Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38551 

hazardous substances at or from the 

Meyers Landfill Site, a former 

municipal waste disposal facility 

located on National Forest Service 

System lands administered by the Lake 

Tahoe Basin Management Unit of the 

Forest Service, and a declaration of the 

County’s and the City’s liability for 

future response costs incurred by the 

United States related to the Site. The 

County filed a counterclaim for 

contribution against the United States as 

well as a Third Party Complaint for 

contribution against a number of third 

party defendants. 

Under the proposed Partial Consent 

Decree, the County will implement the 

Operable Unit One (‘‘OU–1’’) remedy, 

which involves consolidating the 

landfill waste and encasing it under an 

impervious cap and construction of 

certain enhanced drainage features 

around the cap. The County will also 

pay $1,651,000 to resolve the United 

States’ claim for Past Response Costs (as 

defined in the proposed Partial Consent 

Decree) at the Site. In exchange, the 

County will receive from the United 

States a covenant not to sue or to take 

administrative action pursuant to 

Sections 106 or 107 of CERCLA, 42 

U.S.C. 9606 and 9607, for the 

performance of response actions at OU– 

1 and for the United States’ Past 

Response Costs and Future Oversight 

Costs (as defined in the proposed Partial 

Consent Decree). 

In addition, the proposed Partial 

Consent Decree resolves the County’s 

contribution counterclaims against the 

United States regarding response costs 

incurred, or to be incurred, by the 

County at OU–1, referred to in the 

proposed Partial Consent Decree as 

‘‘Settling Defendant Past Response 

Costs’’ and ‘‘Settling Defendant Future 

OU–1 Response Costs,’’ in exchange for 

a payment of $1,612,349 to the County. 

The County, in turn, must deposit that 

amount into a special account to fund 

implementation of the OU–1 remedy. 

The Department of Justice will receive 

for a period of thirty (30) days from the 

date of this publication comments 

relating to the Partial Consent Decree. 

Comments should be addressed to the 

Assistant Attorney General, 

Environment and Natural Resources 

Division, and either e-mailed to 

pubcomment-ees.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should refer to United 

States of America v. El Dorado County, 

California, et al., Civil No. S–01–1520 

MCE GGH (E.D. Cal.) (DOJ Ref. No. 90– 

11–3–06554) (Partial Consent Decree 

with El Dorado County). 

The Partial Consent Decree may be 

examined at U.S. Department of 

Agriculture, Office of General Counsel, 

33 New Montgomery Street, 17th Floor, 

San Francisco, CA 94150 (contact Rose 

Miksovsky, (415) 744–3158). During the 

public comment period, the Partial 

Consent Decree may also be examined 

on the following Department of Justice 

Web site: http://www.usdoj.gov/enrd/ 

Consent_Decrees.html. A copy of the 

Partial Consent Decree may also be 

obtained by mail from the Consent 

Decree Library, U.S. Department of 

Justice, P.O. Box 7611, Washington, D.C. 

20044–7611 or by faxing or e-mailing a 

request to Tonia Fleetwood 

(tonia.fleetwood@usdoj.gov), fax no. 

(202) 514–0097, phone confirmation 

number (202) 514–1547. In requesting a 

copy from the Consent Decree Library, 

please refer to United States of America 

v. El Dorado County, California, et al., 

Civil No. S–01–1520 MCE GGH (E.D. 

Cal.) (DOJ Ref. No. 90–11–3–06554) 

(Partial Consent Decree with El Dorado 

County), and enclose a check in the 

amount of $66.50 (25 cents per page 

reproduction cost) payable to the U.S. 

Treasury or, if by e-mail or fax, forward 

a check in that amount to the Consent 

Decree Library at the stated address. 

Maureen Katz, 

Assistant Section Chief, Environmental 

Enforcement Section, Environment and 

Natural Resources Division. 

[FR Doc. 2010–16119 Filed 7–1–10; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Prohibited Transaction Exemptions 

and Grant of Individual Exemptions 

Involving D–11448, The PNC Financial 

Services Group, Inc., 2010–19; D– 

11514, Citigroup Inc. and its Affiliates 

(Citigroup or the Applicant), 2010–20; 

D–11527, Barclays California 

Corporation (Barcal), 2010–21; D– 

11533 and D–11534, Respectively, 

CUNA Mutual Pension Plan for 

Represented Employees and CUNA 

Mutual Pension Plan for NonRepresented Employees (Together, the 

Plans), 2010–22 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Grant of individual exemptions. 

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 (ERISA or the Act) 

and/or the Internal Revenue Code of 

1986 (the Code). 

A notice was published in the Federal 

Register of the pendency before the 

Department of a proposal to grant such 

exemption. The notice set forth a 

summary of facts and representations 

contained in the application for 

exemption and referred interested 

persons to the application for a 

complete statement of the facts and 

representations. The application has 

been available for public inspection at 

the Department in Washington, DC. The 

notice also invited interested persons to 

submit comments on the requested 

exemption to the Department. In 

addition the notice stated that any 

interested person might submit a 

written request that a public hearing be 

held (where appropriate). The applicant 

has represented that it has complied 

with the requirements of the notification 

to interested persons. No requests for a 

hearing were received by the 

Department. Public comments were 

received by the Department as described 

in the granted exemption. 

The notice of proposed exemption 

was issued and the exemption is being 

granted solely by the Department 

because, effective December 31, 1978, 

section 102 of Reorganization Plan No. 

