FR 2025-05326

The Department of Labor (DOL) has released a notice requesting public comments on a proposed information collection process. This process relates to a financial exemption that permits employee benefit plans to invest in mutual funds under specific conditions. The exemption, Prohibited Transaction Class Exemption 1997-41, allows plans to make in-kind transfers from collective investment funds to mutual funds. Importantly, this transaction is only allowed under certain stipulations, such as the requirement for banks or plan advisers to notify independent fiduciaries and keep them informed with regular updates.

Summary of the Document

The DOL, through its Employee Benefits Security Administration (EBSA), is seeking approval from the Office of Management and Budget (OMB) for an information collection request (ICR). This request is in accordance with the Paperwork Reduction Act of 1995. Stakeholders are invited to provide their comments by April 28, 2025. Affected parties include businesses in the private sector, non-profit institutions, and for-profit sectors. The OMB will review the request to ensure its alignment with statutory requirements and public interest.

Significant Issues and Concerns

A few key issues emerge from the review of this document:

1. Technical Jargon and Complex Provisions: The notice is laden with technical terms and regulatory references which might prove difficult for laypersons to understand. This complexity could hinder public engagement and result in fewer comments being submitted during the open comment period.

2. Accessibility of the Comment Submission Portal: Comments are to be submitted via a web portal, which might not be handy or accessible for all individuals, particularly those lacking internet access. This raises concerns about whether this requirement inadvertently limits who can participate in the comment process.

3. Estimated Cost Burden: The document mentions an estimated annual cost burden of just $91, a figure that appears surprisingly low. This estimate might warrant further explanation to ensure all relevant costs have been considered and itemized accurately.

4. Manual Submission Processes: The ICR seems to rely heavily on manual processes, which might not take full advantage of available automated information collection technologies. This could increase the administrative burden both for the agencies involved and potentially for those required to submit information.

Impact on the Public and Stakeholders

Broadly speaking, this document presents an opportunity for public engagement, allowing stakeholders to express their views on the necessity and efficacy of the proposed information collection process. However, the technical nature of the document might deter widespread participation, potentially leading to a narrow input base.

For specific stakeholders such as private sector businesses and non-profit institutions, the implications are quite direct. These entities need to comply with the outlined provisions and might incur additional administrative overhead. On the positive side, the exemptions could facilitate easier financial transactions for employee benefit plans, potentially improving financial outcomes for these organizations.

Conversely, independent fiduciaries and bank advisers operating under this exemption might face additional compliance checks and administrative responsibilities to meet the required conditions. However, the provision ensures a level of transparency and due process that might guard against conflicts of interest, thereby safeguarding beneficiary interests.

In conclusion, while the DOL's document aims to streamline and clarify particular financial transactions under exempt conditions, its complexities and procedural demands might pose challenges that require careful consideration and broader outreach to maximize meaningful public interaction.

The document includes a specific reference to a financial estimation made by the Department of Labor concerning the proposed information collection. It states that the Total Estimated Annual Other Costs Burden is $91. This cost is associated with the collection of information under the Paperwork Reduction Act for the Department’s Employee Benefits Security Administration. This estimation represents additional costs beyond the time burden, such as operational or administrative expenses necessary to execute the collection of information.

An important issue to note regarding this financial reference is its surprisingly modest figure. For government projects involving duties like administering complex financial information related to employee benefit plans, an annual other costs burden of $91 appears to be unexpectedly low. Given the typically intricate and resource-intensive nature of fulfilling regulatory requirements and ensuring compliance, there may be concern about whether this figure accurately captures the entirety of related expenses. Stakeholders might question whether this assessment accounts for unexpected costs or whether any expenses have been inadvertently omitted.

Furthermore, this budgetary figure relates directly to the issue identified regarding the collection's reliance on manual submission processes. A low cost burden might suggest limited investment in more efficient, automated systems for data collection, which could help reduce administrative burdens reported in the 3,010 hours estimated annual time burden. If administrative processes were more automated, the low cost burden noted could seem more plausible, balancing both time and fiscal efficiencies. Therefore, it is crucial for the Department to ensure clarity and transparency concerning these financial estimations to maintain public trust and guarantee stakeholder engagement in the comment submission process.