[Federal Register Volume 61, Number 141 (Monday, July 22, 1996)]
[Notices]
[Pages 37933-37937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18539]
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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 96-54; Exemption Application No. D-
09334, et al.]
Grant of Individual Exemptions; Wells Fargo Bank, N.A. (the
Bank), 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, DC. 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.
Wells Fargo Bank, N.A. (the Bank) Located in San Francisco, CA
[Prohibited Transaction Exemption 96-54; Exemption Application No. D-
09334]
Exemption
Section I. Exemption for the In-Kind Transfer of Assets
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) of the Code, shall not apply, effective
July 2, 1993 until October 1, 1993, to the in-kind transfer of all or a
pro rata portion of the assets of employee benefit plans (the Plans)
that are held in certain collective investment funds (the CIF or CIFs),
for which the Bank or any of its affiliates (collectively, Wells Fargo)
serves as fiduciary, to the Stagecoach Funds, Inc. (the Fund or Funds),
an open-end investment company registered under the Investment Company
Act of 1940 (the '40 Act), as amended, for which Wells Fargo acts as
investment adviser and may provide other services, in exchange for
shares of the Funds (the CIF Exchanges), in connection with the partial
termination of the CIFs.
This exemption is subject to the following conditions and the
general conditions of Section II:
(a) The CIF Exchange is a one-time transaction between the Plan and
the respective Fund.
(b) No sales commissions or other fees are paid by the Plans in
connection with the CIF Exchanges and no redemption fees are paid by
the Plan in connection with the sale by the Plan of shares acquired in
a CIF Exchange.
(c) A fiduciary of each Plan who is independent of and unrelated to
Wells Fargo (the Second Fiduciary) receives advance written notice of
the CIF Exchange and full written disclosure of information concerning
the Funds which includes, but is not limited to the following:
(1) A current prospectus for each Fund in which the Plan is
considering investing;
(2) A statement describing the fees for investment advisory or
similar services, any secondary services (the Secondary Services) as
referred to in paragraph (h) of Section III, and all other fees to be
charged to, or paid by, the Plan (and by such Fund) to Wells Fargo,
including the nature and extent of any differential between the rates
of the fees;
(3) The reasons why Wells Fargo considers an investment in the Fund
to be appropriate for the Plan; and
(4) A statement describing whether there are any limitations
applicable to Wells Fargo with respect to which assets of a Plan may be
invested in a Fund, and, if so, the nature of such limitations.
(d) On the basis of the foregoing information, the Second Fiduciary
approves, in writing, the CIF Exchange.
(e) Each Plan receives shares of the Funds which have a total net
asset value equal to the value of all or the Plan's pro rata share of
the Plan's assets invested in the CIF on the date of the transfer,
based on the current market value of the CIF's assets, as objectively
determined in a single valuation, performed in the same manner at the
close of the same business day by a principal pricing service (the
Principal Pricing Service), disclosed previously by Wells Fargo to the
Second Fiduciary, and/or as applicable, by the amortized cost method.
(f) The terms of the transaction are no less favorable to each Plan
than those obtainable in an arm's length transaction with an unrelated
party.
(g) Wells Fargo sends by regular mail to each affected Plan a
written confirmation, not more than 7 days after the completion of the
transaction, containing the date of the transaction, the number of
shares acquired by the Plan in each of the Funds, the price paid per
share for the shares in each of the Funds and the total dollar amount
involved in the transaction with each Fund.
(h) As to each Plan, the combined total of all fees received by
Wells Fargo for the provision of services to such Plan, and in
connection with the provision of services to any of the Funds in which
the Plan may invest, is not in excess of ``reasonable compensation''
within the meaning of section 408(b)(2) of the Act.
(i) Wells Fargo does not receive any fees payable pursuant to Rule
12b-1 of
[[Page 37934]]
the `40 Act in connection with the transactions involving the Funds.
(j) The Plans are not sponsored or maintained by Wells Fargo.
