2011ss_pte_86-128_(1210-0059_Broker_Dealers)final

PTE 86-128 (Securities Broker-Dealers)

OMB Number 1210-0059

August 2011

SUPPORTING STATEMENT FOR PAPERWORK REDUCTION ACT 1995 SUBMISSIONS

A. Justification

1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.

Section 408(a) of the Employee Retirement Income Security Act of 1974 (ERISA) and section 4975(c)(2) of the Internal Revenue Code of 1986 (the Code) authorizes the Secretary of Labor and the Secretary of the Treasury to grant a conditional or unconditional exemption of any fiduciary, disqualified person or class of fiduciaries, orders of disqualified persons or transactions, from all or part of the restrictions imposed by sections 406 and 407(a) of ERISA and from taxes imposed by sections 4975(a) and (b) of the Code, by reason of section 4975(c)(1) of the Code. Under section 102 of Reorganization Plan No. 4, of 1978 (Reorganization Plan No. 4), the Secretary of Labor was given the authority to grant such exemptions.

Prohibited transaction class exemption (PTE) 86-128, which was granted on November 18, 1986, exempts from the prohibited transaction restrictions the effecting or executing of securities transactions and the receipt of fees on behalf of an employee benefit plan of sales by a person who is a fiduciary with respect to the plan and who is acting in such transactions as agent for the plan. It also applies to the performance by such person of clearance, settlement, custodial or other functions incidental to such transactions. This exemption allows sponsors of pooled separate accounts and other pooled investment funds to use their affiliates to effect or execute securities transactions for such accounts in order to recapture brokerage commissions for the benefit of employee benefit plans whose assets are maintained in pooled separate accounts managed by the insurance companies. This class exemption replaced two prior class exemptions, PTE 79-1 and PTE 84-46.

Based on an application submitted by the Securities Industry Association, in 2002, the Department amended PTE 86-128 to make the exemption available to fiduciaries that are plan trustees¹, subject to certain additional conditions. The conditions include a minimum plan size (at least $50 million in total net assets), and at least annual reporting to the authorizing fiduciary of both dollar and cents-per-share commissions paid to brokers that are: a) affiliated, and b) non-affiliated with the trustee.

Section 406 of ERISA prohibits various transactions between a plan and certain related parties. Those parties in interest described in section 3(14) of ERISA and disqualified persons described in section 4975(e)(2) of the Code, such as plan fiduciaries, sponsoring employers, unions, service providers and affiliates, may not engage in a transaction described in section 406 of ERISA and section 4975(c) of the Code with a plan without an exemption. Specifically, these sections prohibits sales, leases, loans, or the provision of services between a party in interest and a plan; or the use of plan assets by or for the benefit of, or a transfer of plan assets to, a party in interest or a disqualified person, unless a statutory or administrative exemption applies to the transaction. In addition, unless exempted, section 406(b) of ERISA prohibits a fiduciary’s dealing with the assets of a plan in his or her own interest.

Although, section 408(b)(2) of ERISA provides a conditional statutory exemption permitting a plan to make reasonable contractual arrangements with parties in interest for the provision of services necessary for the plan’s operations, the class exemption does not extend to an act of self-dealing described in section 406(b) of ERISA. A fiduciary performing both investment management and brokerage services for the same plan is in a position where his or her decision, as an exercise of fiduciary discretion, to engage in a portfolio trade on behalf of the plan would result in the plan’s paying the fiduciary an additional fee for performance of the brokerage services. In the Department’s view, such a decision involves an act of self-dealing prohibited by section 406(b) of ERISA and not exempt by section 408(b)(2) of ERISA. The Department of Labor has authority pursuant to section 408(a) of ERISA and section 4975(c)(2) of the Code to grant either individual or class exemptions. In order to grant a class exemption under section 408 and section 4975(c)(2), the Department must determine that the exemption is:

(1) administratively feasible,

(2) in the interests of the plan and its participants and beneficiaries, and

(3) protective of the rights of participants and beneficiaries of such plan.

