[Federal Register Volume 60, Number 140 (Friday, July 21, 1995)]
[Notices]
[Pages 37689-37690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17960]



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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 95-61; Exemption Application No. L-
09933, et al.]


Grant of Individual Exemptions; United Food and Commercial 
Workers Union, 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.

United Food and Commercial Workers Union Local 789 and St. Paul Food 
Employers Health Care Plan (the Plan) Located in Bloomington, Minnesota

[Prohibited Transaction Exemption 95-61; Exemption Application No. L-
09933]

Exemption

    The restrictions of section 406(a) of the Act shall not apply to 
the purchase of prescription drugs, at discount prices, by Plan 
participants and beneficiaries, from Supervalu Pharmacies, Inc. (SPI) 
and Cub Foods (Cub), parties in interest with respect to the Plan, 
provided the following conditions are satisfied: (a) the terms of the 
transaction are at least as favorable to the Plan as those the Plan 
could obtain in a similar transaction with an unrelated party; (b) any 
decision by the Plan to enter into agreements governing the subject 
purchases will be made by Plan fiduciaries independent of SPI and Cub; 
and (c) at least 50% of the preferred providers participating in the 
Preferred Pharmacy Network (PPN) which will be selling prescription 
drugs to the Plan's participants and beneficiaries will be unrelated to 
SPI and Cub.

    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 22, 1995 at 60 FR 
27127.


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

[[Page 37690]]


General Motors Hourly-Rate Employes' Pension Plan (the GM Hourly Plan); 
The General Motors Retirement Program for Salaried Employees (the GM 
Salaried Plan); The Saturn Individual Retirement Plan for Represented 
Team Members; The Saturn Personal Choices Retirement Plan for Non-
Represented Team Members; and The Employees' Retirement Plan for GMAC 
Corporation (all five plans collectively, the GM Plans); The AT&T 
Pension Plan; and the AT&T Management Pension Plan (together, the AT&T 
Plans; all seven plans collectively, the Plans) Located in Detroit, 
Michigan (the GM Plans), and in New York, New York (the AT&T Plans)

[Prohibited Transaction Exemption 95-62; Exemption Application Nos. D-
09964 through D-09968]

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 
(1) the granting to The Industrial Bank of Japan, Limited, New York 
Branch (IBJ), as the representative of lenders (the Lenders) 
participating in a credit facility (the Facility), of security 
interests in limited partnership interests in The Morgan Stanley Real 
Estate Fund II, L.P. (the Partnership) owned by the Plans with respect 
to which some of the Lenders are parties in interest; and (2) the 
agreements by the Plans to honor capital calls made by IBJ in lieu of 
the Partnership's general partner; provided that (a) the grants and 
agreements are on terms no less favorable to the Plans than those which 
the Plans could obtain in arm's-length transactions with unrelated 
parties; and (b) the decisions on behalf of each Plan to invest in the 
Partnership and to execute such grants and agreements in favor of IBJ 
are made by a fiduciary which is not included among, and is independent 
of, the Lenders and IBJ.
    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 22, 1995 at 60 FR 
27129.
    Written Comments: The Department received one written comment with 
respect to the proposed exemption, which was submitted by the 
applicants to correct two errors in the proposed exemption. The 
Partnership Agreement referred to in Representation #1 of the proposed 
exemption was dated December 19, 1994, rather than December 29, 1994, 
as the applicants had originally represented. The applicants also noted 
that the word ``Employes'' in the names of the GM Hourly Plan and the 
GM Salaried Plan should have only one ``e'' due to a historical quirk. 
The Department has made the appropriate corrections and determined to 
grant the exemption as it was proposed.

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

Eaton Corporation Share Purchase and Investment Plan (the Plan) Located 
in Cleveland, Ohio

[Prohibited Transaction Exemption 95-63; Exemption Application No. D-
09978]

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 by Eaton Corporation 
(Eaton) to the Plan in the form of loans (the Loans) with respect to 
certain guaranteed investment contracts (collectively, the GICs); and 
(2) the repayment (the Repayments) by the Plan of all or a portion of 
amounts advanced to the Plan by Eaton on the terms described in the 
agreement governing such Loans, provided: (a) all terms of such 
transactions 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 other expenses will be incurred by the Plan in 
connection with the Loans; (c) the Loans would be made only when, and 
to the extent needed, to avoid penalties that would otherwise be 
incurred if the liquidation of one or more of the GICs is required, as 
determined by the Corporate Compensation Committee (the Plan 
Committee); (d) Repayments will be made only from payments made to the 
Plan as the GICs mature (the GIC Proceeds); (e) the Repayments will not 
exceed the total amount of the Loans; and (f) the Repayments will be 
waived to the extent that the Loans exceed 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 May 22, 1995 at 60 FR 
27130.

EFFECTIVE DATE: This exemption is effective July 5, 1995.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz 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, D.C., this 18th day of July, 1995.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 95-17960 Filed 7-20-95; 8:45 am]
BILLING CODE 4510-29-P