[Federal Register Volume 59, Number 227 (Monday, November 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29169]


[Federal Register: November 28, 1994]


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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 94-80; Exemption Application No. D-
9178 and D-9179, et al.]


Grant of Individual Exemptions; Banque Paribas (the Bank) and 
Paribas Asset Management, Inc., et al.

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Grant of Individual Exemptions.

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SUMMARY: This document contains exemptions issued by the Department of 
Labor (the Department) from certain of the prohibited transaction 
restrictions of the Employee Retirement Income Security Act of 1974 
(the Act) and/or the Internal Revenue Code of 1986 (the Code).
    Notices were published in the Federal Register of the pendency 
before the Department of proposals to grant such exemptions. The 
notices set forth a summary of facts and representations contained in 
each application for exemption and referred interested persons to the 
respective applications for a complete statement of the facts and 
representations. The applications have been available for public 
inspection at the Department in Washington, D.C. The notices also 
invited interested persons to submit comments on the requested 
exemptions to the Department. In addition the notices stated that any 
interested person might submit a written request that a public hearing 
be held (where appropriate). The applicants have represented that they 
have complied with the requirements of the notification to interested 
persons. No public comments and no requests for a hearing, unless 
otherwise stated, were received by the Department.
    The notices of proposed exemption were issued and the exemptions 
are being granted solely by the Department because, effective December 
31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR 
47713, October 17, 1978) transferred the authority of the Secretary of 
the Treasury to issue exemptions of the type proposed to the Secretary 
of Labor.

Statutory Findings

    In accordance with section 408(a) of the Act and/or section 
4975(c)(2) of the Code and the procedures set forth in 29 CFR Part 
2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon 
the entire record, the Department makes the following findings:

    (a) The exemptions are administratively feasible;
    (b) They are in the interests of the plans and their 
participants and beneficiaries; and
    (c) They are protective of the rights of the participants and 
beneficiaries of the plans.

Banque Paribas (the Bank) and Paribas Asset Management, Inc. (the 
Manager; collectively, the Applicants) Located, respectively, in Paris, 
France and New York, New York

[Prohibited Transaction Exemption 94-80; Application Nos. D-9178 and D-
9179]

Exemption

    The restrictions of sections 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 guarantee by the Bank to an employee benefit plan (the Plan) that 
retains the Manager as investment manager for such plan of the value of 
the Plan's principal investment with the Manager, provided that each of 
the following conditions is satisfied: (1) The fiduciaries of the Plan 
who are responsible for the selection and retention of the Manager as 
investment manager for the Plan, and for the selection of the guarantee 
from the Bank, are independent of the Manager, the Bank, and their 
affiliates; (2) no separate fee or remuneration is payable by the Plan 
or any other person to the Manager, the Bank, or any of their 
affiliates for the guarantee; (3) the Plan is entitled to cancel the 
investment management agreement with the Manager, and/or the guarantee 
provided by the Bank, at any time upon reasonable notice; (4) the 
agreement between each Plan and the Manager and the Bank will be 
amended to provide that, for purposes of enforcing the Bank's 
guarantee, the determination of the value of a Plan's assets under the 
Manager's investment management at any relevant time shall be made 
pursuant to objective standards determined jointly by the Manager and 
the Plan's custodian, which is the bank or other entity holding the 
assets of the Plan or other Plan fiduciary responsible for causing the 
Plan to enter into the agreement; (5) however, if the Manager and the 
Plan's custodian are unable to agree as to the value of the Plan's 
account, they will jointly select a qualified appraiser to make this 
determination; if they are unable to agree on an appraiser, the Manager 
and the Plan's custodian will each select a qualified appraiser and the 
value will be determined by mutual agreement of such appraisers or, if 
they cannot agree, by a third qualified appraiser designated by the two 
appraisers, and all such appraisers will be independent of the Manager; 
and (6) the investment management agreement between each Plan and the 
Manager and the Bank will provide: (a) that income from any lending 
from a Plan's account will be credited to the Plan's account and not to 
the Manager's account, and (b) that no lending of this type will occur 
under circumstances where the borrower is a party in interest or 
disqualified person with respect to the Plan, unless the conditions of 
Prohibited Transaction Exemptions 81-6 (52 FR 18754, May 19, 1987) and 
82-63 (47 FR 14084, April 6, 1982, as corrected by 47 FR 16437, April 
16, 1982)] are satisfied.
    For purposes of this exemption, the term ``affiliate'' of another 
person means any person directly or indirectly, through one or more 
intermediaries, controlling, controlled by, or under common control 
with such person, provided that the Manager shall not be deemed an 
affiliate of another person solely because the Manager has investment 
management authority or discretion over the assets of the other person. 
For purposes of the foregoing, the term ``control'' means the power to 
exercise a controlling influence over the management or policies of a 
person other than an individual. Further, for purposes of this 
exemption, a Plan fiduciary shall be deemed ``independent'' of a person 
only if: (1) the fiduciary is not an affiliate, as defined above, of 
such person; and (2) the fiduciary has no other relationship to or 
interest in such persons that might affect the exercise of such 
fiduciary's best judgment as a fiduciary.
    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 September 19, 1994, at 59 
FR 47947.

