[Federal Register Volume 61, Number 21 (Wednesday, January 31, 1996)]
[Notices]
[Pages 3478-3483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1777]
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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 96-1; Exemption Application No. D-
09877, et al.]
Grant of Individual Exemptions; First Hawaiian Bank, 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, 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.
[[Page 3479]]
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.
First Hawaiian Bank Located Honolulu, HI
[Prohibited Transaction Exemption 96-1; Exemption Application No. D-
09877]
Exemption
Section I. Exemption for In-Kind Transfer of Assets
The restrictions of section 406(a) and section 406(b) 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 (F) of the Code, shall
not apply to the in-kind transfer to any opened investment company (the
Fund or Funds) registered under the Investment Company Act of 1940 (the
'40 Act) to which First Hawaiian Bank or any of its affiliates
(collectively, the Bank) serves as investment adviser and may provide
other services, of the assets of various employee investment funds (the
CIF or CIFs) maintained by the Bank or otherwise held by the Bank as
trustee, investment manager, or in any other capacity as fiduciary on
behalf of the Plans, in exchange for shares of such Funds, providing
the following conditions are met:
(a) A fiduciary (the Second Fiduciary) who is acting on behalf of
each affected Plan and who is independent of and unrelated to the Bank,
as defined in paragraph (g) of Section III below, receives advance
written notice of the in-kind transfer of assets of the Plans or the
CIFs in exchange for shares of the Fund and the disclosure described in
paragraph (g) of Section II below.
(b) On the basis of the information described in paragraph (g) of
Section II below, the Second Fiduciary authorizes in writing the in-
kind transfer of assets of the Plans in exchange for shares of the
Funds, the investment of such assets in corresponding portfolios of the
Funds, and the fees received by the Bank in connection with its
services to the Fund. Such authorization by the Second Fiduciary to be
consistent with the responsibilities, obligations, and duties imposed
on fiduciaries by Part 4 of Title I of the Act.
(c) No sales commission are paid by the Plans in connection with
the in-kind transfers of asset of the Plans or the CIFs in exchange for
shares of the Funds.
(d) All or a pro rata portion of the assets of the Plans held in
the CIFs or all or a pro rata portion of the assets of the Plans held
by the Bank in any capacities as fiduciary on behalf of such Plans are
transferred in-kind to the Funds in exchange for shares of such Funds.
(e) The Plans or the CIFs receive shares of the Funds that have a
total net asset value equal in value to the assets of the Plans or the
CIFs exchanged for such shares on the date of transfer.
(f) The current market value of the assets of the Plans or the CIFs
to be transferred in-kind in exchange for shares is determined in a
single valuation performed in the same manner and at the close of
business on the same day, using independent sources in accordance with
the procedures set forth in Rule 17a-7b (Rule 17a-7) under the '40 Act,
as amended from time to time or any successor rule, regulation, or
similar pronouncement and the procedures established by the Funds
pursuant to Rule 17a-7 for the valuation of such assets. Such
procedures must require that all securities for which a current market
price cannot be obtained by reference to the last sale price for
transactions reported on a recognized securities exchange or NASDAQ be
valued based on an average of the highest current independent bid and
lowest current independent offer, as of the close of business on the
last business day preceding the date of the Plan or CIF transfers
determined on the basis of reasonable inquiry from at least three
sources that are broker-dealers of pricing services independent of the
Bank.
(g) Not later than 30 business days after completion of each in-
kind transfer of assets of the Plans or the CIFs in exchange for shares
of the Funds, the Bank sends by regular mail to the Second Fiduciary,
who is acting on behalf of each affected Plan and who is independent of
and unrelated to the Bank, as defined in paragraph (g) of Section III
below, a written confirmation that contains the following information:
(1) The identity of each of the assets that was valued for purposes
of the transaction in accordance with Rule 17a-7(b)(4) under the '40
Act;
(2) The price of each of the assets involved in the transaction;
and
(3) The identity of each pricing service or market maker consulted
in determining the value of such assets; and
(h) No later than 90 days after completion of each in-kind transfer
of assets of the plans or the CIFs in exchange for shares of the Funds,
the Bank sends by regular mail to the Second Fiduciary, who is acting
on behalf of each affected Plan and who is independent of and unrelated
to the Bank, as defined in paragraph (g) of Section III below, a
written confirmation that contains the following information:
(1) The number of CIF units held by each affected Plan immediately
before the conversion (and the related per unit value and the aggregate
dollar value of the units transferred); and
(2) The number of shares in the Funds that are held by each
affected Plan following the conversion (and the related per share net
asset value and the aggregate dollar value of the shares received).
