[Federal Register Volume 59, Number 118 (Tuesday, June 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15007]
[[Page Unknown]]
[Federal Register: June 21, 1994]
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Application No. D-9613]
Proposed Exemptions; Abbott Pension Plan et al.
AGENCY: Pension and Welfare Benefits Administration, Labor.
ACTION: Notice of proposed exemptions.
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SUMMARY: This document contains notices of pendency before the
Department of Labor (the Department) of proposed exemptions from
certain of the prohibited transaction restriction of the Employee
Retirement Income Security Act of 1974 (the Act) and/or the Internal
Revenue Code of 1986 (the Code).
Written Comments and Hearing Requests
Unless otherwise stated in the Notice of Proposed Exemption, all
interested persons are invited to submit written comments, and with
respect to exemptions involving the fiduciary prohibitions of section
406(b) of the Act, requests for hearing within 45 days from the date of
publication of this Federal Register Notice. Comments and request for a
hearing should state: (1) the name, address, and telephone number of
the person making the comment or request, and (2) the nature of the
person's interest in the exemption and the manner in which the person
would be adversely affected by the exemption. A request for a hearing
must also state the issues to be addressed and include a general
description of the evidence to be presented at the hearing. A request
for a hearing must also state the issues to be addressed and include a
general description of the evidence to be presented at the hearing.
ADDRESSES: All written comments and request for a hearing (at least
three copies) should be sent to the Pension and Welfare Benefits
Administration, Office of Exemption Determinations, Room N-5649, U.S.
Department of Labor, 200 Constitution Avenue, NW., Washington, DC
20210. Attention: Application No. stated in each Notice of Proposed
Exemption. The applications for exemption and the comments received
will be available for public inspection in the Public Documents Room of
Pension and Welfare Benefits Administration, U.S. Department of Labor,
Room N-5507, 200 Constitution Avenue, NW., Washington, DC 20210.
Notice to Interested Persons
Notice of the proposed exemptions will be provided to all
interested persons in the manner agreed upon by the applicant and the
Department within 15 days of the date of publication in the Federal
Register. Such notice shall include a copy of the notice of proposed
exemption as published in the Federal Register and shall inform
interested persons of their right to comment and to request a hearing
(where appropriate).
SUPPLEMENTARY INFORMATION: The proposed exemptions were requested in
applications filed pursuant to section 408(a) of the Act and/or section
4975(c)(2) of the Code, and in accordance with procedures set forth in
29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990).
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 requested
to the Secretary of Labor. Therefore, these notices of proposed
exemption are issued solely by the Department.
The applications contain representations with regard to the
proposed exemptions which are summarized below. Interested persons are
referred to the applications on file with the Department for a complete
statement of the facts and representations.
Abbott Pension Plan (the Plan), located in Lynn, MA.
[Application No. D-9613].
Proposed Exemption
The Department is considering granting an exemption under the
authority of section 408(a) of the Act and section 4975(c)(2) of the
Code and in accordance with the procedures set forth in 29 CFR part
2570, subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption
is granted, 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 transfer by the Plan, of
certain limited partnership interests (the Interests) to Abbott House
Nursing Home, Inc. (Abbott); Winthrop Nursing Home, Inc. (which does
business as the Bay View Nursing Home and is referred to herein as
Winthrop/Bay View); Devereux House Nursing Home, Inc. (Devereux); and
the Greenview House Nursing Home, Inc. (Greenview), in satisfaction of
certain cash advances made to the Plan by these entities. (Abbott,
Winthrop/Bay View, Devereux and Greenview, which are parties in
interest with respect to the Plan, are collectively referred to herein
as the Nursing Facilities.)
This proposed exemption is conditioned upon the following
requirements: (1) The transfer represents a one-time transaction and
satisfies certain cash advances made by the Nursing Facilities to the
Plan; (2) the Interests are transferred for the greater of their
historical cost to the Plan, their fair market value or the total
amount of cash advanced to the Plan; (3) for purposes of the transfer,
the fair market value of the Interests has been established by a
qualified, independent appraiser; and (4) the Plan does not pay any
fees or commissions in connection with the transfer.
