[Federal Register Volume 59, Number 19 (Friday, January 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1952]


[Federal Register: January 28, 1994]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
Prohibited Transaction Exemption 94-8 ; Exemption Application No. D-
9093, et al.]


Grant of Individual Exemptions

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, 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.

Frederick J. Grant, M.D., A.P.C. Profit Sharing Plan (the Plan) Located 
in San Luis Obispo, California

[Prohibited Transaction Exemption 94-8; Exemption Application No. D-
9093]

Exemption

    The restrictions of sections 406(a) and 406(b)(1) and (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 an interest in certain improved real 
property (the Property) from the individually directed account in the 
Plan of Frederick J. Grant, M.D. (Grant), a party in interest with 
respect to the Plan, to Grant, provided that the following conditions 
are met:
    1. The terms of the sale are at least as favorable as those the 
Plan could obtain in an arm's-length transaction with an unrelated 
party;
    2. The sale will involve only Grant's individual account in the 
Plan;
    3. The fair market value of the Property (and as a result the 
Plan's equity in the Property) will be established by an independent 
real estate appraiser;
    4. The Plan will receive no less than the greater of its share of 
the fair market value of the Property (minus the pro rata portion of 
the encumbrance) or the total amount the Plan has expended in relation 
to the Property as of the date of sale; and
    5. The Plan will receive all cash in regard to the transaction.
    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 December 17, 1993, at 58 
FR 66033.

FOR FURTHER INFORMATION CONTACT: Paul Kelty of the Department, 
telephone (202) 219-8883. (This is not a toll-free number.)

Retirement Plan for Employees of Holsum Bakery, Inc. (the Plan) Located 
in Phoenix, Arizona

[Prohibited Transaction Exemption 94-9; Exemption Application No. D-
9457]

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 (the Sale) by the Plan of certain improved 
real property (the Property) to Holsum Bakery, Inc. (the Employer), a 
party in interest with respect to the Plan.
    This exemption is conditioned upon the following requirements: (1) 
The Sale is a one-time cash transaction; (2) the Plan is not required 
to pay any commissions, costs or other expenses in connection with this 
transaction; (3) the Property is appraised by qualified, independent 
appraisers; (4) the sales price for the Property is the greater of 
either: (a) $250,000, representing the original amount paid by the Plan 
at the time of acquisition; or (b) its fair market value on the date of 
the Sale; (5) an independent, qualified fiduciary, who has made an 
initial determination that the proposed sale is appropriate for the 
Plan, monitors its terms for the Plan; and (6) within ninety days of 
the publication in the Federal Register of the grant of this exemption, 
the Employer files Forms 5330 with the Internal Revenue Service (the 
Service) and pays all applicable additional excise taxes that are due 
by reason of the prohibited lease transactions.
    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 December 10, 1993 at 58 
FR 64982.

FOR FURTHER INFORMATION CONTACT: Kathryn Parr of the Department, 
telephone (202) 219-8971. (This is not a toll-free number.)

Couch Distributing Company Amended and Restated Money Purchase Pension 
Plan (the Plan) Located in Watsonville, CA

[Prohibited Transaction Exemption 94-10; Exemption Application No. D-
9482]

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 proposed sale by the Plan of a judgment (the 
Judgment), to Mr. George W. Couch, III, a party in interest with 
respect to the Plan, provided: (1) The sale is a one-time transaction 
for cash; (2) the Plan is not required to pay any fees or commissions 
in connection therewith; (3) Mr. Couch purchases the Judgment for its 
outstanding principal amount and pays any past due interest as well as 
additional interest accruing at the statutory rate on the Judgment to 
the date of the purchase; (4) the Plan receives a complete return of 
its investment; (5) any additional consideration that Mr. Couch 
receives pursuant to the Judgment which is in excess of the purchase 
price is applied to litigation expenses and the balance paid to the 
Plan; (6) an independent fiduciary determines that the transaction is 
appropriate for the Plan and in the best interest of its participants 
and beneficiaries.
    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 December 3, 1993 at 58 FR 
64012.

FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

W.J. Casey Trucking & Rigging Co., Inc. Employees Profit Sharing Plan 
and Trust (the Plan) Located in Union, New Jersey

[Prohibited Transaction Exemption 94-11 ; Exemption Application No. D-
9506]

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 seven-year loan of $300,000 (the Loan) by 
the Plan to W. J. Casey Trucking & Rigging Co., Inc. (the Employer), a 
party in interest with respect to the Plan; and (2) the personal 
guarantees of the Employer's obligations under the Loan by James P. and 
Nicholas J. Biondi (the Biondis), parties in interest with respect to 
the Plan.
    This exemption is conditioned upon the following requirements: (a) 
All terms and conditions of the Loan are at least as favorable to the 
Plan as those obtainable in an arm's-length transaction with an 
unrelated party; (b) the Loan will not exceed twenty-five percent of 
the Plan's assets at any time during the transaction; (c) the Loan is 
secured by a first lien interest on certain equipment (the Equipment), 
which has been appraised by a qualified, independent appraiser to 
ensure that the fair market value of the Equipment is at least 200 
percent of the amount of the Loan; (d) the Employer's obligations under 
the Loan are personally guaranteed by the Biondis; (e) the fair market 
value of the Equipment remains not less than 200 percent of the 
outstanding balance of the Loan throughout the duration of the Loan; 
(f) an independent, qualified fiduciary determines on behalf of the 
Plan that the Loan is administratively feasible, in the best interests 
of the Plan, and protective of the Plan and its participants and 
beneficiaries; and (g) the independent, qualified fiduciary monitors 
compliance with the terms and conditions of the exemption and the Loan 
throughout the duration of the transaction, taking any action necessary 
to safeguard the Plan's interest, including foreclosure on the 
Equipment in the event of default.
    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 December 10, 1993 at 58 
FR 64983.

FOR FURTHER INFORMATION CONTACT: Kathryn Parr of the Department, 
telephone (202) 219-8971. (This is not a toll-free number.)

Schwebke-Shiskin & Associates, Inc. Profit Sharing Plan and Trust (the 
Plan) Located in Miramar, Florida

[Prohibited Transaction Exemption 94-12; Exemption Application No. D-
9520]

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 proposed sale by the Plan to Schwebke-Shiskin & 
Associates, Inc. (SSA), the Plan's sponsor and a party in interest with 
respect to the Plan, of certain real property (the Property), for cash, 
provided the following conditions are satisfied: (a) The Plan pays no 
fees or commissions in connection with the transaction; (b) the sales 
price of the Property will be the greater of $1,068,000 or the fair 
market value of the Property on the date of the sale as determined by a 
qualified, independent appraiser; (c) SSA will pay to the Internal 
Revenue Service in timely fashion all excise taxes due in connection 
with the past leasing of the Property by the Plan to SSA; and (d) to 
the extent that the Plan received less than fair market rental value 
from SSA in connection with the past leasing of the Property, SSA will 
make the Plan whole, with appropriate interest, for any such shortfall, 
within 60 days of the granting of this exemption.
    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 December 3, 1993 at 58 FR 
64015.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

NCR Corporation Savings Plan (the Plan) Located in Dayton, Ohio

[Prohibited Transaction Exemption 94-13; Exemption Application No. D-
9536]

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) of through (E) of the 
Code, shall not apply to (1) An interest-free loan to the Plan (the 
Loan) by NCR Corporation, the sponsor of the Plan, with respect to 
guaranteed investment contract number GA-GIC-01226 (the GIC) issued by 
Executive Life Insurance Company of California (Executive Life); and 
(2) the Plan's potential repayment of the Loan (the Repayment); 
provided that the following conditions are satisfied:

    (A) No interest and/or expenses are paid by the Plan;
    (B) The Loan is made to reimburse the Plan for amounts invested 
with Executive Life under the terms of the GIC;
    (C) The Repayment is restricted to cash proceeds paid to the 
Plan (the GIC Proceeds) by Executive Life and/or any other 
responsible third party with respect to the GIC, and no other Plan 
assets are used to make the Repayments; and
    (D) The Repayments will be waived to the extent the 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 November 24, 1993 at 58 
FR 62144.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

Randall W. Smith, M.D., A.P.C., Defined Benefit Pension Plan (the 
Plan), Located in San Diego, California

[Prohibited Transaction Exemption 94-14; Exemption Application No. D-
9547]

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 cash sale (the Sale) of certain real property 
(the Property) by the Plan to Randall W. Smith, M.D. and Florence E. 
Smith, husband and wife and disqualified persons with respect to the 
Plan, provided that the consideration paid for the Property is no less 
than the fair market value of the Property on the date of the Sale as 
determined by a qualified, independent appraiser.
    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 December 17, 1993, at 58 
FR 66036.

FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver 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 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 25th day of January, 1994.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, U.S. Department of Labor.
[FR Doc. 94-1952 Filed 1-27-94; 8:45 am]
BILLING CODE 4510-29-P