(i) The conditions set forth in paragraphs (d), (e), (f), (o), (p),
(q), and (r) of Section II below are satisfied.
Section II. Exemption for Receipt of Fees from Funds
The restrictions of section 406(a) and section 406(b) of the Act
and the sanctions resulting from the application of section 4975 of the
Code, by reason of section 4975(c)(1) (D) through (F) of the Code shall
not apply to the receipt of fees by the Bank from the Funds for acting
as the investment adviser, custodian, sub-administrator, and other
service provider for the Funds in connection with the investment in the
Funds by the Plans for which the Bank acts as a fiduciary provided
that:
(a) No sales commissions are paid by the Plans in connection with
purchases or sales of shares of the funds and no redemption fees are
paid in connection with the sale of such shares by the Plans to the
Funds.
(b) The price paid or received by the Plans for shares in the Funds
is the net asset value per share, as defined in paragraph (e) of
Section III, at the time of the transaction and is the same price which
would have been paid or received for the shares by any other investor
at that time.
[[Page 3480]]
(c) Neither the Bank nor an affiliate, including any officer or
director purchases from or sells to any of the Plans shares of any of
the Funds.
(d) As to each individual Plan, the combined total of all fees
received by the Bank for the provision of services to the Plan, and in
connection with the provision of services to any of the Funds in which
the Plan may invest, is not in excess of ``reasonable compensation''
within the meaning of section 408(b)(2) of the Act.
(e) The Bank does not receive any fees payable, pursuant to Rule
12b-1 under the '40 Act in connection with the transactions.
(f) The Plans are not sponsored by the Bank.
(g) A Second Fiduciary who is acting on behalf of each Plan and who
is independent of and unrelated to the Bank, as defined in paragraph
(g) of Section III below, receives in advance of the investment by the
Plan in any of the Funds a full and detailed written disclosure of
information concerning such Fund (including, but not limited to, a
current prospectus for each portfolio of each of the Funds in which
such Plan is considering investing and a statement describing the fee
structure).
(h) On the basis of the information described in paragraph (g) of
this Section II, the Second Fiduciary authorizes in writing the
investment of assets of the Plans in shares of the Funds and the fees
received by the Bank in connection with its services to the Funds. Such
authorization by the Second Fiduciary is consistent with the
responsibilities obligations, and duties imposed on fiduciaries by Part
4 of Title I of the Act.
(i) The authorization, described in paragraph (h) of this Section
II, is terminable at will by the Second Fiduciary of a Plan, without
penalty to such Plan. Such termination will be effected by the Bank
selling the shares of the Fund held by the affected Plan within one
business day following receipt by the Bank, either by mail, hand
delivery, facsimile, or other available means at the option of the
Second Fiduciary, of the termination form (the Termination Form), as
defined in paragraph (i) of Section III below, or any other written
notice of termination; provided that if, due to circumstances beyond
the control of the Bank, the sale cannot be executed within one
business day, the Bank shall have one additional business day to
complete such redemption.
(j) Plans do not pay any Plan-level investment management fees,
investment advisory fees, or similar fees to the Bank with respect to
any of the assets of such Plans which are invested in shares of any of
the Funds. This condition does not preclude the payment of investment
advisory fees or similar fees by the Funds to the Bank under the terms
of an investment advisory agreement adopted in accordance with section
15 of the '40 Act or other agreement between the Bank and the Funds.
(k) In the event of an increase in the rate of any fees paid by the
Funds to the Bank regarding any investment management services,
investment advisory services, or fees for similar services that the
Bank provides to the Funds over an existing rate for such services that
had been authorized by a Second Fiduciary, in accordance with paragraph
(h) of this Section II, the Bank will, at least 30 days in advance of
the implementation of such increase, provide a written notice (which
may take the form of a proxy statement, letter, or similar
communication that is separate from the prospectus of the Fund and
which explains the nature and amount of the increase in fees) to the
Second Fiduciary of each of the Plans invested in a Fund which is
increasing such fees. Such notice shall be accomplained by the
Termination Form, as defined in paragraph (i) of Section III below.
