[Federal Register Volume 62, Number 97 (Tuesday, May 20, 1997)]
[Notices]
[Pages 27621-27625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13180]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Prohibited Transaction Exemption 97-24; Exemption Application No. D-
10253, et al.]
Grant of Individual Exemptions; The Retirement Plan for Salaried
and Certain Hourly Employees of Keebler Company (the Plan), et al.
AGENCY: Pension and Welfare Benefits Administration, Labor.
ACTION: Grant of individual exemptions.
-----------------------------------------------------------------------
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.
The Retirement Plan for Salaried and Certain Hourly Employees of
Keebler Company (the Plan) Located in Elmhurst, Illinois
[Prohibited Transaction Exemption 97-24; Exemption Application No. D-
10253]
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 leasing by the Plan of certain improved real
property (the Property) to Keebler Company (the Employer), a party in
interest with respect to the Plan, (2) the potential future purchase of
the Property by the Employer, either pursuant to the Employer's right
of first refusal, as stipulated in the lease, or pursuant to an offer
by the Employer to purchase the Property, and (3) the ``make whole
agreement,'' and any payments thereunder, whereby the Employer will
make the Plan whole, in the event that the Plan sells the Property to
an unrelated party at a net loss.
This exemption is subject to the following conditions:
(1) The Plan is represented for all purposes with respect to the
lease by a qualified, independent fiduciary;
[[Page 27622]]
(2) The terms and conditions of the lease are and continue to be at
least as favorable to the Plan as those the Plan could obtain in a
comparable arm's length transaction with an unrelated party;
(3) The rent paid to the Plan under the lease is and continues to
be no less than the fair market rental value of the Property, as
established by a qualified, independent appraiser;
(4) The rent is adjusted, at a minimum, every three years (upwards
only), based upon an updated independent appraisal;
(5) The lease is a net lease, under which the Employer as the
tenant is obligated for all operating expenses, including maintenance,
taxes, insurance, and utilities;
(6) The independent fiduciary for the Plan represents that it has
reviewed the terms and conditions of the lease on behalf of the Plan
and believes the lease is in the best interests of and appropriate for
the Plan;
(7) The independent fiduciary monitors and enforces compliance with
the terms and conditions of the lease and of the exemption for the
duration of the lease;
(8) The independent fiduciary expressly approves any improvements
by the Employer over $100,000 to the Property and any renewal of the
lease beyond the initial term;
(9) In the event that the Employer exercises its right of first
refusal under the lease, or makes an offer to purchase the Property
which is accepted by the Plan, the Employer purchases the Property from
the Plan for an amount which is the greater of: (a) The original
acquisition cost of the Property, plus the cost of any improvements,
paid by the Plan, or (b) the fair market value of the Property as of
the date of the sale, as established by a qualified, independent
appraiser selected by the independent fiduciary;
(10) In the event that the Plan sells the Property to an unrelated
party at a net loss (taking into account the cost of any improvements
and all selling expenses paid by the Plan), the Employer makes the Plan
whole, within 15 days after the date of such sale, by paying the Plan
cash in an amount equal to the difference between: (a) The original
acquisition cost of the Property, plus the cost of any improvements and
all selling expenses, paid by the Plan, and (b) the amount of the sale
proceeds received by the Plan; and
(11) At all times, the fair market value of the Property represents
no more than 25 percent of the total assets of the Plan.
EFFECTIVE DATE: This exemption is effective as of April 15, 1996.
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 January 30, 1996 at 61 FR
68791.
Written Comments
The Department received a number of telephone inquiries and written
comments from interested persons with respect to the proposed
exemption, as well as one request for a public hearing. All of the
comments, except for one comment from the applicant, were from
participants and beneficiaries of the Plan. The Department responded
directly to most of the commenters' concerns via a telephone hot line.
Three commenters raised substantive issues, which are addressed below.
The applicant wished the record to include the following updated
information regarding the Employer and the Plan. On June 4, 1996,
Keebler Corporation, the parent company of the Employer, acquired
Sunshine Biscuits, Inc. Effective as of December 31, 1996, the Sunshine
Biscuits, Inc. Pension Plan (the Sunshine Plan) was merged into, and
survived by, the Plan. Accordingly, in the first paragraph under the
Summary of Facts and Representations in the notice of proposed
exemption, the third and fourth sentences should be revised to read:
As of December 31, 1996, the Plan had approximately 14,300
participants and beneficiaries and total assets of $473,030,442.