4 of 1978, 5 U.S.C. App. 1 (1996), 

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 exemption is administratively 

feasible; 

(b) The exemption is in the interests of the 

plan and its participants and beneficiaries; 

and 

(c) The exemption is protective of the 

rights of the participants and beneficiaries of 

the plan. 

Exemption 

Section I—Exemption for In-Kind 

Redemption of Assets 

The restrictions in sections 

406(a)(1)(A) through (D) and 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, 


emcdonald on DSK2BSOYB1PROD with NOTICES
38552 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 

1For purposes of this exemption, references to 

specific provisions of Title I of the Act, unless 

otherwise specified, refer also to the corresponding 

provisions of the Code. 

shall not apply 1 to certain in-kind 

redemptions (the Redemption(s)) by The 

Employees’ Thrift Plan of Mercantile 

Bankshares Corporation and 

Participating Affiliates (the Mercantile 

Plan) that occurred overnight on 

October 31, 2007, of shares (the Shares) 

of proprietary mutual funds (the Funds) 

for which The PNC Financial Services 

Group, Inc. (PNC) or an affiliate thereof 

provides investment advisory and other 

services, provided that the following 

conditions were satisfied: 

(A) No sales commissions, 

redemption fees, or other similar fees 

were paid in connection with the 

Redemptions (other than customary 

transfer charges paid to parties other 

than PNC and any affiliates of PNC 

(PNC Affiliates)); 

(B) The assets transferred to the 

Mercantile Plan pursuant to the 

Redemptions consisted entirely of cash 

and Transferable Securities, as such 

term is defined in Section II, below; 

(C) In each Redemption, the 

Mercantile Plan received its pro rata 

portion of the securities with respect to 

the Capital Opportunities Fund, and 

certain securities, selected pursuant to a 

verifiable methodology, that were 

approved by an independent fiduciary 

(Independent Fiduciary, as such term is 

defined in Section II) with respect to the 

other four Funds covered by this 

exemption, such that the securities 

received were equal in value to that of 

the number of Shares redeemed, as 

determined in a single valuation (using 

sources independent of PNC and PNC 

Affiliates) performed in the same 

manner and as of the close of business 

on the same day, in accordance with 

Rule 2a–4 under the Investment 

Company Act of 1940, as amended (the 

1940 Act) and the then-existing 

procedures adopted by the Board of 

Directors of PNC Funds, Inc., which 

were in compliance with all applicable 

securities laws; 

(D) Neither PNC nor any PNC Affiliate 

received any direct or indirect 

compensation or any fees, including any 

fees payable pursuant to Rule 12b–1 

under the 1940 Act, in connection with 

any Redemption of the Shares; 

(E) Prior to a Redemption, the 

Independent Fiduciary received a full 

written disclosure of information 

regarding the Redemption; 

(F) Prior to a Redemption, the 

Independent Fiduciary communicated 

its approval for such Redemption to 

PNC; 

(G) Prior to a Redemption, based on 

the disclosures provided to the 

Independent Fiduciary, the Independent 

Fiduciary determined that the terms of 

the Redemption were fair to the 

Mercantile Plan, and comparable to and 

no less favorable than terms obtainable 

at arm’s length between unaffiliated 

parties, and that the Redemption was in 

the best interests of the Mercantile Plan 

and its participants and beneficiaries; 

(H) Not later than thirty (30) business 

days after the completion of a 

Redemption, the Independent Fiduciary 

received a written confirmation 

regarding such Redemption containing: 

(i) The number of Shares held by the 

Mercantile Plan immediately before the 

Redemption (and the related per Share 

net asset value and the total dollar value 

of the Shares held) for each Fund; 

(ii) The identity (and related aggregate 

dollar value) of each security provided 

to the Mercantile Plan pursuant to the 

Redemption, including each security 

valued in accordance with Rule 2a–4 

under the 1940 Act and procedures 

adopted by the Board of Directors of 

PNC Funds, Inc. (using sources 

independent of PNC and PNC 

Affiliates); 

(iii) The current market price of each 

security received by the Mercantile Plan 

pursuant to the Redemption; and 

(iv) If applicable, the identity of each 

pricing service or market maker 

consulted in determining the value of 

such securities; 

(I) The value of the securities received 

by the Mercantile Plan for each 

redeemed Share equaled the net asset 

value of such Share at the time of the 

transaction, and such value equaled the 

value that would have been received by 

any other investor for shares of the same 

class of the Fund at that time; 

(J) Subsequent to the Redemptions, 

the Independent Fiduciary performed a 

post-transaction review that included, 

among other things, a random sampling 

of the pricing information it received; 

(K) Each of the Mercantile Plan’s 

dealings with the Funds, the investment 

advisors to the Funds, the principal 

underwriter for the Funds, or any 

affiliated person thereof, were on a basis 

no less favorable to the Mercantile Plan 

than dealings between the Funds and 

other shareholders holding shares of the 

same class as the Shares; 

(L) ) Prior to the publication of this 

final exemption in the Federal Register 

regarding the subject transactions, PNC: 

(i) Reimbursed The PNC Financial 

Services Group, Inc. Incentive Savings 

Plan (the PNC Plan), into which the 

Mercantile Plan was merged on 

November 1, 2007, for all brokerage 

costs incurred by the Mercantile Plan on 

November 1, 2007 to liquidate the 

securities that the Mercantile Plan 

received in kind pursuant to a 

Redemption; and (ii) provided the 

Department with written documentation 

indicating reimbursement to the PNC 

Plan for such brokerage costs; 

