[Federal Register Volume 60, Number 19 (Monday, January 30, 1995)]
[Notices]
[Pages 5731-5732]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2082]
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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 95-04; Exemption Application No. D-
09721, et al.]
Grant of Individual Exemptions; Mid-Hudson Medical Group, P.C.
Money Purchase Pension Trust, et al.
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, D.C. 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.
Mid-Hudson Medical Group, P.C. Money Purchase Pension Trust (the Plan)
Located in Fishkill, New York
[Prohibited Transaction Exemption 95-04; Exemption Application No. D-
09721]
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 acquisition by the Plan of certain improved
real property (the Property) from unrelated parties for a sales price
of $562,500; and 2) the leasing (the Lease) of the Property by the Plan
to Mid-Hudson Medical Group, P.C. (the Employer), a party in interest
with respect to the Plan, provided the following conditions are
satisfied: (a) The Plan pays no more than the fair market value of the
Property; (b) the Property represents no more than 25% of the value of
the Plan's assets; (c) the terms of the Lease are, and will remain, at
least as favorable to the Plan as those obtainable in an arm's-length
transaction with an unrelated party; (d) the fair market rental value
has been, and will continue to be determined on an annual basis by a
qualified, independent appraiser; (e) the Plan's independent fiduciary
has determined that the transaction is appropriate for the Plan and in
the best interests of the Plan's participants and beneficiaries; and
(f) the Plan's independent fiduciary will continue to monitor the
transaction and the conditions of the exemption and take whatever
action is necessary to enforce the Plan's rights under the Lease.
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 5, 1994 at 59 FR
62420.
For Further Information Contact: Gary H. Lefkowitz of the
Department, telephone (202) 219-8881. (This is not a toll-free number.)
John R. Lyman Company 401(k) Profit Sharing Plan (the Plan) Located in
Chicopee, Massachusetts
[Prohibited Transaction Exemption 95-05; Exemption Application No. D-
09759]
Exemption
The restrictions of sections 406(a) and 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 cash sale (the Sale) by the Plan of Guaranteed
Investment Contract CGO 1303A3A and Guaranteed Investment Contract CGO
1344A3A (collectively, the GICs) issued by Executive Life Insurance
Company (Executive Life), a California corporation, to John R. Lyman
Company, a Massachusetts corporation (the Employer), the sponsoring
employer and a party in interest with respect to the Plan; provided (1)
the Sales is a one-time transaction for cash; (2) the Plan experiences
no loss nor incurs any expense from the Sale; (3) the Plan receives as
consideration from the Sale the greater of either the fair market value
of the GICs as determined on the date of the Sale, or an amount that is
equal to the total amount expended by the Plan for the GICs at the time
of acquisition, less withdrawals, plus the amount the GICs would have
earned by the date of the Sale if Executive Life had not been placed
under conservatorship; and (4) any funds from the GICs in excess of the
Sale price that are received by the Employer, or its successors, from
Executive Life, or its successors, after the date of the Sale are paid
to the Plan.
For a more complete statement of the facts and representations
representing the Department's decision to grant this exemption refer to
the notice of proposed exemption published on November 28, 1994, at 59
FR 60847.
For Further Information Contact: Mr. C. E. Beaver of the
Department, telephone (202) 219-8881. (This is not a toll-free number.)
Regency Marketing Corporation Restated Employees Profit Sharing Plan
and Trust (the Plan) Located in West Bloomfield, Michigan
[Prohibited Transaction Exemption 95-06; Application No. D-9763]
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 proposed loan (the Loan) of $84,667 by the Plan to
Frankenmuth [[Page 5732]] Brewing Company, a disqualified person with
respect to the Plan.1
\1\Since Randall Heine and his wife, Paula Heine, are the only
participants in the Plan, there is no jurisdiction under Title I of
the Act pursuant to 29 CFR 2510.3-3(b). However, there is
jurisdiction under Title II of the Act pursuant to section 4975 of
the Code.
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This exemption is conditioned upon the following requirements: (a)
The terms 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 does not exceed twenty-five percent of the assets of the Plan
at any time during the duration of the Loan; (c) the Loan is secured by
a first deed of trust on certain real property (the Property) which has
been appraised by an independent, qualified appraiser to ensure that
the fair market value of the Property is at least 150 percent of the
amount of the Loan; (d) the fair market value of the Property remains
at least equal to 150 percent of the outstanding balance of the Loan
throughout the duration of the Loan; (e) the Plan trustees determine on
behalf of the Plan that the Loan is in the best interests of the Plan
and protective of the Plan's participants and beneficiaries; and (f)
the Plan trustees monitor compliance with the terms and conditions of
the Loan throughout the duration of the transaction, taking any action
necessary to safeguard the Plan's interest, including foreclosure on
the Property 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 19, 1994, at 59
FR 65395.
For Further Information Contact: Kathryn Parr of the Department,
telephone (202) 219-8971. (This is not a toll-free number).
Lucky Electric Supply Inc. Employees Pension Plan (the Plan) Located in
Memphis, Tennessee
[Prohibited Transaction Exemption 95-07; Exemption Application No. D-
09792]
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 the cash sale by the Plan to Lucky Electric
Supply, Inc., the sponsor of the Plan, of a group annuity contract (the
GAC) issued by Mutual Benefit Life Insurance Company of New Jersey
(Mutual Benefit); provided that the following conditions are satisfied:
(A) The sale is a one-time transaction for cash;
(B) The Plan does not suffer any loss or incur any expenses in the
transaction;
(3) The Plan receives a purchase price of no less than the fair
market value of the GAC at the time of the transaction; and
(4) The proceeds of the sale are used solely to discharge the
Plan's obligations to participants and beneficiaries in connection with
the termination of the Plan.
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 28, 1994 at 59
FR 60842.
For Further Information Contact: Ronald Willett of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Stratus Computer, Inc. Employees' Capital Accumulation Plan (the Plan)
Located in Marlboro, Massachusetts
[Prohibited Transaction Exemption 95-08; Exemption Application No. D-
09823]
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 extension of credit by Stratus Computer,
Inc. (Stratus) to the Plan in the form of a loan (the Loan) with
respect to Guaranteed Investment Contract, Number 62456 (the GIC)
issued by Confederated Life Insurance Company of Canada (CL); and (2)
the Plan's potential repayment of the Loan (the Repayments), provided:
(a) All terms of such transactions are no less favorable to the Plan
than those which the Plan could obtain in arm's-length transactions
with an unrelated party; (b) no interest and/or expenses are paid by
the Plan; (c) the amount of the Loan is no less than the accumulated
book value of the GIC as of August 12, 1994; (d) the Repayments are
restricted to the amounts, if any, paid to the Plan after August 12,
1994, by CL or other responsible third parties with respect to the GIC
(the GIC Proceeds); (e) the Repayments do not exceed the total amount
of the Loan; and (f) the Repayments are 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 December 5, 1994 at 59 FR
62419.
For Further Information Contact: Gary H. Lefkowitz 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 accurately describes all material terms of the transaction
which is the subject of the exemption.
Signed at Washington, D.C., this 24th day of January, 1995.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, Department of Labor.
[FR Doc. 95-2082 Filed 1-27-95; 8:45 am]
BILLING CODE 4510-29-P
