[Federal Register Volume 61, Number 80 (Wednesday, April 24, 1996)]
[Notices]
[Pages 18159-18161]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10072]
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Prohibited Transaction Exemption 96-24; Exemption Application No. D-
10036 and D-10037, et al.]
Grant of Individual Exemptions; Biscayne Bay Pilots, Inc.
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.
Biscayne Bay Pilots, Inc. Money Purchase Pension Plan (M/P Plan) and
Biscayne Bay Pilots, Inc. 401(k) Profit Sharing Plan (P/S Plan;
collectively, the Plans), Located in Miami, Florida
[Prohibited Transaction Exemption 96-24; Exemption Application Nos. D-
10036 and D-10037]
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 certain improved real property (the
Property) by a trust (the HK Trust) established on behalf of Helge
Krarup (Mr. Krarup) within the Plans to Mr. Krarup, a party in interest
with respect to the Plans; provided that the following conditions are
satisfied:
(a) the sale will be a one-time cash transaction;
(b) the HK Trust will receive the current fair market value for the
Property established at the time of the sale by an independent
qualified appraiser;
(c) the HK Trust will pay no expenses associated with the sale;
(d) the sale will provide the HK Trust with liquidity; and
(e) only the assets in the HK Trust will be affected by the
transaction.
FOR FURTHER INFORMATION CONTACT: Ekaterina A. Uzlyan of the Department
at (202) 219-8883. (This is not a toll-free number.)
Zausner Foods Corp. Savings Plus Plan (the Plan), Located in New
Holland, Pennsylvania
[Prohibited Transaction Exemption 96-25; Exemption Application No. D-
10064]
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 past sale by the Plan of certain units of
limited partnership interests (the Units) to Zausner Foods Corp.
(Zausner Foods), a party in interest with respect to the Plan, provided
that the following conditions were satisfied: (1) The sale was a one-
time transaction for cash; (2) the Plan paid no commissions nor other
expenses relating to the sale; and (3) the purchase price was the
greater of: (a) the fair market value of the Units as determined by a
qualified, independent appraiser, or (b) the original acquisition cost
of the Units plus attributable opportunity costs.
[[Page 18160]]
EFFECTIVE DATE: December 29, 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 March 5, 1996 at 61 FR
8683.
FOR FURTHER INFORMATION CONTACT: Karin Weng of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Jack, Lyon & Jones, P.A. Profit Sharing Plan (the Plan), Located in
Little Rock, AR
[Prohibited Transaction Exemption 96-26; Exemption Application No. D-
10071]
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 (1) Proposed purchase by the Plan of certain
improved real property (the Property) from Jack, Lyon & Jones, P.A.,
(the Employer), a party in interest with respect to the Plan; (2) the
subsequent leasing (the Lease) of the Property by the Plan to the
Employer; and (3) the potential future repurchase of the Property by
the Employer from the Plan pursuant to the terms of an option agreement
(the Option Agreement).
This exemption is conditioned on the following requirements:
(a) The interests of the Plan with respect to the purchase of the
Property, the execution and maintenance of the Lease and the potential
repurchase of the Property by the Employer will be represented by First
Commercial Trust Company (FCTC) of Little Rock, Arkansas, which will
serve as the independent fiduciary.
(b) FCTC does not and will not derive more than one percent of its
gross business revenues from the Employer and/or its principals for
each fiscal year that it serves as the independent fiduciary for the
Plan with respect to the transactions described herein.
(c) FCTC will evaluate the transactions, determine that such
transactions are in the best interests of the Plan, and monitor and
enforce compliance with the terms and conditions of the transactions
and the exemption, at all times.
(d) The acquisition price for the Property will be paid by the Plan
in cash and will be based upon the fair market value of the Property as
determined by a qualified, independent appraiser.
(e) The fair market value of the Property will not exceed 25
percent of the assets of the Plan.
