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 plans
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 plans 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