Supporting Statement MPP 2016

SUPPORTING STATEMENT
REQUEST FOR APPROVAL OF PROPOSED COLLECTION
AGENCY:

Pension Benefit Guaranty Corporation

TITLE:

Missing Participants; 29 CFR Part 4050; PBGC Forms MP100, MP200, MP300
and MP400, and schedules

STATUS:

Request for approval of new information collection under a new control number.

CONTACT: Deborah Murphy (202-326-4400, ext. 3041) or Jo Amato Burns (202-326-4400,
ext. 3072)
1. Need for collection. The Pension Benefit Guaranty Corporation (PBGC) administers
the pension insurance program under title IV of the Employee Retirement Income Security Act
of 1974 (ERISA). The title IV insurance program applies to most defined benefit (DB) pension
plans. (Among the DB plans not covered by title IV are small plans of professional service
employers.) If a covered plan terminates underfunded, PBGC steps in to guarantee benefits up to
specified limits. PBGC also oversees the termination of well-funded plans.
The process of closing out a terminated retirement plan involves the disposition of plan
assets to satisfy the benefits of plan participants and beneficiaries. One difficulty faced by plan
administrators in closing out terminated plans is how to provide for the benefits of missing
persons. Title IV includes a provision (section 4050 of ERISA) under which PBGC holds
retirement benefits for missing participants and beneficiaries in terminated pension plans and
seeks to reunite those participants and beneficiaries with the benefits being held for them.
Alternatively, if a plan buys an annuity contract to provide a missing person’s benefit, PBGC
keeps information about the annuity contract that can be provided to the person when located.
This missing participants program is currently limited to single-employer DB plans covered by
title IV of ERISA.
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The Pension Protection Act of 2006 provides for expansion of the missing participants
program, and PBGC is proposing to extend the program to —
● defined contribution (DC) plans (not covered by title IV 1),
● small professional service DB plans (not covered by title IV), and
● multiemployer DB plans (covered by title IV).
PBGC’s proposal would also redesign its existing missing participants program (for singleemployer DB plans covered by title IV). The citation and publication date of PBGC’s proposed
rule are set forth in the ROCIS submission for this collection of information.
All four programs would follow the same basic design. The most prominent difference
among them would lie in the mandatory or voluntary nature of the programs. For plans covered
by the title IV insurance program, participation in the program is mandatory. However, DB
plans covered by the title IV insurance program have the choice — for each missing participant
— of transferring the benefit to PBGC or purchasing an annuity contract and providing PBGC
with information on the annuity (information needed by the missing participant to access to the
benefit). For plans not covered by title IV, PBGC’s proposal permits, but does not require, such
plans to participate in PBGC’s missing participants program.
If a plan not covered by title IV decides to participate, it must then elect to be a
transferring plan or a notifying plan. Under the proposal, a transferring plan must transfer
benefits for all missing participants to PBGC. A notifying plan does not transfer benefits to
PBGC; instead, it makes other dispositions of the missing participants’ benefits (for example, by

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Eligibility for the missing participants program under ERISA section 4050 is not by itself considered coverage by
title IV or ERISA.

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transfer to an account with a financial institution) and notifies PBGC of the disposition for some
or all of the missing individuals.
PBGC needs information from plans that participate in the missing participants program
to identify the plans and the missing participants and beneficiaries, to verify that persons
reported missing are actually missing, to determine the persons entitled to benefits that the plans
transfer to PBGC and the form and amount of benefits payable, and to refer claimants of benefits
being held elsewhere to the institutions holding the benefits.
Because PBGC’s current missing participants program applies only to single-employer
plans covered by title IV, the information collection requirements for the program are integrated
with information collection requirements related to the title IV insurance program and approved
by OMB under control number 1212-0036 (expires November 30, 2017). Under PBGC’s
proposed rule, PBGC anticipates that most plans using the missing participants program will be
DC plans not covered by title IV. Therefore, PBGC is seeking a new control number for the
collection of information under the proposed rule.
2. Use of information. PBGC uses the information collected under the current program
to identify reporting plans, verify missing status, search for missing participants and
beneficiaries, identify persons entitled to benefits and the amount and form of benefits payable,
and refer claimants to institutions other than PBGC that hold benefits for missing participants
and beneficiaries. PBGC will use the information collected under the proposed program for the
same purposes.

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3. Information technology. The proposed rule would allow filers to calculate benefits to
be transferred to PBGC by use of spreadsheets accessible on PBGC’s website. Payments to
PBGC for missing participants may be made by wire transfers.
4. Identifying duplication. In general, the information required in the missing participant
filings is not routinely filed with, and available from, any other Federal Government agency, and
there is no similar information that is available instead of the information reported in these
filings.
5. Reducing the burden on small entities. The proposal would reduce burden on all
terminating plans, including small plans, by providing a solution to the problem of distributing
the benefits of missing participants and beneficiaries upon close-out.
6. Consequences of less frequent reporting. This collection of information occurs only
once in the life of a pension plan covered by section 4050 of ERISA ‒— upon close-out in
connection with plan termination. Therefore, the collection could be conducted less frequently
only it were not conducted at all. If this information were not collected at all, PBGC would not
be able to fulfill its duties under the missing participants program provided for in section 4050 of
ERISA.
7. Disfavored requirements. This collection of information does not involve any
requirement listed in 5 CFR § 1320.5(d)(2).
8. Outside input. PBGC’s proposed rule solicits public comment on this collection of
information. The citation and publication date of the proposed rule are set forth in the ROCIS
submission.