Participants and beneficiaries of the former Sunshine Plan were
included by the Employer among the class of ``interested persons'' who
were provided with notice of the proposed exemption.
In addition, the applicant requested that the exemption as proposed
should be modified to permit the potential future purchase of the
Property by the Employer, either pursuant to the Employer's right of
first refusal, as stipulated in the lease, or pursuant to an offer by
the Employer to purchase the Property. The applicant argues, and the
Department concurs, that it would be in the best interests of the Plan
to be able to entertain an offer by the Employer to purchase the
Property, under the terms and conditions of the exemption, in
circumstances where the Plan did not have a ready offer to purchase the
Property from an unrelated party. The operative language, including
Condition 9, in this notice of exemption has been modified accordingly.
Another commenter raised a question concerning the procedures used
in the selection of the independent appraiser who valued the Property.
Chicago Trust, the Plan's independent fiduciary, which selected the
appraiser, states that it did so in a prudent manner consistent with
standard industry practices and that Messrs. Hall and Klein, M.A.I., of
Binswanger Real Estate Appraisal, were chosen on the basis of their
ability to render a fair and accurate valuation. The commenter also
inquired into the reason for a retroactive effective date for the
exemption. Chicago Trust states that the requested effective date of
April 15, 1996 coincides with the date of the sale of the California
Property, which is the date on which the Plan's leasing of the Property
to the Employer became a prohibited transaction under the Act.
A third commenter objected to the Department's condition that the
fair market value of the Property represent no more than 25% of the
total assets of the Plan, on the grounds that a permitted level of 25%
was excessive. Chicago Trust states that the 25% limitation is a
standard established by the Department and refers to a maximum
percentage that is in no way indicative of any requirement or intent on
the part of the Employer to increase the Plan's real estate investments
to 25% of Plan assets. As of December 31, 1996, the Property, which is
the Plan's sole real estate investment, represented 66% of the Plan's
assets.
Both the second and third commenters raised concerns regarding the
future financial integrity of the Employer. Chicago Trust states that,
as it has represented in the exemption application, it has examined the
financial viability of the Employer and determined that the Employer
has the ability to meet its contractual obligations under the lease.
Moreover, Chicago Trust, states that, as consistent with its duties as
a subtrustee of the Plan, it will continue to monitor these matters and
will take any action necessary to enforce the Plan's rights under the
lease and the exemption, including those provisions that pertain to the
potential sale of the Property to the Employer and to the ``make whole
agreement.''
After a careful consideration of the entire record, including the
written comments and the applicant's responses thereto, the Department
has determined that a public hearing in this instance is unwarranted
and that the exemption should be granted, as modified.
FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
[[Page 27623]]
Hughes Non-Bargaining Retirement Plan, Hughes Bargaining Retirement
Plan, Hughes Subsidiary Retirement Plan (collectively, the Plans)
[Prohibited Transaction Exemption 97-25; Exemption Applications No. D-
10295, D-10296 and D-10297]
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 leasing by the Plans of 10,106 square feet of
office space (Suite 300) in a commercial office building which is owned
by the Plans (the Building) to Sarofim Realty Advisors (SRA), a party
in interest with respect to the Plans, for a period ending February 28,
2000 pursuant to the terms of a lease amendment (the Lease) provided
the following conditions are satisfied: (1) An independent third party
determined that the terms of the Lease represented not less than fair
rental value as of the date of the Lease; (2) the terms of the Lease
were reviewed and approved by a qualified independent fiduciary of the
Plans who determined that the terms of the transaction were at least as
favorable as the terms generally available to the Plans in arm's length
transactions between unrelated parties and that SRA's improvements to
Suite 300 were acceptable; (3) the qualified independent fiduciary
concluded that the transaction was in the best interests of the Plans
and the Plans' participants and beneficiaries; (4) on behalf of the
Plans, the qualified independent fiduciary continues to monitor SRA's
performance under the Lease; and (5) within sixty (60) days of [insert
the date of publication in the Federal Register of the notice granting
this exemption], SRA will file Form 5330 with the Internal Revenue
Service and pay the excise taxes applicable under section 4975(a) of
the Code that are due by reason of the prohibited Lease transaction
during the period beginning March 1, 1995 and ending on the effective
date of this exemption.
