[Federal Register Volume 60, Number 200 (Tuesday, October 17, 1995)]
[Notices]
[Pages 53810-53812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25716]
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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 95-96; Exemption Application No. D-
09953, et al.]
Grant of Individual Exemptions; PaineWebber Incorporated
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.
PaineWebber Incorporated Located in New York, New York
[Prohibited Transaction Exemption 95-96; Exemption Application No. D-
09953]
Exemption
PaineWebber Incorporated and each of its affiliates (collectively,
PaineWebber), shall not be precluded from functioning as a ``qualified
professional asset manager'' pursuant to Prohibited Transaction Class
Exemption 84-14 (PTCE 84-14, 49 FR 9494, March 13, 1984) solely because
of a failure to satisfy section I(g) of PTCE 84-14, as a result of
General Electric Company's ownership interest in PaineWebber, including
any current or future affiliate of PaineWebber which is, or in the
future may become, eligible to serve as a QPAM under PTCE 84-14;
provided the following conditions are satisfied:
(A) This exemption is not applicable to any affiliation by
PaineWebber with any person or entity convicted of any of the felonies
described in part I(g) of PTCE 84-14, other than G.E.; and
(B) This exemption is not applicable with respect to any
convictions of G.E. for felonies described in part I(g) of PTCE 84-14
other than those involved in the G.E. Felonies, described in the Notice
of Proposed Exemption.
Effective Date: This exemption is effective as of December 16,
1994.
Written Comments: The Department received one written comment,
submitted by the applicant, PaineWebber, and no requests for a hearing.
The comment addressed the fact that the Notice of Proposed Exemption
did not include a proposed effective date for the exemption. The
applicant requests that the exemption be effective as of December 16,
1994, the date on which General Electric Company became the owner of
more than five percent of PaineWebber. In accordance with the
applicant's request, the exemption includes an effective date of
December 16, 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 June 29, 1995 at 60 FR
33868.
[[Page 53811]]
For Further Information Contact: Ronald Willett of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
TSC International Ltd., Custom Marketing and Import Profit Sharing Plan
(the Plan) Located in Kansas City, MO
[Prohibited Transaction Exemption 95-97; Exemption Application No. D-
09956]
Exemption
The sanctions resulting from the application of section 4975 of the
Code, by reason of section 4975(c)(1)(A) through (E) shall not apply to
the (1) redemption by TSC International Merchandising Ltd., Custom
Marketing and Import Company (TSC) of 19,000 shares of common stock
issued by TSC and held by the Plan; and (2) the extension of credit by
the Plan to TSC in connection with the redemption of the stock.\1\
\1\Because Mr. Jack Hardgree is the sole participant in the
Plan, there is no jurisdiction under Title I of the Employee
Retirement Income Security Act of 1974 (the Act). However, there is
jurisdiction under Title II of the Act pursuant to section 4975 of
the Code.
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The exemption is conditioned on the following requirements:
(1) The redemption price for the stock is determined by a
qualified, independent appraiser.
(2) The note which evidences the redemption price for the stock
represents not more than 25 percent of the Plan's assets.
(3) The terms of the note are based upon terms that are comparable
to those that would be extended by a third party lender.
(4) The stock, which secures TSC's obligations under the note, at
all times represents 200 percent of the outstanding balance of the
note; however, if the value of the stock ever falls below the 200
percent level, TSC will pledge additional collateral.
(5) The Plan is not required to pay any fees or commissions in
connection with the redemption of the stock or the administration of
the note.
(6) Boatmen's First National Bank of Kansas City holds certificates
representing the stock in an escrow account until TSC pays the
redemption price in full.
(7) The Plan increases its liquidity and investment yield by
disposing of an asset and receives cash to promote asset
diversification.
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 6, 1995 at 60
FR 46312.
For Further Information Contact: Ms. Jan D. Broady of the
Department, telephone (202) 219-8881. (This is not a toll-free number.)