Summary of Facts and Representations
1. The Plan is a defined benefit plan that has been adopted by four
Massachusetts-based nursing facilities which are members of a
controlled group of corporations. The Nursing Facilities that sponsor
the Plan for the benefit of their employees are Abbott, Winthrop/Bay
View, Devereux and Greenview. As of December 31, 1992, the Plan had
total net assets of $2,060,920. This amount was allocated among the
Nursing Facility sub-Plan accounts as follows:
------------------------------------------------------------------------
Nursing facility sub-plan accounts Net assets
------------------------------------------------------------------------
Abbott..................................................... $471,149
Winthrop/Bay View.......................................... 385,383
Greenview.................................................. 872,004
Devereux................................................... 332,384
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Total.................................................. 2,060,920
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2. As of December 23, 1993, the Plan had two remaining
participants, Richard C. Bane and his brother, Robert Bane, both of
whom participate in the Abbott sub-Plan account. Richard Bane is the
Plan trustee and the decisionmaker with respect to the Plan's
investments. Both Richard and Robert Bane are 50 percent shareholders
of Abbott and Devereux. Their father, George H. Bane, and Gerald
Gouchberg, an outside investor who is not related to members of the
Bane Family, each own 50 percent of the outstanding stock of Winthrop/
Bay View and Greenview.
3. The Plan is in the process of terminating and upon termination,
will be replaced with a deferred compensation plan. On April 12, 1993,
the Plan received approval from the Internal Revenue Service to
terminate as of December 31, 1992 and it made cash distributions to 126
employees of the Nursing Facilities with the exception of the Banes. To
provide partial funding for the participant distributions and to
provide liquidity while assets were being sold, the Nursing Facilities
made cash advances\1\ to the Plan during the second and third quarters
of 1993 in the following amounts:
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\1\11 The applicant represents that the loans were interest-
free, unsecured and used for the payment of benefits to
participants. As such, the applicant is of the view that such loans
are in compliance with Prohibited Transaction Exemption 80-26 (45 FR
28545, April 29, 1980). However, the Department expresses no opinion
herein on whether the cash advances have satisfied the terms and
conditions of PTE 80-26.
------------------------------------------------------------------------
Cash
Nursing facility advance
------------------------------------------------------------------------
Winthrop/Bay View.......................................... $27,808
Greenview.................................................. 31,650
Devereux................................................... 41,296
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Total................................................ 100,754
------------------------------------------------------------------------
In addition to the cash advances, each Nursing Facility made cash
contributions during 1992 and 1993 to their respective sub-Plan account
in order to satisfy the Plan's liabilities. Such contributions were in
excess of $273,000.
4. At present, the Plan holds certain assets that are not readily
marketable and have limited liquidity. These assets consist of
interests in New England Pension Properties V (NEPP V) and New England
Pension Properties VI (NEPP VI). NEPP V and NEPP VI are real estate
investment trusts/limited partnerships. The Plan has paid no servicing
fees in connection with the holding of the Interests in NEPP V and NEPP
VI nor have any restrictions been placed upon their sale or transfer.
The Plan acquired the Interests in NEPP V and NEPP VI on June 22,
1987 and July 13, 1988, respectively, from Copley Partnerships, an
unrelated party. The Plan made a cash investment of $50,000 in NEPP V
and $40,000 in NEPP VI. At the time of acquisition, the per unit value
of the Interests in NEPP V and NEPP VI was $1,000. Thus, the Plan
received 50 limited partnership units in NEPP V and 40 limited
partnership units in NEPP VI. Both NEPP V and NEPP VI have a maturity
date of December 31, 2036.
On July 31, 1990, the Plan received $1,926 from Copley Partnerships
with respect to the Interest in NEPP VI. This amount represented a
return of capital. In addition, the Plan received income payments of
$14,082 for NEPP V and $11,165 for NEPP VI or a total income payment of
$25,247.