EFFECTIVE DATE: The effective date of this exemption is October 6,
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 January 14, 1997 at 62 FR
1921.
FOR FURTHER INFORMATION CONTACT: Wendy McColough of the Department,
telephone (202) 219-8971. (This is not a toll-free number.)
ADP Fluor Daniel, Incorporated Retirement Savings Plan (the Plan)
Located in Tucson, Arizona
[Prohibited Transaction Exemption 97-26; Exemption Application No. D-
10307]
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 sale by the Plan of two limited
partnership interests (the Units) to ADP Fluor Daniel, Incorporated, a
party in interest with respect to the Plan, providing the following
conditions are satisfied:
(1) The sale is a one-time transaction for cash;
(2) The Plan pays no commissions or other expenses relating to the
sale; and
(3) The purchase price is the greater of: (a) The fair market value
of the Units as determined by a qualified, independent appraiser, or
(b) the original acquisition and holding costs of the Units, plus
attributable opportunity costs.
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, 1997 at 62 FR
10074.
FOR FURTHER INFORMATION CONTACT: Janet L. Schmidt of the Department,
telephone (202) 219-8883. (This is not a toll-free number.)
Thompson, Siegel and Walmsley, Inc. (TS&W) Located in Richmond,
Virginia
[Prohibited Transaction Exemption 97-27; Application No. D-10369]
Exemption
Section I--Transactions
The restrictions of sections 406(a) and 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 following transactions which occurred between April 16,
1996 and August 26, 1996, provided that the conditions set forth in
Section II below are met:
(a) The acquisition by the Lewis-Gale Clinic, Inc. Profit Sharing
Plan (the Plan) on April 16, 1996, of shares of the TS&W Equity
Portfolio and Fixed Income Portfolio (the TS&W Portfolios), each a
series of the UAM Funds, Inc. (the UAM Funds), an open-end investment
company registered under the Investment Company Act of 1940 (the '40
Act), with respect to which TS&W serves as the investment adviser,
through the in-kind transfer of assets of a separate account known as
``Fund E'' managed by TS&W as a fiduciary for the Plan;
(b) The subsequent sale of shares of the TS&W Portfolios by Fund E
of the Plan on a cash basis;
(c) The acquisition and sale of shares of the DSI Money Market
Portfolio (the DSI Portfolio), another series of the UAM Funds whose
investment adviser--Dewey Square Investors Corporation (DSI)--is an
affiliate of TS&W, by Fund E of the Plan on a cash basis;
(d) The receipt of fees from the TS&W Portfolios and the DSI
Portfolio (collectively, the Portfolios) by TS&W and DSI, respectively,
for acting as an investment adviser for the Portfolios; and
(e) The receipt of fees from the Portfolios by UAM Fund Services,
Inc. (UAM Fund Services), an affiliate of TS&W and DSI, for performing
secondary services for the Portfolios (e.g. administrative, fund
accounting, dividend disbursing and transfer agent services).
Section II--Conditions
(a) The Plan's in-kind acquisition of shares of the TS&W Portfolios
were one-time transactions; the initial cash acquisition of shares of
the DSI Portfolio was a one-time transaction; and all subsequent cash
acquisitions and sales of the Portfolios were the result of routine
contributions and withdrawals by Plan participants and beneficiaries
which were not subject to the control or influence of TS&W and the
routine reallocation of assets of Fund E by TS&W pursuant to its
responsibility to allocate assets of Fund E between the TS&W
Portfolios, the TS&W International Portfolio and the DSI Portfolio.
(b) No sales commissions or other fees were paid by the Plan in
connection with the acquisition of shares of the Portfolios and no
redemption fees were paid by the Plan in connection with the sale by
the Plan of such shares.
(c) A fiduciary of the Plan who was independent of and unrelated to
TS&W (the Second Fiduciary) received advance notice of the transactions
and full disclosure of information concerning the Portfolios which
included, but was not limited to, the following:
(1) A current prospectus for each Portfolio;
(2) The fees for investment advisory and other services charged to
and paid by the Plan (and by the Portfolios) to TS&W, DSI, UAM Fund
Services or an
[[Page 27624]]
affiliate, including the nature and extent of any differential between
the rates of the fees; and
(3) The reasons why TS&W considered investments in the Portfolios
to be appropriate for the Plan.