(k) Wells Fargo provides the Second Fiduciary of such Plan with--
(l) A copy of the proposed exemption and/or the final exemption, if
granted;
(2) A copy of an updated prospectus of such Fund, at least
annually;
(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 Fund to Wells Fargo, upon the
request of the Second Fiduciary; and
(4) A statement specifying--
(A) The total, expressed in dollars, of brokerage commissions that
are paid to Wells Fargo by such Fund;
(B) The total, expressed in dollars, of brokerage commissions that
are paid by such Fund to brokerage firms unrelated to Wells Fargo;
(C) The average brokerage commissions per share, expressed as cents
per share, paid to Wells Fargo by such Fund; and
(D) The average brokerage commissions per share, expressed as cents
per share, paid by such Fund to brokerage firms unrelated to Wells
Fargo. (Such statement will be provided at least annually with respect
to each of the Funds in which a Plan invests in the event a Fund places
brokerage transactions with Wells Fargo.)
(l) All dealings between the Plans and the Funds are on a basis no
less favorable to the Plans than dealings with other shareholders of
the Funds.
Section II. General Conditions
(a) Wells Fargo maintains for a period of six years the records
necessary to enable the persons described below in paragraph (b) of
Section II 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 Wells Fargo, the records are lost or destroyed prior to the end of
the six-year period, and (2) no party in interest, other than Wells
Fargo shall be subject to the civil penalty that may be assessed under
section 502(i) of the Act or 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 (b) below; and
(b)(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 (a) are unconditionally available at their
customary location for examination during normal business hours by--
(A) Any duly authorized employee or representative of the
Department or the Internal Revenue Service,
(B) Any fiduciary of the Plans who has authority to acquire or
dispose of shares of the Funds owned by the Plans, or any duly
authorized employee or representative of such fiduciary, and
(C) Any participant or beneficiary of the Plans or duly authorized
employee or representative of such participant or beneficiary;
(2) None of the persons described in paragraph (b)(1)(B) and (C)
shall be authorized to examine trade secrets of Wells Fargo, or
commercial or financial information which is privileged or
confidential.
Section III. Definitions
For purposes of this exemption,
(a) The term ``Wells Fargo'' means Wells Fargo Bank, N.A. and any
affiliate of Wells Fargo Bank, N.A., as defined in paragraph (b) of
this Section VI.
(b) An ``affiliate'' of Wells Fargo includes--
(1) Any person directly or indirectly through one or more
intermediaries, controlling, controlled by, or under common control
with Wells Fargo;
(2) Any officer, director, employee, relative, or partner in any
such person; and
(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 ``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.
(e) The term ``Second Fiduciary'' means a fiduciary of a Plan who
is independent of and unrelated to Wells Fargo. For purposes of this
exemption, the Second Fiduciary will not be deemed to be independent of
and unrelated to Wells Fargo if--
(1) Such Second Fiduciary directly or indirectly controls, is
controlled by, or is under common control with Wells Fargo;
(2) Such Second Fiduciary, or any officer, director, partner,
employee, or relative of such Second Fiduciary is an officer, director,
partner, or employee of Wells Fargo (or is a relative of such persons);
(3) Such Second 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 proposed
exemption.
If an officer, director, partner, or employee of Wells Fargo (or a
relative of such persons), is a director of such Second Fiduciary, and
if he or she abstains from participation in the choice of the Plan's
investment manager/adviser, the approval of any purchase or sale by the
Plan of shares of the Funds, and the approval of any change of fees
charged to or paid by the Plan, in connection with any of the
transactions described in Section I above, then paragraph (e)(2) of
this Section III, shall not apply.
(f) The term ``Fund or Funds'' means a diversified open-end
investment company or companies registered under the `40 Act for which
Wells Fargo serves as investment adviser and may also provide Secondary
Services as approved by such Fund. The Funds are limited to six
investment Fund portfolios of the Stagecoach Funds, Inc. These Fund
portfolios include include the Asset Allocation Fund, the Bond Index
Fund, the Growth Stock Fund, the Short-Intermediate Term Fund, the S&P
500 Stock Fund and the U.S. Treasury Allocation Fund.
(g) The term ``net asset value'' means the amount for purposes of
pricing all purchases and sales of shares in a Fund calculated by
dividing the value of all securities, determined by a method as set
forth in a Fund's prospectus and statement of additional information,
and other assets belonging to such Fund, less the liabilities charged
to the Fund, by the number of outstanding shares in such Fund.
