Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations 17221

Replacement of PBGC interest rate. A

participant’s accrued benefit is not

considered to be reduced in violation of

section 411(d)(6) merely because of a

plan amendment that changes any

interest rate or mortality assumption

used to calculate the present value of a

participant’s benefit under the plan

(even if the amendment provides for

temporary additional benefits to

accommodate a more gradual transition

from the plan’s old interest rate to the

new rules), if the following conditions

are satisfied—

(1) The amendment replaces the

PBGC interest rate (or an interest rate or

rates based on the PBGC interest rate) as

the interest rate used under the plan in

determining the present value of a

participant’s benefit under this

paragraph (d); and

(2) After the amendment is effective,

the present value of a participant’s

benefit under the plan cannot be less

than the amount calculated using the

applicable mortality table and the

applicable interest rate for the first full

calendar month preceding the calendar

month that contains the annuity starting

date.

(B) Replacement of non-PBGC interest

rate. The section 411(d)(6) relief

provided in paragraph (d)(10)(iii)(A) of

this section does not apply to a plan

amendment that replaces an interest rate

other than the PBGC interest rate (or an

interest rate or rates based on the PBGC

interest rate) as an interest rate used

under the plan in determining the

present value of a participant’s benefit

under this paragraph (d). Thus, the

accrued benefit determined using that

interest rate and the associated mortality

table is protected under section

411(d)(6). For purposes of paragraphs

(d)(10)(iii)(A) and (B) of this section, an

interest rate is based on the PBGC

interest rate if the interest rate is defined

as a specified percentage of the PBGC

interest rate or as the PBGC interest rate

minus a specified number of basis

points.

(C) Plan amendment providing for

prior determination date or up to two

months earlier. If the special rule of

paragraph (d)(10)(iii)(A) of this section

would apply to a plan except that the

applicable interest rate is determined for

a month other than the first full

calendar month preceding the calendar

month that contains the annuity starting

date, a participant’s accrued benefit is

not considered to be reduced in

violation of section 411(d)(6) if the

applicable interest rate is determined for

the calendar month that contains the

date as of which the PBGC interest rate

was determined immediately before the

amendment, or for one of the two

calendar months immediately preceding

that month, or if the plan amendment

satisfies the conditions of paragraph

(d)(10)(ii) of this section.

(D) Examples. The provisions of this

paragraph (d)(10)(iii) are illustrated by

the following examples:

Example 1. On December 31, 1994, Plan A

provided that all single-sum distributions

were to be calculated using the UP–1984

Mortality Table and 100% of the PBGC

interest rate for the date of distribution. On

January 4, 1995, and effective on February 1,

1995, Plan A was amended to provide that

all single-sum distributions are calculated

using the applicable mortality table and the

annual interest rate on 30-year Treasury

securities for the first full calendar month

preceding the calendar month that contains

the annuity starting date. This amendment of

Plan A is not considered to reduce the

accrued benefit of any participant in

violation of section 411(d)(6).

Example 2. On December 31, 1994, Plan B

provided that all single-sum distributions

were to be calculated using the UP–1984

Mortality Table and an interest rate equal to

the lesser of 100% of the PBGC interest rate

for the date of distribution, or 6%. On

January 4, 1995, and effective on February 1,

1995, Plan B was amended to provide that all

single-sum distributions are calculated using

the applicable mortality table and the annual

interest rate on 30-year Treasury securities

for the second full calendar month preceding

the calendar month that contains the annuity

starting date. The 6% interest rate provided

for under the plan is not based on the PBGC

interest rate. Therefore, to satisfy the

requirements of section 411(d)(6), the plan

must provide that the single-sum distribution

payable to any participant must be no less

than the single-sum distribution calculated

using the UP–1984 Mortality Table and an

interest rate of 6%, based on the participant’s

benefits under the plan accrued through

January 31, 1995, and based on the

participant’s age at the annuity starting date.

Example 3. (a) Employer X maintains Plan

C, a calendar year plan. As of December 7,

1994, Plan C provided for single-sum

distributions to be calculated using the PBGC

interest rate as of the annuity starting date for

distributions not greater than $25,000, and

120% of that interest rate (but not an interest

rate producing a present value less than

$25,000) for distributions over $25,000.

