[Federal Register Volume 60, Number 153 (Wednesday, August 9, 1995)]
[Notices]
[Pages 40622-40624]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19664]
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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 95-67; Exemption Application No. D-
09869, et al.]
Grant of Individual Exemptions; Bankers Trust Company
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.
Bankers Trust Company (Bankers Trust) Located in New York, NY;
Exemption
[Prohibited Transaction Exemption 95-67; Exemption Application No.
D-09869]
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 as of October 28, 1994, to the cash sale of certain
structured notes (the Notes) for $432,131,250 by three collective
investment funds for which Bankers Trust acts as trustee (the Funds) to
[[Page 40623]]
Bankers Trust New York Corporation (BTNY), a party in interest with
respect to employee benefit plans invested in the Funds, provided that
the following conditions were met:
(a) Each sale was a one-time transaction for cash;
(b) Each Fund received an amount which was equal to the greater of
either: (i) the par value of the Notes owned by the Fund at the time of
sale, (ii) the purchase price paid by the Fund for its interest in each
of the Notes, or (iii) the fair market value of the Notes owned by the
Fund, as determined by bid quotations for the Notes obtained from
independent broker-dealers at the time of sale;
(c) The Funds did not pay any commissions or other expenses with
respect to the sale;
(d) Bankers Trust, as trustee of the Funds, determined that the
sale of the Notes was in the best interests of each Fund, and the
employee benefit plans invested in the Fund, at the time of the
transactions;
(e) Bankers Trust took all appropriate actions necessary to
safeguard the interests of the Funds, and the employee benefit plans
invested in the Funds, in connection with the transactions; and
(f) The Funds received a reasonable rate of return during the
period of time that the Funds held the Notes.
EFFECTIVE DATE: This exemption is effective as of October 28, 1994.
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 June 15, 1995, at 60 FR
31508.
FOR FURTHER INFORMATION CONTACT: Mr. E.F. Williams of the Department,
telephone (202) 219-8194. (This is not a toll-free number.)
Masik Tool and Die Corporation Profit Sharing Plan (the Plan) Located
in Cudahy, Wisconsin; Exemption
[Prohibited Transaction Exemption 95-68; Application No. D-09899]
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 past leasing (the Lease) of a lathe (the
Lathe) owned by the Plan and certain individually-directed accounts in
the Plan (the Accounts) to Masik Tool and Die Corporation (Masik), a
party in interest with respect to the Plan; and (2) the proposed cash
sale (the Sale) of the Lathe by the Accounts to Masik.
This exemption is conditioned on the following requirements: (1)
With respect to the past Lease--
(a) the terms and conditions of the Lease have been at least as
favorable to the Plan and the Accounts as those obtainable in an arm's
length transaction with an unrelated party; (b) the value of the Lathe
did not exceed twenty-five percent of the assets of the Plan or of any
of the Accounts at any time during the duration of the Lease; (c) an
independent, qualified fiduciary approved of the Lease on behalf of the
Plan and the Accounts and has monitored the Lease throughout its
entirety; (d) the rental amount received by the Plan and the Accounts
was based upon the fair market rental value of the Lathe; and (e)
within ninety days of the publication in the Federal Register of the
grant of this exemption, Masik files Forms 5330 with the Internal
Revenue Service and pay all applicable excise taxes that are due by
reason of the past prohibited transactions, which are not subject to
this exemption.
(2) With respect to the prospective Sale--
(a) the terms and conditions of the Sale are at least as favorable
to the Accounts as those obtainable in an arm's length transaction with
an unrelated party; (b) the Sale is a one-time cash transaction; (c)
the Accounts are not required to pay any commissions, costs or other
expenses in connection with the Sale; (d) the Sale price for the Lathe
is based upon its fair market value on the date of the Sale as
determined by an independent, qualified appraiser; and (e) within
ninety days of the publication in the Federal Register of the grant of
this exemption, Masik files Forms 5330 with the Internal Revenue
Service and pay all applicable excise taxes that are due by reason of
the past prohibited transactions, which are not subject to this
exemption.