In order to ensure that the class exemption is not abused, that the rights of the participants and beneficiaries are protected, and that the exemption’s conditions are being complied with, the Department often requires minimal information collection pertaining to the affected transactions.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.

Section III of the class exemption imposes the following information collection requirements on fiduciaries of employee benefit plans that effect or execute securities transactions (“broker-dealers”) and the independent plan fiduciary authorizing the plan to engage in the transactions with the broker-dealer (“authorizing fiduciary”) under the conditions contained in the exemption:

1. The authorizing plan fiduciary must provide the broker-dealer with an advance written authorization for the transactions;

2) The broker-dealer must provide the authorizing fiduciary with information necessary to determine whether an authorization should be made, including a copy of the exemption, a form for termination, a description of the broker-dealer’s brokerage placement practices, and any other reasonably available information regarding the matter that the authorizing fiduciary requests;

3) The broker-dealer must provide the authorizing fiduciary with an annual termination form, at least annually, explaining that the authorization is terminable at will, without penalty to the plan, and that failure to return the form will result in continued authorization for the broker-dealer to engage in securities transactions on behalf of the plan;

4) The broker-dealer must provide the authorizing fiduciary with either (a) a conformation slip for each individual securities transaction within 10 days of the transaction containing the information described in Rule 10b-10(a)(1-7) under the Securities Exchange Act of 1934, 17 CFR 240.10b-10 or (b) a quarterly report containing certain financial information including the total of all transaction-related charges incurred by the plan;

5) The broker-dealer must provide the authorizing fiduciary with an annual summary of the confirmation slips or quarterly reports, containing all security transaction-related charges, the brokerage placement practices, and a portfolio turnover ratio; and

6) A broker-dealer who is a discretionary plan trustee must provide the authorizing fiduciary with an annual report showing separately the commissions paid to affiliated brokers and non-affiliated brokers, on both a total dollar basis and a cents-per-share basis.

These requirements are designed as appropriate safeguards to ensure the protection of the plan assets involved in the transactions, which, in the absence of the class exemption, would not be permitted. These safeguards rely on the prior authorization and monitoring of the broker-fiduciary’s activities by a second plan fiduciary that is independent of the first.

Without the relief provided by this class exemption, broker-fiduciaries who provide research and investment management services to accounts for which they effect transactions for the purchase and sale of securities, may be barred by ERISA from providing these combined services to employee benefit plans. Without this class exemption, these sales could not continue, causing disruption of the existing business practices of plans and the businesses that serve them.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration for using information technology to reduce burden.

Under 29 C.F.R. § 2520.104b-1(b) of ERISA, “where certain material, including reports, statements, and documents, is required under Part I of the Act and this part to be furnished either by direct operation of law or an individual request, the plan administrator shall use measures reasonably calculated to ensure actual receipt of the material by plan participants and beneficiaries.” Section 2520.104b-1(c) establishes the manner in which disclosures under Title I of ERISA made through electronic media will be deemed to satisfy the requirement of § 2520.104b-1(b). Section 2520-107-1 establishes standards concerning the use of electronic media for maintenance and retention of records. Under these rules, all pension and welfare plans covered under Title I of ERISA may use electronic media to satisfy disclosure and recordkeeping obligations, subject to specific safeguards.

The Government Paperwork Elimination Act (GPEA) requires agencies to allow customers the option to submit information or transact with the government electronically, when practicable. Where feasible, and subject to resource availability and resolution of legal issues, EBSA has implemented the electronic acceptance of information submitted by customers to the federal government.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

The reporting requirements of this class exemption are similar in some respects to the information required to be disclosed under Rule 10b-10 of the Securities Exchange Act of 1934. The requirements included in this class exemption have been designed so that compliance with the Securities and Exchange Commission (SEC) requirements could be used where applicable. Therefore, the requirements of this class exemption are not duplicative.

5. If the collection of information impacts small businesses or other small entities (Item 5 of OMB Form 83-I), describe any methods used to minimize burden.

