[Federal Register Volume 79, Number 189 (Tuesday, September 30, 2014)]
[Proposed Rules]
[Pages 58720-58724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-22855]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2520

RIN 1210-AB62


Electronic Filing of Notices for Apprenticeship and Training 
Plans and Statements for Pension Plans for Certain Select Employees

AGENCY: Employee Benefits Security Administration, Department of Labor.

ACTION: Proposed rule.

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SUMMARY: This document contains proposed regulations that would revise 
filing procedures for apprenticeship and training plan notices and 
``top hat'' plan statements with the Secretary of Labor to require 
electronic submission of these notices and statements.

DATES: Comments are due on or before December 29, 2014.

ADDRESSES: You may submit comments, identified by RIN 1210-AB62, by one 
of the following methods:
     Federal eRulemaking Portal: 
http:[sol][sol]www.regulations.gov. Follow the instructions for 
submitting comments.
     Email: [email protected]. Include RIN 1210-AB62 in the subject 
line of the message.
     Mail or personal delivery: Office of Regulations and 
Interpretations, Employee Benefits Security Administration, Room N-
5655, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 20210.
    Instructions: All submissions received must include the agency name 
and Regulation Identifier Number (RIN) for this rulemaking. Comments 
received, including any personal information provided, will be posted 
without change to http:[sol][sol]www.regulations.gov and 
http:[sol][sol]www.dol.gov/ebsa, and made available for public 
inspection at the Public Disclosure Room, N-1513, Employee Benefits 
Security Administration, 200 Constitution Avenue NW., Washington, DC 
20210. Persons submitting comments electronically are encouraged not to 
submit paper copies.

FOR FURTHER INFORMATION CONTACT: Marjorie M. Kress or Eric A. Raps, 
Office of Regulations and Interpretations, Employee Benefits Security 
Administration (EBSA), Department of Labor, at (202) 693-8500. This is 
not a toll-free number.

SUPPLEMENTARY INFORMATION:

Background

    Part 1 of Title I of the Employee Retirement Income Security Act of 
1974, as amended (ERISA), contains reporting and disclosure 
requirements applicable to plans covered by ERISA. For instance, 
sections 103 and 104 of ERISA establish requirements for the 
publication and filing of annual reports, while sections 102 and 104 of 
ERISA require plan administrators to furnish summary plan descriptions 
and summaries of material modifications or changes to participants and 
beneficiaries.
    Section 104(a)(3) of ERISA, however, authorizes the Secretary to 
exempt any welfare benefit plan from all or part of the reporting and 
disclosure obligations, or to provide simplified reporting and 
disclosure, if the Secretary finds that the requirements are 
inappropriate for these plans. Under this authority, the Secretary, in 
1980, issued 29 CFR 2520.104-22, which provides an exemption from the 
reporting and disclosure provisions of Part 1 of Title I of ERISA for 
employee welfare benefit plans that provide only apprenticeship or 
training benefits, or both, if certain conditions are met.\1\ Under the 
regulation, a welfare plan that provides only these benefits is not 
required to meet the requirements of Part 1 of Title I if the 
administrator files with the Secretary a notice as described in Sec.  
2520.104-22 by mail or personal delivery, takes steps reasonably 
designed to ensure that the information required to be contained in the 
notice is disclosed to employees of employers contributing to the plan 
who may be

[[Page 58721]]