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

Del Monte Savings Plan, and Del Monte Certain Hourly Savings Plan (the 
Plans) Located in San Francisco, CA

[Prohibited Transaction Exemption 94-81; Exemption Application Nos. 
D-9767, D-9768]

Exemption

    The restrictions of sections 406(a), 406 (b)(1) and (b)(2) of the 
Act and the sanctions resulting from the application of section 4975 of 
the Code, by reason of section 4975(c)(1) (A) through (E) of the Code, 
shall not apply to (1) the extension of credit to the Plans (the Loan) 
by Del Monte Corporation, the sponsor of the Plans, with respect to the 
Plans' interests in guaranteed investment contract No. CG01300B3A (the 
GIC) issued by Executive Life Insurance Company of California 
(Executive Life); and (2) the Plans' potential repayment of the Loan 
(the Repayments); provided that 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 or expenses are paid by the Plans;
    (C) The Loan is made in lieu of amounts to be paid to the Plan 
under the plan of rehabilitation resulting from the bankruptcy of 
Executive Life (the Rehab Plan);
    (D) The Repayments shall not exceed the principal amount of the 
Loan;
    (E) The Repayments shall not exceed the amounts actually received 
by the Plans under the Rehab Plan; and
    (F) Repayment of the Loan shall be waived to the extent that the 
amount of the Loan exceeds the amount of cash recovered by the Plans 
under the Rehab Plan.
    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 September 30, 1994 at 59 
FR 50008.

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 exemptions does not 
apply and the general fiduciary responsibility provisions of section 
404 of the Act, which among other things require a fiduciary to 
discharge his duties respecting the plan solely in the interest of the 
participants and beneficiaries of the plan and in a prudent fashion in 
accordance with section 404(a)(1)(B) of the Act; nor does it affect the 
requirement of section 401(a) of the Code that the plan must operate 
for the exclusive benefit of the employees of the employer maintaining 
the plan and their beneficiaries;
    (2) These exemptions are supplemental to and not in derogation of, 
any other provisions of the Act and/or the Code, including statutory or 
administrative exemptions and transactional rules. Furthermore, the 
fact that a transaction is subject to an administrative or statutory 
exemption is not dispositive of whether the transaction is in fact a 
prohibited transaction; and
    (3) The availability of these exemptions is subject to the express 
condition that the material facts and representations contained in each 
application accurately describes all material terms of the transaction 
which is the subject of the exemption.

    Signed at Washington, DC, this 22nd day of November, 1994.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 94-29169 Filed 11-25-94; 8:45 am]
BILLING CODE 4510-29-P