(h) The term ``Secondary Service'' means a service other than an
investment management, investment advisory or similar service which is
provided by Wells Fargo to the Funds. However, for purposes of this
exemption, Secondary Services will include only brokerage services
provided to the Funds by Wells Fargo for the execution of securities
transactions engaged in by the Funds.
(i) The term ``Principal Pricing Service'' means an independent,
recognized pricing service that has determined the aggregate dollar
value of marketable securities involved in a CIF Exchange. Prior to the
CIF Exchange, the Principal Pricing Service was disclosed in writing by
Wells Fargo to the Second Fiduciary.
EFFECTIVE DATE: This exemption is effective from July 2, 1993 until
October
[[Page 37935]]
1, 1993 with respect to CIF Exchanges that occurred on July 2, August
19, and October 1, 1993.
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 April 4, 1996 at 61 FR
15123.
Written Comments
The Department received one written comment with respect to the
notice of proposed exemption and no requests for a public hearing. The
comment, which was submitted by Wells Fargo, concerned notification of
interested persons. In this regard, Wells Fargo represented that notice
of the proposed exemption was originally sent to its client Plans on
April 24, 1996. However, because the notice was incomplete, Wells Fargo
explained that it renotified these Plans of the proposed exemption on
May 24, 1996 and extended the comment period until June 24, 1996.
In addition, Wells Fargo stated that client Plans of BZW Barclays
Global Investors, N.A. were properly notified of the proposed
exemption. Therefore, there were no further extensions of the comment
period with respect to such Plans.
Thus, after giving full consideration to the entire record, the
Department has decided to grant the subject exemption. Wells Fargo's
comment letter has been included as part of the public record of the
exemption application. The complete application file, including all
supplemental submissions received by the Department, is made available
for public inspection in the Public Documents Room of the Pension and
Welfare Benefits Administration, Room N-5638, U.S. Department of Labor,
200 Constitution Avenue, NW., Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Aircon Energy, Inc. 401(k) Profit Sharing Plan (the Plan) Located in
Sacramento, California
[Prohibited Transaction Exemption 96-55; Exemption Application No. D-
10073]
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 by the Plan of certain office equipment
(the Workstations) to Aircon Energy, Inc. (Aircon), a party in interest
with respect to the Plan, provided that the following conditions are
satisfied: (1) the sale is a one-time transaction for cash; (2) the
Plan pays no commissions nor any other expenses relating to the sale;
(3) the purchase price is the greater of: (a) the fair market value of
the Workstations as determined by a qualified, independent appraiser,
or (b) the Plan's initial acquisition cost plus opportunity costs
attributable to the Workstations while in storage; (4)
contemporaneously with the sale, Aircon reimburses the Plan for the
fair market rental value with respect to the prohibited use of certain
of the Workstations; (5) contemporaneously with the sale, Aircon
reimburses the Plan for losses and opportunity costs associated with
the prior sale of certain of the Workstations to an unrelated third
party; and (6) within 90 days of the publication in the Federal
Register of the grant of this exemption, Aircon files Form 5330 with
the Internal Revenue Service (the Service) and pays all applicable
additional excise taxes that are due by reason of the prohibited use
transactions.
The Department has determined to clarify Conditions 4 and 5 and has
modified the language in this exemption accordingly.
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, 1996 at 61 FR
3476.