eligible to enroll, and makes the notice available to these employees 
upon request.
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    \1\ See 40 FR 24647 (June 9, 1975); 40 FR 34529, 34530 (August 
15, 1975); and 45 FR 34528, 34529 FN 10 (March 11, 1980).
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    Similarly, section 110(a) of ERISA permits the Secretary to specify 
an alternative form of compliance with the reporting and disclosure 
obligations of Part 1 of Title I for any pension plan or class of 
pension plans subject to ERISA if certain findings are made. Under the 
authority of section 110(a), the Department, in 1975, issued regulation 
29 CFR 2520.104-23 to provide an alternative method of compliance with 
the reporting and disclosure requirements of Part 1 of Title I for 
unfunded or insured pension plans established for a select group of 
management or highly compensated employees (``top hat'' plans).\2\ 
Under the alternative method of compliance, the administrator of a top 
hat plan will satisfy the requirements for the reporting and disclosure 
provisions of Part 1 of Title I by filing a statement with the 
Secretary by mail or personal delivery to the address specified in the 
regulation, and by providing plan documents, if any, to the Secretary 
upon request. The statement must include the information listed in the 
regulation.
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    \2\ See 40 FR 24647, 24648 (June 9, 1975) and 40 FR 34530 
(August 15, 1975).
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    Recently, the Department instituted a wholly electronic system 
(EFAST2) for filing and processing the Form 5500 Annual Return/Report, 
which is used to report information to the government on certain 
employee benefit plans and direct filing entities. Form 5500 Annual 
Return/Reports filed through EFAST2 on or after the 2009 plan years are 
also available to the general public through the Department's Web site 
at http:[sol][sol]www.efast.dol.gov. The EFAST2 system, however, does 
not include apprenticeship and training plan notices and top hat 
statements.\3\ Thus, all such notices and statements are filed with the 
Department on paper though regular mail or personal delivery.
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    \3\ The Department also requires that the administrator of a 
multiple employer welfare arrangement (MEWA) and the administrator 
of any entity claiming exception (ECE) satisfy Form M-1 reporting 
obligations by filing electronically. Apprenticeship and training 
plan notices and top hat statements also are not part of the MEWA 
and ECE electronic filing process.
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    The Department has determined that regular mail or personal 
delivery are no longer the most efficient or cost-effective ways to 
file and process these notices and statements. The Department annually 
receives approximately 120 apprenticeship and training plan notices and 
approximately 2,000 top hat plan statement filings. To make the 
information on these notices and statements accessible, the Department 
converts each paper filing to electronic format. The proposal will 
eliminate the need for this time-consuming task. Because the internet 
is widely accessible to persons who file these notices and statements, 
the Department expects that the regulated community will find 
electronic filing to be easier and more cost-effective than paper 
filing. Electronic filing should also facilitate the disclosure of the 
information to participants and beneficiaries, and other interested 
members of the public since electronically filed documents can be 
promptly posted on the Department's Web site. Thus, the Department, 
filers, and users all stand to benefit from this proposal in ways that 
are consistent with the goals of the E-Government Act of 2002.\4\
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    \4\ Public Law 107-347, sec. 2 (Dec. 17, 2002).
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Explanation of Provisions

    The proposal would revise the current procedures for filing 
apprenticeship and training plan notices and ``top hat'' plan 
statements with the Secretary of Labor to require electronic submission 
of these notices and statements. The proposal is not intended to 
express any view on, and would not change, the current content 
requirements in the exemption under Sec.  2520.104-22 for 
apprenticeship and training plans or the alternative method of 
compliance under Sec.  2520.104-23 for top hat plans.\5\
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    \5\ We note that the proposed filing system would require the 
filer to input an email address. Although neither regulation 
explicitly mentions such an address, we are not viewing this item as 
a content requirement of the regulations. Rather, the address is 
needed for system functionality because without it the filer would 
not receive instantaneous confirmation of the filing.
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    The proposal would revise Sec.  2520.104-22(c) and Sec.  2520.104-
23(c) to require internet-based electronic filing of apprenticeship and 
training plan notices and top hat plan statements with the Secretary 
through EBSA's Web site. Once they are filed, these notices and 
statements would be posted on the Department's Web site at 
http:[sol][sol]www.dol.gov/ebsa and be available to the public. The 
submission process would be easy to use because the web portal would 
include instructions for using the electronic filing system and also 
would assist administrators by ensuring that all of the information 
required by the regulations would be included in the notice or 
statement before the filing could be completed through the Web site. In 
addition, as previously mentioned, the process would provide an 
electronic confirmation to the administrator that the filing had been 
received by EBSA. This assurance would provide a benefit to 
apprenticeship and training plan administrators and top hat plan 
administrators that is not available through the existing paper-based 
filing system. Finally, the design of the electronic filing system will 
facilitate the requirement that plan administrators of apprenticeship 
and training plans make notices available to participants upon request.