The Interests have been appraised by Fredric Daub, President of
Capital Insurance Agency, Inc., an independent investment broker from
Maynard, MA. In an appraisal report dated February 25, 1994, Mr. Daub
has verified that during the fourth quarter of 1993, he obtained firm
bids for NEPP V of $232 per unit and $324 per unit for NEPP VI in the
secondary market. Thus, the fair market values of the Plan's Interests
in NEPP V and NEPP VI would be $11,600 and $12,960, respectively, or a
total fair market value of $24,560. Mr. Daub represents that these
values reflect gross proceeds before the application of a one-time fee
of $250 and a re-registration fee of an unspecified amount. Mr. Daub
also notes that these values reflect a commitment as of the day of the
offering and that the secondary market for investments such as NEPP V
and NEPP VI is extremely limited.
5. To facilitate the liquidation and termination of the Plan and
reimburse the Nursing Facilities for the cash advances they have made
to the Plan, the Nursing Facilities propose to have the Interests
transferred to them. Accordingly, an administrative exemption is
requested from the Department.
The Interests will be transferred to the Nursing Facilities for the
greater of their historical cost to the Plan, their fair market value,
or $100,754 representing the total outstanding loans advanced
previously by the Nursing Facilities to the Plan. According to the
applicant, these loans would have been repaid in cash had the Plan not
been in the process of terminating. As a result of the transfer, the
Nursing Facilities will cancel the outstanding indebtedness. The Plan
will not be required to pay any fees or commissions in connection
therewith.
6. In summary, it is represented that the proposed transaction will
satisfy the statutory criteria for an exemption under section 408(a) of
the Act because: (a) the transfer will be a one-time transaction to
satisfy certain cash advances made by the Nursing Facilities to the
Plan; (b) the Interests will be transferred to the Nursing Facilities
for the greater of their historical cost to the Plan, their fair market
value or the total amount of cash advanced to the Plan; (c) for
purposes of the transfer, the fair market value of the Interests has
been established by a qualified, independent appraiser; and (d) the
Plan will not pay any fees or commissions in connection with the
transfer.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department at
(202) 219-8881. (This is not a toll-free number.)
AT&T Management Pension Plan and AT&T Pension Plan (the AT&T
Plans), and BellSouth Management Pension Plan and BellSouth Pension
Plan (the BellSouth Plans; collectively, the Plans). Located in
Morristown, New Jersey. [Application Nos. D-9607, D-9608, D-9609, D-
9610].
Proposed Exemption
The Department is considering granting an exemption under the
authority of section 408(a) of the Act and section 4975(c)(2) of the
Code and in accordance with the procedures set forth in 29 CFR Part
2570, Subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption
is granted 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, effective June 3, 1993, to the past and
proposed lease (the Lease) by the Plans, through the Telephone Real
Estate Equity Trust (TREET), of office space in Southpark C, a
commercial office building in Austin, Texas, to American Telephone and
Telegraph Co. (AT&T), one of the sponsors of the Plans; provided that
the following conditions are satisfied:
(A) The interests of TREET for all purposes under the Lease are
represented by Hill Partners, which is independent of and unrelated to
AT&T, serving as a fiduciary under the Act;
(B) At all times under the Lease, AT&T pays TREET rent of no less
than the fair market rental value of the Property; and
(C) All terms and conditions of the Lease are at least as favorable
to TREET as those which TREET could obtain in arm's-length transactions
with unrelated parties;
EFFECTIVE DATE: This exemption, if granted, will be effective as of
June 3, 1993.
Summary of Facts and Representations
1. The AT&T Plans are defined benefit pension plans sponsored by
the American Telephone & Telegraph Company (AT&T), a New York public
corporation engaged in a wide variety of nationwide and international
telecommunications services, including the design, manufacture,
marketing and servicing of transmission and switching equipment,
silicon chip products, electronic components, computers and software,
and products and services for the U.S. Department of Defense and
related agencies. The BellSouth Plans are defined benefit pension plans
sponsored by BellSouth, a Georgia public corporation created by the
reorganization of AT&T in 1984. BellSouth is engaged in the furnishing
of exchange telecommunications and exchange access service within
specific geographic areas of the southern United States, directory
advertising and publishing, marketing of customer premises
telecommunications equipment, the provision of advanced mobile
communications services using cellular technology, and other
miscellaneous business activities.