(f) The terms of the Lease will remain at least as favorable to the
Plan as those obtainable in an arm's length transaction with an
unrelated party.
(g) The fair market rental amount will be redetermined every three
years that the Lease is in effect by a qualified, independent appraiser
who has been selected by FCTC and, FCTC will then make appropriate
adjustments to such rent.
(h) The Employer will be obligated for all real estate taxes,
utility costs, fees and insurance premiums that are incidental to the
Lease.
(i) The Option Agreement will enable the Plan to sell the Property
to the Employer in the event that FCTC determines that it is not in the
best interest of the Plan to retain the Property.
(j) The Option Agreement will provide that the Employer repurchase
the Property from the Plan for cash in an amount which is not less than
the greater of (1) the Plan's acquisition cost for the Property or (2)
the fair market value of the Property as determined by a qualified,
independent appraiser who has been selected by FCTC.
(k) The Plan will pay no real estate fees, commissions or other
expenses in connection with the acquisition of the Property, the
administration of the Lease or the repurchase of the Property by the
Employer under the Option Agreement.
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 February 13, 1996 at 61
FR 5574.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
IRA Rollover FBO John W. Meisenbach (the IRA), Located in Seattle,
Washington
[Prohibited Transaction Exemption 96-27; Exemption Application No. D-
10114]
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 sale by the IRA of certain stock (the Stock) to John
W. Meisenbach, a disqualified person with respect to the IRA, provided
that the following conditions are satisfied: (a) the sale is a one-time
transaction for cash; (b) the IRA pays no commissions nor other
expenses relating to the sale; and (c) the purchase price is the fair
market value of the Stock as determined by a qualified, independent
appraiser as of the date of the sale.*
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\*\ Pursuant to 29 CFR 2510.3-2(d), the IRA is not within the
jurisdiction of Title I of the Act. However, there is jurisdiction
under Title II of the Act pursuant to section 4975 of the Code.
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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 March 5, 1996 at 61 FR
8684.
FOR FURTHER INFORMATION CONTACT: Karin Weng of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Associated Claims Management 401(k) Plan (the Plan), Located in Walnut
Creek, California
[Prohibited Transaction Exemption 96-28; Exemption Application No. D-
10121]
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 a group annuity contract (the GAC)
issued by Mutual Benefit Life Insurance Company (Mutual Benefit) by the
Plan to Foundation Health Corporation (FHC), a party in interest with
respect to the Plan, provided that the following conditions are
satisfied: (a) the sale is a one-time transaction for cash; (b) the
Plan suffers no loss nor incurs any expense in connection with the
sale; (c) the purchase price is no less than the fair market value of
the GAC as of the date of the sale; and (d) any payments under the GAC
to FHC, or its successors, after the date of the sale in excess of
FHC's purchase price are paid to 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 February 13, 1996 at 61
FR 5576.
FOR FURTHER INFORMATION CONTACT: Karin Weng of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
[[Page 18161]]
Floral Glass and Mirror, Inc. Profit Sharing Plan and Trust (the Plan),
Located in Hauppage, New York
[Prohibited Transaction Exemption 96-29; Exemption Application No. D-
10144]
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 20 shares of stock of Floral Glass
Industries, Inc. (FGI) by the Plan to Mr. Charles Kaplanek, Jr.
(Kaplanek), a party in interest with respect to the Plan, provided the
following conditions are satisfied: (a) The sale is a one-time
transaction for cash; (b) the Plan pays no commissions or other
expenses in connection with the transaction; (c) the Plan will receive
the fair market value of the shares as determined by a qualified,
independent appraiser; and (d) all terms and conditions of the sale
will be at least as favorable to the Plan as those obtainable in an
arm's-length transaction with an unrelated party at the time 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 March 5, 1996 at 61 FR
8685.
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, DC, this 18th day of April, 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, U.S. Department of Labor.
[FR Doc. 96-10072 Filed 4-23-96; 8:45 am]
BILLING CODE 4510-29-P
