[Federal Register Volume 60, Number 140 (Friday, July 21, 1995)]
[Notices]
[Pages 37689-37690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17960]
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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 95-61; Exemption Application No. L-
09933, et al.]
Grant of Individual Exemptions; United Food and Commercial
Workers Union, 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.
United Food and Commercial Workers Union Local 789 and St. Paul Food
Employers Health Care Plan (the Plan) Located in Bloomington, Minnesota
[Prohibited Transaction Exemption 95-61; Exemption Application No. L-
09933]
Exemption
The restrictions of section 406(a) of the Act shall not apply to
the purchase of prescription drugs, at discount prices, by Plan
participants and beneficiaries, from Supervalu Pharmacies, Inc. (SPI)
and Cub Foods (Cub), parties in interest with respect to the Plan,
provided the following conditions are satisfied: (a) the terms of the
transaction are at least as favorable to the Plan as those the Plan
could obtain in a similar transaction with an unrelated party; (b) any
decision by the Plan to enter into agreements governing the subject
purchases will be made by Plan fiduciaries independent of SPI and Cub;
and (c) at least 50% of the preferred providers participating in the
Preferred Pharmacy Network (PPN) which will be selling prescription
drugs to the Plan's participants and beneficiaries will be unrelated to
SPI and Cub.
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 May 22, 1995 at 60 FR
27127.
FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
[[Page 37690]]
General Motors Hourly-Rate Employes' Pension Plan (the GM Hourly Plan);
The General Motors Retirement Program for Salaried Employees (the GM
Salaried Plan); The Saturn Individual Retirement Plan for Represented
Team Members; The Saturn Personal Choices Retirement Plan for Non-
Represented Team Members; and The Employees' Retirement Plan for GMAC
Corporation (all five plans collectively, the GM Plans); The AT&T
Pension Plan; and the AT&T Management Pension Plan (together, the AT&T
Plans; all seven plans collectively, the Plans) Located in Detroit,
Michigan (the GM Plans), and in New York, New York (the AT&T Plans)
[Prohibited Transaction Exemption 95-62; Exemption Application Nos. D-
09964 through D-09968]
Exemption
The restrictions of section 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
(1) the granting to The Industrial Bank of Japan, Limited, New York
Branch (IBJ), as the representative of lenders (the Lenders)
participating in a credit facility (the Facility), of security
interests in limited partnership interests in The Morgan Stanley Real
Estate Fund II, L.P. (the Partnership) owned by the Plans with respect
to which some of the Lenders are parties in interest; and (2) the
agreements by the Plans to honor capital calls made by IBJ in lieu of
the Partnership's general partner; provided that (a) the grants and
agreements are on terms no less favorable to the Plans than those which
the Plans could obtain in arm's-length transactions with unrelated
parties; and (b) the decisions on behalf of each Plan to invest in the
Partnership and to execute such grants and agreements in favor of IBJ
are made by a fiduciary which is not included among, and is independent
of, the Lenders and IBJ.
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 May 22, 1995 at 60 FR
27129.
Written Comments: The Department received one written comment with
respect to the proposed exemption, which was submitted by the
applicants to correct two errors in the proposed exemption. The
Partnership Agreement referred to in Representation #1 of the proposed
exemption was dated December 19, 1994, rather than December 29, 1994,
as the applicants had originally represented. The applicants also noted
that the word ``Employes'' in the names of the GM Hourly Plan and the
GM Salaried Plan should have only one ``e'' due to a historical quirk.
The Department has made the appropriate corrections and determined to
grant the exemption as it was proposed.
FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Eaton Corporation Share Purchase and Investment Plan (the Plan) Located
in Cleveland, Ohio
[Prohibited Transaction Exemption 95-63; Exemption Application No. D-
09978]
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 by Eaton Corporation
(Eaton) to the Plan in the form of loans (the Loans) with respect to
certain guaranteed investment contracts (collectively, the GICs); and
(2) the repayment (the Repayments) by the Plan of all or a portion of
amounts advanced to the Plan by Eaton on the terms described in the
agreement governing such Loans, provided: (a) all terms of such
transactions are no less favorable to the Plan than those which the
Plan could obtain in arm's-length transactions with unrelated parties;
(b) no interest or other expenses will be incurred by the Plan in
connection with the Loans; (c) the Loans would be made only when, and
to the extent needed, to avoid penalties that would otherwise be
incurred if the liquidation of one or more of the GICs is required, as
determined by the Corporate Compensation Committee (the Plan
Committee); (d) Repayments will be made only from payments made to the
Plan as the GICs mature (the GIC Proceeds); (e) the Repayments will not
exceed the total amount of the Loans; and (f) the Repayments will be
waived to the extent that the Loans exceed the GIC Proceeds.
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 May 22, 1995 at 60 FR
27130.
EFFECTIVE DATE: This exemption is effective July 5, 1995.
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 18th day of July, 1995.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, Department of Labor.
[FR Doc. 95-17960 Filed 7-20-95; 8:45 am]
BILLING CODE 4510-29-P