Boston Safe Deposit and Trust Company Located in Boston, Massachusetts
[Prohibited Transaction Exemption 95-98; Application No. D-09981]
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 as of January 12, 1995, to the cash sale of certain
commercial paper notes (the Notes) for $25,031,269 by the Common Trust
Cash Investment Fund (the Fund) to Boston Safe Deposit and Trust
Company (Boston Safe), a party in interest with respect to employee
benefit plans invested in the Fund, provided that the following
conditions are met:
(a) The sale was a one-time transaction for cash;
(b) The Fund received an amount which was equal to the greater of
either (i) the amortized cost of the Notes, plus accrued but unpaid
interest, as of the date of sale, or (ii) the fair market value of the
Notes, as determined by an independent pricing service at the time of
sale;
(c) The Fund did not pay any commissions or other expenses in
connection with the sale;
(d) Boston Safe, as trustee of the Fund, determined that the sale
of the Notes was appropriate for and in the best interests of the Fund,
and the employee benefit plans invested in the Fund, at the time of the
transaction;
(e) Boston Safe took all appropriate actions necessary to safeguard
the interests of the Fund, and the employee benefit plans invested in
the Fund, in connection with the transactions; and
(f) If the exercise of any of Boston Safe's rights, claims or
causes of action in connection with its ownership of the Notes results
in Boston Safe recovering from the issuer of the Notes, or any third
party, an aggregate amount that is more than the sum of:
(1) the purchase price paid for the Notes by Boston Safe (i.e.
$25,031,269);
(2) the original issue discount on the Notes which remained
unamortized as of the date Boston Safe acquired the Notes from the
Fund; and
(3) the interest due on the Notes from and after the date Boston
Safe purchased the Notes from the Fund, at the rate specified in the
Notes,
Boston Safe will refund such excess amounts promptly to the Fund (after
deducting all reasonable expenses incurred in connection with the
recovery).
Effective Date: This exemption is effective as of January 12, 1995.
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 August 9, 1995, at 60 FR
40615.
For Further Information Contact: Mr. E.F. Williams of the
Department, telephone (202) 219-8194. (This is not a toll-free number.)
Times Mirror Savings Plus Plan (the Plan) Located in Los Angeles,
California
[Prohibited Transaction Exemption 95-99; Exemption Application No. D-
10019]
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 (1) the extensions of credit (the Loans)
to the Plan by the Times Mirror Company (the Employer), the sponsor of
the Plan, with respect to three guaranteed investment contracts issued
by Confederation Life Insurance Company of Canada (Confederation); (2)
the Plan's potential repayment of the Loans; and (3) the potential
purchase of the GICs from the Plan by the Employer for cash; provided
the following conditions are satisfied:
(a) All terms and conditions of the transactions are no less
favorable to the Plan than those which the Plan could receive in arm's-
length transactions with unrelated parties;
(b) No interest and/or expenses are paid by the Plan in connection
with the transactions;
(c) Repayment of the Loans will be restricted to the GIC Proceeds,
defined as cash proceeds obtained by the plan from Confederation, state
guaranty funds, any successor to Confederation, or any other third
party making payments with respect to the obligations of Confederation
under the GICs;
(d) Repayment of the Loans will be waived to the extent that the
Loans exceed the GIC Proceeds; and
(e) In any sale of the GICs to the Employer, the Plan will receive
a purchase price which is the higher of (1) the fair market value of
the GIC less any amounts previously received by the Plan with respect
to the GIC, or (2) the value of the GIC as set forth in paragraph 6 of
the Notice of Proposed
[[Page 53812]]
Exemption, with such purchase price determination to be made by the
Bank of America, the Plan's Trustee.
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 August 9, 1995 at 60 FR
40618.
For Further Information Contact: Charles S. Edelstein 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 12th day of October 1995.
Ivan Strafeld,
Director of Exemption Determinations Pension and Welfare Benefits
Administration, U.S. Department of Labor.
[FR Doc. 95-25716 Filed 10-16-95; 8:45 am]
BILLING CODE 4510-29-M