(d) On the basis of the information described in paragraph (c)
above, the Second Fiduciary approved the transactions, including the
initial in-kind transfer of Fund E's assets to the TS&W Portfolios in
exchange for shares of such Portfolios, prior to the transactions.
(e) The Second Fiduciary acknowledged in a writing dated August 26,
1996, that it received the information described in paragraph (c) above
prior to the transactions and that it approved all of the subject
transactions involving the Portfolios in advance. In addition, the
Second Fiduciary adopted resolutions approving, ratifying and affirming
the in-kind transfer of assets of Fund E to the TS&W Equity and Fixed
Income Portfolios (in exchange for shares of such Portfolios) and the
cash purchases of the shares of the DSI Portfolio as of April 15, 1996.
(f) With respect to the in-kind transfer of securities from Fund E
to the TS&W Portfolios, the Plan received shares of each of the
Portfolios which had a total net asset value equal to the value of all
of the Plan's assets transferred in-kind to such Portfolio on the date
of the transfer (i.e. April 16, 1996).
(g) The assets of the Plan transferred to the TS&W Portfolios were
publicly-traded securities that were valued at their closing prices on
the day they were accepted by the Portfolios (i.e. April 16, 1996), as
determined by independent market sources in accordance with Rule 17a-
7(b), issued by the Securities and Exchange Commission (SEC) under the
'40 Act, by a party unrelated to TS&W and its affiliates.
(h) The terms of the transactions were no less favorable to the
Plan than those which were obtainable in an arm's-length transaction
with an unrelated party at the time of such transactions.
(i) TS&W sent by regular mail to the Second Fiduciary, not more
than seven (7) days after the completion of the in-kind transfers to
the TS&W Portfolios, a written confirmation which contained the
following information: (1) Date of the transfers, (2) the number of
shares of each Portfolio acquired by the Plan, (3) the price paid per
share in each Portfolio, and (4) the total dollar amount involved in
each transfer.
(j) Cash acquisitions and sales of shares of the Portfolios were
reported to the Second Fiduciary in the normal course by means of
regular transaction statements issued by the UAM Funds.
(k) The combined total of all fees received by TS&W and its
affiliates for the provision of services to the Plan, and in connection
with the provision of services to the Portfolios in which the Plan
invested, was not in excess of ``reasonable compensation'' within the
meaning of section 408(b)(2) of the Act.
(l) The Plan did not pay any plan-level investment management fees,
investment advisory fees, or similar fees to TS&W or an affiliate with
respect to any of the assets of such Plan which were invested in shares
of any of the Portfolios. This condition does not preclude the payment
of investment advisory fees or similar fees by the Portfolios to TS&W
or an affiliate under the terms of an investment advisory agreement
adopted in accordance with section 15 of the '40 Act.
(m) Within 10 days of the date that this exemption is granted, TS&W
pays the Plan an amount equal to the additional net fees attributable
to Fund E which TS&W and its affiliates received during the period
covered by this exemption (i.e., April 17, 1996 until August 26, 1996)
as a result of the investment of Fund E's assets in the Portfolios,
plus a reasonable rate of interest on such amount which is at least
equal to the rate of return such assets would have earned as assets
held in Fund E during this period.
(n) Neither TS&W, DSI nor any affiliate thereof received fees
payable pursuant to Rule 12b-1 under the '40 Act in connection with the
transactions involving the Portfolios.
(o) All dealings between the Plan and the Portfolios were on a
basis no less favorable to the Plan than dealings with other
shareholders of the Portfolios.
(p) TS&W provides the Second Fiduciary of the Plan with the
following:
(1) A copy of the proposed exemption and the final exemption when
such documents become available;
(2) A copy of an updated prospectus of each Portfolio at least
annually; and
(3) A report or statement (which may take the form of the most
recent financial report, the current Statement of Additional
Information, or some other written statement) which contains a
description of all fees paid by the Portfolios to TS&W, DSI or any
affiliate thereof, upon the request of the Second Fiduciary.