(1) In the event of an addition of a Secondary Service, as defined
in paragraph (h) of Section III below, provided by the Bank to the Fund
for which a fee is charged or an increase in the rate of any fee paid
by the Funds to the Bank for a Secondary Service, as defined in
paragraph (h) of Section III below, that results either from an
increase in the rate of such fee or from the decrease in the number or
kind of services performed by the Bank for such fee over an existing
rate for such Secondary Service which had been authorized by the Second
Fiduciary of a Plan, in accordance with paragraph (h) of this Section
II, the Bank will at least 30 days in advance of the implementation of
such additional service for which a fee is charged or fee increase,
provide a written notice (which may take the form of a proxy statement,
letter, or similar communication that is separate from the prospectus
of the Fund and which explains the nature and amount of the additional
service for which a fee is charged or the nature and amount of the
increase in fees) to the Second Fiduciary of each of the Plans invested
in a Fund which is adding a service or increasing fees. Such notice
shall be accompanied by the Termination Form, as defined in paragraph
(i) of Section III below.
(m) The Second Fiduciary is supplied with a Termination Form at the
times specified in paragraphs (k), (l), and (n) of this Section II,
which expressly provides an election to terminate the authorization,
described above in paragraph (h) of this Section II, with instructions
regarding the use of such Termination Form including statements that:
(1) The authorization is terminable at will by any of the Plans,
without penalty to such Plans. Such termination will be effected by the
Bank redeeming shares of the Fund held by the Plans requesting
termination within one business day following receipt by the Bank,
either by mail, hand delivery, facsimile, or other available means at
the option of the Second Fiduciary, of the Termination Form or any
other written notice of termination; provided that if, due to
circumstances beyond the control of the Bank, the redemption of shares
of such Plans cannot be executed within one business day, the Bank
shall have one additional business day to complete such redemption; and
(2) Failure by the Second Fiduciary to return the Termination Form
on behalf of a Plan will be deemed to be an approval of the additional
Secondary Service for which a fee is charged or increase in the rate of
any fees, if such Termination Form is supplied pursuant to paragraphs
(k) and (l) of this Section II, and will result in the continuation of
the authorization, as described in paragraph (h) of this Section II, of
the Bank to engage in the transactions on behalf of such Plan.
(n) The Second fiduciary is supplied with a Termination Form,
annually during the first quarter of each calendar year, beginning with
the first quarter of the calendar year that begins after the date this
exemption is published in the Federal Register and continuing for each
calendar year thereafter; provided that the Termination Form need not
be supplied to the Second Fiduciary, pursuant to paragraph (n) of this
Section II, sooner than six months after such Termination Form is
supplied pursuant to paragraphs (k) and (l) of this Section II, except
to the extent required by said paragraphs (k) and (l) of this Section
II to disclose an additional Secondary Service for which a fee is
charged or an increase in fees.
(o)(1) With respect to each of the Funds in which a Plan invests,
the Bank will provide the Second Fiduciary of such Plan:
(A) At least annually with a copy of an updated prospectus of such
Fund;
(B) Upon the request of such Second Fiduciary, with a report or
statement (which may take the form of the most
[[Page 3481]]
recent financial report, the current statement of additional
information, or some other written statement) which contains a
description of all fees paid by the Fund to the Bank; and
(2) With respect to each of the Funds in which a Plan invests, in
the event such Fund places brokerage transactions with the Bank, the
Bank will provide the Second Fiduciary of such Plan at least annually
with a statement specifying:
(A) The total, expressed in dollars, brokerage commissions of each
Fund's investment portfolio that are paid to the Bank by such Fund;
(B) The total, expressed in dollars, of brokerage commissions of
each Fund's investment portfolio that are paid by such Fund to
brokerage firms unrelated to the Bank;
(C) The average brokerage commissions per share, expressed as cents
per share, paid to the Bank by each portfolio of a Fund; and
(D) The average brokerage commissions per share, expressed as cents
per share, paid by each portfolio of a Fund to brokerage firms
unrelated to the Bank.
(p) All dealings between the Plans and any of the Funds are on a
basis no less favorable to such Plans than dealings between the Funds
and other shareholders holding the same class of shares as the Plans.