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9. Payments and gifts. There are no payments or gifts made in connection with this
collection of information.
10. Confidentiality. Confidentiality of information is that afforded by the Freedom of
Information Act and the Privacy Act. PBGC's rules that provide and restrict access to its records
are set forth in 29 CFR Parts 4901 and 4902.
11. Sensitive questions. This collection of information does not call for submission of
information of a sensitive or private nature.
12. Hour burden on the public. About 200 single-employer plans covered by title IV use
the current missing participants program each year; PBGC assumes that figure will remain more
or less steady. The number of covered multiemployer plans and non-covered DB plans using the
new programs is expected to be negligible and assumed to be zero. There is a dearth of data on
which to base an estimate of the number of DC plans that will participate; PBGC assumes there
will be 3,100 per year. Thus the total number of respondents is estimated at 3,300 per year.
Reporting is less onerous for plans that simply report information about the disposition of
missing persons’ benefits (DB plans that annuitize benefits and DC plans that are notifying
plans) than for those that send benefits to PBGC. And for those that send benefits to PBGC,
reporting is easier for DC than DB plans. DC plans (unlike covered DB plans) may choose to be
transferring or notifying plans, and PBGC assumes that a greater proportion of DC plans will be
notifying plans than the proportion of DB plans that annuitize benefits under the current
program. PBGC estimates that about one-third (1,100) of all plans that use the missing
participants program will simply report benefit information, and two-thirds (2,200) will transfer
benefits. Using current missing participants burden estimates (which are for DB plans only and

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thus likely higher than for the projected mix of DB and DC plans), PBGC estimates the per-plan
filing burden as two hours (one-third at 1 hour and two-thirds at 2.5 hours).
The total time required for these filings would thus be 6,600 hours. Using the same
percentage as for the current program, PBGC estimates that 20 percent of this work will be done
in-house, and thus the estimated hour burden is about 1,320 hours. The monetary equivalent of
this time is estimated at $31,680, using an average hourly rate of $24, based on the following
assumptions:
●

Wage rates account for approximately 70% of total labor costs, with the remaining 30%
attributable to benefits costs. 2

●

The in-house hours are primarily performed by office and administrative support staff
(occupational code 43-0000), 3 at a mean hourly wage rate of $17.08 per hour,
approximately $24 per hour including benefits).
13. Dollar burden on the public. PBGC estimates that 5,280 hours (80 percent of 6,600

hours) of the time required for missing participants filings will be contracted out. This translates
into an estimated dollar burden of about $829,000, using an average hourly rate of $157, based
on the following assumptions:
●

Wage rates account for approximately 70 percent of total labor costs, with the remaining
30 percent attributable to benefits costs.4

●

Consulting is performed by compensation and benefits managers (occupational code 113111) at a mean hourly cost of $81.50 (an hourly wage rate of $57.05 plus $24.45 in
benefits) and actuaries (occupational code 15-2011) at a mean hourly cost of $75.61 (an
hourly wage rate of $52.93 plus $15.88 in benefits). Weighting these two rates equally
results in a blended rate for professional consulting services of approximately $78.50. 5

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http://www.bls.gov/news.release/ecec.nr0.htm (see first paragraph).
http://www.bls.gov/oes/current/oes_nat.htm (see “Office and Administrative Support Occupations”).
4 http://www.bls.gov/news.release/ecec.nr0.htm.
5 Occupational Employment and Wages, May 2014, 11-3111 Compensation and Benefits Managers
http://www.bls.gov/oes/current/oes113111.htm, and Occupational Employment and Wages, May 2014,
15-2011 Actuaries, http://www.bls.gov/oes/current/oes152011.htm.
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●

The hourly rate is doubled to provide for overhead and other costs, for a total hourly cost
of approximately $157.
14. Cost to federal government. PBGC proposes to operate the new missing participants

program through the use of contractors (except for inherently governmental functions such as
approving payments to payees) and to charge fees calculated to cover the cost of contractors’
services. Since contractors would be expected to do all processing of filings, the cost to the
federal government would be nil.
15. Change in burden. This is a new collection.
16. Publication. There are no plans for tabulation or publication.
17. Display of expiration dates. PBGC is not seeking approval to not display the
expiration date for OMB approval of the information collection.
18. Exception to certification statement. There are no exceptions to the certifications
described in 5 CFR § 1320.9.

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