FOR FURTHER INFORMATION CONTACT: Karin Weng of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Smith Barney, Located in New York, New York
[Prohibited Transaction Exemption 96-56; Exemption Application No. D-
10126]
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
the lending of securities, under certain ``exclusive borrowing''
arrangements, to Smith Barney, and to any affiliate of Smith Barney who
is a U.S. registered broker-dealer or a government securities broker or
dealer (Affiliates; collectively Smith Barney), by employee benefit
plans (Plans) with respect to which Smith Barney is a party in
interest, provided that the following conditions are satisfied:
(a) For each Plan, neither Smith Barney nor its Affiliates has
discretionary authority or control over the Plan's investment in the
securities available for loan, nor do they render investment advice
(within the meaning of 29 CFR 2510.3-21(c)) with respect to those
assets;
(b) Smith Barney directly negotiates an exclusive borrowing
agreement (Borrowing Agreement) with a Plan fiduciary which is
independent of Smith Barney;
(c) In exchange for granting Smith Barney the exclusive right to
borrow certain securities, the Plan either (i) receives a reasonable
fee, which is specified in the Borrowing Agreement for each category of
securities available for loan and is a flat fee, a set percentage rate,
or a percentage rate established by reference to an objective formula,
or (ii) has the opportunity to derive compensation through the
investment of cash collateral posted by Smith Barney;
(d) Any change in the rate that Smith Barney pays to the Plan with
respect to any securities loan requires the prior written consent of
the independent fiduciary, except that consent is presumed where the
rate changes pursuant to an objective formula specified in the
Borrowing Agreement and the independent fiduciary is notified at least
24 hours in advance of such change and does not object in writing
thereto, prior to the effective time of such change;
(e) On or before the day the loaned securities are delivered, the
Plan receives from Smith Barney (by physical delivery, book entry in a
securities depository, wire transfer, or similar means) collateral
consisting of cash, securities issued or guaranteed by the U.S.
Government or its agencies, irrevocable bank letters of credit issued
by persons other than Smith Barney or its Affiliates, or other
collateral permitted under PTCE 81-6, as it may be amended or
superseded; 1
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1 PTCE 81-6 (46 FR 7527, January 23, 1981, as amended at 52 FR
18754, May 19, 1987) provides an exemption under certain conditions
from section 406(a)(1) (A) through (D) of the Act and the
corresponding provisions of section 4975(c) of the Code for the
lending of securities that are assets of an employee benefit plan to
certain broker-dealers or banks which are parties in interest.
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(f) The market value of the collateral initially equals at least
102 percent of the market value of the loaned securities and, if the
market value of the collateral at any time falls below 100 percent,
Smith Barney delivers additional collateral on the following day to
bring the level of the collateral back to 102 percent;
(g) Before entering into a Borrowing Agreement, Smith Barney
furnishes to the Plan the most recent publicly available audited and
unaudited statements of its financial condition, as
[[Page 37936]]
well as any publicly available information which it believes is
necessary for the independent fiduciary to determine whether the Plan
should enter into or renew the Borrowing Agreement;
(h) The Borrowing Agreement contains a representation by Smith
Barney that as of each time it borrows securities, there has been no
material adverse change in its financial condition since the date of
the most recently furnished financial statements;
(i) The Plan receives the equivalent of all distributions made
during the loan period, including, but not limited to, cash dividends,
interest payments, shares of stock as a result of stock splits, and
rights to purchase additional securities, that the Plan would have
received (net of tax withholdings) 2 had it remained the record
owner of the securities;
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2 The Department notes the applicant's representation
that dividends and other distributions on foreign securities payable
to a lending Plan are subject to foreign tax withholdings and that
Smith Barney will always put the Plan back in at least as good a
position as it would have been in had it not loaned the securities.
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(j) The Borrowing Agreement and/or any securities loan outstanding
may be terminated by either party at any time without penalty,
whereupon Smith Barney returns any borrowed securities (or the
equivalent thereof in the event of reorganization, recapitalization, or
merger of the issuer of the borrowed securities) to the Plan within
five business days of written notice of termination;
(k) In the event that Smith Barney fails to return the borrowed
securities, Smith Barney indemnifies the Plan with respect to the
difference, if any, between the replacement cost of the borrowed
securities and the market value of the collateral on the date the loan
is declared in default, together with expenses not covered by the
collateral plus applicable interest at a reasonable rate;
(l) All procedures regarding the securities lending activities, at
a minimum, conform to the applicable provisions of PTCE 81-6, as it may
be amended or superseded;
(m) Only Plans, which together with related Plans,3 having
assets with an aggregate market value in excess of $50 million may lend
securities to Smith Barney under an exclusive borrowing arrangement;
and
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3 The Department notes the applicant's representation
that the term ``related Plans'' refers to plans within the
jurisdiction of Title I of the Act that are maintained by an entity
or its affiliates, as ``affiliate'' is defined in section 407(d)(7)
of the Act.