2. TREET is a group trust which is utilized for the investment on
an undivided basis of certain real estate assets of the Plans,
resulting from the reorganization of AT&T and its subsidiaries pursuant
to the Plan of Reorganization (the Reorganization) approved by the U.S.
District Court for the District of Columbia in the matter of U.S. v.
Western Electric Co., Inc., et.al (Civil Action No. 82-1092). The
assets of the Plans' predecessor plans had been held in trusts
established for the Bell System Pension Plan (the BSPP) and the Bell
System Management Pension Plan (the BSMPP). On January 1, 1984, the
trusts for the BSPP and the BSMPP were merged into the Bell System
Trust (the BST). Substantially all of the non-real estate assets in the
BST were transferred to a new AT&T trust. The real estate assets were
retained in the BST, which was amended and restated as TREET. The
original participants in TREET were employee benefit plans maintained
by various separate companies resulting from the Reorganization (the
New Companies' Plans), each of which agreed that interests in TREET
would be bought and sold only among the participating plans.
Buying and selling of interests in TREET has occurred among the
Bell Companies' Plans in such manner that the AT&T Plans and the
BellSouth Plans are the only New Companies' Plans which continue to own
participating interests in TREET. As of December 31, 1992, TREET had
net assets of approximately $2,637,276,588. Currently, the only
participants in TREET are the AT&T Master Pension Trust, which holds
the assets of the AT&T Plans, and the BellSouth Master Pension Trust,
which holds the assets of the BellSouth Plans. On January 1, 1993, the
assets of seventeen defined benefit plans sponsored by the NCR
Corporation (NCR) were added to the AT&T Master Pension Trust, as a
result of AT&T's acquisition of NCR.
3. As named fiduciary of TREET, AT&T has utilized more than a
hundred independent trustees and investment managers to manage TREET
assets, including Karsten Realty Advisors (Karsten). Karsten is a
California corporation operating as an investment adviser registered
under the Investment Advisors Act of 1940, as amended. With its
headquarters in Los Angeles, Karsten engages in rendering advice with
respect to the acquisition, management, financing and disposition of
real properties in many locations on behalf of approximately 18 pension
funds and other clients. As of December 31, 1993, Karsten had
approximately $600 million in assets under its management, including
approximately $500 million in tax-exempt assets. Karsten's services to
TREET include the supervision of property managers and leasing agents
and the provision of recommendations regarding sales or other
dispositions of properties. On February 1, 1994, the assets of Karsten
were acquired by Koll Realty Advisors (Koll), which assumed Karsten's
obligations with respect to TREET. Koll is a California corporation
functioning as an investment adviser registered under the Investment
Advisors Act of 1940, as amended. AT&T represents that it is
unaffiliated with Karsten and Koll, and that Karsten and Koll are each
``qualified professional asset managers'' within the meaning of
Prohibited Transaction Class Exemption 84-14 (PTE 84-14, 49 FR 9494,
March 13, 1984).
Among TREET's assets which have been under Karsten's management is
Southpark, a commercial office development in which AT&T was a lessee
at the time TREET acquired it. AT&T is requesting an exemption for its
past and proposed lease of space in Southpark from TREET under the
terms and conditions described herein.
4. During 1981, the Mercantile Real Estate Fund for Employee
Benefit Plans (the Mercantile Fund) extended a line of credit in the
amount of $5,641,000 (the Loan) to real estate developer Crowe-Simmons-
Gottesman (Crowe) to finance the development of several commercial
buildings which included Southpark, an office complex located in the
Crowe Industrial Park South in Austin, Texas. The Loan was secured by a
non-recourse promissory note (the Note) and by a deed of trust granting
the Mercantile Fund a security interest in the three office buildings
of Southpark, designated as Southpark A, B and C (the Deed of Trust).
The Loan was also secured by an assignment of building rents from
Southpark A, B and C. AT&T represents that the parties to the Loan are
independent of an unrelated to TREET and AT&T.
