of these small 

defined contribution plans, 499,234 file 

the Form 5500–SF, cover approximately 

10.0 million participants, and hold 

approximately $0.6 trillion in assets. 

The DOL expects that Form 5500–SF 

small pension plan filers are the most 

likely candidates to join a DCG or a 

pooled employer plan. The DOL lacks 

information on the number of plans, 

whether or not currently Form 5500–SF 

eligible filers, that would join a DCG or 

a pooled employer plan. The DOL is 

seeking comment on this issue. 

Multiple Employer Welfare 

Arrangement (MEWA): A MEWA is 

defined in ERISA section 3(40)(B) 

generally as an employee welfare benefit 

plan or any other arrangement, which is 

established or maintained for the 

purpose of offering or providing welfare 

benefits to the employees of two or more 

employers, or to their beneficiaries. For 

purposes of this definition, two or more 

trades or businesses, whether or not 

incorporated, are deemed a single 

employer if such trades or businesses 

are under common control. Section 

3(40) excludes from the definition of the 

term MEWA any plan or arrangement 

established or maintained under or 

pursuant to a collective bargaining 

agreement, or by a rural electric 

cooperative or rural telephone 

cooperative association. MEWAs that 

offer or provide coverage for medical 

benefits are generally required to file the 

Form M–1. In the 2018 calendar year, 

there were 640 total plan MEWAs that 

filed a Form M–1 with 2.0 million total 

participants. There were 47 non-plan 

MEWAs based on Form M–1 filings.31

Plans affected by change in 

participant-count methodology for 

determining large plan versus small 

plan status and related filing 

requirements. As discussed in the 

NPFR, the Agencies are proposing a 

change in the methodology for defined 

contribution pension plans to determine 

whether the plan is a ‘‘large plan’’ 

(generally covers 100 or more 

participants) for purposes of Form 5500 

annual reporting requirements, 

including the requirement to include an 

IQPA report and other schedules 

generally applicable to large pension 

plans. The plan size measure for this 

annual reporting distinction is based on 

the total number of participants at the 

beginning of the plan year and expressly 

includes employees eligible to 

participate in a Code section 401(k) plan 

(‘‘401(k) plan’’) even if the employees 

has not elected to participate and does 

not have an account balance. The 

proposed change would use a 

participant count based on the number 

of participants at the beginning of the 

year with an account balance. Current 

Form 5500 filings collect the number of 

participants at the end of the year with 

a balance, and does not currently collect 

such a figure for the beginning of the 

plan year. Accordingly, we used the end 

of year number of participants with a 

balance to estimate the number of plans 

impacted by this change. The actual 

number of plans effected could be 

higher or lower, depending on a plan’s 

dynamics, but for plans that are 

growing, using the end of year number 

as a proxy for the beginning of year 

number could lead to an overestimate of 

the number of affected plans. Using the 

current definitions of large and small 

plans, there are 84,754 large defined 

contribution plans and 590,254 small 

defined contribution plans. Using the 

number of participants at the end of the 

year with an account balance as a proxy 

for the new proposed methodology, 

there are 65,312 large defined 

contribution plans and 609,695 small 

defined contribution plans. This would 

result in an estimated 19,442 defined 

contribution plans that, if the 

regulations are finalized as proposed, 

would be able to file as small plans 

instead of large ones and would 

experience cost savings, including due 

to being able to satisfy the conditions for 

being exempt from the IQPA report and 

from including the Schedules of Assets 

as part of their annual report. 

Benefits 

Benefits of Changes for Pooled 

Employer Plans. The SECURE Act 

established a new type of ERISAcovered defined contribution pension 

plan, the pooled employer plan, that is 

established and maintained by a pooled 

plan provider that meets the conditions 

of the statute. By creating the pooled 

employer plan structure, the SECURE 

Act permitted multiple unrelated 

employers to participate without the 

need for any common interest among 

the employers (other than having 

adopted the plan). As discussed above, 

pooled employer plans need to provide 

ERISA section 103(g) participating 

employer information, as well as certain 

basic information regarding the pooled 

plan provider. Potentially increased 

reporting costs for those employers 

choosing to offer retirement benefits to 

their employees through participating in 

a pooled employer plan would be offset 

by other cost reductions or business 

benefits relative to not having 

administer an individual plan as further 

discussed below. 

By participating in a pooled employer 

plan, employers could minimize their 

fiduciary responsibilities for ongoing 

administration and operation of the 

plan. Employers could benefit from 

reduced risk and liability because the 

pooled plan provider would bear most 

of the administrative and fiduciary 

responsibility for operating the pooled 

employer plan, including hiring and 

monitoring the 3(38) investment 

manager. Similarly, because the pooled 

plan provider handles the 

administrative tasks such as participant 

communications, plan recordkeeping, 

submitting the Form 5500 and 

complying with plan audits, this could 

increase the operating efficiency for 

participating employers. Also, as they 


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32 85 FR at 72949–72950. 

33Szapiro, Aron, ‘‘Pooled Employer Plans: 

Paperwork or Panacea.’’ Accessible at https://

www.morningstar.com/lp/paperwork_or_panacea. 

34 VanDerhei, Jack. ‘‘How Much More Secure 

Does the SECURE Act Make American Workers: 

Evidence from EBRI’s Retirement Security 

Projection Mode.’’ EBRI Issue Brief. No 501 (2020). 

VanDerhei refers to MEPs in which the members do 

not need to share a common interest as ‘‘Open 

MEPs.’’ (Available at https://www.ebri.org/docs/ 

default-source/ebri-issue-brief/ebri_ib_501_secure20feb20.pdf?sfvrsn=db6f3d2f_4 (Accessed July 21, 

2021.)). 

are expected to be professional plan 

providers, it is anticipated that a pooled 

plan provider, relative to a small 

employer, would ensure that more 

accurate and complete data is reported 

to the DOL on the Form 5500. Further, 

as discussed in the regulatory impact 

analysis to the regulation establishing 

the Form PR, pooled employer plans 

generally would benefit from scale 

advantages, including the ability to 

obtain lower fees for investment 

options.32 The marginal costs for pooled 

employer plans would diminish and 

pooled plan providers would spread 

fixed costs over a larger pool of member 

employers and employee participants, 

creating direct economic efficiencies. 

Szapiro’s research finds that the peremployer cost of a large MEP can be 

lower than the cost of a small single 

employer plan.33 Specifically, the study 

finds that a MEP with $125 million and 

80 participating companies cost 78 basis 

points, whereas a single-employer plan 

with $1.5 million cost 111 basis points. 

Thus, compared to single-employer 

plans, MEPS can be a more cost-efficient 

option for small employers. The 

increased economic efficiency may 

result in small businesses being able to 

compete more easily with larger 

companies in recruiting and retaining 

workers due to a competitive employee 

benefit package. Finally, pooled 

employer plans may enable participants 

to achieve better retirement outcomes. 

VanDerhei’s research finds that the 

adoption of a MEP in which the 

members do not need to share a 

common interest, other than 

participating in the same plan, with a 25 

percent opt-out rate among employees, 

results in an overall 1.4 percent 

reduction in the retirement savings 

deficit, compared to when a MEP is not 

adopted.34 The study also finds a 3.1 

percent reduction in the retirement 

savings deficit for individuals working 

for employers with fewer than 100 

employees and 3.3 percent reduction in 

the retirement savings deficit for 

individuals working for employers with 

100 to 500 employees. 

Benefits of Establishing the Proposed 

Schedule MEP. A benefit of the 

proposed Schedule MEP would provide 

a unified vehicle to report information 

related to new SECURE Act provisions, 

including information unique to MEPs. 

The participating employer information 

collected pursuant to section 103(g) of 

ERISA would also be data capturable 

and available at publicly viewable 

website containing images of the Form 

5500 and related data sets. That public 

data would help protect plan 

participants and beneficiaries by 

allowing for improved analysis for 

oversight and research purposes by the 

government, the regulated community, 

and other interested stakeholders. 

Benefits of DCGs. The proposal would 

update Form 5500 annual reporting 

requirements to establish requirements 

pursuant to section 202 of the SECURE 

Act for a consolidated return/report to 

provide eligible individual account 

plans with an alternative method of 

compliance with annual reporting 

requirements that would otherwise 

mandate a separate annual report for 

each plan. The consolidated reporting 

option for defined contribution pension 

plans also allows for more choice and 

flexibility in the reporting of 

information to the government. Eligible 

plans can choose, based on benefits and 

preferences, if they want to continue 

with the plan filing as individual plan 

or as part of a DCG. Plans whose 

individual reporting obligations would 

be satisfied by a DCG annual return/ 

report filing may see a reduction in 

reporting costs depending on their 

circumstances. 

The proposal includes the proposed 

Schedule DCG to provide individual 

plan-level information for those defined 

contribution pension plans whose 

annual reporting requirement would be 

satisfied by a DCG’s consolidated filing. 

The uniformity of the DCG arrangement 

structure and the benefits of 

consolidated reporting may reduce the 

complexity and administrative burden 

of plans. Also, by having a common 

plan administrator who is expected to 

be a professional service provider filing 

on behalf of a group, it may increase the 

likelihood that more accurate and 

complete data is reported to the DOL. 

As a result, there may be an increase in 

annual reporting compliance and 

compliance with applicable ERISA 

requirements in general. Additionally, 

the Schedule DCG would help the 

Agency compare individual plan 

participation and aggregate asset and 

liability information from year-to-year. 

The Schedule DCG would include many 

of the questions that are currently 

required on the Form 5500–SF, and for 

large plans, the Schedule H questions 

regarding the report of an IQPA, as well 

as an IQPA report. While this 

requirement reduces the cost saving of 

filing as a DCG, the DOL and the IRS 

(collectively ‘‘Departments’’) believe the 

information requested is consistent with 

the SECURE Act provision permitting 

the Departments to collect whatever 

plan level information is needed to 

perform adequate oversight and vital to 

provide to participants, beneficiaries, 

and the Departments information 

needed to adequately monitor the plans 

and keep track of their assets from year 

to year. 

In light of changes in the financial 

environment and increasing concern 

about investments in hard-to-value 

assets and alternative investments, the 

proposed requirement that plans 

participating in DCGs must have 

investments that meet the currently 

applicable ‘‘eligible plan investment’’ 

criteria for filing a Form 5500 is 

important for regulatory, enforcement, 

and disclosure purposes. The proposal 

would also add trust questions to the 

Form 5500, the Form 5500–SF, and, the 

IRS Form 5500–EZ, regarding the name 

of the plan’s trust, the trust’s employer 

identification number (EIN), the name of 

the trustee or custodian, and the 

trustee’s or custodian’s telephone 

number. This information will enable 

the Agencies to focus more efficiently 

on compliance concerns for retirement 

plan trusts, including those for pooled 

employer plans and DCG reporting 

arrangements. 

Changes to Method of Determining 

Small Plan Status for Certain Filing 

Exemptions and Requirements: As 

described in the NPFR, the proposal 

would change the current method of 

counting covered participants for 

purposes of determining when a defined 

contribution plan may file as a small 

plan and whether the plan may be 

exempt from the IQPA audit 

requirements generally applicable to 

large defined contribution pension 

plans. Under the proposal, defined 

contribution pension plans, including 

401(k) plans and 403(b) plans, would 

determine whether they have to file as 

a large plan and whether they have to 

attach an IQPA report based on the 

number of participants with account 

balances as of the beginning of the plan 

year. Currently, the IQPA requirement 

includes the total number of eligible 

participants at the beginning of the plan 

year, even if the participant is not 

making contributions, receiving 

employer contributions, or maintaining 

an account in the plan. Further, some 

stakeholders have suggested that section 

112 of the SECURE Act could make it 

even more likely that a plan with a 

small number of active participants 


khammond on DSKJM1Z7X2PROD with PROPOSALS
51294 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 

35 GAO Targeted Revisions Could Improve 

Usefulness of Form 5500 Information, at 12. 

36 Id. 

37EBSA Needs to Provide Additional Guidance 

and Oversight to ERISA Plans Holding Hard-ToValue Alternative Investments, Department of Labor 

Office of Inspector General Report Number: 09–13– 

001–12–121 at 4, 18, and 19. 

38These calculations are based on internal 

Department calculations based on 2018 Form M–1 

filings. See the affected entities section for more 

information. 

might be required to bear the cost of an 

audit based on eligible, but not 

participating employees being counted 

toward the audit threshold. Specifically, 

because section 112 provides that, 

beginning January 1, 2024, long-term, 

part time workers that have reached the 

plan’s minimum age requirement and 

have worked at least 500 hours in each 

of three consecutive 12-months period 

must be permitted to make elective 

contributions to a section 401(k) 

qualified cash or deferred arrangement, 

there could be more employees eligible 

to participate that would elect not to do 

so. This change in counting 

methodology would result in not 

counting, for this annual reporting 

purpose, those long-term, part time 

workers who are eligible to make 

elective contributions to a 401(k) plan, 

but have not in fact elected to 

participate in the plan. The DOL expects 

that excluding from the participant 

count participants who are eligible to 

participate but do not have an account 

balance at any time during the plan year 

will reduce expenses of establishing and 

maintaining a retirement plan, and as a 

consequence, encourage more 

employers to offer workplace-based 

retirement savings plans to their 

employees. 

Improving Consistency and 

Enhancing Usability of Data Filed on 

the Schedules of Assets. The financial 

information reported on the Form 5500 

Annual Return/Report, particularly the 

asset/liability statement, contained in 

the current Schedule H (Large Plan 

Financial Information), Schedule I 

(Small Plan Financial Information), as 

well as the more recently established 

Form 5500–SF, is based on data 

elements that have remained largely 

unchanged since the Form 5500 Annual 

Return/Report was established in 1975. 