This exemption is needed primarily for brokers in large institutions, who would be most likely to engage in the covered transactions. Even if the broker works for a small firm, the information collection is a minimal burden needed to protect the assets of the employee benefit plan.

6. Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.

The disclosure requirements of PTE 86-128 are only mandatory if security brokers and trustees with broker affiliates who are also fiduciaries wish to utilize the class exemption. The frequency is dependent on the occurrence of such transactions, not on a predetermined time period. This exemption was requested by in part by the Securities Industry Association (SIA) on behalf of its members.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

• requiring respondents to report information to the agency more often than quarterly;

• requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;

• requiring respondents to submit more than an original and two copies of any document;

• requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than three years;

• in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;

• requiring the use of a statistical data classification that has not been reviewed and approved by OMB;

• that includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

• requiring respondents to submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information's confidentiality to the extent permitted by law.

None.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years -- even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

The Department's Federal Register notice required by 5 CFR 1320.8(d) providing the public with 60 days to comment on the information collection was published May 24, 2011 (76 FR 30199). No comments were received.

9. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.

No payments or gifts are provided to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

No assurance of confidentiality was provided.

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

None.

12. Provide estimates of the hour burden of the collection of information. The statement should:

• Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.

• If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens in Item 13 of OMB Form 83-I.

• Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here.

Section III of the class exemption imposes the following information collection requests on fiduciaries of employee benefit plans that effect or execute securities transactions (“broker-dealers”) and the independent plan fiduciary authorizing the plan to engage in the transactions with the broker-dealer (“authorizing fiduciary”) under the conditions contained in the exemption:

1. The authorizing plan fiduciary must provide the broker-dealer with an advance written authorization for the transactions;

2. The broker-dealer must provide the authorizing fiduciary with information necessary to determine whether an authorization should be made, including a copy of the exemption, a form for termination, a description of the broker-dealer’s brokerage placement practices, and any other reasonably available information regarding the matter that the authorizing fiduciary requests;

3. The broker-dealer must provide the authorizing fiduciary with an annual termination form, at least annually, explaining that the authorization is terminable at will, without penalty to the plan, and that failure to return the form will result in continued authorization for the broker-dealer to engage in securities transactions on behalf of the plan;

4. The broker-dealer must provide the authorizing fiduciary with either (a) a conformation slip for each individual securities transaction within 10 days of the transaction containing the information described in Rule 10b-10(a)(1-7) under the Securities Exchange Act of 1934, 17 CFR 240.10b-10 or (b) a quarterly report containing certain financial information including the total of all transaction-related charges incurred by the plan;

5. The broker-dealer must provide the authorizing fiduciary with an annual summary of the confirmation slips or quarterly reports, containing all security transaction-related charges, the brokerage placement practices, and a portfolio turnover ratio;

6. A broker-dealer who is a discretionary plan trustee must provide the authorizing fiduciary with an annual report showing separately the commissions paid to affiliated brokers and non-affiliated brokers, on both a total dollar basis and a cents-per-share basis.

Using the 2008 Annual Return/Report of Employee Benefit Plan (Form 5500) data, it is estimated that there are approximately 659,000 trust-funded ERISA covered pension and welfare plans.² The Department has estimated that about 25% of these plans (164,800 plans) use a broker-dealer fiduciary that is potentially eligible to take advantage of the exemption.

The Department used the Census Bureau’s NAICS data to estimate the number of potential broker-dealers that use the exemption. It is estimated that there are approximately 19,200 potential broker-dealers. It is assumed that a quarter (4,800) of these could be fiduciaries for covered plans. It is further assumed that twelve percent³ of plans (19,800 plans) in a year are new and that two percent of plans (3,300 plans) enter into new arrangements with broker-fiduciaries in a year.

Wage rates are assumed as the following: an in-house rate of $123.58 for legal professionals and $27.21 for clerical staff. All dollar amounts are measured in 2011 dollars⁴.