Prior to 1986, TREET acquired the Note and the Deed of Trust from
the Mercantile Fund. Commencing in 1986, that portion of TREET's assets
which included the Note and Deed of Trust was managed by Goldman Sachs
& Company (Goldman) pursuant to an agreement with AT&T under which
Goldman managed debt investments of TREET.
Effective December 1, 1990, AT&T commenced leasing from Crowe
approximately 13,997 square feet in Southpark C pursuant to a written
lease (the AT&T Lease) providing for monthly rental of $6858.75 for a
term of 36 months, through November 30, 1993. AT&T represents that at
the time the AT&T Lease commenced, neither Karsten nor any other
representative of TREET had any authority or control over the leasing
of space in Southpark, and TREET's sole interest in Southpark at that
time was as the holder of a security interest arising from TREET's
ownership of the Note and the Deed of Trust.
5. AT&T represents that during the mid-1980's Crowe began to
experience increasing difficulty in meeting its Loan payment
obligations, due to depressed real estate conditions in the Austin
market, and Crowe and TREET negotiated modified Loan payment terms in
1989, 1990 and 1991. These modifications related Crowe's Loan payment
obligation to the level of cash flow generated by the Southpark
buildings, and the parties agreed that unpaid accrued interest would be
added to the Loan principal. As a result, however, the principal amount
of the Loan became so large in relation to the value of the Southpark
buildings that it appeared unlikely that Crowe would be able to receive
any return on its equity after paying off the Loan. After it was
evident that Crowe would eventually default on the Loan and that TREET
would acquire Southpark by foreclosure, Goldman took steps to enable
TREET to acquire title to Southpark prior to foreclosure, in order to
exercise control over the buildings and to directly collect the rents.
Crowe transferred title to Southpark to TREET through a deed in lieu of
foreclosure (the Transfer Deed) executed on June 3, 1993. At that time,
AT&T remained a tenant in Southpark under the AT&T Lease, occupying
approximately 18 percent of the rentable space in Southpark. The term
of the AT&T Lease expired on November 30, 1993, but the lease continues
on a month-to-month holdover basis (the Holdover Lease). AT&T hopes to
negotiate a new lease of office space in Southpark (the New Lease),
under which it would occupy substantially less space in Southpark,
constituting less than ten percent of the Southpark's leasable square
footage.
6. At all times before TREET acquired Southpark, its interests in
the Loan had been managed and advised by Goldman, whose
responsibilities with respect to Trust assets were limited to the
management of debt investments. Upon acquisition of title to Southpark
through the Transfer Deed, TREET thereby acquired equity interests,
which were not within the scope of Goldman's authority to manage under
the terms of its appointment. Accordingly, Karsten, which was already
providing investment management services with respect to other assets
of TREET, was appointed by AT&T to assume investment management
responsibility on TREET's behalf for the Southpark buildings. With the
addition of Southpark to TREET assets under its management, Karsten
commenced to hold management responsibility with respect to more than
twenty percent of the assets of TREET.
7. In order to secure representation of TREET's interests under the
AT&T Lease by a fiduciary which is sufficiently independent of AT&T,
Hill Partners, Inc. (Hill Partners) has been appointed to act as an
independent fiduciary on behalf of TREET, effective December 1, 1993,
with respect to AT&T's lease of space in Southpark. Hill Partners is a
Texas corporation engaged in commercial real estate development and
management services, with its corporate headquarters in Austin, Texas.
Hill Partners represents that it is unrelated to AT&T and TREET, except
for the provision of services as leasing agent for Southpark C, which
it represents constitutes less than five percent of Hill Partners'
total revenues for the past fiscal year. Hill Partners serves as a
fiduciary under the Act, to represent TREET's interests for all
purposes with respect to AT&T's lease of Southpark space pursuant to
the Holdover Lease and any New Lease or extension, renewal or
renegotiation of the AT&T Lease. Hill Partners is required to monitor
AT&T's performance of all obligations under any such lease, and to
pursue appropriate remedies in the event of any default in performance
of such obligations. Hill Partners' obligations include representing
the interests of TREET in the negotiations with AT&T over the New
Lease, and in the oversight and enforcement of AT&T's obligations under
any New Lease which is consummated, including any renewal or extension
thereof.
