Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 66769 

1The Department has considered exemption 

applications received prior to December 27, 2011 

under the exemption procedures set forth in 29 CFR 

Part 2570, Subpart B (55 FR 32836, 32847, August 

10, 1990). 

2Pursuant to Code section 408(e)(2)(A)(for an 

individual retirement account or individual 

retirement annuity); Code section 530(e) (for a 

Coverdell education savings account); Code section 

220(e)(2) (for an Archer medical savings account); 

or Code section 223(e)(2) (for a health savings 

account). 

including the validity of the 

methodology and assumptions used; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• 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. 

Agency: DOL–BLS. 

Title of Collection: Census of Fatal 

Occupational Injuries. 

OMB Control Number: 1220–0133. 

Affected Public: Individuals or 

Households; State Local, and Tribal 

Governments; Federal Government; and 

Private Sector—businesses or other forprofits, farms, and not-for-profit 

institutions. 

Total Estimated Number of 

Respondents: 1,878. 

Total Estimated Number of 

Responses: 18,748. 

Total Estimated Annual Burden 

Hours: 3,469. 

Total Estimated Annual Other Costs 

Burden: $0. 

Dated: October 31, 2013. 

Michel Smyth, 

Departmental Clearance Officer. 

[FR Doc. 2013–26496 Filed 11–5–13; 8:45 am] 

BILLING CODE 4510–24–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Proposed Exemptions From Certain 

Prohibited Transaction Restrictions 

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). This notice includes the 

following proposed exemptions: 

D–11729, Bank of America Corporation; 

and L–11760, Intel Corporation. 

DATES: 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. 

ADDRESSES: 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. 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 email or 

FAX. Any such comments or requests 

should be sent either by email 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: All comments will be made 

available to the public. Do not include 

any personally identifiable information 

(such as Social Security number, name, 

address, or other contact information) or 

confidential business information that 

you do not want publicly disclosed. All 

comments may be posted on the Internet 

and can be retrieved by most Internet 

search engines. 

SUPPLEMENTARY INFORMATION: 

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). 

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 (76 FR 

66637, 66644, October 27, 2011).1

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. 

Bank of America Corporation Located 

in Charlotte, NC 

[Application No. D–11729] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of ERISA section 408(a) and 

Code section 4975(c)(2) in accordance 

with the procedures set forth in 29 CFR 

Part 2570, subpart B (76 FR 66637, 

66644, October 27, 2011). 

Section I: Covered Transactions 

If this proposed exemption is granted, 

the restrictions of ERISA sections 

406(a)(1)(D) and 406(b) and the 

sanctions resulting from the application 

of Code section 4975 (including the loss 

of exemption 2 by reason of Code 

sections 4975(c)(1)(D), (E) and (F)) shall 

not apply to the receipt of Relationship 

Benefits by an individual for whose 

benefit a Covered Plan is established or 

maintained, or by his or her Family 

Members, from BAC pursuant to an 

arrangement in which the Account 

Value of, or the Fees incurred for 

services provided to, the Covered Plan 

is taken into account for purposes of 

determining eligibility to receive such 

Relationship Benefits, provided that 

each condition of Section II of this 

proposed exemption is satisfied. 

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66770 Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 

Section II: Conditions 

(a) The Covered Plan whose Account 

Value, or whose Fees paid, are taken 

into account for purposes of 

determining eligibility to receive 

Relationship Benefits under the 

arrangement must be established and 

maintained for the exclusive benefit of 

the participant covered under the 

Covered Plan, his or her spouse, or their 

beneficiaries. 

(b) The Relationship Benefits offered 

under the arrangement must be of a type 

that a Qualified Affiliate could offer 

consistent with all applicable federal 

and state banking laws and all 

applicable federal and state laws 

regulating Broker-Dealers. 

(c) Where Account Values are taken 

into account for purposes of 

determining eligibility to receive 

benefits under the arrangement, the 

Account Values of Covered Plan 

accounts shall be treated as favorably, 

for purposes of satisfying such 

eligibility requirements, as the Account 

Values of other types of customer 

accounts. 

(d) Where levels of Fees incurred are 

taken into account for purposes of 

determining eligibility to receive 

benefits under the arrangement, the 

levels of Fees incurred by Covered Plan 

accounts shall be treated as favorably, 

for purposes of satisfying such 

eligibility requirements, as the levels of 

Fees incurred by other types of 

customer accounts. 

