[Federal Register Volume 66, Number 160 (Friday, August 17, 2001)]
[Notices]
[Pages 43273-43274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20717]


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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration


Proposed Extension of Information Collection Request Submitted 
for Public Comment and Recommendations; PTE 86-128

ACTION: Notice.

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SUMMARY: The Department of Labor, as part of its continuing effort to 
reduce paperwork and respondent burden conducts a preclearance 
consultation program to provide the general public and other federal 
agencies with an opportunity to comment on proposed and continuing 
collections of information in accordance with the Paperwork Reduction 
Act of 1995 (PRA 95) (44 U.S.C. 3506(c)(2)(A)). This program helps to 
ensure that requested data can be provided in the desired format, 
reporting burden (time and financial resources) is minimized, 
collection instruments are clearly understood, and the impact of 
collection requirements on respondents can be properly assessed. 
Currently, the Pension and Welfare Benefits Administration is 
soliciting comments concerning the proposed extension of a currently 
approved collection of information, Prohibited Transaction Class 
Exemption 86-128 for certain transactions involving employee benefit 
plans and securities broker-dealers. A copy of the proposed information 
collection request (ICR) can be obtained by contacting the office 
listed below in the addresses section of this notice.

DATES: Written comments must be submitted on or before October 16, 
2001.

ADDRESSES: Mr. Gerald B. Lindrew, Office of Policy and Research, U.S. 
Department of Labor, Pension and Welfare Benefits Administration, 200 
Constitution Avenue, NW, Room N-5647, Washington, D.C. 20210. 
Telephone: (202) 219-4782; FAX (202) 219-4745 (these are not toll-free 
numbers).

SUPPLEMENTARY INFORMATION:

I. Background

    Prohibited Transaction Class Exemption 86-128 permits persons who 
serve as fiduciaries for employee benefit plans to effect or execute 
securities transactions on behalf of employee benefit plans. The 
exemption also allows sponsors of pooled separate accounts and other 
pooled investment funds to use their affiliates to effect or execute 
securities transactions for such accounts in order to recapture 
brokerage commissions for benefit of employee benefit plans whose 
assets are maintained in pooled separate accounts managed by the 
insurance companies. This exemption provides relief from certain 
prohibitions in section 406(b) of the Employee Retirement Income 
Security Act of 1974 (ERISA) and from the taxes imposed by section 
4975(a) and (b) of the Internal Revenue Code of 1986 (the Code) by 
reason of Code section 4975(c)(1)(E) or (F).

II. Desired Focus of Comments

    The Department of Labor is particularly interested in comments 
which:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;

[[Page 43274]]

     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected;
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.

II. Current Actions

    The Office's of Management and Budget (OMB's) approval of this ICR 
will expire on November 30, 2001. OMB's approval should be extended 
because without the relief provided by this exemption, broker-
fiduciaries who provide investment management services to accounts for 
which they also effect transactions for the purchase or sale of 
securities, may be barred by ERISA from providing these combined 
services to employee benefit plans, causing disruption of the existing 
business practices of plans and the businesses that service them.
    In order to insure that the exemption is not abused, that the 
rights of participants and beneficiaries are protected, and that the 
exemption's conditions are being complied with, the Department has 
included in the exemption five information collection requirements. The 
first requirement is written authorization executed in advance by an 
independent fiduciary of the plan whose assets are involved in the 
transaction with the broker-fiduciary. The second requirement is, 
within three months of the authorization, the broker-fiduciary furnish 
the independent fiduciary with any reasonably available information 
necessary for the independent fiduciary to determine whether an 
authorization should be made. The information must include a copy of 
the exemption, a form for termination, and a description of the broker-
fiduciary's brokerage placement practices. The third requirement is 
that the broker-fiduciary must provide a termination form to the 
independent fiduciary annually so that the independent fiduciary may 
terminate the authorization without penalty to the plan; failure to 
return the form constitutes continuing authorization. The fourth 
requirement is for the broker-fiduciary to report all transactions to 
the independent fiduciary, either by confirmation slips or through 
quarterly reports. The fifth requirement calls for the broker-fiduciary 
to provide an annual summary of the transactions. The annual summary 
must contain all security transaction-related charges incurred by the 
plan, the brokerage placement practices, and a portfolio turnover 
ratio.
    Agency: Department of Labor, Pension and Welfare Benefits 
Administration.
    Title: PTE 86-128 for Certain Transactions Involving Employee 
Benefit Plans and Securities Broker-Dealers.
    Type of Review: Extension of a currently approved collection.
    OMB Numbers: 1210-0059.
    Affected Public: Individuals or households; Business or other for-
profit; Not-for-profit institutions.
    Total Respondents: 23,000.
    Total Responses: 292,000.
    Frequency of Response: Quarterly; Annually.
    Total Annual Burden: 98,200 hours.
    Total Annual Cost (Operating & Maintenance): $188,200.
    Comments submitted in response to this notice will be summarized 
and/or included in the request for OMB approval of the information 
collection request; they will also become a matter of public record.

    Dated: August 10, 2001.
Gerald B. Lindrew,
Deputy Director, Office of Policy and Research, Pension and Welfare 
Benefits Administration.
[FR Doc. 01-20717 Filed 8-16-01; 8:45 am]
BILLING CODE 4510-29-P