This ICR is for three final regulations under the Employee Retirement Income Security Act of 1974 (ERISA or the Act) that facilitate the termination of, and distribution of
benefits from, individual account pension plans that have been abandoned by their sponsoring employers. The first regulation establishes a procedure for financial
institutions holding the assets of an abandoned individual account plan to terminate the plan and distribute benefits to the planÂs participants and beneficiaries, with limited liability. The second regulation provides a fiduciary safe harbor for making distributions from terminated plans on behalf of participants and beneficiaries who fail to make an election regarding a form of benefit distribution. The third
regulation establishes a simplified method for filing a terminal report for
abandoned individual account plans.
The ICR also takes into account to a class prohibited transaction exemption (PTE 2006-06)that permits a "qualified termination administrator" (QTA) of an individual account plan that has been abandoned by its sponsoring employer to select itself or an affiliate to provide services to the plan in connection with the termination of the plan, to pay itself or an affiliate fees for those services, and to pay itself for services provided prior to the planÂs deemed termination, and class Prohibited Transaction Exemption 2004-16, which are the notice and recordkeeping requirements contained in PTE 2004-16, which permits a pension plan fiduciary that is a financial institution and is also the employer maintaining an individual account pension plan for its employees to establish, on behalf of its separated employees, an IRA at a financial institution that is either the employer or an affiliate, which IRA would receive mandatory distributions that the fiduciary "rolls over" from the plan when an employee terminates employment.
The Department has revised the ICR to account for increases in wage rates and made several changes in estimates. In its previous submission, the Department estimated the number of abandoned plans that would take advantage of the regulations and exemptions. The Department estimated that 4,000 plans would be terminated in the first year and 1,650 plans per year in subsequent years. Based on three years of the data acquired since the last submission, the Department now estimates that only 100 plans a year will take advantage of the regulations to terminate abandoned plans. The previous ICR did not account for a notice that is required to be sent to the 2.5 million participants and beneficiaries under the Safe Harbor, which is accounted for under this submission. Finally, the previous submission assumed that plans would mail out the notice required in order to take advantage of PTE 2004-16. The Department now estimates that the notice will be included in the plans summary plan descriptions.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
PRASSAbandoned Plan09.doc
Termination of Abandoned Individual Account Plans