(M) PNC maintains, or causes to be 

maintained, for a period of six years 

from the date of any covered transaction 

such records as are necessary to enable 

the persons described in paragraph (N) 

below to determine whether the 

conditions of this exemption have been 

met, except that (i) a separate prohibited 

transaction will not be considered to 

have occurred if, due to circumstances 

beyond the control of PNC, the records 

are lost or destroyed prior to the end of 

the six-year period and (ii) no party in 

interest with respect to the Mercantile 

Plan other than PNC shall be subject to 

the civil penalty that may be assessed 

under section 502(i) of the Act or to the 

taxes imposed by section 4975(a) and (b) 

of the Code if such records are not 

maintained or are not available for 

examination as required by paragraph 

(N) below; 

(N)(1) Except as provided in 

subparagraph (2) of this paragraph (N), 

and notwithstanding any provisions of 

section 504(a)(2) and (b) of the Act, the 

records referred to in paragraph (M) 

above are unconditionally available at 

their customary locations for 

examination during normal business 

hours by (i) any duly authorized 

employee or representative of the 

Department, the Internal Revenue 

Service, or the Securities and Exchange 

Commission (SEC), (ii) any fiduciary of 

the PNC Plan as the successor to the 

Mercantile Plan or any duly authorized 

representative of such fiduciary, (iii) 

any participant or beneficiary of the 

PNC Plan as the successor to the 

Mercantile Plan or duly authorized 

representative of such participant or 

beneficiary, and (iv) any employer 

whose employees are covered by the 

PNC Plan as the successor to the 

Mercantile Plan and any employee 

organization whose members are 

covered by such plan; 

(2) None of the persons described in 

paragraphs (N)(1)(ii), (iii) and (iv) shall 

be authorized to examine trade secrets 

of PNC or the Funds, or commercial or 

financial information which is 

privileged or confidential; 

(3) Should PNC or the Funds refuse to 

disclose information on the basis that 

such information is exempt from 

disclosure pursuant to paragraph (N)(2) 

above, PNC or the Funds shall, by the 

close of the thirtieth (30th) day 

following the request, provide a written 

notice advising that person of the 


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Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38553 

2As a general matter, it is the Department’s view 

that the model practice to effect an in-kind 

redemption by a mutual fund to a shareholderpension plan, subject to Title I of ERISA, is through 

a pro rata distribution because the adoption of such 

a method ensures that the individual stocks 

selected for the in-kind redemption are objectively 

determined. The Department recognizes that the inkind redemption for which exemptive relief is 

provided involves unique circumstances because, 

among other things, it facilitated the transfer of plan 

assets and the merger of The Employees’ Thrift Plan 

of Mercantile Bankshares Corporation and 

Participating Affiliates (the Mercantile Plan) with 

The PNC Financial Services Group, Inc. Incentive 

Savings Plan (the PNC Plan). See also Facts and 

Representations #12 contained in the notice of 

proposed exemption, which summarizes the basis 

for satisfying the section 408(a) statutory criteria for 

providing exemptive relief. In this regard, an 

important condition of this exemption is that PNC 

paid all brokerage commissions associated with the 

Mercantile Plan’s sale of the securities received in 

the Redemptions. See Section I(L) of the exemption. 

Further, the Department encourages applicants, 

their advisers and counsel to confer, in advance, 

with EBSA’s Office of Exemption Determinations as 

to whether a contemplated non-pro rata in-kind 

redemption involving plan assets may qualify for 

prohibited transaction exemptive relief. Although 

the applicant requested both retroactive and 

prospective exemptive relief, the Department is 

granting only retroactive exemptive relief relating to 

the October 31, 2007 Redemptions. 

3For purposes of this exemption, references to 

section 406 of the Act should be read to refer as 

well to the corresponding provisions of section 

4975 of the Code. 

reasons for the refusal and that the 

Department may request such 

information. 

Section II—Definitions 

For purposes of this exemption— 

(A) The term ‘‘affiliate’’ means: 

(1) Any person (including corporation 

or partnership) directly or indirectly 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with the person; 

(2) Any officer, director, employee, 

relative, or partner in any such person; 

and 

(3) Any corporation or partnership of 

which such person is an officer, 

director, partner, or employee. 

(B) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual. 

(C) The term ‘‘net asset value’’ means 

the amount for purposes of pricing all 

purchases and sales calculated by 

dividing the value of all securities, 

determined by a method as set forth in 

the Fund’s prospectus and statement of 

additional information, and other assets 

belonging to the Fund, less the 

liabilities charged to each such Fund, by 

the number of outstanding shares. 

(D) The term ‘‘Independent Fiduciary’’ 

means a fiduciary who is: (i) 

independent of and unrelated to PNC 

and its affiliates, and (ii) appointed to 

act on behalf of the Mercantile Plan 

with respect to the in-kind transfer of 

assets from one or more Funds to, or for 

the benefit of, the Mercantile Plan. For 

purposes of this exemption, a fiduciary 

will not be deemed to be independent 

of and unrelated to PNC if: (i) Such 

fiduciary directly or indirectly controls, 

is controlled by, or is under common 

control with, PNC; (ii) such fiduciary 

directly or indirectly receives any 

compensation or other consideration in 

connection with any transaction 

described in this exemption (except that 

an independent fiduciary may receive 

compensation from PNC in connection 

with the transactions contemplated 

herein if the amount or payment of such 

compensation is not contingent upon, or 

in any way affected by, the independent 

fiduciary’s decision); and (iii) an 

amount equal to more than one percent 

(1%) of such fiduciary’s gross income 

(for federal income tax purposes, in its 

prior tax year), is paid by PNC and its 

affiliates to the fiduciary in 2007, the 

year at issue. 