1. Written authorization from the authorizing plan fiduciary to the broker-dealer

Authorizing fiduciaries of new plans entering into a relationship with a broker-dealer are required to provide the broker-dealer with an advance written authorization to perform transactions for the plan. The Department estimates that there are approximately 19,800 new plans each year. In addition there are 3,300 existing plans with a new arrangement with a broker-dealer. Therefore, the Department estimates that approximately 23,100 authorizing fiduciaries are expected to send an advance written authorization. It is assumed that a legal professional will spend one hour per plan preparing an authorization form and ensuring a plan’s compliance with the exemption. This results in an hour burden of 23,100 hours. In addition, the Department assumes that clerical staff will spend one minute preparing and sending the authorization resulting in an hour burden of approximately 400 hours. Based on the above, the written authorization requirement is expected to result in a total hour burden of 23,500 hours with an equivalent cost of $2.85 million.

2. Provision of materials for evaluation of authorization of transaction

Prior to an written authorization being made, the authorizing fiduciary must be provided by the broker-dealer with a copy of the exemption, a form for termination of authorization, a description of broker’s placement practices, and any other reasonably available information. This information is assumed to be readily available.⁵ A clerical staff member is assumed to require two minutes to prepare and mail the required information to the plan fiduciary. This information will be sent to the 23,100 plans entering into an agreement with a broker, and based on the above, the Department estimates that this requirement results in an hour burden of 800 hours with an equivalent cost of $20,900.

3. Provision of an annual termination form

A plan’s authorizing fiduciary must be supplied annually with a form expressly providing an election to terminate the written authorization. It is assumed that legal professionals will spend 10 minutes preparing the termination form for each of the 165,000 plans, which results in an hour burden of 27,500 hours with an equivalent cost of $3.39 million. The Department estimates that clerical staff will spend two minutes per plan preparing and distributing the termination forms resulting in an hour burden of 5,500 hours with an equivalent cost of $150,000. In total requirement, providing the annual termination form is expected to impose an hour burden of 33,000 hours with an equivalent cost of $3.54 million.

4. Transaction Reporting

The broker-dealer engaging in a covered transaction must furnish the authorizing fiduciary with either a conformation slip for each securities transaction or a quarterly report containing specified information. As discussed above, the provision of the confirmation already is required under SEC regulations. Therefore, if the transaction reporting requirement is satisfied by sending conformation slips, no additional hour burden will occur. It is estimated that 60 percent of plans receive quarterly reports. The collecting and generation of the information for the quarterly report is reported as a cost burden. Clerical staff may be required to prepare and distribute the reports. It is assumed that clerical staff will spend one minute per plan for preparing and mailing each of the quarterly reports to the 99,000 plans that receive quarterly reports. This results in an hour burden of 6,600 hours and equivalent cost of $180,000.

5. Annual Statement

In addition to the transaction reporting requirement, broker-dealers are required to send an annual report to each authorizing plan fiduciary containing the same information as the quarterly report and also containing all security transaction-related charges, the brokerage placement practices, and a portfolio turnover ratio. Collecting and generating the information required for the annual report is reported as a cost burden. In addition, it is assumed that the information that must be sent annually could be sent together; therefore, the clerical staff hours required to prepare and distribute the report has been included with the provision of annual termination form requirement. Therefore, no additional hour burden has been reported.

6. Report of Commissions Paid

A discretionary trustee must provide an authorizing fiduciary with an annual report showing separately the commissions paid to affiliated brokers and non-affiliated brokers, on both a total dollar basis and a cents-per-share basis. The collecting and generation of the information for the quarterly report is reported as a cost burden. The clerical hour burden to prepare and distribute the report is included with the provision of annual termination form requirement, because both items are required to be sent annually.

Summary

Table 1 provides a count of the number of respondents and responses by requirement. There are a total of 27,900 distinct respondents sending a total of 1.20 million responses.

Table 2 provides a summary of the hour burden and the associated equivalent cost. The table reports a total hour burden of 64,000 hours and an equivalent cost of $6.61 million.

