[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