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Federal Register / Vol. 86, No. 130 / Monday, July 12, 2021 / Rules and Regulations requirements for eligible plans to apply for special financial assistance SFA
within a short 120 days of the date of enactment of ARP March 11, 2021.
Moreover, PBGC must review applications within only 120 days of filing and plans must apply by the statutory cutoff date of December 31, 2025 December 31, 2026, for revised applications. The compressed timeline for issuing rules, applying for assistance, and processing applications expresses a clear urgency to get appropriate assistance to eligible plans as quickly as possible.
Underscoring that urgency, Congress authorized PBGC to prioritize the filing of applications for eligible plans with the greatest need, but only during the first 2 years after March 11, 2021.
Recognizing that need, PBGC in this interim final rule is prioritizing applications of plans, including soon-tobe insolvent plans and already insolvent plans that previously suspended benefits of participants and beneficiariesbenefits that must be reinstated and restored through makeup payments as a requirement of receiving SFA. Any delay of the effective date of the rule would be contrary to the financial interests of the participants and beneficiaries in these plans. If financial assistance is delayed and plans become insolvent, benefits for participants and beneficiaries will be reduced. For plans already insolvent with participant benefits that were already reduced, any delay will result in participants and beneficiaries having to wait longer to have their benefits reinstated and to receive their make-up payments.
Furthermore, the interim final rule imposes reasonable conditions on eligible plans that receive SFA, as permitted under section 4262m1 of ERISA. PBGC finds good cause for making the conditions provided in the rule effective simultaneously with the application requirements. Plan sponsors need to know, before applying for SFA, what conditions will be imposed on the plan. The conditions may affect a plan sponsors decision to apply for SFA or its determination of the amount of SFA.
For example, the condition on withdrawal liability may affect the assumptions used to determine the amount of SFA in the plans application. The conditions in the interim final rule are integral to the application requirements and decisions being made by plan sponsors, and, therefore, should be effective without delay.
Accordingly, because of the urgent need to get financial assistance to eligible plans as quickly as possible,
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PBGC has determined that prior notice and comment through the issuance of a notice of proposed rulemaking is impracticable and that the public interest is best served by issuing this interim final rule. Further, prior notice and comment is impracticable within the challenging statutory deadline under which PBGC must issue regulations to set forth requirements for special financial assistance applications, and within the limited statutory timeframe already begun in which PBGC has to prioritize the filing of applications of plans with the most urgent need for assistance. However, PBGC is requesting comments at the time this interim final rule is issued and may include changes in a final rule in response to those comments. For the same reasons discussed earlier, pursuant to 5 U.S.C.
553d3, PBGC is making this rule effective on July 12, 2021.
Congressional Review Act Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 also known as the Congressional Review Act or CRA 5
U.S.C. 801 et seq., the Office of Management and Budget OMB has designated this interim final rule as a major rule, as defined by 5 U.S.C.
8042a, which is a rule likely to result in an annual effect on the economy of $100 million or more. Section 8082 of the CRA provides that, notwithstanding the effective date of a major rule defined under section 801, any rule which an agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, shall take effect at such time as the Federal agency promulgating the rule determines. This good cause justification supports waiver of the 60-day delayed effective date for major rules under the CRA.
As discussed earlier, because of the urgent need for the SFA program, PBGC
has determined that this interim final rule must take effect on the date of publication. This immediate effective date is necessary based on the mandate of section 4262c of ERISA to issue regulations or guidance setting forth the requirements for SFA applications within 120 days of the date of enactment of ARP. This short statutory deadline is to allow eligible plans, particularly plans that are close to insolvency or already insolvent, to begin applying for much needed financial assistance. Under the circumstances, PBGC has determined that prior notice and comment through the issuance of a notice of proposed rulemaking is impracticable and that the public interest is best served by making this
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interim final rule effective on July 12, 2021. PBGC does not want to unduly delay providing financial assistance to plans.
Regulatory Impact Analysis 1 Relevant Executive Orders for Regulatory Impact Analysis Under Executive Order E.O. 12866, OMB reviews any regulation determined to be a significant regulatory action.
Section 3f of E.O. 12866 defines a significant regulatory action as an action that is likely to result in a rule that: 1 Has an annual effect on the economy of $100 million or more, or adversely affects in a material way a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities also referred to as economically significant;
2 creates serious inconsistency or otherwise interferes with an action taken or planned by another agency; 3
materially alters the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or 4 raises novel legal or policy issues arising out of legal mandates, the Presidents priorities, or the principles set forth in the E.O.
OMB has determined that this interim final rule is economically significant under section 3f1 and has therefore reviewed this rule under E.O. 12866.
E.O. 13563 supplements and reaffirms the principles, structures, and definitions governing contemporary regulatory review that were established in E.O. 12866, emphasizing the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. It directs agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, and public health and safety effects, distributive impacts, and equity.
PBGC has provided an assessment of the potential benefits, costs, and transfers associated with this interim final rule.
2 Introduction and Need for Regulation As discussed earlier in the preamble, section 9704 of the American Rescue Plan ARP Act of 2021, Special Financial Assistance Program for Financially Troubled Multiemployer Plans, establishes a new section 4262
of ERISA. To implement section 4262, this interim final rule adds to PBGCs
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