Justification for Nonmaterial/Nonsubstantive Change

Annual Return/Report of Employee Benefit Plan (Form 5500)

OMB Number 1212-0057

March 2020

Justification for Nonmaterial/Nonsubstantive Change

Pension Benefit Guaranty Corporation (PBGC) is submitting the current 2020 version of the Form 5500, Annual Return/Report of Employee Benefit Plan, and instructions as a non-material/non-substantive change request under OMB Control Number 1212-0057, which currently is scheduled to expire on February 28, 2023. PBGC is not making any program changes to the forms and instructions for 2020 with this submission. In its submission in late 2019, PBGC proposed changes to the Schedule H, Schedule I, and Schedule R, and their related instructions. The proposed changes were approved by OMB on February 12, 2020, after notice and comment to the public (60-day notice, 84 FR 43189, August 20, 2019; 30-day notice, 84 FR 61658, November 13, 2019). This request parallels non-material/non-substantive change requests submitted by the Internal Revenue Service (IRS) (OMB Control Number 1545-1610) and Department of Labor (DOL) (1210-0110).

As noted in the “Changes to Note” section on the first page of the instructions of the Form 5500, PBGC changes that were approved on February 12, 2020 included updates to the Schedule R to provide multiemployer plans with a choice of using three counting methods to count inactive participants, and to Schedules H and I to improve the accuracy of reporting for a plan that was a defined benefit covered under the PBGC program during the plan year. In addition to those changes, the forms and instructions have been updated to reflect the new form year (2020) and revisions by DOL updating (1) the Schedule H and its instructions to reflect a new auditing standard to improve the Accountant’s Opinion, (2) the Administrative Penalties instructions to reflect the annual increase in the maximum civil penalty amount, and (3) the instructions for the Form 5500-SF.

In addition, IRS changes include revisions to the Form 5500 and Form 5500-SF instructions to reflect that, effective for plan years beginning after 2019, a one-participant plan or a foreign plan required to file an annual return can file Form 5500-EZ electronically using the EFAST2 filing system. Form 5500-SF is no longer used by a one-participant plan or a foreign plan in place of Form 5500-EZ. IRS changes also include updates to the Schedules H and I and the Form 5500-SF to increase the required minimum distribution age from 70 ½ to 72, as amended by the “Setting Every Community Up for Retirement Enhancement Act of 2019” (SECURE Act).

The additional changes will not result in any changes to the number of filings (24,800) or to the hour and cost burden (hour burden of 1,200, cost burden of $1,664,000) for the information collection.