(e) The Relationship Benefits offered 

under the arrangement must be 

provided by a Qualified Affiliate in the 

ordinary course of its business as a Bank 

or Broker-Dealer to customers who 

qualify for such benefits, but who do not 

maintain Covered Plans with a 

Qualified Affiliate. 

(f) The combined total of fees for the 

provision of services to a Covered Plan 

is not in excess of reasonable 

compensation within the meaning of 

ERISA section 408(b)(2) and Code 

section 4975(d)(2). 

(g) The investment performance of the 

investments made by the Covered Plan 

is no less favorable than the investment 

performance of identical investments 

that could have been made at the same 

time by a customer of BAC who is not 

eligible for (or who does not receive) 

Relationship Benefits. 

(h) The Relationship Benefits offered 

under the arrangement to the Covered 

Plan customer must be the same as are 

offered to non-Covered Plan customers 

of Qualified Affiliates having the same 

aggregate Account Value or the same 

amount of Fees generated. 

Section III: Definitions 

The following definitions apply to 

this proposed exemption: 

(a) The term ‘‘Account Value’’ means 

investments in cash or securities held in 

the account for which market quotations 

are readily available. For purposes of 

the exemption, the term ‘‘cash’’ includes 

savings accounts that are insured by a 

federal deposit insurance agency and 

constitute deposits as that term is 

defined in 29 CFR 2550.408b–4(c)(3). 

The term ‘‘Account Value’’ does not 

include investments that are offered by 

BAC (or a Qualified Affiliate) 

exclusively to Covered Plans. 

(b) The term ‘‘affiliate’’ includes any 

person directly or indirectly controlling, 

controlled by, or under common control 

with Bank of America Corporation. 

(c) The term ‘‘Bank’’ means a bank 

described in Code section 408(n). 

(d) The term ‘‘BAC’’ means Bank of 

America Corporation and any of its 

affiliates. 

(e) The term ‘‘Broker-Dealer’’ means a 

broker-dealer registered under the 

Securities Exchange Act of 1934, as 

amended. 

(f) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual. 

(g) The term ‘‘Covered Plan’’ means 

an IRA or other savings account 

described in section III(j) of this 

proposed exemption or a Keogh Plan 

described in section III(k) of this 

proposed exemption that is established 

with BAC as trustee or custodian. 

(h) The term ‘‘Family Members’’ 

means beneficiaries of the individual for 

whose benefit the Covered Plan is 

established or maintained, who would 

be members of the family as that term 

is defined in Code section 4975(e)(6), or 

a brother, a sister, or a spouse of a 

brother or sister. 

(i) The term ‘‘Fees’’ means 

commissions and other fees received by 

a Broker-Dealer from the Covered Plan 

for the provision of services, including 

but not limited to: Brokerage 

commissions, investment management 

fees, investment advisory fees, custodial 

fees, and administrative fees. 

(j) The term ‘‘IRA’’ means an 

individual retirement account described 

in Code section 408(a), an individual 

retirement annuity described in Code 

section 408(b), a Coverdell education 

savings account described in Code 

section 530, an Archer MSA described 

in Code section 220(d), or a health 

savings account described in Code 

section 223(d). For purposes of this 

proposed exemption, the term ‘‘IRA’’ 

does not include an employee benefit 

plan covered by Title I of ERISA, except 

for a Simplified Employee Pension 

(SEP) described in Code section 408(k) 

and a Simple Retirement Account 

described in Code section 408(p) that 

provides participants with the 

unrestricted authority to transfer their 

balances to IRAs or Simple Retirement 

Accounts sponsored by different 

financial institutions. 

(k) The term ‘‘Keogh Plan’’ means a 

pension, profit-sharing, or stock bonus 

plan qualified under Code section 

401(a) and exempt from taxation under 

Code section 501(a) under which some 

or all of the participants are employees 

described in Code section 401(c). For 

purposes of this proposed exemption, 

the term ‘‘Keogh Plan’’ does not include 

an employee benefit plan covered by 

Title I of ERISA. 