(q) The Bank maintains for a period of 6 years the records
necessary to enable the persons, as described in paragraph (r) of
Section II below, to determine whether the conditions of this proposed
exemption have been met, except that:
(1) A prohibited transaction will not be considered to have
occurred if, due to circumstances beyond the control of the Bank, the
records are lost or destroyed prior to the end of the 6 year period;
and
(2) No party in interest, other than the Bank, shall be subject to
the civil penalty that may be assessed under section 502(i) of the Act,
or to the taxes imposed by section 4975 (a) and (b) of the Code, if the
records are not maintained, or are not available for examination as
required by paragraph (r) of Section II below;
(r)(1) Except as provided in paragraph (r)(2) of this Section II
and notwithstanding any provisions of subsection (a)(2) and (b) of
section 504 of the Act, the records referred to in paragraph (q) of
Section II above are unconditionally available at their customary
location for examination during normal business hours by--
(i) Any duly authorized employee or representative of the
Department, the Internal Revenue Service (the Service) or the
Securities and Exchange Commission (the SEC);
(ii) Any fiduciary of each of the Plans who has authority to
acquire or dispose of shares of any of the Funds owned by such a Plan,
or any duly authorized employee or representative of such fiduciary;
and
(iii) Any participant or beneficiary of the Plans or duly
authorized employee or representative of such participant or
beneficiary;
(2) None of the persons described in paragraph (r)(1)(ii) and
(r)(1)(iii) of Section II shall be authorized to examine trade secrets
of the Bank, or commercial or financial information which is privileged
or confidential.
Section III. Definitions
For purposes of this exemption,
(a) The term ``Bank'' means First Hawaiian Bank and any affiliate
of the Bank, as defined in paragraph (b) of this Section III.
(b) An ``affiliate'' of a person includes:
(1) Any person directly or indirectly through one or more
intermediaries, controlling, controlled by, or under common control
with the person.
(2) Any officer, director, employee, relative, or partner in any
such person; and
(3) Any corporation or partnership of which such person is an
officer, director, partner, or employee.
(c) The term ``control'' means the power to exercise a controlling
influence over the management or policies of a person other than an
individual.
(d) The term ``Fund or Funds'' means any diversified open-end
investment company or companies registered under the '40 Act for which
the Bank serves as investment adviser, and may also provide custodial
or other services as approved by such Funds.
(e) The term ``net asset value'' means the amount for purposes of
pricing all purchases and sales calculated by dividing the value of all
securities, determined by a method as set forth in a Fund's prospectus
and statement of additional information, and other assets belonging to
each of the portfolios in such Fund, less the liabilities charged to
each portfolio, by the number of outstanding shares.
(f) The term ``relative'' means a ``relative'' as that term is
defined in section 3(15) of the Act (or a ``member of the family'' as
that term is defined in section 4975(e)(6) of the Code), or a brother,
a sister, or a spouse of a brother or a sister.
(g) The term ``Second Fiduciary'' means a fiduciary of a plan who
is independent of and unrelated to the Bank. For purposes of this
exemption, the Second Fiduciary will not be deemed to be independent of
and unrelated to the Bank if:
(1) Such Second Fiduciary directly or indirectly controls, is
controlled by, or is under common control with the Bank;
(2) Such Second Fiduciary, or any officer, director, partner,
employee, or relative of such Second Fiduciary is an officer, director,
partner, or employee of the Bank (or is a relative of such persons);
(3) Such Second Fiduciary directly or indirectly receives any
compensation or other consideration for his or her own personal account
in connection with any transaction described in this proposed
exemption.
If an officer, director, partner, or employee of the Bank (or a
relative of such persons), is a director of such Second Fiduciary, and
if he or she abstains from participation in (i) the choice of the
Plan's investment manager/adviser, (ii) the approval of any purchase or
redemption by the Plan of shares of the Funds, and (iii) the approval
of any change of fees charged to or paid by the Plan, in connection
with any of the transactions described in Sections I and II above, then
paragraph (g)(2) of Section III above, shall not apply.
(h) The term ``Secondary Service'' means a service, other than an
investment management, investment advisory, or similar service, which
is provided by the Bank to the Funds, including but not limited to
custodial, accounting, brokerage, administrative, or any other service.
(i) The term ``Termination Form'' means the form supplied to the
Second Fiduciary, at the times specified in paragraphs (k), (l), and
(n) of Section II above, which expressly provides an election to the
Second Fiduciary to terminate on behalf of the Plans the authorization,
described in paragraph (h) of Section II. Such Termination Form may be
used at will by the Second fiduciary to terminate such authorization
without penalty to the Plans and to notify the Bank in writing to
effect such termination by redeeming the shares of the Fund held by the
Plans requesting termination within one business day following receipt
by the Bank, either by mail, hand delivery, facsimile, or other
available means at the option of the Second Fiduciary, of written
notice of such request for termination; provided that if, due to
circumstances beyond the control of the Bank, the redemption cannot be
executed within one business day, the Bank shall have one additional
business day to complete such redemption.