Employer X wishes to delay the effective date

of the RPA ’94 rules for a year, and to provide

for an extended transition from the use of the

PBGC interest rate to the new applicable

interest rate under section 417(e)(3). On

December 1, 1995, and effective on January

1, 1996, Employer X amends Plan C to

provide that single-sum distributions are

determined as the sum of—

(i) The single-sum distribution calculated

based on the applicable mortality table and

the annual interest rate on 30-year Treasury

securities for the first full calendar month

preceding the calendar month that contains

the annuity starting date; and

(ii) A transition amount.

(b) The amendment provides that the

transition amount for distributions in the

years 1996–99 is a transition percentage of

the excess, if any, of the amount that the

single-sum distribution would have been

under the plan provisions in effect prior to

this amendment over the amount of the

single sum described in paragraph (a)(i) of

this Example 3. The transition percentages

are 80% for 1996, decreasing to 60% for

1997, 40% for 1998 and 20% for 1999. The

amendment also provides that the transition

amount is zero for plan years beginning on

or after the year 2000. Plan C is not

considered to have reduced the accrued

benefit of any participant in violation of

section 411(d)(6) by reason of this plan

amendment.

Margaret Milner Richardson,

Commissioner of Internal Revenue.

Approved: March 15, 1995.

Leslie Samuels,

Assistant Secretary of the Treasury.

[FR Doc. 95–8229 Filed 4–4–95; 8:45 am]

BILLING CODE 4830–01–U

DEPARTMENT OF LABOR

Wage and Hour Division

29 CFR Part 580

Civil Money Penalties—Procedures for

Assessing and Contesting Penalties

AGENCY: Wage and Hour Division,

Employment Standards Administration,

Labor.

ACTION: Final rule.

SUMMARY: The purpose of this document

is to change the address listed in § 580.6

of Regulations 29 CFR part 580, which

is used for administrative hearing

requests. This revision is being made in

order to streamline the process by

which hearing requests are

acknowledged by consolidating all

aspects of processing hearing requests

into the operations of the office which

issued the administrative determination

upon which the request for a hearing is

based.

EFFECTIVE DATE: This rule is effective

April 5, 1995.

FOR FURTHER INFORMATION CONTACT: J.

Dean Speer, Director, Division of Policy

and Analysis, Wage and Hour Division,

Employment Standards Administration,

U.S. Department of Labor, Room S–

3506, 200 Constitution Avenue NW.,

Washington, DC 20210. Telephone (202)

219–8412. This is not a toll free number.

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act

This rule imposes no reporting or

recordkeeping requirements on the

public.
17222 Federal Register / Vol. 60, No. 65 / Wednesday, April 5, 1995 / Rules and Regulations

II. Background

Section 580.6 of the regulations

requires that any person desiring to

request an administrative hearing on a

notice of determination issued by the

Department of Labor (assessing civil

money penalties for violations under

section 12 of the FLSA relating to child

labor, or repeated and willful violations

of sections 6 and 7 relating to the

minimum wage and overtime

requirements of the FLSA) must do so

in writing within 15 days after the date

of receipt of the notice. Additionally,

section 580.6 specifies that the written

hearing request shall be made to the

Administrator of the Wage and Hour

Division, Employment Standards

Administration, U.S. Department of

Labor.

This revision is being made in order

to streamline the process by which

hearing requests are acknowledged by

consolidating all aspects of processing

hearing requests into the operations of

the office which issued the

administrative determination upon

which the request for a hearing is based.

Accordingly, all such hearing requests

are not to be made to the Wage and

Hour official that issued the

determination in care of the address of

the office that originated the

determination.

III. Summary of Rule

Section 580.6 of regulations, 29 CFR

part 580, is amended to provide for a

new address for purposes of requesting

administrative hearings. Hearing

requests are now directed to the

Administrator of the Wage and Hour

Division, Employment Standards

Administration, U.S. Department of

Labor. Under the amended regulation,

these requests will be directed to the

Wage and Hour Division official who

issued the determination, at the address

appearing on the determination notice.

Executive Order 12866

This rule is not a ‘‘significant

regulatory action’’ within the meaning

of Executive Order 12866. The rule

merely adopts a technical address

change, which will facilitate the

timeliness and handling of the hearing

process. Accordingly, these changes are

not expected to result in a rule that may:

(1) Have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities; (2) create a serious

inconsistency or otherwise interfere

with an action taken or planned by

another agency; (3) materially alter the

budgetary impact of entitlements,

grants, user fees, or loan programs or the

rights and obligations of recipients

thereof; or (4) raise novel legal or policy

issues arising out of legal mandates, the

President’s priorities, or the principles

set forth in Executive Order 12866.