TABLE 1---Number of Respondents and Responses
Requirement	Activity	Frequency	Number of Respondents	Number of Responses
1	Prior authorization for transaction from independent fiduciary to broker	annual	23,100	23,100
2	Necessary information for plan fiduciary	annual	4,800	23,100
3	Annual Termination Form	annual	4,800	164,800
4	Transaction reporting	quarterly	4,800	659,200
5	Annual Report	annual	4,800	164,800
6	Report of commissions paid to affiliated and unaffiliated brokers	annual	4,800	164,800
Total			27,900	1,199,800
Note: The displayed numbers are rounded to the nearest hundred and therefore may not add up to the totals.
TABLE 2---Total Annual Hour Burden and Equivalent Cost
Requirement	Activity	Annual Hour Burden	Equivalent Cost (2011 dollars)
1	Prior authorization for transaction from independent fiduciary to broker	23,500	2,862,000
2	Necessary information for plan fiduciary	800	21,000
3	Annual Termination Form	33,000	3,544,000
4	Transaction reporting	6,600	179,000
5	Annual Report	00	00
6	Report of commissions paid to affiliated and unaffiliated brokers	0	0
Total		63,800	6,606,000
Note: The displayed numbers are rounded to the nearest hundred and therefore may not add up to the totals. The burden hours for preparation and distribution of requirement 5 and 6 are included in estimates for requirement 3. Part of the burden for requirements 4, 5, and 6 are counted as cost burden.

13. Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information. (Do not include the cost of any hour burden shown in Items 12 or 14).

As discussed in item 12 above, the exemption imposes six information requests on authorizing fiduciaries and broker-dealers to qualify for the relief provided in the exemption. The cost burden that is associated with complying with these ICRs is discussed below. These estimates are in addition to the hour burden estimates discussed in item12.

The Department has used the same assumptions as were used in determining the hour burden. In addition, the Department assumes that electronic means will be used to deliver 38 percent of the required information with no associated cost burden. For the required information not sent electronically, the Department estimates that a cost of 5 cents per page for paper and printing costs will be assessed. Postage of 44 cents per mailing will also be incurred.

The annual cost burden is calculated as follows:

1. Written authorization from the authorizing plan fiduciary to the broker-dealer

Plans must issue in writing an authorization to the broker-fiduciary prior to a transaction occurring. It is assumed that the authorization will include two pages, therefore the associated print and mailing cost will be 54 cents per mailing. New plans and plans that enter into a new agreement with a broker-fiduciary will have to send the authorization; therefore about 23,100 plans will have to send the authorization each year with 38 percent being sent electronically. This results in a cost burden of approximately $8,000.

2. Provision of materials for evaluation of authorization of transaction

New plans and plans entering into a new agreement must also receive required information from their broker-fiduciary. This information includes a copy of the exemption, a termination form, a description of the broker-fiduciary’s placement practice, and other requested item. This information is assumed to include seven pages. Once again, approximately 23,100 authorizing plan fiduciaries will receive this information and 38 percent will receive the information electronically at no cost, resulting in a cost burden of about $11,000.

3. Provision of an annual termination form

Annually, a broker-dealer must send the authorizing plan fiduciary a termination form. Authorizing fiduciaries of all 164,800 plans will receive this form. It is assumed that the form will be two pages and that 38 percent will be sent electronically at no cost. With a printing and postage cost of 44 cents per plan, there is a resulting cost burden of approximately $55,000.

4. Transaction Reporting

Two options exist to satisfy the transaction reporting. Conformation slips may be sent to the authorizing plan fiduciary or a quarterly report may be sent that includes the specified information. It is assumed that for plans that receive the slips, no additional costs will be incurred, because the information already is required to be disclosed by the SEC. It is assumed that 60 percent of the authorizing plan fiduciaries will receive a two page quarterly report instead of the confirmation slips, and that 38 percent of the quarterly report will be sent electronically. Therefore, the cost burden of mailing the quarterly transaction report is estimated to be nearly $132,000.