(E) The term ‘‘Transferable Securities’’ 

means securities (1) for which market 

quotations are readily available (as 

determined under Rule 2a–4 of the 1940 

Act) from persons independent of PNC 

and (2) which are not: 

(i) Securities that, if publicly offered 

or sold, would require registration 

under the Securities Act of 1933; 

(ii) Securities issued by entities in 

countries which (a) restrict or prohibit 

the holding of securities by nonnationals other than through qualified 

investment vehicles, such as the Funds, 

or (b) permit transfers of ownership of 

securities to be effected only by 

transactions conducted on a local stock 

exchange; 

(iii) Certain portfolio positions (such 

as forward foreign currency contracts, 

futures and options contracts, swap 

transactions, certificates of deposit, and 

repurchase agreements) that, although 

liquid and marketable, involve the 

assumption of contractual obligations, 

require special trading facilities, or can 

only be traded with the counter-party to 

the transaction to effect a change in 

beneficial ownership; 

(iv) Cash equivalents (such as 

certificates of deposit, commercial 

paper, and repurchase agreements); 

(v) Other assets that are not readily 

distributable (including receivables and 

prepaid expenses), net of all liabilities 

(including accounts payable); and 

(vi) Securities subject to ‘‘stop 

transfer’’ instructions or similar 

contractual restrictions on transfer. 

(F) The term ‘‘relative’’ means a 

‘‘relative’’ as that term is defined in 

section 3(15) of the Act (or a ‘‘member 

of the family’’ as that term is defined in 

section 4975(e)(6) of the Code), or a 

brother, sister, or a spouse of a brother 

or a sister. 

Effective Date: The exemption is 

effective as of October 31, 2007.2

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 

January 19, 2010 at 75 FR 3060. 

Written Comments 

No substantive comments were 

received by the Department with respect 

to the notice of proposed exemption. 

For Further Information Contact: Ms. 

Karin Weng of the Department, 

telephone (202) 693–8557. (This is not 

a toll-free number.) 

Exemption 

Section I. Sales of Auction Rate 

Securities From Plans to Citigroup: 

Unrelated to a Settlement Agreement 

The restrictions of section 

406(a)(1)(A) and (D) and section 

406(b)(1) and (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), (D), and (E) of 

the Code, shall not apply, effective 

February 1, 2008, to the sale by a Plan 

(as defined in Section V(e)) of an 

Auction Rate Security (as defined in 

Section V(c)) to Citigroup, where such 

sale (an Unrelated Sale) is unrelated to, 

and not made in connection with, a 

Settlement Agreement (as defined in 

Section V(f)), provided that the 

conditions set forth in Section II have 

been met.3

Section II. Conditions Applicable to 

Transactions Described in Section I 

(a) The Plan acquired the Auction 

Rate Security in connection with 

brokerage or advisory services provided 

by Citigroup to the Plan; 

(b) The last auction for the Auction 

Rate Security was unsuccessful; 

(c) Except in the case of a Plan 

sponsored by Citigroup for its own 

employees (a Citigroup Plan), the 

Unrelated Sale is made pursuant to a 

written offer by Citigroup (the Offer) 

containing all of the material terms of 

the Unrelated Sale. Either the Offer or 

other materials available to the Plan 

provide: (1) The identity and par value 

of the Auction Rate Security; (2) the 

interest or dividend amounts that are 

due and unpaid with respect to the 

Auction Rate Security; and (3) the most 

recent rate information for the Auction 


emcdonald on DSK2BSOYB1PROD with NOTICES
38554 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 

4The Department notes that the Act’s general 

standards of fiduciary conduct also would apply to 

the transactions described herein. In this regard, 

section 404 of the Act requires, among other things, 

that a fiduciary discharge his duties respecting a 

plan solely in the interest of the plan’s participants 

and beneficiaries and in a prudent manner. 

Accordingly, a plan fiduciary must act prudently 

with respect to, among other things, the decision to 

sell the Auction Rate Security to Citigroup for the 

par value of the Auction Rate Security, plus unpaid 

interest and dividends. The Department further 

emphasizes that it expects plan fiduciaries, prior to 

entering into any of the proposed transactions, to 

fully understand the risks associated with this type 

of transaction following disclosure by Citigroup of 

all relevant information. 

Rate Security (if reliable information is 

available). Notwithstanding the 

foregoing, in the case of a pooled fund 

maintained or advised by Citigroup, this 

condition shall be deemed met to the 

extent each Plan invested in the pooled 

fund (other than a Citigroup Plan) 

receives advance written notice 

regarding the Unrelated Sale, where 

such notice contains all of the material 

terms of the Unrelated Sale; 

(d) The Unrelated Sale is for no 

consideration other than cash payment 

against prompt delivery of the Auction 

Rate Security; 

(e) The sales price for the Auction 

Rate Security is equal to the par value 

of the Auction Rate Security, plus any 

accrued but unpaid interest or 

dividends; 

(f) The Plan does not waive any rights 

or claims in connection with the 

Unrelated Sale; 

(g) The decision to accept the Offer or 

retain the Auction Rate Security is made 

by a Plan fiduciary or Plan participant 

or IRA owner who is independent (as 

defined in Section V(d)) of Citigroup. 

