FR 2021-01741

The document serves as a formal notice from the Pension Benefit Guaranty Corporation (PBGC), indicating its intention to renew the approval from the Office of Management and Budget (OMB) for collecting information related to pension plan terminations. This approval is critical for handling cases where pension plans face financial distress or require intervention from PBGC. The approval is sought under the Paperwork Reduction Act, and public feedback is solicited before finalizing the extension.

Summary of the Document

The PBGC estimates that approximately 70 pension plans will terminate each year, necessitating various processes to ensure those effected are properly informed. Of these terminations, requests for information are expected from affected parties in about 16 cases annually. Each of these requests is anticipated to require 20 hours of work from the staff, translating to a total of 320 hours annually. The cost for this process is estimated to be minimal, as PBGC plans to manage these tasks internally without outsourcing.

Significant Issues and Concerns

There are several concerns regarding the clarity and implications of the document:

• Justification for Time and Effort: The document briefly mentions the time burden, stating that each request will take about 20 hours to process. However, it lacks detailed information on why this amount of time is necessary or what specific tasks are involved.

• Cost Burden Explanation: The assertion that there is a "$0 cost burden" could be misleading. While it indicates no direct financial cost for contracting third parties, it fails to acknowledge the value of staff time, which represents an indirect cost.

• Need for Extension: There is minimal explanation for why an extension is necessary beyond the control number's impending expiration in March 2021. It leaves the reader pondering what challenges, if any, have hindered meeting the requirements within the original timeframe.

• Stakeholders' Understanding: The document uses language that assumes readers are familiar with specific legal and pension-related terms. This could be a barrier for some stakeholders, particularly those without expertise in pensions or legal statutes.

• Contingency Planning: There is no indication of what the consequences might be if the extension is not approved or how PBGC will respond to a significant public pushback against the renewal.

Impact on the Public and Specific Stakeholders

The notice primarily affects stakeholders involved in terminating pension plans, including administrators, sponsors, and affected participants.

• General Public: For most members of the public, unless directly involved with a pension plan under PBGC's jurisdiction, the immediate impact may be minimal. However, the efficiency and transparency of these processes are crucial for maintaining trust in the system that protects retirees' benefits.

• Plan Administrators and Sponsors: These stakeholders may face considerable administrative work. The document suggests an annual workload of over 300 hours collectively, borne by these roles internally. This workload might strain smaller teams or those managing multiple plans.

• Participants and Beneficiaries: Pension beneficiaries depend on accurate and timely information regarding their benefits. Efficient and comprehensive termination procedures, as enabled by this information collection, are vital for preserving participants' rights and ensuring they are informed of any changes.

In conclusion, while the document aims to facilitate the smooth continuation of administrative processes related to pension terminations, the PBGC could improve the narrative by further detailing the necessity, costs, and implications of the proposed actions, presenting a clearer picture to a broader audience, especially those not well-versed in legal or pension-specific terminology.

The document from the Pension Benefit Guaranty Corporation (PBGC) discusses a request for an extension of approval for the collection of information related to pension plan terminations. Financially, this document is notable for its reference to the annual cost burden associated with this collection process, which is estimated to be $0.

Analysis of Financial Reference

The document states that the annual cost burden is estimated to be $0. This suggests that PBGC anticipates that plan administrators and sponsors will manage all necessary activities internally without resorting to hiring third-party services. Here, the implication is that staff members within these entities will perform the required tasks as part of their routine responsibilities, negating any need for additional external expenses.

Issues Related to Financial Reference

1. Lack of Clarity on Cost Burden: The document does not lay out any indirect costs that might arise from using existing staff resources. While the financial figure of $0 suggests no external costs, it doesn't account for the reallocation of staff time which could represent a significant opportunity cost.

2. Insufficient Rationale for Resource Allocation: The document does not adequately explain how the PBGC arrived at this figure, particularly in terms of the potential variance in resource allocation across different plans. There is no breakdown of tasks or detailed justification for the estimated time burden of 320 hours annually. Without this, the estimate might appear simplistic or misleading.

3. Assumption of Efficiency: By stating the annual cost as $0, PBGC assumes high efficiency and capability amongst existing staff members to absorb these duties within their current roles. This assumption might overlook potential inefficiencies or varying resource capabilities amongst different organizations.

Conclusion

While the document provides a straightforward monetary reference indicating no expected additional costs, this figure should be critically assessed. The reality of internal resource use may not fully align with the zero-dollar cost, given potential indirect costs or impacts on staff workload. A deeper examination of cost implications beyond direct financial allocations would benefit stakeholders trying to understand the true resource demands of the information collection process.