Dates and Interim Availability of New Electronic Filing System

    The Department today is launching its new web-based filing system 
for the notices described above. See http:[sol][sol]www.dol.gov/ebsa. 
Use of this system in lieu of paper-based filing is voluntary pending 
the adoption of a final rule. The Department encourages administrators 
of apprenticeship and training plans and administrators of top hat 
plans to file their plan notices and statements using this new system. 
Pending issuance of final regulations, the Department will treat 
administrators who use the new system as having satisfied the 
requirement to mail the notice or statement to the address listed in 
Sec. Sec.  2520.104-22(c) and 2520.104-23(c). The Department is 
interested in receiving comments on the design and operation of the 
system and proposes that the final rules would become effective on 
their date of publication in the Federal Register and applicable to all 
filings made on or after 120 days after that date.\6\ After the 
applicability date, the Web site filing system would be the exclusive 
method of filing these notices and statements. Filings with the 
Secretary by mail and personal delivery would no longer be acceptable.
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    \6\ As noted above, once they are filed, the notices and 
statements would be posted on the Department's Web site and 
available online to the public, One issue we wish to flag for public 
comment is whether there are any concerns with making any of this 
information, in particular the email address of the plan 
administrator, publicly accessible online. Should this address be 
suppressed for privacy or logistical reasons?
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Regulatory Impact Analysis

1. Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of

[[Page 58722]]

reducing costs, of harmonizing and streamlining rules, and of promoting 
flexibility.
    Under Executive Order 12866, ``significant'' regulatory actions are 
subject to the requirements of the executive order and review by the 
Office of Management and Budget (OMB). Section 3(f) of Executive Order 
12866 defines a ``significant regulatory action'' as an action that is 
likely to result in a rule (1) having an annual effect on the economy 
of $100 million or more, or adversely and materially affecting 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) 
creating serious inconsistency or otherwise interfering with an action 
taken or planned by another agency; (3) materially altering the 
budgetary impacts of entitlement grants, user fees, or loan programs or 
the rights and obligations of recipients thereof; or (4) raising novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.
    Pursuant to the terms of the Executive Order, OMB has determined 
that this action is ``significant'' within the meaning of section 3(f) 
of the Executive Order. Therefore, the proposed rule was reviewed by 
OMB. However, because the rule merely would replace the paper-based 
filing of apprenticeship and training plan notices and top hat plan 
statements with an electronic filing system, and no substantive change 
would be made to the notices and statements, the Department does not 
expect this rulemaking to result in significant costs or benefits. For 
a further discussion, see the Paperwork Reduction Act section, below.

2. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the APA (5 
U.S.C. 551 et seq.) and that are likely to have a significant economic 
impact on a substantial number of small entities.
    The Department carefully considered the likely impact of this 
proposed rule on small entities. The proposed rule will implement an 
electronic submission procedure for administrators of apprenticeship 
and training plans and top hat plans to file notices and statements 
described in sections 2520.104-22 and 2520.104-23. The electronic 
filing system will provide instructions, ensure that plan 
administrators include all of the required information in their notices 
and statements, and provide an electronic confirmation that they have 
been received. The Department expects that an electronic filing system 
to file apprenticeship notices and top hat statements would be more 
efficient and cost-effective for small plan administrators than a 
paper-based filing system, because they no longer will incur material 
and postage costs associated with delivery by regular mail or personal 
delivery service. Based on the foregoing, the Department hereby 
certifies that the proposed rule is not likely to have a significant 
economic impact on a substantial number of small entities. The 
Department welcomes public comments regarding its certification.
    Section 610 of the RFA requires that an agency review each rule 
that has or will have a significant economic impact on a substantial 
number of small entities within ten years of publication of the final 
rule. EBSA initiates a Section 610 review to determine if the 
provisions of a rule should be continued without change, rescinded, or 
amended to minimize adverse economic impact on small entities. In 
addition to the changes in this proposal, EBSA, under section 610 of 
RFA, is taking comments on other possible changes or amendments to the 
two regulations (Sec. Sec.  2520.104-22(c) and 2520.104-23(c)) that are 
the subject of the proposed amendments.