Hill Partners' role also includes certain determinations with
respect to the period commencing June 3, 1993, to December 1, 1993 (the
Interim Period), the date of Hill Partners' assumption of duties as
independent fiduciary on behalf of TREET. Specifically, Hill Partners
is obligated to assess and evaluate AT&T's performance of its
obligations under the AT&T Lease during the Interim Period, and
Karsten's representation of TREET's interests during the Interim Period
with respect to the AT&T Lease. Hill Partners represents that it has
determined that during the Interim Period, AT&T was in complete
compliance with all terms and conditions of the AT&T Lease. Hill
Partners also represents that, based upon its review, it has determined
that Karsten's representation of TREET's interests under the AT&T Lease
during the Interim Period was appropriate and adequately protective of
the interests of TREET.
8. With respect to the proposed New Lease, the negotiation of which
has been conducted between AT&T and Hill Partners, AT&T proposes to
lease 7,600 square feet in Southpark C for a term of three years,
effective April 1, 1994. The proposed annual base rent per square foot
is $6.00 for the first year, $6.60 for the second year, and $6.96 for
the third year, and AT&T is responsible for its pro rata share of
expenses. The New Lease's three-year term may be extended for no more
than one three-year renewal term at rent of no less than the prevailing
market rental rate, by written notice to Hill Partners 180 days prior
to expiration of the initial term, subject to Hill Partners'
determination that such extension is in the best interests of the plans
participating in TREET. Hill Partners confirms that it has represented
TREET's interests in negotiating the proposed New Lease, that it
approves of all the terms and conditions of the proposed New Lease, and
that it would be in the best interests of TREET to execute the New
Lease with AT&T. Hill Partners states that it has determined that the
rent required under the New Lease is not less than the fair market
rent. Hill Partners states that in executing the New Lease, TREET will
be retaining a substantial corporate tenant which has an excellent
performance record and which constitutes a very high quality tenant.
Hill Partners represents that all the terms of the proposed New Lease
are at least as favorable to TREET as TREET could obtain in an arm's-
length transaction with an unrelated party.
9. In summary, the applicant represents that the proposed
transactions satisfy the criteria of section 408(a) of the Act for the
following reasons: (1) The interests of TREET with respect to TREET's
lease of space in Southpark to AT&T under the Holdover Lease and the
proposed New Lease have been and will be represented by Hill Partners,
serving as an independent fiduciary on behalf of TREET; (2) Hill
Partners has determined that during the Interim Period, after TREET
acquired Southpark and before Hill Partners' appointment as independent
fiduciary, the interests of TREET were adequately protected and
appropriately represented by Karsten; (3) Hill Partners approves of all
terms of the proposed New Lease and AT&T's continued tenancy in
Southpark, and has determined that the rent required under the New
Lease is not less than the fair market rent; (4) Under the proposed New
Lease, AT&T will reduce the amount of space it leases in Southpark to
less than ten percent of Southpark's total leasable space; and (5) Any
renewal of the New Lease will require the approval of Hill Partners and
will require rent of no less than the fair market rent.
FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department (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 of disqualified
person from certain other provisions of the Act and/or the Code,
including any prohibited transaction 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) Before an exemption may be granted under section 408(a) of the
Act and/or section 4975(c)(2) of the Code, the Department must find
that the exemption is administratively feasible, in the interests of
the plan and of its participants and beneficiaries and protective of
the rights of participants and beneficiaries of the plan;
(3) The proposed exemptions, if granted, will be supplemental to,
and not in derogation of, any other provisions of the Act and/or the
Code, including statutory or administrative exemptions and transitional
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
(4) The proposed exemptions, if granted, will be 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 16th day of June, 1994.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, U.S. Department Of Labor.
[FR Doc. 94-15007 Filed 6-20-94; 8:45 am]
BILLING CODE 4510-29-P