(l) The term ‘‘Qualified Affiliate’’ 

means any person directly or indirectly 

controlling, controlled by, or under 

common control with BAC that is a 

Bank or Broker-Dealer. 

(m) The term ‘‘Relationship Benefits’’ 

means reduced or no cost financial 

products and services, including 

premium rates of account or investment 

interest, discounted rates of interest on 

loans, reductions or waivers of 

otherwise applicable fees and charges, 

and/or differentiated servicing. 

Summary of Facts and Representations 

1. Bank of America Corporation (the 

Applicant) is a bank holding company 

and a financial holding company under 

the Gramm-Leach-Bliley Act of 1999 

(GLBA). As of December 31, 2011, Bank 

of America Corporation and its 

subsidiaries had total consolidated 

assets of approximately $2.1 trillion. 

The consumer and corporate banking 

business of Bank of America 

Corporation and its affiliates (together, 

BAC) is conducted primarily through 

Bank of America, National Association 

(BANA). BANA is a national franchise 

that includes branch and electronic 

banking, consumer lending services, 

and credit and debit card services. 

BAC’s brokerage business, conducted 

primarily through Merrill Lynch, Pierce, 

Fenner & Smith Incorporated (Merrill 

Lynch), provides investment services, 

securities trading, research, and 

brokerage services to consumer and 

corporate customers. Merrill Lynch is a 

retail brokerage firm with approximately 

17,000 financial advisors and offices 

located in all 50 states and the District 

of Columbia. Together, BANA and 

Merrill Lynch serve approximately 57 

million consumer and small business 

relationships and client accounts with 

more than $2.2 trillion in net assets. In 

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Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 66771 

3 58 FR 31053 (May 28, 1993), as amended at 59 

FR 22686 (May 2, 1994), and as amended at 64 FR 

11044 (March 8, 1999). 

4 In the notice of proposed exemption for PTE 93– 

2 (PTE 93–33 subsequently amended PTE 93–2), the 

following examples of relationship banking services 

were listed: free checking services, discounted safe 

deposit box rents, or free loan closing costs. 56 FR 

8365, 8366 (February 28, 1991). In addition, the 

Department notes that a bank may offer other 

services or benefits to customers as part of its 

relationship banking program. For example, under 

PTE 93–33 a bank may offer its relationship banking 

customers a higher interest rate on their 

investments, provided the conditions of the 

exemption are met. 

5 62 FR 5855 (February 7, 1997), as amended at 

64 FR 11042 (March 8, 1999), and as amended at 

67 FR 76425 (December 12, 2002). 

6 In the notice of proposed exemption for PTE 97– 

11, the following examples of relationship 

brokerage services were listed: financial planning 

services, direct deposit/debit and automatic fund 

transfer privileges, enhanced account statements, 

toll-free access to client service centers, check 

writing privileges, debit/credit cards, special 

newsletters, and reduced brokerage and asset 

management fees. 61 FR 39996, 39997 (July 31, 

1996). In addition, the Department notes that a 

broker-dealer may offer its customers additional 

services and benefits as part of its relationship 

brokerage program. For example, under PTE 97–11, 

a broker-dealer may offer its relationship brokerage 

customers a higher interest rate on their 

investments, provided the conditions of the 

exemption are met. 7 73 FR 3280 (January 17, 2008). 

the ordinary course of its business, BAC 

(including BANA and Merrill Lynch) 

provide a range of financial products 

and services to individuals including 

individual retirement accounts (IRAs) 

described in Code section 408(a), 

individual retirement annuities 

described in Code section 408(b), 

Coverdell education savings accounts 

described in Code section 530, Archer 

MSAs described in Code section 220(d), 

health savings accounts described in 

Code section 223(d) and Keogh plans 

(i.e., pension, profit-sharing, or stock 

bonus plans qualified under Code 

section 401(a) and exempt from taxation 

under Code section 501(a) under which 

some or all of the participants are 

employees described in Code section 

401(c)) not covered by Title I of ERISA 

(each, a ‘‘Covered Plan’’ as defined in 

the proposed exemption and 

collectively, the ‘‘Covered Plans’’). For 

purposes of this proposed exemption, 

the term ‘‘Covered Plan’’ includes 

Simplified Employee Pensions (SEP) 

described in Code section 408(k) and 

Simple Retirement Accounts described 

in Code section 408(p) that provide 

participants with the unrestricted 

authority to transfer their balances to 

IRAs or Simple Retirement Accounts 

sponsored by different financial 

institutions. 