Notwithstanding the foregoing: (1) In 

the case of an IRA (as defined in Section 

V(e)) which is beneficially owned by an 

employee, officer, director or partner of 

Citigroup, the decision to accept the 

Offer or retain the Auction Rate Security 

may be made by such employee, officer, 

director or partner; or (2) in the case of 

a Citigroup Plan or a pooled fund 

maintained or advised by Citigroup, the 

decision to accept the Offer may be 

made by Citigroup after Citigroup has 

determined that such purchase is in the 

best interest of the Citigroup Plan or 

pooled fund; 4

(h) Except in the case of a Citigroup 

Plan or a pooled fund maintained or 

advised by Citigroup, neither Citigroup 

nor any affiliate exercises investment 

discretion or renders investment advice 

within the meaning of 29 CFR 2510.3– 

21(c) with respect to the decision to 

accept the Offer or retain the Auction 

Rate Security; 

(i) The Plan does not pay any 

commissions or transaction costs with 

respect to the Unrelated Sale; 

(j) The Unrelated Sale is not part of an 

arrangement, agreement or 

understanding designed to benefit a 

party in interest to the Plan; 

(k) Citigroup and its affiliates, as 

applicable, maintain, or cause to be 

maintained, for a period of six (6) years 

from the date of the Unrelated Sale, 

such records as are necessary to enable 

the persons described below in 

paragraph (l)(1), to determine whether 

the conditions of this exemption, if 

granted, have been met, except that: 

(1) No party in interest with respect 

to a Plan which engages in an Unrelated 

Sale, other than Citigroup and its 

affiliates, as applicable, shall be subject 

to a civil penalty under section 502(i) of 

the Act or the taxes imposed by section 

4975(a) and (b) of the Code, if such 

records are not maintained, or not 

available for examination, as required, 

below, by paragraph (l)(1); and 

(2) A separate prohibited transaction 

shall not be considered to have occurred 

solely because, due to circumstances 

beyond the control of Citigroup or its 

affiliates, as applicable, such records are 

lost or destroyed prior to the end of the 

six-year period; 

(l)(1) Except as provided below in 

paragraph (l)(2), and notwithstanding 

any provisions of subsections (a)(2) and 

(b) of section 504 of the Act, the records 

referred to above in paragraph (k) are 

unconditionally available at their 

customary location for examination 

during normal business hours by: 

(A) Any duly authorized employee or 

representative of the Department, the 

Internal Revenue Service, or the U.S. 

Securities and Exchange Commission; 

(B) Any fiduciary of any Plan, 

including any IRA owner, that engages 

in an Unrelated Sale, or any duly 

authorized employee or representative 

of such fiduciary; and 

(C) Any employer of participants and 

beneficiaries and any employee 

organization whose members are 

covered by a Plan that engages in the 

Unrelated Sale, or any authorized 

employee or representative of these 

entities; 

(2) None of the persons described 

above in paragraphs (l)(1)(B)–(C) shall 

be authorized to examine trade secrets 

of Citigroup, or commercial or financial 

information which is privileged or 

confidential; and 

(3) Should Citigroup refuse to disclose 

information on the basis that such 

information is exempt from disclosure, 

Citigroup shall, by the close of the 

thirtieth (30th) day following the 

request, provide a written notice 

advising that person of the reasons for 

the refusal and that the Department may 

request such information. 

Section III. Sales of Auction Rate 

Securities From Plans to Citigroup: 

Related to a Settlement Agreement 

The restrictions of section 

406(a)(1)(A) and (D) and section 

406(b)(1) and (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), (D), and (E) of 

the Code, shall not apply, effective 

February 1, 2008, to the sale by a Plan 

of an Auction Rate Security to 

Citigroup, where such sale (a Settlement 

Sale) is related to, and made in 

connection with, a Settlement 

Agreement, provided that the conditions 

set forth in Section IV have been met. 

Section IV. Conditions Applicable to 

Transactions Described in Section III 

(a) The terms and delivery of the Offer 

are consistent with the requirements set 

forth in the Settlement Agreement and 

acceptance of the Offer does not 

constitute a waiver of any claim of the 

tendering Plan; 

(b) The Offer or other documents 

available to the Plan specifically 

describe, among other things: 

(1) How a Plan may determine: the 

Auction Rate Securities held by the Plan 

with Citigroup; the number of shares or 

par value of the Auction Rate Securities; 

the interest or dividend amounts that 

are due and unpaid with respect to the 

Auction Rate Securities; and (if reliable 

information is available) the most recent 

rate information for the Auction Rate 

Securities; 

(2) The background of the Offer; 

(3) That neither the tender of Auction 

Rate Securities nor the purchase of any 

Auction Rate Securities pursuant to the 

Offer will constitute a waiver of any 

claim of the tendering Plan; 

(4) The methods and timing by which 

Plans may accept the Offer; 

(5) The purchase dates, or the manner 

of determining the purchase dates, for 

Auction Rate Securities tendered 

pursuant to the Offer; 

(6) The timing for acceptance by 

Citigroup of tendered Auction Rate 

Securities; 

(7) The timing of payment for Auction 

Rate Securities accepted by Citigroup 

for payment; 

(8) The methods and timing by which 

a Plan may elect to withdraw tendered 

Auction Rate Securities from the Offer; 

(9) The expiration date of the Offer; 

(10) The fact that Citigroup may make 

purchases of Auction Rate Securities 

outside of the Offer and may otherwise 

buy, sell, hold or seek to restructure, 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38555 

redeem or otherwise dispose of the 

Auction Rate Securities; 

(11) A description of the risk factors 

relating to the Offer as Citigroup deems 

appropriate; 

(12) How to obtain additional 

information concerning the Offer; and 

(13) The manner in which 

information concerning material 

amendments or changes to the Offer will 

be communicated to the Plan; 

(c) The terms of the Settlement Sale 

are consistent with the requirements set 

forth in the Settlement Agreement; and 

(d) All of the conditions in Section II 

have been met. 

