[Federal Register Volume 59, Number 19 (Friday, January 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1952]
[Federal Register: January 28, 1994]
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
Prohibited Transaction Exemption 94-8 ; Exemption Application No. D-
9093, et al.]
Grant of Individual Exemptions
AGENCY: Pension and Welfare Benefits Administration, Labor.
ACTION: Grant of individual exemptions.
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SUMMARY: This document contains exemptions issued by the Department of
Labor (the Department) from certain of the prohibited transaction
restrictions of the Employee Retirement Income Security Act of 1974
(the Act) and/or the Internal Revenue Code of 1986 (the Code).
Notices were published in the Federal Register of the pendency
before the Department of proposals to grant such exemptions. The
notices set forth a summary of facts and representations contained in
each application for exemption and referred interested persons to the
respective applications for a complete statement of the facts and
representations. The applications have been available for public
inspection at the Department in Washington, DC. The notices also
invited interested persons to submit comments on the requested
exemptions to the Department. In addition the notices stated that any
interested person might submit a written request that a public hearing
be held (where appropriate). The applicants have represented that they
have complied with the requirements of the notification to interested
persons. No public comments and no requests for a hearing, unless
otherwise stated, were received by the Department.
The notices of proposed exemption were issued and the exemptions
are being granted solely by the Department because, effective December
31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR
47713, October 17, 1978) transferred the authority of the Secretary of
the Treasury to issue exemptions of the type proposed to the Secretary
of Labor.
Statutory Findings
In accordance with section 408(a) of the Act and/or section
4975(c)(2) of the Code and the procedures set forth in 29 CFR part
2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon
the entire record, the Department makes the following findings:
(a) The exemptions are administratively feasible;
(b) They are in the interests of the plans and their
participants and beneficiaries; and
(c) They are protective of the rights of the participants and
beneficiaries of the plans.
Frederick J. Grant, M.D., A.P.C. Profit Sharing Plan (the Plan) Located
in San Luis Obispo, California
[Prohibited Transaction Exemption 94-8; Exemption Application No. D-
9093]
Exemption
The restrictions of sections 406(a) and 406(b)(1) and (2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1) (A) through (E) of the Code,
shall not apply to the sale of an interest in certain improved real
property (the Property) from the individually directed account in the
Plan of Frederick J. Grant, M.D. (Grant), a party in interest with
respect to the Plan, to Grant, provided that the following conditions
are met:
1. The terms of the sale are at least as favorable as those the
Plan could obtain in an arm's-length transaction with an unrelated
party;
2. The sale will involve only Grant's individual account in the
Plan;
3. The fair market value of the Property (and as a result the
Plan's equity in the Property) will be established by an independent
real estate appraiser;
4. The Plan will receive no less than the greater of its share of
the fair market value of the Property (minus the pro rata portion of
the encumbrance) or the total amount the Plan has expended in relation
to the Property as of the date of sale; and
5. The Plan will receive all cash in regard to the transaction.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on December 17, 1993, at 58
FR 66033.
FOR FURTHER INFORMATION CONTACT: Paul Kelty of the Department,
telephone (202) 219-8883. (This is not a toll-free number.)
Retirement Plan for Employees of Holsum Bakery, Inc. (the Plan) Located
in Phoenix, Arizona
[Prohibited Transaction Exemption 94-9; Exemption Application No. D-
9457]
Exemption
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,
shall not apply to the sale (the Sale) by the Plan of certain improved
real property (the Property) to Holsum Bakery, Inc. (the Employer), a
party in interest with respect to the Plan.
This exemption is conditioned upon the following requirements: (1)
The Sale is a one-time cash transaction; (2) the Plan is not required
to pay any commissions, costs or other expenses in connection with this
transaction; (3) the Property is appraised by qualified, independent
appraisers; (4) the sales price for the Property is the greater of
either: (a) $250,000, representing the original amount paid by the Plan
at the time of acquisition; or (b) its fair market value on the date of
the Sale; (5) an independent, qualified fiduciary, who has made an
initial determination that the proposed sale is appropriate for the
Plan, monitors its terms for the Plan; and (6) within ninety days of
the publication in the Federal Register of the grant of this exemption,
the Employer files Forms 5330 with the Internal Revenue Service (the
Service) and pays all applicable additional excise taxes that are due
by reason of the prohibited lease transactions.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on December 10, 1993 at 58
FR 64982.