5. Annual Statement

An annual statement is also required to be delivered by the broker dealer to the authorizing plan fiduciary. The statement is an annual summary of the transaction reports and contains all transaction-related charges, a description of brokerage placement practices and the portfolio turnover ratio. It is assumed the report contains five pages and 38 percent are sent electronically. Postage cost is not included here as it is assumed that the annual statement will be sent with the annual termination form and postage costs are accounted for there. The cost burden for the paper and print costs are about $26,000.

6. Report of Commissions Paid

A broker-dealer who is a discretionary trustee must provide the authorizing plan fiduciary with an annual report showing commissions paid to affiliated and non-affiliated brokers, on both a total dollar and a cents-per-share basis. The report is assumed to be two pages, and the Department estimates that 38 percent of the reports will be sent electronically. As the report is sent annually, it is assumed that it could be sent with the transaction report, therefore postage costs are not counted here. The cost burden of the paper and print costs is nearly $10,000.

Requirements 4, 5, and 6 also require the broker-fiduciary to report specific transaction fees and information to the plan fiduciaries. The information must be tracked, assigned to specific plans and reported. It is assumed that it costs the broker-fiduciary $3 per plan to track this information⁶. This results in a cost burden of nearly $494,000 per year.

Table 3 reports the cost burden associated with each requirement and also reports that the total cost burden is almost $737,000 annually.

TABLE 3--Cost Burden
Requirement	Number of Affected Plans	Production Cost	Number of Pages	Cost of Paper/ Printing	Postage	Percent of Disclosures Sent Electronically	Cost Burden (2011 dollars)
1	23,100	N/A	2	$0.05	$0.44	62%	$7,700
2	23,100	N/A	7	0.05	0.44	62%	$11,300
3	164,800	N/A	2	0.05	0.44	62%	$55,200
4	98,900	N/A	2	0.05	0.44	62%	$132,400
5	164,800	N/A	5	0.05	0.00	62%	$25,500
6	164,800	N/A	2	0.05	0.00	62%	$10,200
4,5,6	164,800	$3.00	N/A	N/A	N/A	N/A	$494,400
Total							$736,800
Note: The displayed numbers are rounded to the nearest thousand and therefore may not add up to the totals.

14. Provide estimates of annualized cost to the Federal government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any other expense that would not have been incurred without this collection of information. Agencies also may aggregate cost estimates from Items 12, 13, and 14 in a single table.

There are no ongoing costs to the Federal government.

15. Explain the reasons for any program changes or adjustments reported in Items 13 or 14 of the OMB Form 83-I.

This analysis uses Department 2011 wage and overhead estimates. Costs of postage have been updated. Additionally, the number of plans affected has been updated to reflect updated Form 5500 data. The estimated number of new plans has also been updated to reflect updated Form 5500 data. Additionally, the estimated number of affected broker-fiduciaries has been updated to reflect the most up to date (2007) Census Bureau’s Economic Census.

16. For collections of information whose results will be published, outline plans for tabulation, and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

This is not a collection of information for statistical use.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

The collection of information will display a currently valid OMB control number.

18. Explain each exception to the certification statement identified in Item 19, "Certification for Paperwork Reduction Act Submission," of OMB 83-I.

Not applicable; no exceptions to the certification statement.

B. Collections of Information Employing Statistical Methods

Not applicable. The use of statistical methods is not relevant to this collection of information.

1Prior to the 2002 amendment, PTE 86-128 was not available to any person (or any affiliate thereof) who was a trustee, plan administrator, or an employer, any of whose employees were covered by the plan.

2 Most large trustees primarily servicing large plans are considered to have the ability to utilize an affiliated broker according to the Securities Industry and Financial Markets Association Prohibited Transaction Exemption application, October 29, 1999: http://www.sifma.org/regulatory/exemption_archives/classexemption.pdf.

3 This estimate is from the 2008 Form 5500 data set.

4. EBSA estimates of 2011 hourly labor rates include wages, other benefits, and overhead based on the National Occupational Employment Survey (May 2009, Bureau of Labor Statistics) and the Employment Cost Index (October 2010, Bureau of Labor Statistics).

5 The cost of preparing the authorization form is accounted for under requirement three.

6 This is based on an estimate from an RFI and industry sources.

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