3. Paperwork Reduction Act

    This Notice of Proposed Rulemaking (NPRM) contains an information 
collection that is subject to OMB approval under the Paperwork 
Reduction Act of 1995 (PRA) 44 U.S.C. 3501 et seq. As part of a 
continuing effort to reduce paperwork and respondent burden, the 
Department of Labor and OMB conduct a preclearance consultation program 
to provide the general public and Federal agencies with an opportunity 
to comment on proposed and continuing collection of information. This 
helps to ensure that requested data can be provided in the desired 
format, reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the impact of 
collection requirements on respondents can be properly assessed.
    More specifically and as stated earlier in this preamble, section 
2520.104-22 provides an exemption to the reporting and disclosure 
provisions of Part 1 of Title I of ERISA for employee welfare benefit 
plans that provide only apprenticeship or training benefits, or both, 
if the plan administrator: (1) Files a notice with the Secretary that 
provides the name of the plan, the plan sponsor's Employer 
Identification Number (EIN), the plan administrator's name, and the 
name and location of an office or person from whom interested 
individuals can obtain certain information about courses offered by the 
plan; (2) takes steps reasonably designed to ensure that the 
information required to be contained in the notice is disclosed to 
employees of employers contributing to the plan who may be eligible to 
enroll in any course of study sponsored or established by the plan; and 
(3) makes the notice available to these employees upon request. The 
plan administrator must file the notice with the Secretary of Labor by 
mailing or delivering it to the Department at the address set forth in 
the regulation.
    Section 2520.104-23 provides an alternative method of compliance 
with the reporting and disclosure provisions of Title I of ERISA for 
unfunded or insured plans established for a select group of management 
or highly compensated employees (i.e., top hat plans). In order to 
satisfy the alternative method of compliance, the plan administrator 
must: (1) File a statement with the Secretary of Labor that includes 
the name and address of the employer, the employer EIN, a declaration 
that the employer maintains a plan or plans primarily for the purpose 
of providing deferred compensation for a select group of management or 
highly compensated employees, and a statement of the number of such 
plans and the employees covered by each; and (2) make plan documents 
available to the Secretary upon request. Only one statement needs to be 
filed for each employer maintaining one or more of the plans. The 
statements may be filed with the Secretary by mail or personal 
delivery.
    The proposed rule would replace the paper-based filing of 
apprenticeship and training plan notices and top hat plan statements 
with an electronic filing system. No substantive change would be made 
to the notices and statements. The Department annually receives 
approximately 120 apprenticeship and training plan notices and 
approximately 2,000 top hat plan statement filings. The Department 
estimates in-house human resource professionals on average will spend 
15 minutes preparing each filing at an equivalent cost of $97.69 per 
hour,\7\ and that in-house clerical staff

[[Page 58723]]

will spend three minutes filing the notices and statements on the 
Department's electronic filing system, at an equivalent cost of $29.14 
per hour, for a total of 36 hours for apprenticeship and training plan 
notice filings and 600 hours of top hat plan statement filings and an 
overall total of 636 burden hours. The total equivalent cost for the 
hour burden is $55,000 ($3,000 for apprenticeship and training plan 
notices and $52,000 for top hat plan statements). The Department 
assumes that no other cost burden is associated with this information 
collection request (ICR), because in-house staff will prepare and file 
the notices on behalf of each plan.
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    \7\ The Department estimates 2013 hourly labor rates include 
wages, other benefits, and overhead based on data from the National 
Occupational Employment Survey (June 2012, Bureau of Labor 
Statistics) and the Employment Cost Index (September 2012, Bureau of 
Labor Statistics); the 2011 estimated labor rates are then inflated 
to 2013 labor rates.
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    The Department has submitted an ICR seeking OMB approval for the 
information collection contained in the proposed rule to OMB. A copy of 
this ICR with applicable supporting documentation, including a 
description of the likely respondents, proposed frequency of response, 
and estimated total burden may be obtained free of charge from the 
RegInfo.gov Web site at http://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201407-1210-003 (this link will only become 
active on the day following publication of this notice); by sending a 
request by mail or courier to: PRA Clearance Officer, Office of Policy 
and Research, U.S. Department of Labor, Employee Benefits Security 
Administration, 200 Constitution Avenue NW., Room N-5718, Washington, 
DC 20210; or send an email to [email protected].
    OMB asks that comments about information collections in this NPRM 
be submitted by mail or courier to the Office of Information and 
Regulatory Affairs, Attn: OMB Desk Officer for DOL-EBSA, Office of 
Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 
20503; by Fax: 202-395-6881 (this is not a toll-free number); or by 
email: [email protected]. Commenters are encouraged, 
but not required, to send a courtesy copy of any comments to the party 
identified in the ADDRESSES section of this NPRM. OMB requests that 
comments be received within 30 days of publication of the proposed rule 
to ensure their consideration. Comments submitted in response to this 
request become a matter of public record.
    The Department and OMB are particularly interested in comments 
that:
     Evaluate whether the collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    These paperwork burden estimates are summarized as follows:
    Title: Apprenticeship and Training Plan Notices and Top Hat Plan 
Statements.
    OMB ICR Reference Number: 201407-1210-003.
    Affected Public: Private Sector--business or other for-profit and 
not-for-profit institutions.
    Respondents: 2,120 (120 apprenticeship and training plans and 2,000 
top hat plans).
    Responses: 2,120.
    Frequency of Response: Annually.
    Estimated Total Annual Burden Hours: 636 (36 for apprenticeship and 
training plan notices and 600 for top hat plan statements).
    Estimated Total Annual Burden Cost: $0.