Many investments in alternative and 

hard-to-value assets and held in 

collective investment funds do not fit 

squarely into any of the existing 

reporting categories on data captured 

financial schedules filed with the Form 

5500 (Schedule H for large plans and 

Schedule I for small plans). The GAO 

has expressed concerns that many 

investments with widely varying risk, 

return, and disclosure considerations 

are often reported in the catchall ‘‘other 

plan asset’’ category.35 GAO also noted 

that the plan asset categories on the 

Schedule H are not representative of 

current plan investments, and provide 

little insight into the investments 

themselves, the level of associated risk, 

or structures of the investments.36 The 

DOL–OIG have also recommended that 

the Agencies revise the Form 5500 

Annual Return/Report to improve 

reporting of hard-to-value assets and 

alternative investments.37 As part of 

their overall evaluation of how best to 

structure financial reporting for pooled 

employer plans, MEPs, and DCG 

reporting arrangements to maximize 

usable data while limiting burden 

increases, the Agencies decided, as 

discussed in detail earlier in this 

document and the Notice of Proposed 

Forms Revisions published 

simultaneously, to propose format, data 

element and instruction changes to the 

Schedule H, Line 4i Schedule of Assets 

Held for Investment and the Schedule of 

Assets Acquired and Disposed of Within 

the Plan Year. Although driven by an 

interest in ensuring transparency and 

financial accountability for pooled 

employer plans, MEPs, and DCG 

reporting arrangements, the rationales 

for the changes applied more generally 

to large pension and retirement savings 

plans. These changes apply to large 

plans required to file the Schedules of 

Assets and would not increase the 

annual reporting burden for small plans. 

The proposed changes to the Schedule 

H Line 4i Schedules of Assets, in 

addition to better meeting the needs of 

the Agencies, other government users, 

and other end users of the data, should 

serve to address the shortcomings 

identified in these reports. The basic 

objective of general financial reporting 

is to provide information about the 

reporting entity for the Agencies’ 

enforcement, research, and policy 

formulation programs, for other Federal 

agencies, Congress, and the private 

sector in assessing employee benefit, 

tax, and economic trends and policies; 

and for plan participants and 

beneficiaries and the general public in 

monitoring employee benefit plans. 

Making consistent the financial 

reporting instruments would bring 

greater transparency to plan 

transactions, which would enhance the 

efficiency of the Agencies’ enforcement 

efforts. Specifically, the Agencies would 

be better able to focus their enforcement 

efforts, which will reduce the number of 

investigations involving plans that are 

not engaging in problematic activities. 

Additionally, ERISA Section 513(a) 

authorizes and directs the Secretary of 

Labor and EBSA to conduct a research 

program on employee benefits. The 

Form 5500 Annual Return/Report is one 

of the leading sources of data used in 

this research program. Making uniform 

and receiving in a data searchable way 

the financial information reported on 

the Form 5500 Annual Return/Report 

would improve the quality of the 

research conducted by internal and 

external researchers. This improved 

research, in turn, would improve the 

quality of policy decisions made by 

DOL and other governmental 

policymakers that rely on the Form 5500 

Annual Return/Report data. 

Benefits of Maintaining Participating 

Employer Information for MEWAs and 

Expanding It to Non-Plan MEWAs that 

Provide Medical Benefits. The proposal, 

as described in the NPFR, would add 

new questions to the Form M–1 and 

instructions to require MEWAs (plan 

and non-plan) that offer or provide 

coverage for medical benefits to provide 

multiple employer participating 

employer information on the Form 

M–1 and not as an attachment to the 

Form 5500 Annual Return/Report. Plan 

MEWAs that provide other benefits and 

thus are not required to file a Form 

M–1 (i.e., life and disability benefits) 

would continue to report the 

participating employer information as 

an attachment to the Form 5500 Annual 

Return/Report. 

The proposal would also change 

which MEWAs are required to report 

the participating employer information. 

The current Form 5500 requirement for 

MEPs to report participating employer 

information applies to plan MEWAs 

only. Non-plan MEWAs providing 

health benefits would now have to 

provide the information. Based on 2018 

Form M–1 filings, there were 640 plan 

MEWAs and 47 were non-plan 

MEWAs.38 The proposal, by transferring 

the participating employer information 

from the Form 5500 Annual Return/ 

Report to the Form M–1 for MEWAs that 

offer or provide coverage for medical 

benefits and continuing to require 

reporting of participating employer 

information on the Form 5500 Annual 

Return/Report for plan MEWAs that 

provide other benefits, would enable the 

Agencies to receive participating 

employer information from both plan 

and non-plan MEWAs, regardless of 

how they are funded or structured. This 

would help the Agencies better monitor 

activities of MEWAs and protect plan 

beneficiaries. 


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39 IRS is proposing to make a parallel update to 

the Form 5500–EZ, which is solely in the 

jurisdiction of the IRS. 

40The DOL believes that the annual cost burden 

on filers would be higher still in the absence of the 

regulations enabling use of the Form 5500 Annual 

Return/Report in lieu of the statutory requirements. 

Without the Form 5500 Annual Return/Report, 

filers would not have the benefits of any regulatory 

exceptions, simplified reporting, or alternative 

methods of compliance, and standardized and 

electronic filing methods. 

Internal Revenue Code-Based 

Questions for the 2022 Form 5500s. In 

the NPFR, several questions are being 

proposed to be added to the 2022 Form 

5500s to help identify plans that are 

more likely to experience compliance 

issues, and help the IRS more effectively 

conduct investigations. Section III.F of 

the preamble to the NPFR provides a 

description of these proposed Codebased questions. The proposal, as set 

forth in the NPFR, would add a 

nondiscrimination and coverage test 

question to Form 5500 and Form 5500– 

SF that was on the Schedule T before it 

was eliminated. The question asks if the 

employer aggregated plans in testing 

whether the plan satisfied the 

nondiscrimination and coverage tests of 

Code sections 401(a)(4) and 410(b). 

Adding this question will allow EP to 

identify these plans for examination. 

This question is also helpful when 

performing pre-audit analysis and 

allows the IRS to narrow any inquiries 

for information that is requested from 

the plan sponsor. The restoration of this 

question also reflects the elimination of 

optional coverage and 

nondiscrimination demonstrations in 

the IRS determination letter process. See 

Rev. Proc. 2012–6, 2012–1 I.R.B. 235 

and Announcement 2011–82, 2011–52 

I.R.B. 1052. 

The proposal, as described in the 

NPFR, would add a question to Form 

5500 and Form 5500–SF, for 401(k) 

plans asking whether the plan sponsor 

used the design-based safe harbor rules 

or the ‘‘prior year’’ ADP, or ‘‘current 

year’’ ADP test, or if it is not applicable. 

A plan that performs ‘‘prior year’’ or 

‘‘current year’’ ADP testing is more 

likely to have compliance issues than a 

plan with a ‘‘designed-based safe 

harbor.’’ Adding this question, would 

allow EP to identify 401(k) plans that 

use ADP testing for examination over 

plans that have designed-based safe 

harbors. This question would also help 

the IRS perform pre-audit analysis and 

for design-based safe harbor plans allow 

us to verify whether allocations of 

required safe harbor contributions 

comply with the terms of the plan; and 

whether proper notice requirement is 

satisfied on an annual basis. 

Finally, the proposal, as indicated in 

the NPFR, would add a question to 

Form 5500 and the Form 5500–SF 

asking whether the employer is an 

adopter of a pre-approved plan that 

received a favorable IRS Opinion Letter, 

the date of the favorable Opinion Letter, 

and the Opinion Letter serial number.39

This question would help the IRS 

identify whether a plan sponsor has 

adopted a pre-approved plan and to 

determine whether the plan was 

adopted timely in accordance with the 

Code section 401(b) remedial 

amendment period. This question 

would also assist IRS in determining 

whether to select a plan for examination 

as a late amender for changes in the law. 

Defined Benefit Plan/Title IV 

Questions for the 2022 Form 5500s: The 

proposed changes to the Form 5500 

Schedules MB, SB, and R would help 

remedy data and information 

inadequacies, increasing plans’ 

transparency, enable Agencies to project 

more precisely defined benefit pension 

plans’ and insurance programs’ 

liabilities, and help the PBGC more 

effectively conduct investigations and 

better protect plan participants and 

beneficiaries. 

Schedule MB collects actuarial 

information on multiemployer defined 

benefit plans and certain money 

purchase plans. By revising line 6 and 

clarifying the expense load percentage 

calculation, the Agencies would be able 

to easily identify the expense load and 

more accurately project plan liabilities 

to model the impact of additional 

employers withdrawing from the plan in 

the future. The proposed changes to the 

schedule would provide greater 

transparency in the actuarial status and 

the actuarial assumptions of the plans. 

Based on reviewing previously filed 

Schedules MB responses to line 4f, it 

appears to the Agencies that there is 

some confusion as to how to fill out line 

4f of Schedule MB correctly, as some of 

the responses do not make sense. 

Clarification of the instructions and line 

language is intended to remove 

potential confusion and provide more 

consistent and correct responses. 

Schedule SB collects actuarial 

information on single-employer defined 

benefit plans. The proposed changes 

would better align filing requirements 

for single-employer defined benefit 

plans with the more detailed 

requirements for PBGC-insured 

multiemployer plans. As with the 

proposed changes to the Schedule MB, 

these proposed changes would allow for 

greater transparency in the actuarial 

status and the actuarial assumptions of 

the plans. 

Schedule R collects information on 

retirement plans. Previously, 

multiemployer defined-benefit pension 

plans were required to report 

identifying information about any 

employer whose contributions to the 

plan exceeded five percent of total 

annual contribution. The regulation 

proposes, instead, to require plans to 

report identifying information on any 

employer who (1) contributed more than 

five percent of the plan’s total 

contributions or (2) was one of the top 

ten highest contributors. This would 

provide greater transparency on 

contributors and ensure that reported 

data represents a reasonable sampling of 

contributors. 

The proposed regulation also 

proposes changes in format for certain 

attachments. EFAST2 filers currently 

file some Form 5500 attachments as PDF 

and plain text files. Due to the nature of 

the attachments, they often include 

many numbers that are difficult to 

extract from these file types. There is 

consideration being given to steps that 

could be taken to allow more integration 

of common tabular formats 

(spreadsheet) such as Comma Separate 

Value(s) (CSV). As this is not being 

considered as a requirement at this 

point, plans would not incur an 

additional cost if such functionality 

were made available. Rather, the 

Agencies expect this option may 

simplify the process for preparing and 

filing attachments. 

1.3. Cost Estimates and Savings 

The DOL anticipates that the costs for 

plans to satisfy their annual reporting 

obligations would on average decrease 

under these proposed regulations 

relative to the current regime.40 As 

shown in Table 1 below, the aggregate 

annual cost of such reporting under the 

current regulations and forms is 

estimated to be $514.8 million annually, 

shared across the 822,100 filers subject 

to the filing requirement. 

The DOL estimates that the 

regulations and forms revisions in this 

proposed rule would impose an annual 

burden of $514.1 million on 804,100 

filers, for a total decrease of $64.6 

million annually, $63.9 million 

annually in audit cost savings and $0.7 

million annually in other reporting 

costs. This proposal makes important 

changes to the requirements currently in 

effect while also allowing for the 

number of small plans and large plans 

to change for annual reporting purposes. 

The DOL estimates that a total of 17,601 

small plans and 563 large plans would 

opt to join either a DCG or a pooled 

employer plan, and therefore have their 

filing requirement fulfilled by these 


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41For the calculation of the total number of 

participating employers in pooled employer plans, 

it is first assumed that 80 percent of all the 

employers who would participate in a pooled 

employer plan are currently providing benefits 

through small plans, and that the remaining 20 

percent through large plans. This distribution 

would apply to the registrant that has already 

exceptionally listed 2000 employers (which would 

then be divided in 1600 small participating plans 

and 400 large participating plans) and to the other 

74 pooled plan providers assumed to be created. It 

is also assumed that each one of these other 74 

pooled plan providers would be servicing in total 

11 employers. Therefore, the total number of small 

participating plans in a pooled employer plan is 

calculated as: 1,600 + (74 * 11 * 0.8) = 2,251 

(rounded). Similarly, the total number of large 

participating plans is calculated as 400 + (74 * 11 

* 0.2) = 563 (rounded). 

entities. The DOL also estimates that 

19,442 large plans would be re-defined 

and file as small plans as a result of the 

change in the current threshold for 

determining when a defined 

contribution plan may file as a small 

plan. 

TABLE 1—ESTIMATED BURDEN CHANGE BY TYPE OF FILER

ALL PROPOSED CHANGES

Type of plan 

Number of 

filers under 

current 

(thousands) 

Number of 

filers under 

proposed 

(thousands) 

Aggregate 

cost under 

current 

(millions) 

Aggregate 

cost under 

proposed 

(millions) 

Aggregate 

cost change 

(millions) 

Large Plans .......................................................................... 146.8 126.9 $268.8 $260.3 ¥$8.4 

Small Plans .......................................................................... 666.1 667.9 234.7 235.2 0.5 

DFEs .................................................................................... 9.3 9.4 11.4 18.6 7.2 

All Plans ........................................................................ 822.1 804.1 514.8 514.1 ¥0.7 

Audit Cost ¥63.9 

Overall Total ¥64.6 

Note: Some displayed numbers do not sum up to the totals due to rounding. 

Large plans—100 participants or more. 

Small plans—generally fewer than 100 participants. 

To estimate the net change in cost 

burden, as a result of the interaction of 

the proposed changes, the DOL has also 

analyzed the cost impact of the 

individual revisions on classes of filers. 

In doing so, the DOL took account of the 

fact that various types of plans would be 

affected by more than one revision and 

that the sequence of multiple revisions 

would create an interaction in the 

cumulative burden on those plans. The 

total changes in Table 1 show the 

accumulated changes. The other tables 

below show only the impact of a single 

change at a time from the status quo; 

therefore, the tables cannot be added to 

arrive at the estimates in Table 1. 

Schedule MEP and Pooled Employer 

Plans. The proposed new Schedule MEP 

would be filed by all MEPs, including 

pooled employer plans, and includes 

participating employer information 

already filed as an attachment, as well 

as limited specific reporting 

requirements for pooled employer 

plans. The information on participating 

employers would then be data-readable, 

whereas currently it is only included as 

a nonstandard attachment. As discussed 

in the affected entities section, estimates 

are available for MEPs that have filed a 

Form 5500 previously, but not for the 

newly created pooled employer plans 

that have yet to file a Form 5500. The 

impacts of the DOL recent rulemaking 

on association retirement plans and PEO 

MEPs also carries some uncertainty 

regarding the number of MEPs that may 

be affected. Approximately 50 entities 

have filed the Form PR to register as 

pooled plan providers. Therefore, for 

purposes of this analysis, the DOL 

assumes there would be a total of 75 

pooled employer plans. As it is the case 

with MEPs, joining a pooled employer 

plan translates into less plan 

maintenance expenditures given that 

MEPs can take advantage of economies 

of scale. Additionally, in the DOL’s 

view, the information requested on the 

Schedule MEP should already be 

available to plans, so the burden is 

primarily entering the information onto 

the form. The burden to file the 

Schedule MEP is estimated to average 

10 minutes for MEPs and 14 minutes for 

pooled employer plans, with variation 

depending on the number of 

participating employers. 