Section V. Definitions 

For purposes of this exemption: 

(a) The term ‘‘affiliate’’ means any 

person directly or indirectly, through 

one or more intermediaries, controlling, 

controlled by, or under common control 

with such other person; 

(b) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual; 

(c) The term ‘‘Auction Rate Security’’ 

or ‘‘ARS’’ means a security: (1) That is 

either a debt instrument (generally with 

a long-term nominal maturity) or 

preferred stock; and (2) with an interest 

rate or dividend that is reset at specific 

intervals through a Dutch auction 

process; 

(d) A person is ‘‘independent’’ of 

Citigroup if the person is: (1) not 

Citigroup or an affiliate; and (2) not a 

relative (as defined in section 3(15) of 

the Act) of the party engaging in the 

transaction; 

(e) The term ‘‘Plan’’ means an 

individual retirement account or similar 

account described in section 

4975(e)(1)(B) through (F) of the Code (an 

IRA); an employee benefit plan as 

defined in section 3(3) of the Act; or an 

entity holding plan assets within the 

meaning of 29 CFR 2510.3–101, as 

modified by section 3(42) of the Act; 

and 

(f) The term ‘‘Settlement Agreement’’ 

means a legal settlement involving 

Citigroup and a U.S. state or federal 

authority that provides for the purchase 

of an ARS by Citigroup from a Plan. 

Effective Date: This exemption is 

effective as of February 1, 2008. 

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 

February 23, 2010 at 75 FR 8128. 

For Further Information Contact: 

Brian Shiker of the Department, 

telephone (202) 693–8552. (This is not 

a toll-free number.) 

Exemption 

The restrictions of sections 406(a), 

406(b)(1) and (b)(2) of the Act, section 

8477(c)(2) of the Federal Employees’ 

Retirement System Act of 1986, as 

amended (FERSA), 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 September 4, 

2008, to the cash sales (the Sales) by the 

Barclays Global Investors ‘‘Money 

Market Fund’’ and ‘‘Cash Equivalent 

Fund II,’’ which are short-term collective 

investment funds (STIFs) managed or 

maintained by Barclays Global 

Investors, N.A. (BGI, or together with 

Barcal and any of their affiliates, 

collectively, ‘‘the Applicant’’), of certain 

short-term debt instruments (the Notes) 

to Barcal, provided that the following 

conditions are met: 

(a) The Sales were one-time 

transactions for cash payment made on 

a delivery versus payment (i.e., same 

day) basis in the amount described in 

paragraph (b); 

(b) The STIFs received an amount 

equal to the greater of: 

(1) The amortized cost (including 

accrued and unpaid interest) of the 

Notes, determined as of the dates of the 

Sales, or 

(2) the fair market value (including 

accrued and unpaid interest) of the 

Notes, determined by an independent 

third party source; 

(c) The STIFs did not bear any 

commissions, transaction costs or other 

expenses in connection with the Sales; 

(d) The terms and conditions of the 

Sales were at least as favorable to the 

STIFs as those available in an arm’slength transaction with an unrelated 

party. 

(e) BGI, as fiduciary of the STIFs, 

determined that the Sales were in the 

best interest of the STIFs and any 

employee benefit plans (the Plans) 

invested in the STIFs as of the dates of 

the Sales. 

(f) BGI took all appropriate actions 

necessary to safeguard the interests of 

the STIFs and any Plans invested in the 

STIFs in connection with the Sales. 

(g) If the exercise of any of Barcal’s 

rights, claims, or causes of action in 

connection with its ownership of the 

Notes results in Barcal recovering from 

the issuer of the Notes, or from any third 

party, an aggregate amount that is more 

than the sum of: 

(1) The purchase price paid for such 

Notes by Barcal; and 

(2) the interest due on the notes from 

and after the date Barcal purchased the 

Notes from the STIFs, Barcal will refund 

such excess amount promptly to the 

STIFs (after deducting all reasonable 

expenses incurred in connection with 

the recovery); 

(h) BGI maintains, or causes to be 

maintained, for a period of six (6) years 

from the date of any covered transaction 

such records as are necessary to enable 

the persons described below in 

paragraph (i)(1), to determine whether 

the conditions of this exemption have 

been met, except that— 

(1) No party in interest with respect 

to a Plan which engages in the covered 

transactions, other than BGI and its 

affiliates, shall be subject to a civil 

penalty under section 502(i) of the Act 

or the taxes imposed by section 4975(a) 

and (b) of the Code, if such records are 

not maintained, or not available for 

examination, as required, below, by 

paragraph (i)(1); 