Reduced or No Cost Services in 

Prohibited Transaction Exemptions 

93–33 and 97–11 

2. The Applicant wishes to offer 

relationship banking and brokerage 

benefits that are similar to the reduced 

or no cost services contemplated by 

Prohibited Transaction Exemptions 

(PTEs) 93–33 and 97–11. PTE 93–33 3

permits an individual for whose benefit 

an IRA or Keogh Plan is established or 

maintained, or his or her family 

members, to receive services at reduced 

or no cost from a bank under an 

arrangement in which the account 

balance of the IRA or Keogh Plan is 

considered when determining eligibility 

to receive such services. PTE 93–33 

permits banks to offer their customers 

only those services allowed under 

applicable federal and state banking 

laws.4 When an affiliate of the bank 

offers the service, it must be a type of 

service that the bank can offer its own 

customers. 

3. PTE 97–11 5 permits an individual 

for whose benefit an IRA or Keogh Plan 

is established or maintained, or his or 

her family members, to receive services 

at reduced or no cost from a brokerdealer registered under the Securities 

Exchange Act of 1934 under an 

arrangement in which the account value 

or the fees incurred for services 

provided to the IRA or Keogh Plan is 

considered when determining eligibility 

to receive such services. PTE 97–11 

limits the services that broker-dealers 

may offer under a relationship brokerage 

program to services that are permitted 

under federal and state laws regulating 

broker-dealers.6 Furthermore, when an 

affiliate of the broker-dealer offers the 

services, the services must be a type that 

the broker-dealer can offer its own 

customers. 

4. PTEs 93–33 and 97–11 provide 

relief from the restrictions of ERISA 

sections 406(a)(1)(D) and 406(b) and the 

sanctions resulting from the application 

of Code section 4975, including the loss 

of exemption of an individual 

retirement account under Code section 

408(e)(2) by reason of Code section 

4975(c)(1)(D), (E) and (F), for 

individuals for whose benefit an IRA or 

Keogh Plan is established or 

maintained. 

5. The Applicant states that BAC’s 

decision to offer relationship banking 

and brokerage benefits reflects the 

important changes that have occurred in 

the financial industry since PTEs 93–33 

and 97–11 were issued. In this regard, 

the Applicant notes that PTEs 93–33 

and 97–11 were granted by the 

Department prior to the enactment of 

the GLBA. The Applicant represents 

that the GLBA altered the U.S. legal and 

regulatory framework governing the 

operations of U.S. bank holding 

companies such as Bank of America 

Corporation. The GLBA permits bank 

holding companies that qualify as 

‘‘financial holding companies’’— 

including the Applicant—to affiliate 

broadly with various types of financial 

services firms, including full service 

broker-dealers. Furthermore, the 

enactment of the GLBA greatly 

facilitated financial services integration 

in the United States and growth of bankaffiliated securities operations. 

6. According to the Applicant, 

another significant U.S. regulatory 

development occurred in 1995 when the 

U.S. Federal Reserve Board (FRB) 

adopted a rule regarding inter-affiliate 

‘‘combined-balance discount service 

programs’’ offered to individual 

customers of banks and bank affiliates. 

In particular, the rule established a safe 

harbor from the statutory restrictions on 

bank tying arrangements so that banks 

have greater flexibility to package 

products with their affiliates. The 

Applicant represents that the rule 

validated the ability of banks and their 

broker-dealer affiliates to offer 

combined-balance discount programs 

(that meet the safe harbor requirements) 

to their customers. Furthermore, the 

Applicant represents that in 1997, the 

FRB reaffirmed the safe harbor when it 

re-wrote its Regulation Y, which 

includes a section dealing with antitying restrictions. The Applicant 

represents that the relationship banking 

and brokerage benefits described in this 

proposed exemption meet the safe 

harbor. 

7. In 2008, the Department granted an 

individual exemption, PTE 2008–02,7 to 

Citigroup Inc. (Citigroup) that provides 

relief similar to PTEs 93–33 and 97–11. 