Although the DOL does not know for 

certain how many plans would decide 

to offer benefits through a pooled 

employer plan, it is assumed that the 

current average number of participating 

employers in a MEP is indicative of the 

average number of employers that 

would eventually be in any particular 

pooled employer plan that may be 

established in the future. The DOL 

estimates that MEPs, on average, have 

nine employers participating in a MEP 

with fewer than 100 participants and 

two employers with 100 or more 

participants. The DOL uses these 

measures as estimates for most of the 

upcoming pooled employer plans, 

therefore assuming that, for most pooled 

employer plans, on average there would 

be nine small participating plans and 

two large participating plans per pooled 

employer plan. Combined with one 

pooled plan provider registrant that has 

already listed 2000 participating 

employers, it is estimated that a total of 

2,251 small participating plans and 563 

large participating plans would provide 

benefits through pooled employer 

plans.41 The DOL assumes this would 

result in a direct decrease of 2,251 

defined contribution Form 5500–SF 

filers and a decrease of 563 Form 

defined contribution 5500 filers. As 

Table 2 shows this would result in a 

reporting cost reduction of $1.5 million 

(not including the audit cost reduction 

in Table 1) and a total reduction of filers 

from 822,100 to 819,400 filers. Such a 

reduction in filers would be partially 

offset by an increase in pooled employer 

plan filings. We are not, however, able 

to explicitly measure the net impact on 

filings because of the uncertainty 


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42The DOL acknowledges that there could be 

other employers whose plans are outside the 

category of small defined contribution type, which 

currently file the Form 5500–SF and report plan 

characteristic 3D, that might also find an advantage 

in joining a DCG and therefore start providing 

benefits this way. 

43https://www.irs.gov/retirement-plans/preapproved-retirement-plans. 

regarding the number of pooled 

employer plans and the resulting 

increase in pooled employer plan 

filings. The DOL requests comments on 

these estimates. 

TABLE 2—ESTIMATED BURDEN CHANGE BY TYPE OF FILER

INTRODUCTION OF POOLED EMPLOYER PLANS AND SCHEDULE MEP FILING

Type of plan 

Number of 

filers under 

current rules 

(thousands) 

Number of 

filers under 

proposed rules 

(thousands) 

Aggregate 

reporting 

cost under 

current rules 

(millions) 

Aggregate 

reporting 

cost under 

proposed rules 

(millions) 

Aggregate 

cost change 

(millions) 

Large Plans .......................................................................... 146.8 146.3 $268.8 $267.9 ¥$0.9 

Small Plans .......................................................................... 666.1 663.8 234.7 234.0 ¥0.7 

DFEs .................................................................................... 9.3 9.3 11.4 11.4 0.0 

Overall Total ................................................................. 822.1 819.4 514.8 513.3 ¥1.5 

Note: Some displayed numbers do not sum up to the totals due to rounding. 

Large plans—100 participants or more. 

Small plans—generally fewer than 100 participants. 

DCG filings. As discussed above, a 

DCG filing for a group of plans has the 

potential to reduce reporting burden as 

only one Form 5500 is filed and signed 

by a common plan administrator so 

signatures from separate administrators 

of the participating plans are not 

needed. Offsetting these cost savings 

would be the burden from the 

consolidated Form 5500 filed by the 

DCG, including the Schedule DCG to 

report individual plan information for 

each participating plans. There are 

499,234 small defined contribution 

plans that file the Form 5500–SF and 

report the plan characteristic code 3D; 

the DOL assumes this type of plan may 

find it advantageous to adopt this new 

structure of providing benefits and 

therefore a fraction of them will join a 

DCG. The DOL seeks comments on these 

assumptions.42

The change in burden from allowing 

a DCG to file on behalf of plans is 

estimated in the following manner. 

Apart from the 499,234 small defined 

contribution mentioned above, there are 

1,813 pre-approved plans.43 While the 

DOL does not know if all 1,813 preapproved plans actually would file on 

behalf of these 499,234 plans, if they did 

there would be an average of 275 plans 

per pre-approved filer. These preapproved filers are the likeliest entities 

to file as a DCG. Although DOL lacks 

sufficient information to confidently 

estimate how many DCGs will form, the 

50 entities that have filed the Form PR 

to register as a pooled plan provider, so 

far, may be suggestive of the number of 

entities currently seeking to take 

advantage of new structures to reduce 

plan administrative costs. Potential 

DCGs may be better positioned than 

pooled plan providers to commence 

operations as they already have client 

plans that could benefit from the 

savings and do not have to switch plans. 

Therefore, the DOL assumes that twice 

the number of DCGs (100) would form 

in the first year as the number of pooled 

plan providers (50). With the 

availability of DCGs as an option, some 

service providers may discontinue their 

provision of individual Form 5500 filing 

services, and only offer to file as DCGs. 

Some plans that contract with such 

service providers may choose to be 

moved into DCG filings, while others 

may seek out new service providers 

because they don’t wish to comply with 

the additional filing obligations placed 

on DCG filers. For purposes of this 

analysis, we assume that approximately 

half of the plans currently associated 

with a pre-approved plan provider 

would be offered the opportunity and 

would agree to comply with the DCG 

requirements to stay with the same 

provider. The DOL then uses these 

results to assume 100 DCGs with a total 

of 15,350 small plans whose annual 

return/report filing obligation would be 

satisfied by the filing of a DCG Form 

5500. 

As described above, the consolidated 

return/report that would need to be filed 

by the DCG to satisfy the annual 

reporting requirements of participating 

plans would have to include a Schedule 

DCG for each participating plan. The 

cost calculation must therefore take into 

account cost of this schedule per plan 

participating in a DCG. The DOL 

believes that once individual plans join 

a DCG, the average cost of filing a 

Schedule DCG, which would be done 

for each one of the estimated 15,350 

participating plans, would be lower 

than the cost of filing a Form 5500–SF 

separately, which cost was incurred by 

a small plan before joining a DCG. 

Although the DOL does not know how 

much lower this new cost would be, it 

estimates that completing a schedule 

DCG as part of the DCG’s Form 5500 

annual return/report would take about 

40 percent less time than completing a 

Form 5500–SF for each individual plan. 

As Table 3 shows, assuming the 

number of DCGs and plans per DCG as 

described above, along with the 

estimated cost of filing schedule DCG, 

the DOL expects an overall cost 

reduction of $1.6 million. This cost 

reduction assumes, as baseline, the 

current definition of large and small 

plans, and would be the result of a 

decrease in the number of Form 5500– 

SF filers, from 666,100 to 650,700. Such 

a reduction in filers would be partially 

offset by an increase in DFE filings, 

which reflects the introduction of DCGs 

as filing entities. 


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TABLE 3—ESTIMATED BURDEN CHANGE BY TYPE OF FILER

INTRODUCTION OF DCGS AND SCHEDULE DCG FILING

Type of plan 

Number of 

filers under 

current rules 

(thousands) 

Number of 

filers under 

proposed rules 

(thousands) 

Aggregate 

reporting 

cost under 

current rules 

(millions) 

Aggregate 

reporting 

cost under 

proposed rules 

(millions) 

Aggregate 

cost change 

(millions) 

Large Plans .......................................................................... 146.8 146.8 $268.8 $268.8 $0.0 

Small Plans .......................................................................... 666.1 650.7 234.7 230.1 ¥4.6 

DFEs .................................................................................... 9.3 9.4 11.4 14.3 2.9 

Overall Total ................................................................. 822.1 806.9 514.8 513.1 ¥1.6 

Note: Some displayed numbers do not sum up to the totals due to rounding. 

Large plans—100 participants or more. 

D Small plans—generally fewer than 100 participants. 

As noted above, there is substantial 

uncertainty regarding these estimates. 

The DOL specifically seeks comments 

on estimates of the number of DCGs, the 

number of plans joining those DCGs, 

and the cost of filing a schedule DCG 

compared to filing a Form 5500–SF, and 

the overall cost burden savings due to 

plans joining a DCG. 

Revised financial reporting on the 

Schedule H: Revising the Schedule H 

Line 4i Schedules of Assets to make it 

data-capturable to increase the 

accessibility to this information, 

including information regarding hardto-value assets, would increase costs. 

Without altering the current definition 

of large and small plans, the DOL 

estimates that the effect of this change 

would be to increase the total burden by 

370,253 hours, which reflects the 

increase in burden that large plans and 

DFEs, both as typical filers of Schedule 

H, would face. As Table 4 shows, in 

total this change would translate into an 

increase of filing costs of $41 million 

(which represents an estimated cost of 

approximately $260 per large plan/DFE 

potentially required to file the 

Schedules of Assets). The Department 

seeks comments on the increase in 

burden for entities filing the Schedule 

H, and if that burden will decrease over 

time. 

TABLE 4—ESTIMATED BURDEN CHANGE BY TYPE OF FILER

REVISED FINANCIAL REPORTING ON THE SCHEDULE H 

Type of plan 

Number of 

filers under 

current rules 

(thousands) 

Number of 

filers under 

proposed rules 

(thousands) 

Aggregate 

reporting 

cost under 

current rules 

(millions) 

Aggregate 

reporting 

cost under 

proposed rules 

(millions) 

Aggregate 

cost change 

(millions) 

Large Plans .......................................................................... 146.8 146.8 $268.8 $305.4 $36.7 

Small Plans .......................................................................... 666.1 666.1 234.7 234.7 0.0 

DFEs .................................................................................... 9.3 9.3 11.4 15.6 4.3 

Overall Total ................................................................. 822.1 822.1 514.8 555.7 41.0 

Note: Some displayed numbers do not sum up to the totals due to rounding. 

Large plans—100 participants or more. 

Small plans—generally fewer than 100 participants. 

Changes to Methodology for 

Determining Small Plan Status for 

Purposes of Annual Report Filing 

Requirements: The proposal would 

adopt the change described in the NPFR 

to the current method of counting 

participants for purposes of determining 

when a defined contribution plan may 

file as a small plan and whether the 

plan may be exempt from the IQPA 

audit requirement. Specifically, the 

proposal would allow plans to count 

just the number of participants/ 

beneficiaries with account balances as 

of the beginning of the plan year, as 

compared to the current rule that counts 

all the employees eligible to participant 

in the plan by adding to the Form 5500 

and Form 5500–SF a new question, for 

defined contribution pension plans 

only, asking for the number of 

participants with account balances at 

the beginning of the plan year. 

This change would reduce costs for 

plans. The additional question imposes 

little burden as the end-of year number 

is already tracked and reported, but to 

plans who now qualify as small instead 

of large, savings could be significant. 

EBSA estimates that the typical 

reporting burden of all required 

schedules for a small pension plan is 

$348. In contrast, the typical reporting 

burden of all required schedules for a 

large pension plan is currently 

estimated by EBSA to be $1,903. While 

there would be a cost reduction, these 

plans and their participants would no 

longer have the protections provided by 

the audit, which could result in an 

increased risk of errors and fraud, but 

there are conditions for small plans to 

be eligible for the audit waiver that are 

designed to address those potential 

risks. In the case of small pension plans, 

to be eligible for the audit waiver small 

pension plans must meet conditions 

related to investment assets, financial 

institutions holding plan assets, 

disclosures to participants and 

beneficiaries, and enhanced fidelity 

bonding for persons who handle certain 

assets. In the case of welfare plans, both 

large and small plans, the plan must be 

fully insured or unfunded to be eligible 

for the audit waiver. Consistent with the 

Department’s goal of encouraging 

pension plan establishment and 

maintenance, particularly in the small 

business community, the Department 


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44To estimate the number of large plans currently 

providing the IQPA report and audited financial 

statements the DOL identified those large plans that 

would be most likely to be re-defined as small plans 

and to have filed the Schedule H in 2018, as 

estimated on the 2018 Form 5500 Pension Research 

Files. Note that the 80 to 120 participant transition 

provision at 29 CFR 2520.103–1(d) allows a plan 

that covers fewer than 100 participants to continue 

taking advantage of the simplified option or 

exemption, as applicable, until they reach 121 

participants, therefore not all plans with 100 or 

more participants will file a plan in a given year. 

45See http://Mathematica.org/publications/ 

estimates-of-the-burden-for-filing-form-5500-thechange-in-burden-from-the-1997-to-the-1999-forms. 

46A report by Mathematica suggests audit costs 

of between $3,000 and $30,000. Adjusted for 

inflation this would be about $5,000 to $50,000 in 

2021 dollars. https://mathematica.org/publications/ 

estimates-of-the-burden-for-filing-form-5500-thechange-in-burden-from-the-1997-to-the-1999-forms. 

See also www.paychex.com/retirement-services/ 

pooled-employer-plans (accessed July 21, 2021) 

which suggest $10,000 to $20,000. Additionally 

conversations with stake holders suggest a range 

similar to the $10,000 to $20,000. As the affected 

plans are expected to be small, the low estimates 

are averaged ($5,000 and $10,000) to arrive at 

$7,500. 

concluded that engaging an accountant 

should not be the only means by which 

the security of small plan assets can be 

adequately protected. Rather, in 

developing the proposed regulation, 

consistent with the existing regulatory 

conditions for the small plan audit 

waiver, the Department attempted to 

balance the interest in providing secure 

retirement savings for participants and 

beneficiaries with the interest in 

minimizing costs and burdens on small 

pension plans and the sponsors of those 

plans. 

The DOL estimates that there could be 

a reduction of 20,005 large plans filing 

under the proposed regulations, 19,442 

defined contribution plans due to the 

changing definition of who can file as a 

small plan, and 563 large participating 

plans that could provide benefits 

through pooled employer plans. An 

estimated 11,362 of these plans 

currently provide the IQPA report and 

audited financial statements and would 

therefore save in audit costs.44 The 

Department estimates that there could 

be an audit cost reduction of $7,500 for 

each one of these 11,362 plans. Plans 

may still conduct an audit, even if there 

is no requirement. It is estimated that 25 

percent of plans could still conduct an 

audit.45 Data on the cost of an audit for 

these plans is not known and will vary 

based on plan size and complexity. An 

estimate of $7,500 is used to estimate 

the cost savings.46 The Department 

seeks comment on the size of the costs 

savings. Cost savings of $63.91 million 

annually is estimated for the 8,522 plans 

(11,362 * 0.75) that will no longer be 

required to conduct an audit. These 

cost-savings are reported in Table 1 

above. 