EFFECTIVE DATE: This exemption is effective as of June 1, 1988 with
respect to the Lease. The exemption is effective as of the date of the
grant of the exemption with respect to 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 Notice published on April 27, 1995 at
60 FR 20767.
FOR FURTHER INFORMATION CONTACT: Mr. E.F. Williams of the Department,
telephone (202) 219-8194. (This is not a toll-free number.)
The Amended and Restated Profit Sharing Retirement Plan for Employees
of 84 Lumber Company (the Profit Sharing Plan) and The Amended and
Restated Savings Fund Plan for Employees of 84 Lumber Company (the
Savings Plan; together, the Plans) Located in Eighty Four,
Pennsylvania; Exemption
[Prohibited Transaction Exemption 95-69; Exemption Application Nos.
D-09945 and D-09946]
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 84 Lumber Company
(Lumber) to the Plans in the form of loans (the Loans) with respect to
Guaranteed Investment Contract, Number CG0124601A issued by Executive
Life Insurance Company (ELIC) to the Profit Sharing Plan and Guaranteed
Investment Contract No. CG0124701A (both Contracts together, the GICs)
issued by ELIC to the Savings Plan; and (2) the Plans' potential
repayment of the Loans (the Repayments), provided: (a) All terms of
such transactions are no less favorable to the Plans than those which
the Plans could obtain in arm's-length transactions with an unrelated
party; (b) no interest and/or expenses are paid by the Plans; (c) the
Loans are made with respect to amounts invested by the Plans in the
GICs; (d) the Repayments are restricted to the amounts, if any, paid to
the Plans after the date of the Loans by ELIC or other responsible
third parties with respect to the GICs (the GIC Proceeds); (e) the
Repayments under each Loan will not exceed the total amount of the
Loan; and (f) the Repayments are waived with respect to the amount by
which any Loan exceeds 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 June 15, 1995 at 60 FR
31515.
FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Universal Underwriters Group Thrift Plan (the Plan) Located in Overland
Park, Kansas; Exemption
[Prohibited Transaction Exemption 95-70; Application No. D-09947]
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application
[[Page 40624]]
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 extensions of credit (the
Loans) to the Plan from Universal Underwriters Insurance Company (the
Employer), with respect to a guaranteed investment contract (the GIC)
issued by Confederation Life Insurance Company (Confederation); (2) the
Plan's potential repayment of the Loans upon the receipt by the Plan of
payments under the GIC; and (3) the assignment by the Plan to the
Employer of all claims or causes of action it may have against the
Plan's former GIC placement advisor for recommending that the Plan
purchase the GIC; provided the following conditions are satisfied:
(A) All terms and conditions of such transaction 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 expenses are paid by the Plan in connection with
the proposed transaction;
(C) The Loans will be repaid only out of amounts paid to the Plan
by Confederation, its successors, or any other responsible third party;
(D) Repayment of the Loans will be waived to the extent that the
Loans exceed GIC proceeds;
(E) A qualified independent fiduciary will represent the interests
of the Plan throughout the duration of the proposed transaction; and
(F) The Employer's recovery resulting from a cause of action
assigned to the Employer by the Plan will be limited to the amount
necessary to pay for litigation expenses and to pay off the Plan's
outstanding Loan balance and any excess recovery will be transferred
back to the Plan.
WRITTEN COMMENTS: The Department received a total of 6 written
comments. All 6 commentators urged the Department to grant the
exemption. No commentators requested a hearing.
After giving full consideration to the entire record, including the
written comments, the Department has determined to grant the exemption.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption refer to
the Notice published on June 7, 1995, at 60 FR 30109.
FOR FURTHER INFORMATION CONTACT: Virginia J. Miller of the Department,
telephone (202) 219-8971. (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 do 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 4th day of August, 1995.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, U.S. Department of Labor.
[FR Doc. 95-19664 Filed 8-8-95; 8:45 am]
BILLING CODE 4510-29-P