Therefore, no regulatory impact analysis

has been prepared.

Regulatory Flexibility Act

Because no notice of proposed

rulemaking is required for the rule

under 5 U.S.C. 553(b), the requirements

of the Regulatory Flexibility Act, Public

Law 96–354, 94 Stat. 1165, 5 U.S.C. 601

et seq. pertaining to regulatory

flexibility analysis, do not apply to this

rule. See 5 U.S.C. 601(2). The rule

simplifies the handling of hearing

requests and will not have a significant

economic impact on a substantial

number of small entities.

Administrative Procedure Act

This regulation is procedural in

nature. Accordingly, the Secretary, for

good cause, finds pursuant to 5 U.S.C.

553(b)(3), that prior notice and public

comment are unnecessary,

impracticable, and contrary to the

public interest.

The Secretary also for good cause

finds, pursuant to 5 U.S.C. 553(d)(3),

that this rule should take effect

immediately because it is merely a

technical procedural change which does

not affect any substantive rights.

Document Preparation: This document was

prepared under the direction and control of

Maria Echaveste, Administrator, Wage and

Hour Division, Employment Standards

Administration, U.S. Department of Labor.

List of Subjects in 29 CFR Part 580

Administrative practice and

procedure, Child labor, Employment,

Labor, Law enforcement, Penalties.

For the reasons set forth above, 29

CFR part 580 is amended as set forth

below.

Signed at Washington, DC, on this 30th day

of March, 1995.

Maria Echaveste,

Administrator, Wage and Hour Division.

PART 580—CIVIL MONEY

PENALTIES—PROCEDURES FOR

ASSESSING AND CONTESTING

PENALTIES

1. The authority citation for part 580

continues to read as follows:

Authority: 29 U.S.C. 9a, 203, 211, 212, 216;

Reorg. Plan No. 6 of 1950, 64 Stat. 1263, 5

U.S.C. App.; secs. 25, 29, 88 Stat. 72, 76;

Secretary of Labor’s Order No. 13–71, 36 FR

8755; 5 U.S.C. 500, 503, 551, 559; sec. 9, Pub.

L. 101–157, 103 Stat. 938; sec. 3103, Pub. L.

101–508.

2. Paragraph (a) of § 580.6 is revised

to read as follows:

§ 580.6 Exception to determination of

penalty and request for hearing.

(a) Any person desiring to take

exception to the determination of

penalty shall request an administrative

hearing pursuant to this part. The

exception shall be in writing to the

official who issued the determination at

the Wage and Hour Division address

appearing on the determination notice,

and must be received no later than 15

days after the date of receipt of the

notice referred to in § 580.3 of this part.

No additional time shall be added

where service of the determination of

penalties or of the exception thereto is

made by mail.

* * * * *

[FR Doc. 95–8335 Filed 4–4–95; 8:45 am]

BILLING CODE 4510–27–M

DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 3

[CGD 94–107]

RIN 2115–AF00

Ninth District Marine Inspection and

Captain of the Port Zone Boundaries

AGENCY: Coast Guard, DOT.

ACTION: Final rule.

SUMMARY: The Coast Guard is amending

the descriptions of several Marine

Inspection and Captain of the Port zone

boundaries in the Ninth Coast Guard

District to reflect recent organizational

changes. These changes will clarify

Coast Guard responsibilities with the

Ninth District. These changes will not

impact the type or level of Coast Guard

services performed.

EFFECTIVE DATE: May 5, 1995.

ADDRESSES: Unless otherwise indicated,

documents referred to in this preamble

are available for inspection or copying

at the office of the Executive Secretary,

Marine Safety Council, (G–LRA/3406),

U.S. Coast Guard Headquarters, 2100

Second Street SW., Room 3406,

Washington, DC 20593–0001, between 8

a.m. and 3 p.m., Monday through

Friday, except Federal holidays. The

telephone number is (202) 267–1477.

FOR FURTHER INFORMATION CONTACT:

ENS Harry E. George, Office of Marine

Safety, Security and Environmental