As discussed above there are an 

estimated 19,442 defined contribution 

plans that would now be able to file as 

a small plan. Other reporting cost 

savings for these plans are based on 

their filing the Form 5500–SF instead of 

the Form 5500 and the correspondent 

schedules. As shown in Table 5, the 

DOL estimates that this redefinition of 

small and large alone would translate 

into a decrease of filing costs of $29.4 

million, with a reduction from 146,800 

to 127,400 in large plan filers. The DOL 

requests comments on this estimate. 

TABLE —ESTIMATED BURDEN CHANGE BY TYPE OF FILER

CHANGES TO FILING EXEMPTIONS AND REQUIREMENTS FOR SMALL PLANS

Type of plan 

Number of 

filers under 

current rules 

(thousands) 

Number of 

filers under 

proposed rules 

(thousands) 

Aggregate 

reporting 

cost under 

current rules 

(millions) 

Aggregate 

reporting 

cost under 

proposed rules 

(millions) 

Aggregate 

cost change 

(millions) 

Large Plans .......................................................................... 146.8 127.4 $268.8 $233.6 ¥$35.2 

Small Plans .......................................................................... 666.1 685.5 234.7 240.4 5.8 

DFEs .................................................................................... 9.3 9.3 11.4 11.4 0.0 

Overall Total ................................................................. 822.1 822.1 514.8 485.4 ¥29.4 

Note: Some displayed numbers do not sum up to the totals due to rounding. 

Large plans—100 participants or more. 

Small plans—generally fewer than 100 participants. 

Changes for MEWAs that file the Form 

M–1. As set forth in the NPFR, the 

proposal would update the Form M–1, 

transferring the multiple employer 

participating employer information 

questions from the Form 5500 to the 

Form M–1 for MEWAs (plan and nonplan) that offer or provide coverage for 

medical benefits and continued 

reporting of participating employer 

information on the Form 5500 Annual 

as an attachment for plan MEWAs that 

provide other benefits. The current 

Form 5500 requirement for MEPs to 

report participating employer 

information applies to plan MEWAs 

offering all types of benefits—not just 

those that provide group health plans. 

The DOL estimates that the change in 

burden would be de minimis for these 

plans. 

However, non-plan MEWAs providing 

health benefits would now have the 

added burden of providing the 

participating employer information. The 

DOL assumes that non-plan MEWAs 

already have access to this information, 

and reporting it would not add a 

substantive burden to these entities’ 

reporting costs. 

Internal Revenue Code and ERISA 

Title IV Proposed Changes. As described 

the NPFR, the proposal includes 

changes related to Internal Revenue 

Code requirements and reporting 

requirements for defined benefit 

pensions subject to filing Schedules MB, 

SB, and R. The Agencies’ believe the 

additional questions reflect information 

plans should know and expect that 

reporting this information would result 

in a de minimis marginal burden. 

Assumptions, Methodology, and 

Uncertainty: The cost and burden 

associated with the annual reporting 

requirement for any given plan depend 

upon the specific information that must 

be provided, given the plan’s 

characteristics, practices, operations, 

and other factors. For example, a small, 

single-employer defined contribution 

pension plan eligible to file the Form 

5500–SF should incur far lower costs 

than a large, multiemployer defined 

benefit pension plan that holds multiple 

insurance contracts, engages in 

reportable transactions, and has many 

service providers that each received 

over $5,000 in compensation. The DOL 

separately considered the cost to 

different types of plans in arriving at its 

aggregate cost estimates. The DOL’s 

basis for these estimates follows. 


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47The MPR report can be accessed at https://

mathematica.org/publications/estimates-of-theburden-for-filing-form-5500-the-change-in-burdenfrom-the-1997-to-the-1999-forms. See also 

Technical Appendix: Documentation of Form 5500 

Revision Burden Model at www.dol.gov/agencies/ 

ebsa/laws-and-regulations/rules-and-regulations/ 

technical-appendices. 48See 72 FR 64731 (Nov. 16, 2007) and 81 FR 

47496 (July 16, 2016). 

49For purposes of this analysis, multiple 

employer plans were treated as single employer 

plans. 

Assumptions Underlying this 

Analysis: The DOL’s analysis assumes 

that all benefits and costs would be 

realized in the first year of the reporting 

cycle to which the changes apply and 

within each year thereafter. This 

assumption is premised on the 

requirement that each plan will be 

required to file the Form 5500 Annual 

Return/Report. The DOL has used a 

‘‘status quo’’ baseline for this analysis, 

assuming that the world in the future, 

absent the proposed regulations, will 

resemble the present. The DOL does not 

anticipate that there will be material 

one-time transition cost for learning or 

updating systems during the first year in 

which the reporting changes apply. The 

proposal would largely apply 

requirements currently in effect for large 

MEPs to pooled employer plans and 

DCGs. The financial services providers 

and recordkeepers that be sponsoring 

such plans and DCGs generally are 

already providing Form 5500 filings 

services for the employee benefit plans 

they service so we do not anticipate 

material start-up costs for them to file 

Form 5500s on behalf of pooled 

employer plans or DCGs. We also do not 

anticipate that individual plans that 

participate in a DCG reporting 

arrangement would expend more time 

to supply information to DCG reporting 

arrangements during the first year than 

what they currently incur to supply 

annual reporting data to service 

provides that prepare their annual 

reports (and may in fact incur less time 

even during the first year). Similarly, 

the creation of the Schedule MEP 

mostly reorganizes the way annual 

reporting data is provided by affected 

plans, rather than adding significant 

additional information collection. 

Similarly, the changes to the content of 

the Schedules of Assets are calling for 

reporting of a very limited number of 

data elements that plans should already 

have as part of the ordinary business 

records. The DOL also expects that the 

formatting changes being proposed to 

make the Schedules of Assets more 

usable will match formatting that filers 

already use to file various other 

schedules, and, accordingly, they would 

not involve material costs for learning or 

system adjustments. Moreover, the DOL 

is proposing to permit (but not require) 

certain attachments to Schedule MB and 

SB to be provided in a tabular format 

(spreadsheet) rather than PDF or TXT 

formats. The DOL solicits comments on 

whether filers would want a similar 

option for the Schedules of Assets and 

whether they believe such an option 

would reduce reporting burdens, 

including any potential transition cost. 

Further, with respect to the limited 

number of additional questions for 

defined benefit pension plans and Coderelated questions for pension plans 

relate to existing compliance 

obligations, those questions should not 

entail material start-up or learning costs. 

We also do not anticipate material 

transition costs related to the proposed 

changes related to reporting 

participating employer information 

which largely apply existing 

requirements in the context of a new 

schedule for some filers and as an 

attachment to current filings for others. 

Nonetheless, the DOL specifically 

solicits comments on whether plans or 

groups of plans anticipate a material 

increase in such transition costs during 

the first year. 

Methodology: Mathematica Policy 

Research, Inc. (MPR) developed the 

underlying cost data, which has been 

used by the Agencies in estimating 

burden related to the Form 5500 Annual 

Return/Report since 1999. See 65 FR 

21068, 21077–78 (Apr. 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 DOL May 25, 

1999.47 The cost information was 

derived from surveys of filers and their 

service providers, as modified due to 

comments, which were used to measure 

the unit cost burden of providing 

various types of information. The DOL 

has adjusted these unit costs since 1999 

to account for changes to the forms and 

schedules and increases in the cost of 

labor and service providers since MPR 

developed the initial data. 

For this forms revision, the DOL used 

the adjusted MPR unit cost data for 

pension and non-health welfare plans. 

The DOL developed the unit cost data 

for group health plans using the best 

available data. To develop unit costs for 

DFEs, the DOL created weighted 

averages of the unit costs for plans. 

To obtain filer counts for pension 

plans, welfare plans, and DFEs, the DOL 

used historical counts of Form 5500 

Annual Return/Report filers tabulated 

by type and reported characteristics. 

The DOL modeled its approach to 

calculating burden on the approach 

used during the 2009 forms revision and 

the 2016 modernization proposal.48

Aggregate burden estimates were 

produced in both revisions by 

multiplying the unit cost measures by 

the filer count estimates. The 

methodology is described in broad 

terms below. 

To estimate aggregate burdens, types 

of plans with similar reporting 

requirements were grouped together in 

various groups and subgroups. 

Calculations of aggregate cost were 

prepared for each of the various 

subgroups both under requirements in 

effect prior to this action and under the 

forms as revised. The universe of filers 

was divided into four basic types: 

Defined benefit pension plans, defined 

contribution pension plans, welfare 

plans, and DFEs. For the plans, each of 

these major plan types was further 

subdivided into multiemployer and 

single-employer plans.49 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 (1,000 or 

more participants) and other large plans 

(at least 100 participants, but fewer than 

1,000 participants). Small plans (less 

than 100 participants) were divided 

similarly, except that they were divided 

into Form 5500–SF eligible and Form 

5500–SF ineligible plans, as applicable. 

Welfare plans were divided into group 

health plans and plans that do not 

provide any group health benefits, while 

plans that provide group health benefits 

and have fewer than 100 participants 

were divided into fully insured group 

health plans and unfunded, 

combination unfunded/fully insured 

plans, or funded with a trust group 

health plans. DFEs were divided into 

Master Trusts/MTIAs, CCTs, PSAs, 103– 

12 IEs, GIAs, and DCGs. For each of 

these sets of respondents, burden hours 

per respondent were estimated for the 

Form 5500 Annual Return/Report itself 

and up to seven schedules or the Form 

5500–SF (and the Schedule SB, for 

Form 5500–SF eligible defined benefit 

pension plans). 

We also separately estimated the costs 

for each of the forms and schedules that 

are part of the Form 5500 Annual 

Return/Report. When items on a 

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 how many items 

are required by each agency. The burden 

associated with reading the instructions 


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50Some filers are eligible to file the Form 5500– 

SF, but choose to file a Form 5500 and attach 

Schedule I and/or other schedules because they 

find it less burdensome to do so in their particular 

situation. Counts of these filings are adjusted to 

reflect what they would have filed if they had 

chosen to file the Form 5500–SF. 

51Section 1 of ERISA states the ‘‘Congressional 

findings and declaration of policy.’’ Of relevance to 

our consideration of these alternatives, section (b) 

states, in relevant part: ‘‘It is hereby declared to be 

the policy of this chapter to protect interstate 

commerce and the interests of participants in 

employee benefit plans and their beneficiaries, by 

requiring the disclosure and reporting to 

participants and beneficiaries of financial and other 

information with respect thereto . . . .’’ 29 U.S.C. 

1001(b). 

for each item also is tallied and 

allocated accordingly. 

The reporting burden for each type of 

plan is estimated in light of the 

circumstances that are known to apply 

or that are generally expected to apply 

to such plans, including plan size, 

funding method, usual investment 

structures, and the specific items and 

schedules such plans ordinarily 

complete. For example, a large singleemployer defined benefit pension plan 

that is intended to be tax-qualified that 

has insurance products among its 

investments and whose service 

providers received compensation above 

the Schedule C reporting thresholds 

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 

(Single Employer Defined Benefit Plan 

Actuarial Information), Schedule C 

(Service Provider Information), possibly 

the Schedule G (Financial Transaction 

Schedules), Schedule H (Financial 

Information), and Schedule R 

(Retirement Plan Information), and 

would be required to submit an IQPA 

report. In this way, the Agencies intend 

meaningfully to estimate the relative 

burdens placed on different categories 

of filers. 

Burden estimates were adjusted for 

the proposed revisions to each schedule, 

including items added or deleted in 

each schedule and items moved from 

one schedule to another. 

The DOL has not attributed a 

recordkeeping burden to the 5500 Forms 

in this analysis or in the Paperwork 

Reduction Act analysis because it 

believes that plan administrators’ 

practice of keeping financial records 

necessary to complete the 5500 Forms 

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 as filed prior to this action 

multiplied by the estimated aggregate 

number of forms and schedules filed.50

The DOL estimated the burden impact 

of changes in the numbers of filings and 

of changes made to the form and the 

various schedules. The burden estimates 

use data from the Form 5500 Annual 

Return/Report for plan year 2018, which 

is the most recent year for which 

complete data is available. 

1.4. Uncertainty 

The SECURE Act created pooled 

employer plans and directed the 

Departments to make available 

consolidated reporting for defined 

contribution pension plans that meet 

certain requirements. Due to these 

proposed rules designed to implement 

the SECURE Act, as well as the DOL’s 

final rules with respect to association 

retirement plans and PEO-sponsored 

plans, the DOL assumes that these types 

of entities will file a Form 5500 and 

report the number of participating 

employers, numbers of covered 

participants, and amount of assets in the 

future. However, until they file, the 

Departments face significant uncertainty 

about the number of each type of entity 

and whether they are merely providing 

coverage in a different manner than was 

already provided by employers to their 

employees through single employer 

plans or already existing MEPs 

(including association retirement plans 

and PEOs) or whether with the 

availability of additional commercial 

arrangements and plans, more 

employers will establish plans for their 

employees. 

While pooled plan providers have 

filed a Form PR and list plans they are 

forming, they do not report the number 

of participating employers. The DOL has 

identified 611,568 defined contribution 

plans that reported code 3D, of which 

499,234 are considered small defined 

contribution plans filing the Form 

5500–SF as possible plans that could 

join a DCG or a pooled employer plan. 

However, the decision depends not only 

on cost savings, and administrative ease, 

but also on employers’ preferences and 

perceptions about the advantages and 

disadvantages of joining either group or 

neither. 

The Departments request information 

that will help improve its current 

estimates of the numbers of affected 

entities, employers and the burdens 

they will experience due to these 

proposed rules. 

1.5. Alternatives 

As described above, the DOL 

proposed changes to Title I annual 

reporting requirements primarily are 

designed to implement statutory 

changes enacted as part of the SECURE 

Act. The DOL considered several 

alternative approaches to address these 

statutory changes, including: 

• Not requiring an audit for large 

plans that are part of a DCG reporting 

arrangement, and instead requiring just 

an audit of the DCG’s trust. Including 

more or fewer questions on the 

Schedule DCG and the Schedule MEP. 

• Including more or fewer questions 

for defined benefit plans on issues 

under Title IV of ERISA or questions for 

retirement plans on Internal Revenue 

Code compliance issues. 

• Not adding new content elements to 

the Schedules of Assets and not 

requiring the Schedules of Assets to be 

filed in a data-capturable format. 

• Not changing the methodology for 

participant count for determining 

whether a defined contribution 

retirement plan is subject to the annual 

reporting requirements applicable to 

large plans versus small plans. 

