[Federal Register Volume 59, Number 227 (Monday, November 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29169]
[Federal Register: November 28, 1994]
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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 94-80; Exemption Application No. D-
9178 and D-9179, et al.]
Grant of Individual Exemptions; Banque Paribas (the Bank) and
Paribas Asset Management, Inc., 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.
Banque Paribas (the Bank) and Paribas Asset Management, Inc. (the
Manager; collectively, the Applicants) Located, respectively, in Paris,
France and New York, New York
[Prohibited Transaction Exemption 94-80; Application Nos. D-9178 and D-
9179]
Exemption
The restrictions of sections 406(a) 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 (D) of the Code shall not apply to
the guarantee by the Bank to an employee benefit plan (the Plan) that
retains the Manager as investment manager for such plan of the value of
the Plan's principal investment with the Manager, provided that each of
the following conditions is satisfied: (1) The fiduciaries of the Plan
who are responsible for the selection and retention of the Manager as
investment manager for the Plan, and for the selection of the guarantee
from the Bank, are independent of the Manager, the Bank, and their
affiliates; (2) no separate fee or remuneration is payable by the Plan
or any other person to the Manager, the Bank, or any of their
affiliates for the guarantee; (3) the Plan is entitled to cancel the
investment management agreement with the Manager, and/or the guarantee
provided by the Bank, at any time upon reasonable notice; (4) the
agreement between each Plan and the Manager and the Bank will be
amended to provide that, for purposes of enforcing the Bank's
guarantee, the determination of the value of a Plan's assets under the
Manager's investment management at any relevant time shall be made
pursuant to objective standards determined jointly by the Manager and
the Plan's custodian, which is the bank or other entity holding the
assets of the Plan or other Plan fiduciary responsible for causing the
Plan to enter into the agreement; (5) however, if the Manager and the
Plan's custodian are unable to agree as to the value of the Plan's
account, they will jointly select a qualified appraiser to make this
determination; if they are unable to agree on an appraiser, the Manager
and the Plan's custodian will each select a qualified appraiser and the
value will be determined by mutual agreement of such appraisers or, if
they cannot agree, by a third qualified appraiser designated by the two
appraisers, and all such appraisers will be independent of the Manager;
and (6) the investment management agreement between each Plan and the
Manager and the Bank will provide: (a) that income from any lending
from a Plan's account will be credited to the Plan's account and not to
the Manager's account, and (b) that no lending of this type will occur
under circumstances where the borrower is a party in interest or
disqualified person with respect to the Plan, unless the conditions of
Prohibited Transaction Exemptions 81-6 (52 FR 18754, May 19, 1987) and
82-63 (47 FR 14084, April 6, 1982, as corrected by 47 FR 16437, April
16, 1982)] are satisfied.
For purposes of this exemption, the term ``affiliate'' of another
person means any person directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control
with such person, provided that the Manager shall not be deemed an
affiliate of another person solely because the Manager has investment
management authority or discretion over the assets of the other person.
For purposes of the foregoing, the term ``control'' means the power to
exercise a controlling influence over the management or policies of a
person other than an individual. Further, for purposes of this
exemption, a Plan fiduciary shall be deemed ``independent'' of a person
only if: (1) the fiduciary is not an affiliate, as defined above, of
such person; and (2) the fiduciary has no other relationship to or
interest in such persons that might affect the exercise of such
fiduciary's best judgment as a fiduciary.
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 19, 1994, at 59
FR 47947.
FOR FURTHER INFORMATION CONTACT: Louis Campagna of the Department,
telephone (202) 219-8883. (This is not a toll-free number.)
Del Monte Savings Plan, and Del Monte Certain Hourly Savings Plan (the
Plans) Located in San Francisco, CA
[Prohibited Transaction Exemption 94-81; Exemption Application Nos.
D-9767, D-9768]
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 to the Plans (the Loan)
by Del Monte Corporation, the sponsor of the Plans, with respect to the
Plans' interests in guaranteed investment contract No. CG01300B3A (the
GIC) issued by Executive Life Insurance Company of California
(Executive Life); and (2) the Plans' potential repayment of the Loan
(the Repayments); provided that the following conditions are satisfied:
(A) All terms and conditions of such transactions are no less
favorable to the Plans than those which the Plans could obtain in
arm's-length transactions with unrelated parties;
(B) No interest or expenses are paid by the Plans;
(C) The Loan is made in lieu of amounts to be paid to the Plan
under the plan of rehabilitation resulting from the bankruptcy of
Executive Life (the Rehab Plan);
(D) The Repayments shall not exceed the principal amount of the
Loan;
(E) The Repayments shall not exceed the amounts actually received
by the Plans under the Rehab Plan; and
(F) Repayment of the Loan shall be waived to the extent that the
amount of the Loan exceeds the amount of cash recovered by the Plans
under the Rehab 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 September 30, 1994 at 59
FR 50008.
FOR FURTHER INFORMATION CONTACT: Ronald Willett 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, DC, this 22nd day of November, 1994.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, Department of Labor.
[FR Doc. 94-29169 Filed 11-25-94; 8:45 am]
BILLING CODE 4510-29-P