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(n) Prior to any Plan's approval of the lending of its securities
to Smith Barney, a copy of this exemption, if granted (and the notice
of pendency) are provided to the Plan, and Smith Barney informs the
independent fiduciary that Smith Barney is not acting as a fiduciary of
the Plan in connection with its borrowing securities from the
Plan.4
4 The Department notes the applicant's representation that,
under the proposed exclusive borrowing arrangements, Smith Barney
will not perform the functions of a securities lending agent, nor
will Smith Barney perform any services ancillary to securities
lending, such as monitoring the level of collateral and the value of
the loaned securities.
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EFFECTIVE DATE: The exemption is effective as of September 25, 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 May 23, 1996 at 61 FR
25905.
FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
VVP America, Inc. Incentive Savings Plan (the Plan) Located in Memphis,
Tennessee
[Prohibited Transaction Exemption 96-57; Exemption Application No. D-
10141]
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 sales by the Plan to VVP America, Inc., the
sponsor of the Plan, of universal life insurance policies (the
Policies) issued by the Confederation Life Insurance Company; provided
that the following conditions are satisfied:
(A) All terms and conditions of the transactions are at least as
favorable to the Plan as those which the Plan could obtain in arm's-
length transactions with unrelated parties;
(B) The Plan receives cash purchase prices for the Policies of no
less than the greater of (1) the fair market value of each Policy as of
the sale date, or
(2) each Policy's cash surrender value (as described in the Notice
of Proposed Exemption) as of the sale date; and
(C) The Plan does not incur any expenses or suffer any loss with
respect to the transactions.
For a more complete statement of the facts and representations
supporting this exemption, refer to the notice of proposed exemption
published on May 23, 1996 at 61 FR 25907.
FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Fieldcrest Cannon, Inc. Retirement Savings Plan for Salaried Employees,
and Fieldcrest Cannon, Inc. Retirement Savings Plan for Hourly
Employees (the Plans) Located in Eden, North Carolina
[Prohibited Transaction Exemption 96-58; Exemption Application Nos. D-
10180 & D-10181]
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 guaranty (the Guaranty) by Fieldcrest
Cannon, Inc. (the Employer), the sponsor of the Plans, of amounts due
the Plans with respect to three guaranteed investment contracts (the
GICs) issued by Confederation Life Insurance Company (Confederation);
(2) the potential extensions of credit (the Advances) to the Plans by
the Employer pursuant to the Guaranty; (3) the Plans' potential
repayment of the Advances; and (4) the potential purchase of the GICs
from the Plans by the Employer for cash; provided 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 and/or expenses are paid by the Plans in connection
with the transactions;
(C) The proceeds of the Advances are used solely in lieu of
payments due from Confederation with respect to the GICs;
(D) Repayment of the Advances will be restricted to the GIC
Proceeds, defined as the cash proceeds obtained by the Plans from or on
behalf of Confederation with respect to the GICs;
(E) Repayment of the Advances will be waived to the extent that the
Advances exceed the GIC Proceeds; and
(F) In any sale of a GIC to the Employer, the Plans will receive a
purchase price which is no less than the fair market value of the GIC
as of the sale date, and no less than the GIC's ``Book Value'' as
defined in the Notice of Proposed Exemption, plus post-maturity
interest, if applicable, at the FIF Rate as defined in the Notice of
Proposed Exemption, less any Advances made pursuant to this exemption
and any GIC Proceeds received with respect to the GIC, as of the sale
date.
For a more complete statement of the facts and representations
supporting
[[Page 37937]]
this exemption, refer to the notice of proposed exemption published on
May 6, 1996 at 61 FR 20281.
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 exemption 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, D.C., this 17th day of July, 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, U.S. Department of Labor.
[FR Doc. 96-18539 Filed 7-19-96; 8:45 am]
BILLING CODE 4510-29-P