• Allowing a DCG with under 100 

total participants to file as a small plan 

rather than requiring all DCGs to 

generally follow the annual reporting 

requirements applicable to large plans— 

i.e., Form 5500, Schedule A (if 

applicable), Schedule I, Schedule R (if 

applicable)—no IQPA audit, and no 

detailed supplemental schedules. 

• Not requiring non-plan MEWAs 

and/or non-group health MEWA plans 

report the participating plan 

information on the Form M–1 and Form 

5500, respectively. 

While slightly less burdensome than the 

proposed rule’s requirements, requiring 

fewer data elements or less transparent 

and usable data filing requirements 

would provide substantially less 

information to the DOL, which would 

impede its ability to fulfill its critical 

oversight role of protecting participants 

and plan assets. Employers in DCGs and 

MEPs also would receive less 

information to survey the market when 

choosing a DCG or pooled plan provider 

or deciding whether to continue to rely 

on an existing provider. Less 

information and less usable data filing 

requirements would also not have as 

effectively served the interests of other 

users of Form 5500 data, including the 

IRS, PBGC, other Federal agencies, 

Congress, and the private sector who 

use the Form 5500 filings as an 

important source of information and 

data in assessing employee benefit, tax, 

and economic trends and policies.51

2. Paperwork Reduction Act Statement 

As part of its continuing effort to 

reduce paperwork and respondent 


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52 44 U.S.C. 3506(c)(2)(A) (1995). 

53 5 U.S.C. 601 et seq. (1980). 

54 5 U.S.C. 551 et seq. (1946). 

55While some large employers may have small 

plans, in general, small employers maintain most 

small plans. The Form 5500 Annual Return/Report 

impacts any employer in any private sector industry 

who chooses to sponsor a plan. The DOL is unable 

to locate any data linking employer revenue to 

plans to determine the relationship between small 

plans and small employers in industries whose SBA 

size standard is revenue-based. For a separate 

project, the DOL purchased data on ESOPs that file 

the Form 5500 and on defined contribution pension 

plans that file the Form 5500–SF from Experian 

Information Solutions, Inc. The Experian dataset 

provides the number of employees for the plan 

sponsor. By merging these data with internal DOL 

data sources, the DOL determined the relationship 

between small plans and small employers in 

industries whose SBA size standard is based on a 

threshold number of employees that varies from 100 

to 1,500 employees. Based on these data, the DOL 

estimates that over 97 percent of small retirement 

plans and over 80 percent of small health plans are 

sponsored by employers with fewer than 100 

employees. The DOL estimates that over 99 percent 

of small retirement plans and over 97 percent of 

small health plans are sponsored by employers with 

fewer than 1,500 employees. Thus, the DOL 

believes that assessing the impact of these proposed 

rules on small plans is an appropriate substitute for 

evaluating the effect on small entities. 

56Memorandum received from the U.S. Small 

Business Administration, Office of Advocacy on 

July 10, 2020. 

burden, the DOL conducts a 

preclearance consultation program to 

allow the general public and Federal 

agencies to comment on proposed and 

continuing collections of information in 

accordance with the Paperwork 

Reduction Act of 1995 (PRA).52 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 is properly 

assessed. Currently, the DOL is 

soliciting comments concerning the 

proposed revision of the Form 5500 

Annual Return/Report, which is an 

information collection request (ICR) 

subject to the PRA. The accompanying 

Notice of Proposed Forms Revisions 

includes a separate PRA discussion that 

includes tables breaking out the average 

time for filing the Form 5500, Form 

5500–SF, and each schedule, broken 

down by pension plans (sub-grouped by 

large plans filing the Form 5500, small 

plan filing the Form 5500, small plan 

filing the Form 5500–SF), welfare plans 

that include health benefits (subgrouped by large plans and small, 

unfunded, combination unfunded/fully 

insured, or funded with a trust 5500– 

SF), welfare plans that do not include 

health benefits (sub-grouped by large 

plans filing the Form 5500, small plan 

filing the Form 5500, small plan filing 

the Form 5500–SF), and DFEs (subgrouped by master trusts, CCTs, PSAs, 

103–1IEs, GIAs, and DCGs). The 

discussion also includes a table with the 

estimated PRA burdens attributable the 

Form 5500 Annual Return/Report 

broken down by the portions allocated 

to the DOL and the IRS. The DOL is also 

submitting revisions to the Form M–1 

and Summary Annual Report ICRs. A 

copy of the ICRs may be obtained by 

contacting the person listed in the PRA 

Addressee section below. The DOL has 

submitted a copy of the proposed 

revisions to the Office of Management 

and Budget (OMB) in accordance with 

44 U.S.C. 3507(d) for its review of the 

DOL’s information collection. The DOL 

and OMB are particularly interested in 

comments that: 

• Evaluate whether the collection of 

information is necessary for the 

functions of the agency, including 

whether the information will have 

practical utility; 

• Evaluate the accuracy of the 

agency’s estimate of the burden of the 

collection of information, including the 

validity of the methodology and 

assumptions used; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology 

(e.g., permitting electronically delivered 

responses). 

Comments should be sent to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10235, New Executive 

Office Building, Washington, DC 20503 

and marked ‘‘Attention: Desk Officer for 

the Employee Benefits Security 

Administration.’’ Comments can also be 

submitted by Fax: 202–395–5806 (this is 

not a toll-free number), or by email: 

OIRA_submission@omb.eop.gov. OMB 

requests that comments be received by 

October 15, 2021, which is 30 days from 

publication of the proposed rule to 

ensure their consideration. 

PRA Addressee: Address requests for 

copies of the ICRs to James Butikofer, 

Office of Regulations and 

Interpretations, U.S. Department of 

Labor, Employee Benefits Security 

Administration, 200 Constitution 

Avenue NW, Room N–5655, 

Washington, DC 20210. Telephone: 

(202) 693–8410; Fax: (202) 219–4745; 

Email: ebsa.opr@dol.gov. These are not 

toll-free numbers. ICRs submitted to 

OMB also are available at http://

www.RegInfo.gov. 

3. Regulatory Flexibility Act 

The Regulatory Flexibility Act 

(RFA) 53 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 54 and are 

likely to have a significant economic 

impact on a substantial number of small 

entities. Unless an agency determines 

that a proposal is not likely to have a 

significant economic impact on a 

substantial number of small entities, 

section 603 of the RFA requires the 

agency to present an initial regulatory 

flexibility analysis (IRFA) of the 

proposed rule. The DOL has determined 

that this proposed rule is likely to have 

a significant impact on a substantial 

number of small entities. Therefore, the 

DOL provides its IRFA of the proposed 

rule, below. 

For purposes of this IRFA, an entity 

is considered a small entity if it is an 

employee benefit plan with fewer than 

100 participants.55 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.). The basis of EBSA’s definition of 

a small entity for this IRFA 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. The DOL has consulted 

with the SBA Office of Advocacy 

concerning use of this participant count 

standard for RFA purposes.56 The DOL 

seeks comment on the appropriateness 

of continuing to use this size standard. 

The following subsections address 

specific components of an IRFA, as 

required by the RFA. 

3.1. Need for and Objectives of the Rule 

This proposal would amend the 

DOL’s reporting regulations relating to 

the annual reporting and disclosure 

requirements to implement the forms 

changes that are set forth in the NPFR 

published concurrently with this notice 

of proposed rulemaking. DOL 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 changes over 

time. In addition, the technologies 

available to manage and transmit 

information continually advance. 


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57For the calculation of the total number of 

employers in pooled employer plans it is first 

assumed that 80 percent of all the employers who 

would participate in a pooled employer plan are 

currently providing benefits through small plans, 

and the remaining 20 percent through large plans. 

This distribution would apply to the registrant that 

has already exceptionally listed 2000 employers 

(which would then be divided in 1600 small 

participating plans and 400 large participating 

plans) and to the other 74 pooled plan providers 

assumed to be created. As explained, it is also 

assumed that each one of these other 74 pooled 

plan providers would be servicing in total 11 

employers. Therefore, the total number of small 

participating plans in a pooled employer plan is 

calculated as: 1,600 + (74 * 11 * 0.8) = 2,251 

(rounded). 

58These calculations are based on internal DOL 

calculations based on 2018 Form M–1 filings. In 

2018, of the 640 total plan MEWAs, 143 reported 

having fewer than 100 participants, of which 69 had 

zero participants. Of the 47 non-plan MEWAs, six 

reported having fewer than 100 participants all of 

which had zero participants. 

Therefore, it is incumbent on the 

Agencies to revise their reporting 

requirements from time to time to keep 

pace with such changes. The proposed 

forms revisions, and associated DOL 

regulatory amendments in the proposal, 

are intended to implement the reporting 

requirements required by the SECURE 

Act, taking into account certain recent 

changes in markets, other law, and 

technology, many of which are referred 

to above in this document. 

3.2. Affected Small Entities 

The proposal would change the 

current method of counting covered 

participants for purposes of determining 

when a defined contribution plan may 

file as a small plan and whether the 

plan may be exempt from the audit 

requirement from the current 

requirement. Specifically, the proposal 

would allow plans to count just the 

number of participants/beneficiaries 

with account balances as of the 

beginning of the plan year, as compared 

to the current rule that counts all the 

employees eligible to participant in the 

plan. This change would allow an 

estimated 19,442 large defined 

contribution plans to be re-defined and 

file as small defined contribution plans. 

The estimated distribution of these 

plans by amount of assets is shown in 

Table 6. 

TABLE 6—DISTRIBUTION OF LARGE DC PENSION PLANS TO BE REDEFINED AS SMALL FILERS, BY TYPE OF PLAN AND

AMOUNT OF ASSETS, 2018 

Amount of assets Total 

Singleemployer 

plans 

Multiemployer 

plans 

Multipleemployer 

plans 

Total Plans ................................................................................................. 19,442 18,974 134 334 

None or not reported ................................................................................. 50 50 .............................. ........................

$1–24K ....................................................................................................... 221 220 .............................. 1 

25–49K ....................................................................................................... 183 182 .............................. 1 

50–99K ....................................................................................................... 312 306 2 4 

100–249K ................................................................................................... 816 800 3 13 

250–499k ................................................................................................... 1,276 1,260 2 14 

500–999K ................................................................................................... 2,561 2,522 4 34 

1–2.49M ..................................................................................................... 6,158 6,049 3 106 

2.5–4.9M .................................................................................................... 4,790 4,683 7 100 

5–9.9M ....................................................................................................... 2,316 2,259 10 48 

10–24.9M ................................................................................................... 592 556 27 10 

25–49.9M ................................................................................................... 80 53 25 2 

50–74.9M ................................................................................................... 26 12 14 ........................

75–99.9M ................................................................................................... 12 6 6 ........................

100–149.9M ............................................................................................... 9 6 3 ........................

150–199.9M ............................................................................................... 13 4 9 ........................

200–249.9M ............................................................................................... 8 3 5 ........................

250–499.9M ............................................................................................... 12 1 11 ........................

500–999.9M ............................................................................................... 4 3 1 ........................

1–2.49B ...................................................................................................... 2 1 1 ........................

As described in the regulatory impact 

analysis, above, the DOL estimates that 

100 DCGs will form in the first year, 

filing for 15,350 small plans. These 

plans would no longer need to file a 

Form 5500 or Form 5500–SF; their DCG 

filing a complete Form 5500 Annual 

Return/Report in accordance with its 

instructions, including the requirement 

to include the proposed Schedule DCG 

for each individual participating plan, 

would satisfy the reporting 

requirements for those plans. There also 

may be some cases in which sponsors of 

small plans decide to instead participate 

in the pooled employer plan, which 

would also result in a number of small 

plans either being terminated or 

possibly merged into the pooled 

employer plan and no longer filing a 

Form 5500 or Form 5500–SF. As 

discussed above, the DOL is estimating 

that 2,251 small employers/plans will 

join a pooled employer plan.57

Due to the change in the requirements 

to be considered a small plan on the 

basis of account balance, in total, 

approximately 609,695 defined 

contribution pension plans covering 

fewer than 100 participants with 

account balances would be eligible to 

comply with annual reporting 

requirements applicable to small plans, 

where previously approximately 

590,254 defined contribution plans were 

filing as small plans. In this regard, in 

total there would be now 648,837 small 

plans where previously were 629,397. 

Estimates of the number of small 

pension plans are based on 2018 Form 

5500 filing data. 

Additionally, the proposed changes in 

annual reporting requirements would 

affect MEWAs. In the 2018 calendar 

year, there were 143 plan MEWAs and 

six non-plan MEWAs with fewer than 

100 participants that filed a Form M– 

1.58

3.3. Impact of the Rule 

While many small plans could 

experience a reduced burden as a result 

of the proposed changes, it is the 20,005 

large plans filing under the proposed 

regulations, that we estimate would 

experience a significant impact. 

Specifically, 19,442 defined 

contribution plans due to the change in 

the definition of who can file as a small 

plan and be eligible for an audit waiver, 


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59To estimate the number of large plans currently 

providing the IQPA report and audited financial 

statements the DOL identified those large plans are 

most likely to be re-defined as small plans and have 

filed Schedule H in 2018, as estimated on the 2018 

Form 5500 Pension Research Files. Note that an 80 

to 120 participant transition provision allows a plan 

that covers fewer than 100 participants to continue 

taking advantage of the simplified option or 

exemption, as applicable, until they reach 121 

participants, therefore not all plans with 100 or 

more participants will file a plan in a given year. 

60See fns. 47–49 supra. 

61The methodology DOL uses results in estimates 

that it will take a small pension plan approximately 

12 hours to file a Schedule H, compared to two 

hours and six minutes to file a Schedule I. See 

‘‘Methodology’’ section starting, supra, at page 56 

for a discussion of the burden estimating 

methodology. 

62Plan asset data reflects data reported on 2018 

Form 5500 filings. 

63 2 U.S.C. 1501 et seq. (1995). 