4. Congressional Review Act

    The proposed rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.) and, if finalized, will be transmitted to 
Congress and the Comptroller General for review. The proposed rule is 
not a ``major rule'' as that term is defined in 5 U.S.C. 804, because 
it is not likely to result in (1) an annual effect on the economy of 
$100 million or more; (2) a major increase in costs or prices for 
consumers, individual industries, or Federal, State, or local 
government agencies, or geographic regions; or (3) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export markets.

5. Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4), as well as Executive Order 12875, this proposed rule does not 
include any Federal mandate that may result in expenditures by State, 
local, or tribal governments in the aggregate of more than $100 
million, adjusted for inflation, or increase expenditures by the 
private sector of more than $100 million, adjusted for inflation.

6. Federalism Statement

    Executive Order 13132 (August 4, 1999) outlines fundamental 
principles of federalism, and requires the adherence to specific 
criteria by Federal agencies in the process of their formulation and 
implementation of policies that have substantial direct effects on the 
States, the relationship between the national government and States, or 
on the distribution of power and responsibilities among the various 
levels of government. This proposed rule does not have federalism 
implications because it has no substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Section 514 of ERISA provides, with certain 
exceptions specifically enumerated, that the provisions of Titles I and 
IV of ERISA supersede any and all laws of the States as they relate to 
any employee benefit plan covered under ERISA. The electronic filing 
requirements in this proposed rule do not alter the fundamental 
reporting and disclosure requirements of the statute with respect to 
employee benefit plans, and, as such, have no implications for the 
States or the relationship or distribution of power between the 
national government and the States.

List of Subjects in 29 CFR Part 2520

    Employee benefit plans, Employee Retirement Income Security Act, 
Pension plans, Pension and welfare plans, Reporting and recordkeeping 
requirements, Welfare benefit plans.

    For the reasons set forth in the preamble, the Department proposes 
to amend 29 CFR part 2520 as follows:

PART 2520--RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE

0
1. The authority citation for part 2520 continues to read as follows:

    Authority: 29 U.S.C. 1021-1024, 1027, 1029-31, 1059, 1134 and 
1135; Secretary of

[[Page 58724]]

Labor's Order 1-2011, 77 FR 1088 (January 9, 2012). Sec. 2520.101-2 
also issued under 29 U.S.C. 1181-1183, 1181 note, 1185, 1185a-d, and 
1191-1191c. Sec. 2520.103-1 also issued under 26 U.S.C. 6058 note. 
Sec. 2520.101-6 also issued under 29 U.S.C. 1021(k); Secs. 2520.102-
3, 2520.104b-1 and 2520.104b-3 also issued under 29 U.S.C. 1003, 
1181-1183, 1181 note, 1185, 1185a-d, 1191, and 1191a-c. Secs. 
2520.104b-1 and 2520.107 also issued under 26 U.S.C. 401 note, 111 
Stat. 788.

0
2. Section 2520.104-22 is amended by revising paragraph (c) to read as 
follows:


Sec.  2520.104-22  Exemption from reporting and disclosure requirements 
for apprenticeship and training plans.

* * * * *
    (c) Electronic filing of notice. The notice referred to in 
paragraph (a) of this section shall be filed with the Secretary 
electronically in accordance with the instructions published by the 
Department.
0
3. Section 2520.104-23 is amended by revising paragraph (c) to read as 
follows:


Sec.  2520.104-23  Alternative method of compliance for pension plans 
for certain selected employees.

* * * * *
    (c) Electronic filing of statement. Statements referred to in 
paragraph (b) of this section shall be filed with the Secretary 
electronically in accordance with the instructions published by the 
Department.
* * * * *

    Signed this 16th day of September 2014.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, U.S. 
Department of Labor.
[FR Doc. 2014-22855 Filed 9-29-14; 8:45 am]
BILLING CODE 4510-29-P