[[Page 3482]]
Written Comments
The Department received two written comments with respect to the
proposed exemption and no requests for a public hearing. The comments
were submitted by the Bank and concerned clarifications to the Summary
of Facts and Representations of the proposed exemption and notification
of interested persons. Following is a discussion of the applicant's
comments.
1. Clarifications to the Proposed Exemption
a. The Bank notes that the word ``Pooled'' should be inserted in
Representation #1c. before the words ``Equity Fund'' in the last line
of the middle column of page 47601.
b. The Bank explains that in Representation #3, the word ``close,''
appearing in the fourth line of the last paragraph of the right column
on page 47602, should be replaced with the word ``opening.'' As
described in Representation #3 of the proposed exemption (see page
47603, the last paragraph of the left column, carrying over to the top
of the middle column, and the last paragraph of the middle column), the
Bank asserts that the transferred assets are valued as of the ``CIF
Valuation Date,'' which is the close of business on the last business
day prior to the date of transfer to the Funds. The transfer of the
assets so valued is made to the Funds before the opening of business on
the transfer date. Before the opening of business, the Bank further
explains that the assets will have the same value as determined at the
CIF Valuation Date, and the shares of the corresponding Funds will have
the same value as the assets transferred. By the close of business on
the transfer date, the Bank points out that the assets transferred in-
kind to a Fund may change in value (i.e., increase or decrease) from
the CIF Valuation Date, and thus the aggregate value of the
corresponding fund may also change between opening and closing of
business on the transaction date.
c. The Bank explains that the following language should be added
after the words ``Bishop Street Funds'' in the eight line of
Representation #4 on page 47603: ``in exchange for an appropriate
number of shares of certain portfolios of the Bishop Street Funds.''
2. Notification of Interested Persons
Due to unavoidable delays and an error in the dates specified in
its first notice, the Bank explains that it renotified all interested
persons on or before November 13, 1995. In the second notice, the Bank
indicates that it gave interested persons an extension of the comment
period until December 15, 1995 which was more than 30 days from the
mailing date of the second notice. As a result of the extended comment
period, no further comments were received by the Department.
After giving full consideration to the entire record, including the
written comments, the Department has decided to grant the exemption as
clarified and modified above. The comment letters have been included as
part of the public record of the exemption application. The complete
application file, including all supplemental submissions received by
the Department, is made available for public inspection in the Public
Documents Room of the Pension and Welfare Benefits Administration, Room
N-5638, U.S. Department of Labor, 200 Constitution Avenue, NW,
Washington, DC 20210.
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 September 13, 1995 at 60
FR 47598.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
The Chase Manhattan Bank (National Association) Pooled Investment Trust
for Employee Benefit Plans (the Trust) Located in New York, New York
[Prohibited Transaction Exemption 96-2; Exemption Application No. D-
9983]
Exemption
The restrictions of sections 406(a) 406(b)(1) and 406(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 past cash sale of certain commercial paper notes
(the Notes) for $25,129,748 by two collective investment funds in the
Trust known as VAN 1 and VAN 18 (the VANs) to The Chase Manhattan Bank,
N.A. (the Bank), a party in interest with respect to the employee
benefit plans invested in the VANs at the time of the transaction;
provided the following conditions were met:
(a) The sale of each of the Notes was a one-time cash transaction;
(b) The terms and conditions of the sale were at least as favorable
to the VANs as those obtainable in an arm's-length transaction with an
unrelated party;
(c) The VANs received an amount for the Notes that was equal to the
greater of: (i) In the case of a Note that had a scheduled maturity
after the date of the transaction, the original purchase price paid by
the particular VAN for the Note plus interest at the imputed yield to
maturity up to the date of sale, as calculated by the Bank; (ii) in the
case of a Note that had a scheduled maturity on or before the date of
the transaction, the value at maturity plus additional interest to the
date of sale at the daily rates earned by the related VAN (exclusive of
its holdings of the Notes) from the maturity date to the date of sale;
or (iii) the fair market value of each Note as of the time of sale as
determined by an independent, qualified appraiser;
(d) The VANs did not pay any commissions, costs or other expenses
in connection with the sale of the Notes;
(e) If the exercise of any of the Bank's rights, claims or causes
of action in connection with its ownership of the Notes results in the
Bank recovering from the issuer of the Notes, or any third party, an
aggregate amount that is more than the purchase price paid to the VANs
by the Bank for the Notes (i.e. $25,129,748), the Bank will pay such
excess amounts to the respective VANs within thirty (30) days of the
receipt of such recovery amounts; and
(f) Each employee benefit plan with interests in the VANs received
its proportionate share of the proceeds of the sale of the Notes to the
Bank and receives its proportionate share of any recovery amounts
obtained on the Notes in excess of the purchase price received by the
VANs, as described in condition (e) above.