(2) A separate prohibited transaction 

shall not be considered to have occurred 

solely because due to circumstances 

beyond the control of BGI, such records 

are lost or destroyed prior to the end of 

the six-year period. (i)(1) Except as 

provided, below, in paragraph (i)(2), and 

notwithstanding any provisions of 

subsections (a)(2) and (b) of section 504 

of the Act, the records referred to, 

above, in paragraph (h) are 

unconditionally available at their 

customary location for examination 

during normal business hours by— 

(A) Any duly authorized employee or 

representative of the Department or of 

the Internal Revenue Service; or 

(B) Any fiduciary of any Plan that 

engages in the covered transactions, or 

any duly authorized employee or 

representative of such fiduciary; or 

(C) Any employer of participants and 

beneficiaries and any employee 

organization whose members are 

covered by a Plan that engages in the 

covered transactions, or any authorized 

employee or representative of these 

entities; or 

(D) Any participant or beneficiary of 

a Plan that engages in a covered 

transaction, or duly authorized 

employee or representative of such 

participant or beneficiary; 

(2) None of the persons described, 

above, in paragraph (i)(1)(B)–(D) shall be 

authorized to examine trade secrets of 

BGI, or commercial or financial 

information which is privileged or 

confidential; and 

(3) Should BGI refuse to disclose 

information on the basis that such 

information is exempt from disclosure, 

BGI shall, by the close of the thirtieth 

(30th) day following the request, 

provide a written notice advising that 

person of the reasons for the refusal and 

that the Department may request such 

information. 


emcdonald on DSK2BSOYB1PROD with NOTICES
38556 Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 

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 (the Notice) 

published on March 15, 2010 at 75 FR 

12308. 

Effective Date: This exemption is 

effective September 4, 2008. 

Written Comments 

The only written comment received 

by the Department was submitted by the 

Applicant. The Applicant requested 

changes with respect to condition (i) of 

the Notice concerning the entities to 

whom the records maintained pursuant 

to condition (h) of the Notice are 

required to be made available by BGI. 

First, the Applicant requested that the 

records need not be made 

unconditionally available to duly 

authorized employees or representatives 

of the Securities and Exchange 

Commission (the SEC) because, unlike 

the cases involving Auction Rate 

Securities, the subject Sales were not 

required by an SEC settlement; nor are 

the STIFs within the jurisdiction of the 

SEC. The Department accepts these 

representations by the Applicant and 

has amended the grant accordingly. 

Second, the Applicant requested that 

the records need not be made 

unconditionally available to any 

participant or beneficiary of a Plan that 

engages in a covered transaction, or 

duly authorized employee or 

representative of such participant or 

beneficiary. The Applicant noted that 

there are nearly 1,000 Plans whose 

fiduciaries will have access to these 

records. There are millions of 

participants in these Plans, none of 

whom have a relationship with the 

Applicant. In order to protect the 

confidentiality of Plan arrangements, 

every time a Plan participant sought to 

review these records, the Applicant 

would be required to contact a Plan 

fiduciary to verify that the participant 

was in fact a participant in the Plan on 

the date of the transaction and is still a 

participant in the Plan. This would 

cause the Applicant to spend countless 

hours just so that a participant or his or 

her representative could review material 

that the Plan fiduciary already had in its 

possession. The Applicant stated that 

this would impose a considerable and 

unwarranted burden. However, because 

participants and beneficiaries of the 

Plans are affected by the subject Sales 

and have an interest in the fiduciary 

management of their Plan assets, it is 

the Department’s view that they also 

should have access to the records 

maintained by BGI, which are otherwise 

required to be maintained and made 

available pursuant to the grant of 

exemptive relief. Accordingly, the 

Department has not made this requested 

change to the condition contained in 

section (i) of the Notice. 

The Department has given full 

consideration to the entire record, 

including the comment letter received. 

The Department has determined to grant 

the exemption, with the one change as 

noted above. 

For Further Information Contact: Gary 

H. Lefkowitz of the Department, 

telephone (202) 693–8546. (This is not 

a toll-free number.) 

Exemption 

The restrictions of sections 

406(a)(1)(A), 406(a)(1)(B), 406(a)(1)(D), 

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: (i) the 

February 20, 2009 cash sale (the Sale), 

at aggregate cost basis plus interest, by 

each of the Plans of interests in certain 

private equity funds (the Funds) to the 

CUNA Mutual Insurance Society (the 

Applicant), the sponsor of the Plans and 

a party in interest with respect to the 

Plans, pursuant to a contract between 

the Applicant and the trustee of the 

Plans concluded on that same date; (ii) 

the September 14, 2009 payment by the 

Applicant of certain additional cash 

amounts, including interest (the Top-Up 

Payments); to the Plans pursuant to the 

terms of the foregoing contract; and (iii) 

the extension of credit between the 

Plans and the Applicant from the date 

of the Sale (February 20, 2009) to the 

date of the Top-Up Payments 

(September 14, 2009), provided that the 

following conditions were satisfied: 

(a) An independent fiduciary 

reviewed the terms and conditions of 

the Sale and of the Top-Up Payments 

prior to their execution, and determined 

that both were protective of the interests 

of the Plans; 

(b) The independent fiduciary 

determined that the terms and 

conditions of both the Sale and of the 

Top-Up Payments were at least as 

favorable to the Plans as those that 

would have been obtained in an arm’s 

length transaction between unrelated 

parties; 