FOR FURTHER INFORMATION CONTACT: Kathryn Parr of the Department,
telephone (202) 219-8971. (This is not a toll-free number.)
Couch Distributing Company Amended and Restated Money Purchase Pension
Plan (the Plan) Located in Watsonville, CA
[Prohibited Transaction Exemption 94-10; Exemption Application No. D-
9482]
Exemption
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,
shall not apply to the proposed sale by the Plan of a judgment (the
Judgment), to Mr. George W. Couch, III, a party in interest with
respect to the Plan, provided: (1) The sale is a one-time transaction
for cash; (2) the Plan is not required to pay any fees or commissions
in connection therewith; (3) Mr. Couch purchases the Judgment for its
outstanding principal amount and pays any past due interest as well as
additional interest accruing at the statutory rate on the Judgment to
the date of the purchase; (4) the Plan receives a complete return of
its investment; (5) any additional consideration that Mr. Couch
receives pursuant to the Judgment which is in excess of the purchase
price is applied to litigation expenses and the balance paid to the
Plan; (6) an independent fiduciary determines that the transaction is
appropriate for the Plan and in the best interest of its participants
and beneficiaries.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on December 3, 1993 at 58 FR
64012.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
W.J. Casey Trucking & Rigging Co., Inc. Employees Profit Sharing Plan
and Trust (the Plan) Located in Union, New Jersey
[Prohibited Transaction Exemption 94-11 ; Exemption Application No. D-
9506]
Exemption
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,
shall not apply to: (1) The seven-year loan of $300,000 (the Loan) by
the Plan to W. J. Casey Trucking & Rigging Co., Inc. (the Employer), a
party in interest with respect to the Plan; and (2) the personal
guarantees of the Employer's obligations under the Loan by James P. and
Nicholas J. Biondi (the Biondis), parties in interest with respect to
the Plan.
This exemption is conditioned upon the following requirements: (a)
All terms and conditions of the Loan are at least as favorable to the
Plan as those obtainable in an arm's-length transaction with an
unrelated party; (b) the Loan will not exceed twenty-five percent of
the Plan's assets at any time during the transaction; (c) the Loan is
secured by a first lien interest on certain equipment (the Equipment),
which has been appraised by a qualified, independent appraiser to
ensure that the fair market value of the Equipment is at least 200
percent of the amount of the Loan; (d) the Employer's obligations under
the Loan are personally guaranteed by the Biondis; (e) the fair market
value of the Equipment remains not less than 200 percent of the
outstanding balance of the Loan throughout the duration of the Loan;
(f) an independent, qualified fiduciary determines on behalf of the
Plan that the Loan is administratively feasible, in the best interests
of the Plan, and protective of the Plan and its participants and
beneficiaries; and (g) the independent, qualified fiduciary monitors
compliance with the terms and conditions of the exemption and the Loan
throughout the duration of the transaction, taking any action necessary
to safeguard the Plan's interest, including foreclosure on the
Equipment in the event of default.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on December 10, 1993 at 58
FR 64983.
FOR FURTHER INFORMATION CONTACT: Kathryn Parr of the Department,
telephone (202) 219-8971. (This is not a toll-free number.)