(q) All acquisitions and sales of shares of the Portfolios on and
after August 26, 1996 are made in compliance with the terms and
conditions of Prohibited Transaction Exemption (PTE) 77-4 (42 FR 18732,
April 8, 1977).1
---------------------------------------------------------------------------
\1\ PTE 77-4, in pertinent part, permits the purchase and sale
by an employee benefit plan of shares of a registered, open-end
investment company when a fiduciary with respect to the plan is also
the investment adviser for the investment company, provided that
certain conditions are met.
---------------------------------------------------------------------------
(r) TS&W and its affiliates maintain for a period of six years the
records necessary to enable the persons described below in paragraph
(s) to determine whether the conditions of this 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 TS&W or an
affiliate, the records are lost or destroyed prior to the end of the
six-year period, and (2) no party in interest other than TS&W or an
affiliate 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 (s) below.
(s)(1) Except as provided in paragraph (b)(2) and notwithstanding
any provisions of section 504 (a)(2) and (b) of the Act, the records
referred to in paragraph (r) are unconditionally available at their
customary location for examination during normal business hours by--
(i) Any duly authorized employee or representative of the
Department or the Internal Revenue Service,
(ii) Any fiduciary of the Plan who has authority to acquire or
dispose of shares of the Portfolios owned by the Plan, or any duly
authorized employee or representative of such fiduciary, and
(iii) Any participant or beneficiary of the Plan or duly authorized
employee or representative of such participant or beneficiary.
(2) None of the persons described in paragraph (s)(1) (ii) and
(iii) shall be authorized to examine trade secrets of TS&W or its
affiliates, or commercial or financial information which is privileged
or confidential.
Section III--Definitions
For purposes of this exemption:
(a) The term ``TS&W'' means Thompson, Siegel and Walmsley, Inc. and
any affiliate thereof as defined below in paragraph (b) of this
section.
(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
[[Page 27625]]
(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 ``Portfolios'' means the TS&W Equity and Fixed Income
Portfolios and the DSI Money Market Portfolio, each a series of the UAM
Funds, Inc., an open-end series investment company registered under the
'40 Act, with respect to which TS&W and DSI, respectively serve as the
investment adviser and for which UAM Fund Services provides certain
``secondary services'' as defined below in paragraph (h).
(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 the Portfolio's
prospectus and statement of additional information, and other assets
belonging to the Portfolio, less the liabilities charged to each such
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 acting for the
Plan who is independent of and unrelated to TS&W and its
affiliates.2 For purposes of this exemption, the Second
Fiduciary will not be deemed to be independent of and unrelated to TS&W
if:
---------------------------------------------------------------------------
\2\ The Second Fiduciary which acted for the Plan was the
Lewis-Gale Clinic, Inc. (the Plan Sponsor) and the individuals who
acted for the Plan Sponsor in carrying out its responsibilities as
the named fiduciary for the Plan.
---------------------------------------------------------------------------
(1) Such fiduciary directly or indirectly controls, is controlled
by, or is under common control with TS&W or an affiliate;
(2) Such fiduciary, or any officer, director, partner, employee, or
relative of the fiduciary is an officer, director, partner or employee
of TS&W or an affiliate (or is a relative of such persons);
(3) Such 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 exemption.
(h) The term ``Secondary Service'' means a service other than an
investment management, investment advisory, or similar service, which
was provided by TS&W's affiliate, UAM Fund Services, to the Portfolios.
EFFECTIVE DATE: This exemption is effective for the subject
transactions, which occurred during the period from April 16, 1996
until August 26, 1996.
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 January 31, 1997, at 62
FR 4803.
FOR FURTHER INFORMATION CONTACT: Mr. E. F. Williams of the Department,
telephone (202) 219-8194. (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 are true and complete and accurately describe all material
terms of the transaction which is the subject of the exemption. In the
case of continuing exemption transactions, if any of the material facts
or representations described in the application change after the
exemption is granted, the exemption will cease to apply as of the date
of such change. In the event of any such change, application for a new
exemption may be made to the Department.
Signed at Washington, DC, this 15th day of May, 1997.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, U.S. Department of Labor.
[FR Doc. 97-13180 Filed 5-19-97; 8:45 am]
BILLING CODE 4510-29-P