64Enhancing the Intergovernmental Partnership, 

58 FR 58093 (Oct. 28, 1993). 

65Federalism, supra note 6. 

and 563 large participating plans that 

could provide benefits through pooled 

employer plans and be covered by the 

pooled employer plan single audit 

rather than a separate audit if they 

sponsored their own single employer 

plan. An estimated 11,362 of those 

affected large plans currently provide 

the IQPA report and audited financial 

statements that would save in audit 

costs under the proposal.59 There is 

variation in filing requirements based 

on the characteristics of a plan and 

types of assets held. However, these 

plans would no longer need to attach 

the IQPA report (audit) and other 

schedules required of large plans with 

its annual return/report. As described 

earlier in this document,60 the 

Department estimates that there could 

be an audit cost reduction of $7,500 for 

each one of these 11,362 plans. Plans 

may still conduct an audit, even if there 

is no requirement. It is estimated that 25 

percent of plans could still conduct an 

audit. Data on the cost of an audit for 

these plans is not known and will vary 

based on plan size and complexity. An 

estimate of $7,500 is used to estimate 

the cost savings per year. These plans 

also would no longer be required to file 

the Schedule H, but would need to file 

the Schedule I. The difference in burden 

between filing Schedule H and 

Schedule I is estimated to be $770 per 

year.61

Table 6 above shows that number of 

plans by the amount of assets in the 

plans. This shows an estimate of 5,369 

plans (those with less than $1 million in 

assets) that would see a costs savings of 

about one percent of plan assets.62

The establishment of DCGs, the use of 

Schedules DCG ($178 per plan), 

Schedule MEP ($20 for most MEPs and 

$26 per pooled employer plan), and the 

other changes could impact a 

substantial number of small plans, as 

discussed above, but the impacts per 

plan are small in magnitude and do not 

meet the qualifications for a significant 

impact for this analysis. 

3.4. Duplicate, Overlapping, or Relevant 

Federal Rules 

The DOL is unaware of any relevant 

Federal rules for small plans that 

duplicate, overlap, or conflict with these 

regulations. 

3.5. Description of Steps Taken To 

Minimize the Impact on Small Entities 

These proposed regulations and 

related changes to the Form 5500 

Annual Return/Report generally 

implement or otherwise relate to 

SECURE Act changes to ERISA and the 

Code, and do not include significant 

modifications to existing small plan 

simplified reporting options other than 

expanding the number of plans that will 

be eligible for simplified reporting 

options by reason of the proposed 

change in the method of counting 

participants for determining small plans 

versus large plan status. Small pension 

plans that are invested in ‘‘eligible’’ 

plan assets and otherwise meet certain 

requirements are able to use a simplified 

reporting option of filing Form 5500–SF, 

which was established by regulation in 

part to comply with provisions of the 

Pension Protection Act requiring a 

simplified form of reporting for plans 

with fewer than 25 participants. In light 

of the fact that the majority of small 

plans required to file an ERISA annual 

report cover fewer than 25 participants, 

the simplified reporting option also 

constitutes the Department’s efforts to 

further reduce the information 

collection burden for small business 

concerns with fewer than 25 employees, 

pursuant to the Small Business 

Paperwork Relief Act of 2002, Public 

Law 107–198, see 44 U.S.C. 3506 (c)(4). 

The Department, in developing the 

proposed regulatory changes for Form 

5500 filings by DCGs, carried forward an 

audit waiver for small plans 

participating in a DCG consolidated 

Form 5500 filing. We also, in 

developing the Schedule MEP filing 

requirements for pooled employer plans 

and other MEPs, did not expand small 

plan reporting requirements. We 

generally limited the information 

collection to consolidating information 

onto the Schedule MEP information that 

is already reported elsewhere by MEPs 

on the current Form 5500, as discussed 

elsewhere in this preamble and in the 

NPFR. Overall, the DOL believes that 

the proposed changes to the reporting 

requirements reduce the burden on 

small plans, while allowing the DOL to 

collect sufficient information for it to 

fulfill its statutory responsibilities. 

4. Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 requires each 

Federal agency to prepare a written 

statement assessing the effects of any 

Federal mandate in a proposed or final 

agency rule that may result in an 

expenditure of $100 million or more 

(adjusted annually for inflation with the 

base year 1995) in any one year by State, 

local, and tribal governments, in the 

aggregate, or by the private sector.63 For 

purposes of the Unfunded Mandates 

Reform Act, as well as Executive Order 

12875,64 this proposal does not include 

any Federal mandate that the DOL 

expects would result in such 

expenditures by State, local, or tribal 

governments, or the private sector. 

5. Federalism Statement 

Executive Order 13132 outlines 

fundamental principles of federalism, 

and requires the 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 States, or on 

the distribution of power and 

responsibilities among the various 

levels of government.65 Federal agencies 

promulgating regulations that have 

federalism implications must consult 

with State and local officials and 

describe the extent of their consultation 

and the nature of the concerns of State 

and local officials in the preamble to the 

rule. 

In the DOL’s view, these proposed 

regulations would not have federalism 

implications because they would not 

have direct effects on the States, on the 

relationship between the National 

Government and the States, or on the 

distribution of power and 

responsibilities among various levels of 

government. These proposed rules do 

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 proposed to be 


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implemented in these rules do 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. The DOL welcomes input 

from affected States regarding this 

assessment. 

List of Subjects in 29 CFR Part 2520 

Accounting, Employee benefit plans, 

Freedom of information, Pensions, 

Public assistance programs, Reporting 

and recordkeeping requirements. 

For the reasons discussed in the 

preamble, 29 CFR part 2520 is proposed 

to be amended as follows: 

PART 2520—RULES AND 

REGULATIONS FOR REPORTING AND 

DISCLOSURE 

■ 1. The authority citation for part 2520 

is revised to read as follows: 

Authority: 29 U.S.C. 1002(44), 1021–1025, 

1027, 1029–31, 1059, 1134, and 1135; and 

Secretary of Labor’s Order 1–2011, 77 FR 

1088. Sec. 2520.101–2 also issued under 29 

U.S.C. 1132, 1181–1183, 1181 note, 1185, 

1185a–b, 1191, and 1191a–c. Sec. 2520.101– 

5 also issued under 29 U.S.C. 1021 note; sec. 

501, Pub. L. 109–280, 120 Stat. 780; sec. 

105(a), Pub. L. 110–458, 122 Stat. 5092. Secs. 

2520.102–3, 2520.104b–1, and 2520.104b–3 

also issued under 29 U.S.C. 1003, 1181–1183, 

1181 note, 1185, 1185a–b, 1191, and 1191a– 

c. Secs. 2520.104b–1 and 2520.107 also 

issued under 26 U.S.C. 401 note; sec. 1510, 

Pub. L. 105–34, 111 Stat. 1068. 

■ 2. In § 2520.103–1, revise paragraphs 

(a)(2), (b) introductory text, (b)(1), (c)(1), 

(c)(2)(i), and (c)(2)(ii)(D) and (E) and add 

paragraphs (c)(2)(ii)(F) and (G) to read as 

follows: 

§ 2520.103–1 Contents of the annual 

report. 

(a) * * * 

(2) Under the authority of subsections 

104(a)(2), 104(a)(3), and 110 of the Act, 

section 1103(b) of the Pension 

Protection Act of 2006, and section 202 

of the SECURE Act, a simplified report, 

limited exemption, or alternative 

method of compliance is prescribed for 

employee welfare and pension benefit 

plans, as applicable. A plan filing a 

simplified report or electing the limited 

exemption or alternative method of 

compliance shall file an annual report 

containing the information prescribed in 

paragraph (b) or (c) of this section, as 

applicable, and shall furnish a summary 

annual report as prescribed in 

§ 2520.104b–10. 

(b) Contents of the annual report for 

plans with 100 or more participants 

electing the limited exemption or 

alternative method of compliance. 

Except as provided in paragraphs (d) 

and (f) of this section and in 

§§ 2520.103–2, 2520.103–14, and 

2520.104–44, the annual report of an 

employee benefit plan covering 100 or 

more participants at the beginning of the 

plan year which elects the limited 

exemption or alternative method of 

compliance described in paragraph 

(a)(2) of this section shall include: 

(1) A Form 5500 ‘‘Annual Return/ 

Report of Employee Benefit Plan’’ and 

any statements or schedules required to 

be attached to the form, completed in 

accordance with the instructions for the 

form, including Schedule A (Insurance 

Information), Schedule C (Service 

Provider Information), Schedule D 

(DFE/Participating Plan Information), 

Schedule G (Financial Transaction 

Schedules), Schedule H (Financial 

Information), Schedule SB (SingleEmployer Defined Benefit Plan 

Actuarial Information), Schedule MB 

(Multiemployer Defined Benefit Plan 

and Certain Money Purchase Plan 

Actuarial Information), Schedule MEP 

(Multiple Employer Plan), Schedule R 

(Retirement Plan Information), and 

other financial schedules described in 

§ 2520.103–10. See the instructions for 

this form. 

* * * * * 

(c) * * * 

(1) Except as provided in paragraphs 

(c)(2), (d), (e), and (f) of this section, and 

in §§ 2520.103–14, 2520.104–51, 

2520.104–43, 2520.104–44, 2520.104a– 

6, and 2520.104a–9, the annual report of 

an employee benefit plan that covers 

fewer than 100 participants at the 

beginning of the plan year shall include 

a Form 5500 ‘‘Annual Return/Report of 

Employee Benefit Plan’’ and any 

statements or schedules required to be 

attached to the form, completed in 

accordance with the instructions for the 

form, including Schedule A (Insurance 

Information), Schedule D (DFE/ 

Participating Plan Information), 

Schedule I (Financial Information— 

Small Plan), Schedule SB (Single 

Employer Defined Benefit Plan 

Actuarial Information), Schedule MB 

(Multiemployer Defined Benefit Plan 

and Certain Money Purchase Plan 

Actuarial Information), Schedule MEP 

(Multiple Employer Plan), and Schedule 

R (Retirement Plan Information). See the 

instructions for this form. 

(2)(i) The annual report of an 

employee pension benefit plan or 

employee welfare benefit plan and that 

covers fewer than 100 participants at the 

beginning of the plan year and that 

meets the conditions in paragraph 

(c)(2)(ii) of this section with respect to 

a plan year may, as an alternative to the 

requirements of paragraph (c)(1) of this 

section, meet its annual reporting 

requirements by filing the Form 5500– 

SF ‘‘Short Form Annual Return/Report 

of Small Employee Benefit Plan’’ and 

any statements or schedules required to 

be attached to the form, Schedule SB 

(Single Employer Defined Benefit Plan 

Actuarial Information) and Schedule 

MB (Multiemployer Defined Benefit 

Plan and Certain Money Purchase Plan 

Actuarial Information), completed in 

accordance with the instructions for the 

form. See the instructions for this form. 

(ii) * * * 

(D) Is not a multiemployer plan; 

(E) Is not a plan subject to the Form 

M–1 requirements under § 2520.101–2; 

(F) Is not a multiple employer pension 

plan, including a pooled employer plan 

described in section 3(43) of the Act and 

a multiple employer defined 

contribution pension plan described in 

§ 2510.3–55 of this chapter; and 

(G) Is not a DCG reporting 

arrangement described in § 2520.104– 

51. 

* * * * * 

■ 3. In § 2520.103–5, revise paragraph 

(a) introductory text to read as follows: 

§ 2520.103–5 Transmittal and certification 

of information to plan administrator for 

annual reporting purposes. 

(a) General. In accordance with 

section 103(a)(2) of the Act, an 

insurance carrier or other organization 

which provides benefits under the plan 

or holds plan assets, a bank or similar 

institution which holds plan assets, or 

a plan sponsor shall transmit and certify 

such information as needed by the 

administrator to file the annual report 

under section 104(a)(1) of the Act and 

§ 2520.104a–5, § 2520.104a–6, or 

§ 2520.104a–9: 

* * * * * 

■ 4. In § 2520.103–10: 

■ a. Revise paragraphs (a) and (b)(1) and 

(2); 

■ b. Redesignate paragraph (c) as 

paragraph (d); 

■ c. Add a new paragraph (c); and 

■ d. In newly redesiganted pargraph (d), 

remove ‘‘paragraphs (b)(1), (b)(2) or 

(b)(6)’’ and add ‘‘paragraph (b)(1), (2), or 

(6)’’ in its place. 

The revisions and addition read as 

follows: 

§ 2520.103–10 Annual report financial 

schedules. 

(a) General. The administrator of a 

plan filing an annual report pursuant to 

§ 2520.103–1(a)(2), the report for a 

group insurance arrangement pursuant 

to § 2520.103–2, or the report for a 

defined contribution pension plan 


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51306 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 

group (DCG) reporting arrangement 

pursuant to § 2520.103–14, shall, as 

provided in the instructions to the Form 

5500 ‘‘Annual Return/Report of 

Employee Benefit Plan,’’ include as part 

of the report the separate financial 

schedules described in paragraph (b) of 

this section. 

(b) * * * 

(1) Assets held for investment. (i) A 

schedule of all assets held for 

investment purposes at the end of the 

plan year (see § 2520.103–11) with 

assets aggregated and identified by: 

(A) Identity of issue, borrower, lessor 

or similar party to the transaction 

(including a notation as to whether such 

party is known to be a party in interest); 

(B) Description of investment 

including maturity date, rate of interest, 

collateral, par, or maturity value; 

(including whether the investment is a 

hard-to-value asset); 

(C) Cost; 

(D) Current value, and, in the case of 

a loan, the payment schedule; 

(E) The asset category in which the 

asset was reported on the Schedule H; 

(F) The Central Index Key (CIK) 

number, Legal Entity Identifier (LEI) 

Code, or National Association of 

Insurance Commissioners (NAIC) 

Company Code, or other government 

registration or identity number for the 

investment described in paragraphs 

(b)(1)(i)(A) and (B) of this section, or if 

no government number is available, a 

market or exchange registration or 

identity number; and 

(G) In the case of individual account 

plans, whether the investment is a 

designated investment alternative (DIA) 

or a qualified default investment 

alternative (QDIA), and for each such 

DIA and QDIA with respect to which 

the return is not fixed, the total annual 

operating expenses on the latest 404a– 

5 statement provided to participants 

during the plan year. 

(ii) [Reserved] 

(2) Assets acquired and disposed 

within the plan year. (i) A schedule of 

all assets acquired and disposed of 

within the plan year (see § 2520.103–11) 

with assets aggregated and identified by: 

(A) Identity of issue, borrower, issuer 

or similar party; 

(B) Descriptions of investment 

including maturity date, rate of interest, 

collateral, par, or maturity value; 

(C) Cost of acquisitions; and 

(D) Proceeds of dispositions. 

(ii) [Reserved] 

* * * * * 

(c) Presentation of investment assets 

in commingled trusts and direct filing 

entities (DFEs). (1) Except as provided 

in the Form 5500 and the instructions 

thereto or for filings by direct filing 

entities or DCG reporting arrangements, 

in the case of assets or investment 

interests of two or more plans 

maintained in one trust, entries on the 

schedule of assets held for investment 

purposes at the end of the plan year and 

the schedule of assets acquired and 

disposed of during the plan year shall 

be completed by including the plan’s 

allocable portion of the trust. 