Schwebke-Shiskin & Associates, Inc. Profit Sharing Plan and Trust (the
Plan) Located in Miramar, Florida
[Prohibited Transaction Exemption 94-12; Exemption Application No. D-
9520]
Exemption
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,
shall not apply to the proposed sale by the Plan to Schwebke-Shiskin &
Associates, Inc. (SSA), the Plan's sponsor and a party in interest with
respect to the Plan, of certain real property (the Property), for cash,
provided the following conditions are satisfied: (a) The Plan pays no
fees or commissions in connection with the transaction; (b) the sales
price of the Property will be the greater of $1,068,000 or the fair
market value of the Property on the date of the sale as determined by a
qualified, independent appraiser; (c) SSA will pay to the Internal
Revenue Service in timely fashion all excise taxes due in connection
with the past leasing of the Property by the Plan to SSA; and (d) to
the extent that the Plan received less than fair market rental value
from SSA in connection with the past leasing of the Property, SSA will
make the Plan whole, with appropriate interest, for any such shortfall,
within 60 days of the granting of this exemption.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on December 3, 1993 at 58 FR
64015.
FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
NCR Corporation Savings Plan (the Plan) Located in Dayton, Ohio
[Prohibited Transaction Exemption 94-13; Exemption Application No. D-
9536]
Exemption
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) of through (E) of the
Code, shall not apply to (1) An interest-free loan to the Plan (the
Loan) by NCR Corporation, the sponsor of the Plan, with respect to
guaranteed investment contract number GA-GIC-01226 (the GIC) issued by
Executive Life Insurance Company of California (Executive Life); and
(2) the Plan's potential repayment of the Loan (the Repayment);
provided that the following conditions are satisfied:
(A) No interest and/or expenses are paid by the Plan;
(B) The Loan is made to reimburse the Plan for amounts invested
with Executive Life under the terms of the GIC;
(C) The Repayment is restricted to cash proceeds paid to the
Plan (the GIC Proceeds) by Executive Life and/or any other
responsible third party with respect to the GIC, and no other Plan
assets are used to make the Repayments; and
(D) The Repayments will be waived to the extent the Loan exceeds
the GIC Proceeds.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on November 24, 1993 at 58
FR 62144.
FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Randall W. Smith, M.D., A.P.C., Defined Benefit Pension Plan (the
Plan), Located in San Diego, California
[Prohibited Transaction Exemption 94-14; Exemption Application No. D-
9547]
Exemption
The sanctions resulting from the application of section 4975 of the
Code, by reason of section 4975(c)(1) (A) through (E) of the Code,
shall not apply to the cash sale (the Sale) of certain real property
(the Property) by the Plan to Randall W. Smith, M.D. and Florence E.
Smith, husband and wife and disqualified persons with respect to the
Plan, provided that the consideration paid for the Property is no less
than the fair market value of the Property on the date of the Sale as
determined by a qualified, independent appraiser.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption refer to
the notice of proposed exemption published on December 17, 1993, at 58
FR 66036.
FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under section 408(a) of the Act and/or section 4975(c)(2) of the Code
does not relieve a fiduciary or other party in interest or disqualified
person from certain other provisions to which the exemptions does not
apply and the general fiduciary responsibility provisions of section
404 of the Act, which among other things require a fiduciary to
discharge his duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of the Act; nor does it affect the
requirement of section 401(a) of the Code that the plan must operate
for the exclusive benefit of the employees of the employer maintaining
the plan and their beneficiaries;
(2) These exemptions are supplemental to and not in derogation of,
any other provisions of the Act and/or the Code, including statutory or
administrative exemptions and transactional rules. Furthermore, the
fact that a transaction is subject to an administrative or statutory
exemption is not dispositive of whether the transaction is in fact a
prohibited transaction; and
(3) The availability of these exemptions is subject to the express
condition that the material facts and representations contained in each
application are true and complete and accurately describe all material
terms of the transaction which is the subject of the exemption. In the
case of continuing exemption transactions, if any of the material facts
or representations described in the application change after the
exemption is granted, the exemption will cease to apply as of the date
of such change. In the event of any such change, application for a new
exemption may be made to the Department.
Signed at Washington, DC, this 25th day of January, 1994.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, U.S. Department of Labor.
[FR Doc. 94-1952 Filed 1-27-94; 8:45 am]
BILLING CODE 4510-29-P