(c) The terms and conditions of both 

the Sale and of the Top-Up Payments 

were at least as favorable to the Plans as 

those that would have been obtained in 

an arm’s length transaction between 

unrelated parties; and 

(d) The independent fiduciary 

provided its opinion in written reports 

on behalf of the Plans as to the fairness 

and reasonableness of the Sale of the 

Plans’ interests in the Funds to the 

Applicant, and determined that the 

terms of the original Sale and 

subsequent Top-Up Payments were 

especially beneficial to each of the Plans 

because: (i) On February 20, 2009, the 

Plans received a return of their aggregate 

cost basis of their interests in the Funds 

(which cost basis was determined by the 

independent fiduciary to exceed the 

aggregate fair market value of the Plans’ 

interests in the Funds as of October 31, 

2008), plus interest accrued on the 

Funds from their date of acquisition by 

each Plan through the date of the Sale; 

and (ii) On September 14, 2009, the 

independent fiduciary determined that, 

in instances where the fair market value 

of any Fund on December 31, 2008 

exceeded its original cost basis, each of 

the Plans received a Top-Up Payment 

on September 14, 2009 comprised of the 

increased value of such Fund, plus 

interest accrued on such increased value 

from December 31, 2008 to the date of 

the Top-Up Payments (September 14, 

2009). 

Written Comments 

The Notice of Proposed Exemption 

(The Notice), Published in the Federal 

Register on April 2, 2010 beginning on 

page 16849, invited all interested 

persons to submit written comments 

and requests for a hearing to the 

Department within forty-five (45) days 

of the date of its publication. At the 

close of the comment period, the 

Department received a single written 

comment from two current beneficiaries 

of the CUNA Mutual Pension Plan for 

Non-Represented Employees. While 

expressing concern about the Plan’s 

initial decision to invest in the Funds, 

the comment letter was supportive of 

the proposed exemption for the sale of 

the Plan’s interests in the Funds as 

described in the Notice. The Department 

did not receive any other written 

comments from interested persons with 

respect to the Notice during the 

aforementioned 45-day comment 

period, nor did it receive any requests 

for a hearing. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the text of the Notice 

at 75 FR 16849. 

For Further Information Contact: Mr. 

Mark Judge of the Department at (202) 

693–8550. (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 


emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices 38557 

1For purposes of this proposed exemption, 

references to section 406 of ERISA should be read 

to refer also to the corresponding provisions of 

section 4975 of the Code. 

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 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) This exemption is 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 this exemption 

is subject to the express condition that 

the material facts and representations 

contained in the application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 28th day of 

June, 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–16097 Filed 7–1–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Application Nos. and Proposed 

Exemptions; D–11489, Morgan Stanley 

& Co., Incorporated; L–11609, The 

Finishing Trades Institute of the MidAtlantic Region (the Plan) et al. 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemptions. 

SUMMARY: This document contains 

notices of pendency before the 

Department of Labor (the Department) of 

proposed exemptions from certain of the 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (ERISA or the Act) and/or 

the Internal Revenue Code of 1986 (the 

Code). 

Written Comments and Hearing 

Requests 

All interested persons are invited to 

submit written comments or requests for 

a hearing on the pending exemptions, 

unless otherwise stated in the Notice of 

Proposed Exemption, within 45 days 

from the date of publication of this 

Federal Register Notice. Comments and 

requests 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. 

ADDRESSES: All written comments and 

requests for a hearing (at least three 

copies) should be sent to the Employee 

Benefits Security Administration 

(EBSA), Office of Exemption 

Determinations, Room N–5700, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

Attention: Application No.___, stated in 

each Notice of Proposed Exemption. 

Interested persons are also invited to 

submit comments and/or hearing 

requests to EBSA via e-mail or FAX. 

Any such comments or requests should 

be sent either by e-mail to: 

‘‘moffitt.betty@dol.gov’’, or by FAX to 

(202) 219–0204 by the end of the 

scheduled comment period. The 

applications for exemption and the 

comments received will be available for 

public inspection in the Public 

Documents Room of the Employee 

Benefits Security Administration, U.S. 

Department of Labor, Room N–1513, 

200 Constitution Avenue, NW., 

Washington, DC 20210. 

Warning: If you submit written 

comments or hearing requests, do not 

include any personally-identifiable or 

confidential business information that 

you do not want to be publiclydisclosed. All comments and hearing 

requests are posted on the Internet 

exactly as they are received, and they 

can be retrieved by most Internet search 

engines. The Department will make no 

deletions, modifications or redactions to 

the comments or hearing requests 

received, as they are public records. 

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, 5 U.S.C. App. 1 (1996), 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. 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the 

Employee Retirement Income Security 

Act of 1974 (ERISA) and section 

4975(c)(2) of the Internal Revenue Code 

of 1974 (the Code), and in accordance 

with the procedures set forth in 29 CFR 

part 2570, subpart B (55 FR 32836, 

32847, August 10, 1990). 

Section I. Transactions Involving Plans 

Described in Both Title I and Title II of 

ERISA 

If the proposed exemption is granted, 

the restrictions of section 406(a)(1)(A) 

through (D) and section 406(b) of 

ERISA, and the sanctions resulting from 

the application of sections 4975(a) and 

(b) of the Code, by reason of section 

4975(c)(1) of the Code, shall not apply, 

effective February 1, 2008, to the 

following transactions, if the conditions 

set forth in Section III have been met: 1

(a) The sale or exchange of an 

‘‘Auction Rate Security’’ (as defined in 

Section IV (b)) by a ‘‘Plan’’ (as defined 

in Section IV(h)) to the ‘‘Sponsor’’ (as 

defined in Section IV (g)) of such Plan; 

or 


emcdonald on DSK2BSOYB1PROD with NOTICES