(2) In the case of direct filing entities 

and DCG reporting arrangements 

required to file a schedule of assets held 

for investment purposes at the end of 

the plan year and the schedule of assets 

acquired and disposed of during the 

plan year, the entries on the schedules 

shall be completed by including the 

assets held by the DFE or in the DCG 

reporting arrangement’s trust and shall 

include the number of plans with an 

allocable interest in each listed 

investment. 

* * * * * 

■ 5. Add § 2520.103–14 to read as 

follows: 

§ 2520.103–14 Contents of the annual 

report for defined contribution pension plan 

group (DCG) reporting arrangements. 

(a) General. A defined contribution 

pension plan group reporting 

arrangement as described in § 2520.104– 

51(c) (‘‘DCG reporting arrangement’’) 

that files a consolidated annual report 

pursuant to § 2520.104–51 shall include 

in such report the items set forth in 

paragraph (b) of this section, and shall 

furnish a summary annual report as 

prescribed in § 2520.104b–10. 

(b) Contents of the annual report for 

DCG reporting arrangement. (1) A Form 

5500 ‘‘Annual Return/Report of 

Employee Benefit Plan’’ and any 

statements or schedules required to be 

attached to the form, completed in 

accordance with the instructions for the 

form, including Schedule A (Insurance 

Information), Schedule C (Service 

Provider Information), Schedule D 

(DFE/Participating Plan Information), 

Schedule G (Financial Transaction 

Schedules), Schedule H (Financial 

Information), Schedule DCG (Individual 

Plan Information), Schedule R 

(Retirement Plan Information), and the 

other financial schedules referred to in 

§ 2520.103–10, completed in accordance 

with the instructions for the form. 

(2) A report of an independent 

qualified public accountant for the DCG 

trust. 

(3) Separate financial statements for 

the DCG reporting arrangement trust 

described in § 2520.104–51(c)(2)(i) (in 

addition to the information required by 

paragraph (b)(1) of this section), if such 

financial statements are prepared in 

order for the independent qualified 

public accountant to form the opinion 

required by section 103(a)(3)(A) of the 

Act and paragraph (b)(6) of this section. 

These financial statements shall include 

the following: 

(i) A statement of all trust assets and 

liabilities at current value presented in 

comparative form for the beginning and 

end of the year. The statement of trust 

assets and liabilities shall include the 

assets and liabilities required to be 

reported on the Form 5500; however, 

the assets and liabilities may be 

aggregated into categories in a manner 

other than that used on Form 5500. 

(ii) Separate or combined statements 

of all trust income and expenses and 

changes in net assets, which includes 

the categories of income, expense, and 

changes in assets required to be reported 

on the Form 5500; however, the income, 

expense, and changes in assets may be 

aggregated into categories in a manner 

other than that used on Form 5500. 

(4) Notes to the financial statements 

described in paragraph (b)(1) or (2) of 

this section which contain a description 

of the accounting principles and 

practices reflected in the financial 

statements and, if applicable, variances 

from generally accepted accounting 

principles; a description of the DCG 

reporting arrangement including any 

significant changes in the arrangement 

made during the period and the impact 

of such changes on benefits; a 

description of material lease 

commitments, other commitments, and 

contingent liabilities; a description of 

agreements and transactions with 

persons known to be parties in interest; 

a general description of priorities upon 

termination of the DCG reporting 

arrangement; an explanation of the 

differences, if any, between the 

information contained in the separate 

financial statements and the assets, 

liabilities, income, expenses and 

changes in net assets as required to be 

reported on the Form 5500; and any 

other matters necessary to fully and 

fairly present the financial condition of 

the DCG reporting arrangement. 

(5) In the case of a DCG reporting 

arrangement some or all of the assets of 

which are held in a pooled separate 

account maintained by an insurance 

carrier, or in a common or collective 

trust maintained by a bank, trust 

company or similar institution, a copy 

of the annual statement of assets and 

liabilities of such account or trust for 

the fiscal year of the account or trust 

which ends with or within the plan year 

for which the annual report is made as 

required to be furnished by such 

account or trust under § 2520.103–5(c). 

See §§ 2520.103–3 and 2520.103–4 for 


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Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 51307 

reporting requirements for plans some 

or all of the assets of which are held in 

a pooled separate account maintained 

by an insurance company, or a common 

or collective trust maintained by a bank 

or similar institution, and see 

§ 2520.104–51(b)(2) for when the term 

‘‘DCG reporting arrangement’’ or ‘‘DCG’’ 

shall be used in place of the term 

‘‘plan.’’ 

(6) In the case of a plan participating 

in a DCG reporting arrangement 

covering 100 or more participants at the 

beginning of the plan year, the Schedule 

DCG for each participating plan shall 

include the following as provided in the 

instructions to the Schedule DCG: 

(i) A report of an independent 

qualified public accountant for the 

participating plan. 

(ii) Separate financial statements and 

financial schedules described in 

§ 2520.103–10 for the plan, if such 

financial statements and schedules are 

prepared in order for the independent 

qualified public accountant to form the 

opinion required by section 103(a)(3)(A) 

of the Act and paragraph (b)(6) of this 

section. The financial statement shall 

include the information set forth in 

§ 2520.103–1(b)(2). 

(iii) Notes to the financial statements 

described in paragraph (b)(2)(i) of this 

section, which contain the information 

set forth in § 2520.103–1(b)(3). 

(iv) In the case of a participating plan, 

some or all of the assets of which are 

held in a pooled separate account 

maintained by an insurance company, 

or a common or collective trust 

maintained by a bank or similar 

institution, the information described in 

§ 2520.103–1(b)(4). 

(c) Technical requirements. The 

accountant’s report required for the DCG 

trust and any participating plan subject 

to the requirements in paragraph (b)(6) 

of this section— 

(1) Shall be dated; 

(2) Shall be signed manually; 

(3) Shall indicate the city and state 

where issued; 

(4) Shall identify without detailed 

enumeration the financial statements 

and schedules covered by the report; 

(5) Shall state whether the audit was 

made in accordance with generally 

accepted auditing standards; 

(6) Shall designate any auditing 

procedures deemed necessary by the 

accountant under the circumstances of 

the particular case, which have been 

omitted, and the reasons for their 

omission. Authority for the omission of 

certain procedures which independent 

accountants might ordinarily employ in 

the course of an audit made for the 

purpose of expressing the opinions 

required by paragraph (b)(5)(iii) of this 

section is contained in § 2520.103–8; 

and 

(7) Shall state clearly: 

(i) The opinion of the accountant in 

respect of the financial statements and 

schedules covered by the report and the 

accounting principles and practices 

reflected therein; and 

(ii) The opinion of the accountant as 

to the consistency of the application of 

the accounting principles with the 

application of such principles in the 

preceding year, or as to any changes in 

such principles which have a material 

effect on the financial statements. 

(8) Any matters to which the 

accountant takes exception shall be 

clearly identified, the exception thereto 

specifically and clearly stated, and, to 

the extent practicable, the effect of the 

matters to which the accountant takes 

exception on the related financial 

statements given. The matters to which 

the accountant takes exception shall be 

further identified as to: 

(i) Those that are the result of DOL 

regulations; and 

(ii) All others. 

(d) Electronic filing requirement. See 

§ 2520.104a–2 and the instructions for 

the Form 5500 ‘‘Annual Return/Report 

of Employee Benefit Plan’’ for electronic 

filing requirements. The common plan 

administrator for each plan whose 

reporting obligations are satisfied by a 

DCG filing under this section must 

maintain an original copy of the DCG 

filing, with all required signatures, as 

part of the DCG’s records. 

■ 6. Add § 2520.104–51 to read as 

follows: 

§ 2520.104–51 Alternative method of 

compliance for defined contribution 

pension plan group (DCG) reporting 

arrangements. 

(a) General. Under the authority of 

section 110 of the Act and section 202 

of the SECURE Act, the plan 

administrator common to each plan 

(‘‘common plan administrator’’), as 

described in paragraph (c)(2)(iii) of this 

section, satisfies the obligation to file an 

annual report for each of the plans 

participating in the DCG reporting 

arrangement described in paragraph (c) 

of this section if the participating plan 

meets the requirements of paragraph (b) 

of this section. 

(b) Application. (1) The alternative 

method of compliance set out in this 

section is available only for an 

individual account or defined 

contribution pension plan in a plan year 

in which: 

(i) Such plan participates in a defined 

contribution pension plan group (DCG) 

reporting arrangement described in 

paragraph (c) of this section; and 

(ii) A consolidated annual report 

containing the items set forth in 

§ 2520.103–14 has been filed with the 

Secretary of Labor in accordance with 

§ 2520.104a–9 by the common plan 

administrator (as described in paragraph 

(c)(2)(iii) of this section) for all of the 

plans participating in the DCG reporting 

arrangement (as described in paragraph 

(c) of this section). 

(2) For purposes of this section, the 

term ‘‘DCG reporting arrangement’’ or 

‘‘common plan administrator’’ shall be 

used in place of the terms ‘‘plan’’ and 

‘‘plan administrator,’’ in §§ 2520.103–3, 

2520.103–4, 2520.103–6, 2520.103–8, 

2520.103–9, and 2520.103–10 and 

elsewhere in subpart C of this part and 

this subpart, as applicable. 

(c) Defined contribution pension plan 

group (DCG) reporting arrangement. An 

arrangement is only a ‘‘DCG reporting 

arrangement’’ if all plans participating 

in the arrangement— 

(1) Are individual account plans or 

defined contribution plans as defined in 

section 3(34) of the Act; 

(2) Have— 

(i) The same trustee as described in 

section 403(a) of the Act (‘‘common 

trustee’’) and trust(s) (‘‘common trust’’); 

(ii) The same one or more named 

fiduciaries as described in section 

402(a) of the Act (‘‘common named 

fiduciaries’’), except that nothing in this 

paragraph (c)(2)(ii) precludes an 

individual employer acting as an 

additional named fiduciary with respect 

to the individual plan it sponsors; 

(iii) A designated plan administrator 

that is the same plan administrator as 

defined in section 3(16)(A) of the Act 

(‘‘common plan administrator’’); and 

(iv) Plan years beginning on the same 

date (‘‘common plan year’’); 

(3) Provide the same investments or 

investment options (‘‘common 

investments or investment options’’) to 

participants and beneficiaries; and 

(4) Have the investment assets held in 

a single trust of the DCG reporting 

arrangement, and the participating plan: 

(i) Do not hold any employer 

securities at any time during the plan 

year; 

(ii) At all times during the plan year, 

are 100% invested in assets that have a 

readily determinable fair market value 

as described in § 2520.103–1(c)(2)(ii)(C); 

(iii) Are either audited by an 

independent qualified public 

accountant (IQPA) or satisfies the audit 

waiver conditions in § 2520.104– 

46(b)(1)(i)(A)(1) and (b)(1)(i)(B) and (C); 

(iv) Are not a multiemployer plan; 

and 

(v) Are not a multiple employer 

pension plan, including a pooled 

employer plan described in section 


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51308 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 

3(43) of the Act and multiple employer 

defined contribution pension plans 

described in § 2510.3–55 of this chapter. 

(d) Limitations. The alternative 

method of reporting set out in this 

section does not relieve the 

administrator of a defined contribution 

pension plan participating in a DCG 

reporting arrangement described in 

paragraph (c) of this section from any 

other requirements of Title I of the Act, 

including the provisions which require 

that plan administrators furnish copies 

of the summary plan description to 

participants and beneficiaries (section 

104(b)(1)), furnish certain documents to 

the Secretary of Labor upon request 

(section 104(a)(6)), authorize the 

Secretary of Labor to collect information 

and data from employee benefit plans 

for research and analysis (section 513), 

and furnish a copy of a summary annual 

report to participants and beneficiaries 

of the plan, as required by section 

104(b)(3) of the Act. 

■ 7. In § 2520.104a–5, revise paragraph 

(a) introductoty text to read as follows: 

§ 2520.104a–5 Annual reporting filing 

requirements. 

(a) Filing obligation. Except as 

provided in §§ 2520.104a–6 and 

2520.104a–9, the administrator of an 

employee benefit plan required to file 

an annual report pursuant to section 

104(a)(1) of the Act shall file an annual 

report containing the items prescribed 

in § 2520.103–1 within: 

* * * * * 

■ 8. Add § 2520.104a–9 to read as 

follows: 

§ 2520.104a–9 Annual reporting for 

defined contribution pension plan group 

(DCG) reporting arrangements. 

(a) General. A defined contribution 

pension plan group (DCG) reporting 

arrangement described in § 2520.104– 

51(c) that files an annual report in 

accordance with the terms of paragraphs 

(b) and (c) of this section shall be 

deemed to have filed such a report for 

purposes of § 2520.104–51. 

(b) Date of filing. The annual report 

shall be filed within seven months after 

the close of the plan year of the DCG 

reporting arrangement, unless extended. 

See ‘‘When to file’’ instructions of the 

appropriate Annual Return/Report 

Form. 

(c) Where to file. The annual report 

prescribed in § 2520.103–14 shall be 

filed electronically in accordance with 

the instructions to the Annual Return/ 

Report Form. 

■ 9. In § 2520.104b–10: 

■ a. In paragraph (d)(3): 

■ i. Revise the ‘‘Summary Annual 

Report for (name of plan)’’; 

■ ii. Add paragraphs 11 and 12 

immediately following paragraph 10 

under ‘‘Your Rights to Additional 

Information’’; and 

■ iii. Remove the last undesignated 

paragraph and add two undesignated 

paragraphs in its place; and 

■ b. Remove the appendix to the 

section; and 

■ c. Add table 1 at the end of the 

section. 

The revisions and additions read as 

follows: 

§ 2520.104b–10 Summary Annual Report. 

* * * * * 

(d) * * * 

(3) * * * 

Summary Annual Report for (name of 

plan) 

This is a summary of the annual 

report [insert as applicable either Form 

5500 Annual Return/Report of 

Employee Benefit Plan or Form 5500–SF 

Annual Return/Report of Small 

Employee Benefit Plan] of [insert name 

of plan and EIN/PN] for [insert period 

covered by this report]. The [insert as 

applicable either Form 5500 or Form 

5500–SF] annual report has been filed 

with the Employee Benefits Security 

Administration, as required under the 

Employee Retirement Income Security 

Act of 1974 (ERISA). Your plan is a 

[insert a brief description of the plan 

based on the plan characteristic codes 

listed for the plan on the Form 5500, 

including whether it is a defined 

contribution or defined benefit plan, 

and whether the plan is a pooled 

employer plan, another type of multiple 

employer plan, a single employer plan]. 