EFFECTIVE DATE: This exemption is effective as of December 19, 1994.
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 October 17, 1995, at 60
FR 53806.
FOR FURTHER INFORMATION CONTACT: Mr. E. F. Williams of the Department,
telephone (202) 219-8194. (This is not a toll-free number.)
Retirement Plan for Employees of Concord Hospital Capital Region
Healthcare Corp. (the Plan) Located in Concord, New Hampshire
[Prohibited Transaction Exemption 96-3; Exemption Application No. D-
10027]
Exemption
The restrictions of section 406 (b)(1) and (b)(2) of the Act and
the sanctions resulting from application of section 4975 of the Code,
by reason of section 4975(a)(1) (A) through (E) of the Code, shall not
apply to: (1) The July 7, July 13, July 18, August 19, and August 22,
1994, transfers to the Plan of $7,376,039
[[Page 3483]]
of publicly--traded securities from non-ERISA accounts (the Accounts)
of Concord Hospital, Inc. and its parent corporation, Capital Region
Health Care Corporation; (2) the transfer of $3,761,319 of publicly-
traded securities from the Plan to the Accounts in August of 1994; and
(3) the proposed transfer of approximately $3.6 million from the Plan
to the Accounts, provided the following conditions are satisfied: (a)
The decision for the Plan to enter the subject transactions was made at
the recommendation of the Plan's independent investment advisor; (b)
the Plan has not paid and will not pay commissions or other fees in
connection with the subject transactions; (c) the transactions involve
publicly-traded securities, the fair market values of which were based
upon published prices on established markets; and (d) the Plan's
independent fiduciary has reviewed the transactions and has determined
that the transactions were in the best interest of the Plan and
protective of the rights of the participants and beneficiaries 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 3, 1995 at 60 FR
55857.
EFFECTIVE DATE: This exemption is effective July 7, 1994.
FOR FURTHER INFORMATION CONTACT:
Gary H. Lefkowitz of the Department, telephone (202) 219-8881. (This is
not a toll-free number.)
Larson Distributing Co. Profit Sharing Plan (the Plan) Located in
Denver, Colorado
[Prohibited Transaction Exemption 96-4; Exemption Application No. D-
10083]
Exemption
The restrictions of section 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 to the Plan (the Loan)
by Larson Distributing Co., Inc. (the Employer), the sponsor of the
Plan, with respect to the Plan's investments in annuity accounts
maintained with USG Annuity and Life Co. and All American Life
Insurance Company (the Annuities), and (2) the Plan's potential
repayment of the Loan (the Repayments); provided the following
conditions are satisfied:
(A) The Plan does not pay any interest or incur any expenses with
respect to the Loan;
(B) The Repayments are restricted solely to the amounts recovered
by the Employer on behalf of the Plan (the Recovery Amounts) in
litigation concerning the Annuities; and
(C) To the extent that Loan exceeds the total Recovery Amounts, the
Repayments shall be waived.
For a more complete statement of the facts and representations
supporting the exemption, refer to the notice of proposed exemption
published on November 3, 1995 at 60 FR 55881.
FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Retirement Savings Plan and Trust for Employees of the J.H. Heafner
Company, Inc. (the Plan) Located in Lincolnton, North Carolina
[Prohibited Transaction Exemption 96-5; Exemption Application No. D-
10125]
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 of the Plan of certain limited partnerships
units (the Units) in two limited partnerships to the J.H. Heafner
Company, Inc. (Heafner), provided the following conditions are
satisfied: (a) The sale is a one-time transaction for cash; (b) the
Plans pays no commissions or other expenses in connection with the
transaction; and (c) the Plan receives no less than the greater of: (1)
Its cost for the Units; or (2) the fair market value of the Units on
the date of the sale.
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 3, 1995 at 60 FR
55862.
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 25th day of January 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration.
[FR Doc. 96-1777 Filed 1-30-96; 8:45 am]
BILLING CODE 4510-29-M