[If the plan is participating in a DCG 

reporting arrangement]: 

Your plan participates in an annual 

reporting arrangement that files a 

consolidated Form 5500 Annual Report 

for all the separate plans in the 

arrangement. This summary includes 

aggregate information on all the 

participating plans from the 

consolidated Form 5500. The 

consolidated Form 5500 also includes a 

separate schedule (Schedule DCG) for 

each individual plan. As noted below 

regarding your rights to additional 

information, you have a right to receive 

a copy of the Schedule DCG relating to 

your plan on request from the plan 

administrator.] 

* * * * * 

Your Rights to Additional Information 

* * * * * 

■ 11. a Schedule DCG for plans 

participating in a consolidated group 

Form 5500 filing that includes your plan 

sponsor’s name, EIN, total number of 

participants in your plan and basic 

financial information about the plan. 

■ 12. a Schedule MEP, including name 

and EIN of the employers participating 

in the MEP, each participating 

employer’s percentage of the total 

contributions (employer and employee) 

made by all employer participating in 

the MEP and aggregate account balance 

for each of the employer participating in 

the MEP. 

* * * * * 

[If the plan is participating in a DCG 

reporting arrangement]: 

You also have the legally protected 

right to examine the annual report at the 

main office of the plan (address), (at any 

other location where the report is 

available for examination), and at the 

U.S. Department of Labor in 

Washington, DC, or to obtain a copy 

from the U.S. Department of Labor upon 

payment of copying costs. Requests to 

the Department should be addressed to: 

Public Disclosure Room, Room N–1513, 

Employee Benefits Security 

Administration, U.S. Department of 

Labor, 200 Constitution Avenue NW, 

Washington, DC 20210. The annual 

report is also available online at the 

Department of Labor website 

www.efast.dol.gov. 

* * * * * 

TABLE 1 TO § 2520.104B–10—THE SUMMARY ANNUAL REPORT (SAR) UNDER ERISA: A CROSS-REFERENCE TO THE

ANNUAL REPORT

SAR item Form 5500 large plan filer line 

items 

Form 5500 small plan filer line 

items Form 5500–SF filer line items 

A. Pension Plan: 

1. Funding arrangement ......... Form 5500–9a .............................. Same ............................................ Not applicable. 

2. Total plan expenses ........... Sch. H–2j ...................................... Sch. I–2j ........................................ Line 8h. 

3. Administrative expenses ..... Sch. H–2i(5) .................................. Sch. I–2h ...................................... Line 8f. 

4. Benefits paid ....................... Sch. H–2e(4) ................................ Sch. I–2e ...................................... Line 8d. 


khammond on DSKJM1Z7X2PROD with PROPOSALS
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TABLE 1 TO § 2520.104B–10—THE SUMMARY ANNUAL REPORT (SAR) UNDER ERISA: A CROSS-REFERENCE TO THE

ANNUAL REPORT—Continued 

SAR item Form 5500 large plan filer line 

items 

Form 5500 small plan filer line 

items Form 5500–SF filer line items 

5. Other expenses .................. Sch. H—Subtract the sum of 

2e(4) & 2i(5) from 2j.

Sch. I–2i ........................................ Line 8g. 

6. Total participants ................ Form 5500–6f ............................... Same ............................................ Line 5b. 

6. Value of plan assets (net): 

a. End of plan year .......... Sch. H–1l [Col. (b)] ....................... Sch. I–1c [Col. (b)] ....................... Line 7c [Col. (b)]. 

b. Beginning of plan year Sch. H–1l [Col. (a)] ....................... Sch. I–1c [Col. (a)] ....................... Line 7c [Col. (a)]. 

8. Change in net assets ......... Sch. H—Subtract 1l [Col. (a)] from 

1l [Col. (b)].

Sch. I—Subtract 1c [Col. (a) from 

Col. (b)].

Line 7c—Subtract Col. (a) from 

Col. (b). 

9. Total income ....................... Sch. H–2d ..................................... Sch. I–2d ...................................... Line 8c. 

a. Employer contributions Sch. H–2a(1)(A) & 2a(2) if applicable.Sch. I–2a(1) & 2b if applicable ..... Line 8a(1) if applicable. 

b. Employee contributions Sch. H–2a(1)(B) & 2a(2) if applicable.Sch. I–2a(2) & 2b if applicable ..... Line 8a(2) & 8a(3) if applicable. 

c. Participating employer’s 

percentage of the total 

contributions (employer 

and employee) made 

by all employers participating in a MEP.

Sch. MEP Line 2c ......................... Sch. MEP Line 2c ......................... Not applicable. 

d. Aggregate account balance of the employer 

participating in a MEP 

(determined as the sum 

of the account balances 

of the employees of 

such employer (including the beneficiaries of 

such employees).

Sch. MEP Line 2d ........................ Sch. MEP Line 2d ........................ Not applicable. 

e. Gains (losses) from 

sale of assets.

Sch. H–2b(4)(C) ........................... Not applicable ............................... Not applicable. 

f. Earnings from investments.Sch. H—Subtract the sum of 

2a(3), 2b(4)(C) and 2c from 2d.

Sch. I–2c ....................................... Line 8b. 

11. Total insurance premiums Total of all Schs. A–6b ................. Total of all Schs. A–6b ................. Not applicable. 

12. Unpaid minimum required 

contribution (S–E plans) or 

Funding deficiency (ME 

plans): 

a. S–E Defined benefit 

plans.

Sch. SB–39 ................................... Same ............................................ Same. 

b. ME Defined benefit 

plans.

Sch. MB–10 .................................. Same ............................................ Not applicable. 

c. Defined contribution 

plans.

Sch. R–6c, if more than zero ....... Same ............................................ Line 12d. 

13. Individual plan information 

for plans participating in a 

DCG reporting arrangement.

Schedule DCG .............................. Same ............................................ Not applicable. 

B. Welfare Plan: 

1. Name of insurance carrier .. All Schs. A–1(a) ............................ Same ............................................ Not applicable. 

2. Total (experience rated and 

non-experienced rated) insurance premiums.

All Schs. A—Sum of 9a(1) and 

10a.

Same ............................................ Not applicable. 

3. Experience rated premiums All Schs. A–9a(1) .......................... Same ............................................ Not applicable. 

4. Experience rated claims ..... All Schs. A–9b(4) .......................... Same ............................................ Not applicable. 

5. Value of plan assets (net): 

a. End of plan year .......... Sch. H–11 [Col. (b)] ...................... Sch. I–1c [Col. (b)] ....................... Line 7c [Col. (b)]. 

b. Beginning of plan year Sch. H–11 [Col. (a)] ...................... Sch. I–1c [Col. (a)] ....................... Line 7c [Col. (a)]. 

6. Change in net assets ......... Sch. H—Subtract 1 [Col. (a)] from 

1 [Col. (b)].

Sch. I—Subtract 1c [Col. (a)] from 

1c [Col. (b)].

Line 7c—Subtract [Col. (a)] from 

7c [Col. (b)]. 

7. Total income ....................... Sch. H–2d ..................................... Sch. I–2d ...................................... Line 8c. 

a. Employer contributions Sch. H–2a(1)(A) & 2a(2) if applicable.Sch. I–2a(1) & 2b if applicable ..... Line 8a(1) if applicable. 

b. Employee contributions Sch. H–2a(1)(B) & 2a(2) if applicable.Sch. I–2a(2) & 2b if applicable ..... Line 8a(2) if applicable. 

c. Gains (losses) from 

sale of assets.

Sch. H–2b(4)(C) ........................... Not applicable ............................... Not applicable. 

d. Earnings from investments.Sch. H—Subtract the sum of 

2a(3), 2b(4)(C) and 2c from 2d.

Sch. I–2c ....................................... Line 8b. 

8. Total plan expenses ........... Sch. H–2j ...................................... Sch. I–2j ........................................ Line 8h. 

9. Administrative expenses ..... Sch. H–2i(5) .................................. Sch. I–2h ...................................... Line 8f. 

10. Benefits paid ..................... Sch. H–2e(4) ................................ Sch. I–2e ...................................... Line 8d. 


khammond on DSKJM1Z7X2PROD with PROPOSALS
51310 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Proposed Rules 

1National Ambient Air Quality Standards for 

Ozone, Final Rule, 80 FR 65292 (October 26, 2015). 

Although the level of the standard is specified in 

the units of ppm, ozone concentrations are also 

described in parts per billion (ppb). For example, 

0.070 ppm is equivalent to 70 ppb. 

2SIP revisions that are intended to meet the 

applicable requirements of section 110(a)(1) and (2) 

of the CAA are often referred to as infrastructure 

SIPs and the applicable elements under section 

110(a)(2) are referred to as infrastructure 

requirements. 

3See North Carolina v. EPA, 531 F.3d 896, 909– 

911 (D.C. Cir. 2008). 

TABLE 1 TO § 2520.104B–10—THE SUMMARY ANNUAL REPORT (SAR) UNDER ERISA: A CROSS-REFERENCE TO THE

ANNUAL REPORT—Continued 

SAR item Form 5500 large plan filer line 

items 

Form 5500 small plan filer line 

items Form 5500–SF filer line items 

11. Other expenses ................ Sch. H—Subtract the sum of 

2e(4) & 2i(5) from 2j.

Sch. I–2i ........................................ Line 8g. 

Signed at Washington, DC, this 2nd day of 

September, 2021. 

Ali Khawar, 

Acting Assistant Secretary, Employee Benefits 

Security Administration, U.S. Department of 

Labor. 

[FR Doc. 2021–19713 Filed 9–14–21; 8:45 am] 

BILLING CODE 4510–29–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R01–OAR–2021–0580; FRL–8967–01– 

R1] 

Air Plan Approval; Rhode Island; 2015 

Ozone NAAQS Interstate Transport 

Requirements 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: The Clean Air Act (CAA) 

requires each State Implementation Plan 

(SIP) to contain adequate provisions 

prohibiting emissions that will have 

certain adverse air quality effects in 

other states. The State of Rhode Island 

made a submission to the 

Environmental Protection Agency (EPA) 

to address these requirements for the 

2015 ozone National Ambient Air 

Quality Standards (NAAQS). EPA is 

proposing to approve the submission for 

Rhode Island as meeting the 

requirement that each SIP contain 

adequate provisions to prohibit 

emissions that will significantly 

contribute to nonattainment or interfere 

with maintenance of the 2015 ozone 

NAAQS in any other state. 

DATES: Written comments must be 

received on or before October 15, 2021. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R01– 

OAR–2021–0580 at https://

www.regulations.gov, or via email to 

simcox.alison@epa.gov. For comments 

submitted at Regulations.gov, follow the 

online instructions for submitting 

comments. Once submitted, comments 

cannot be edited or removed from 

Regulations.gov. For either manner of 

submission, EPA may publish any 

comment received to its public docket. 

Do not submit electronically any 

information you consider to be 

Confidential Business Information (CBI) 

or other information whose disclosure is 

restricted by statute. Multimedia 

submissions (audio, video, etc.) must be 

accompanied by a written comment. 

The written comment is considered the 

official comment and should include 

discussion of all points you wish to 

make. EPA will generally not consider 

comments or comment contents located 

outside of the primary submission (i.e., 

on the web, cloud, or other file sharing 

system). For additional submission 

methods, please contact the person 

identified in the FOR FURTHER

INFORMATION CONTACT section. For the 

full EPA public comment policy, 

information about CBI or multimedia 

submissions, and general guidance on 

making effective comments, please visit 

https://www.epa.gov/dockets/ 

commenting-epa-dockets. Publicly 

available docket materials are available 

at https://www.regulations.gov or at the 

U.S. Environmental Protection Agency, 

EPA Region 1 Regional Office, Air and 

Radiation Division, 5 Post Office 

Square—Suite 100, Boston, MA. EPA 

requests that if at all possible, you 

contact the contact listed in the FOR

FURTHER INFORMATION CONTACT section to 

schedule your inspection. The Regional 

Office’s official hours of business are 

Monday through Friday, 8:30 a.m. to 

4:30 p.m., excluding legal holidays and 

facility closures due to COVID–19. 

FOR FURTHER INFORMATION CONTACT: 

Alison C. Simcox, Air Quality Branch, 

U.S. Environmental Protection Agency, 

EPA Region 1, 5 Post Office Square— 

Suite 100, (Mail code 05–2), Boston, MA 

02109—3912, tel. (617) 918–1684, email 

simcox.alison@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Throughout this document whenever 

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean 

EPA. 

Table of Contents 

I. Background 

II. Rhode Island Submission 

III. EPA Evaluation of Rhode Island’s 

Submission 

IV. Proposed Action 

V. Statutory and Executive Order Reviews 

I. Background 

On October 1, 2015, EPA promulgated 

a revision to the ozone NAAQS (2015 

ozone NAAQS), lowering the level of 

both the primary and secondary 

standards to 0.070 parts per million 

(ppm).1 Section 110(a)(1) of the CAA 

requires states to submit, within 3 years 

after promulgation of a new or revised 

standard, SIP submissions meeting the 

applicable requirements of section 

110(a)(2).2 One of these applicable 

requirements is found in section 

110(a)(2)(D)(i)(I), otherwise known as 

the good neighbor provision, which 

generally requires SIPs to contain 

adequate provisions to prohibit in-state 

emissions activities from having certain 

adverse air quality effects on other states 

due to interstate transport of pollution. 

There are two so-called ‘‘prongs’’ within 

CAA section 110(a)(2)(D)(i)(I). A SIP for 

a new or revised NAAQS must contain 

adequate provisions prohibiting any 

source or other type of emissions 

activity within the state from emitting 

air pollutants in amounts that will: 

Significantly contribute to 

nonattainment of the NAAQS in another 

state (prong 1) or interfere with 

maintenance of the NAAQS in another 

state (prong 2). EPA and states must give 

independent significance to prong 1 and 

prong 2 when evaluating downwind air 

quality problems under CAA section 

110(a)(2)(D)(i)(I).3

We note that EPA has addressed the 

interstate transport requirements of 

CAA section 110(a)(2)(D)(i)(I) with 

respect to prior ozone NAAQS in 

several regional regulatory actions, 

including the Cross-State Air Pollution 

Rule (CSAPR), which addressed 

interstate transport with respect to the 

1997 ozone NAAQS as well as the 1997 

and 2006 fine particulate matter 


khammond on DSKJM1Z7X2PROD with PROPOSALS