Under the exemption, individuals for 

whose benefit an IRA or Keogh Plan is 

established or maintained, and their 

family members, can receive both 

banking and brokerage services at 

reduced or no cost under an 

arrangement in which the account value 

of, or the fees incurred for services 

provided to, the IRA or Keogh Plan is 

taken into account for purposes of 

determining eligibility to receive such 

services. As part of the arrangement, 

Citigroup contemplated providing 

services such as: Reductions or waivers 

of fees for services such as checking, 

ATM, investment advisory and account 

opening or maintenance fees; preferred 

lending rates; premium interest 

crediting rates; credit or debit cards 

providing services such as enhanced 

mileage accumulation and reward point 

features; and the provision of 

investment information and seminars 

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66772 Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 

that are available on an invitation-only 

basis. 

Proposed Transactions 

8. In 2009, the Applicant acquired 

Merrill Lynch, which operates a 

significant retail securities business. As 

a result, BAC developed programs that 

link retail banking services with retail 

brokerage services. Under these 

programs, the Applicant’s affiliates are 

able to consider a customer’s combined 

balance maintained with the 

Applicants’s affiliates to determine the 

customer’s eligibility to receive various 

benefits including bank and brokerdealer products and services at reduced 

or no cost. The Applicant does not 

believe these arrangements clearly fall 

within the relief provided by PTEs 93– 

33 and 97–11. Therefore, the Applicant 

requests an exemption to permit the 

receipt of certain benefits by an 

individual for whose benefit a Covered 

Plan is established or maintained, or his 

or her family members, from BAC, 

pursuant to an arrangement in which 

the account value of or the fees incurred 

for services provided to the Covered 

Plan, is taken into account for purposes 

of determining eligibility to receive such 

products and services. The Applicant 

represents that these products and 

services (Relationship Benefits) are 

defined as reduced or no cost financial 

products and services, including 

premium rates of account or investment 

interest, discounted rates of interest on 

loans, reductions or waivers of 

otherwise applicable fees and charges, 

and/or differentiated servicing. More 

specifically, the Relationship Benefits 

will include: (1) Higher interest rates on 

products such as checking accounts, 

savings accounts and certificates of 

deposit; (2) services with reduced cost 

or value added features such as 

reductions or waivers of fees on 

checking accounts and ATM access, 

reduced or waived investment advisory 

and account opening or maintenance 

fees, reduced or waived securities 

trading commissions, and preferred 

lending rates; (3) credit or debit cards 

that provide services such as enhanced 

mileage accumulation and reward 

points features; (4) access to enhanced 

customer support services; and/or (5) 

investment information and seminars 

that are available on an invitation-only 

basis. Differentiated servicing refers to 

the provision of an enhanced level of 

customer service relative to that which 

would otherwise be provided, such as 

reduced customer service wait times, 

access to specialized customer support 

representatives, specialized newsletters, 

and similar items. 

9. The Applicant offers the following 

example of a Relationship Benefits 

program that could be offered under the 

proposed exemption, if granted: 

An individual client of BAC is the 

beneficial owner of an IRA with assets of 

$25,000 in a 12-month certificate of deposit, 

and BAC is the IRA custodian. The client 

also maintains a savings account at BANA 

with a balance of $10,000; a BANA checking 

account with a balance of $5,000; and a 

brokerage account at Merrill Lynch with a 

balance of $20,000. BAC makes a 

Relationship Benefits program available to 

clients that maintain aggregate balances of 

$50,000 or more in accounts eligible to 

participate in the program. Under the 

Relationship Benefits program, certain 

account fees that might otherwise apply are 

waived for the eligible accounts of qualifying 

clients, and higher interest rates are paid on 

certain deposit accounts. Without the 

exemption proposed herein, the client’s IRA 

is not an eligible account, so the client fails 

to qualify for the program. Consequently, the 

client’s checking account may be charged a 

$10 fee for overdraft protection transfers, a 

$30 fee for stop payment requests, and/or a 

$3 fee for receiving images of paid checks. 

Additionally, the client’s brokerage account 

will not be eligible for the 30 free trades per 

month that would otherwise be available 

through the program. Finally, if the client’s 

IRA is not eligible to participate, the interest 

rate paid on the savings account will be 

0.15% annual percentage yield (APY) rather 

than 0.20% APY, and the interest rate paid 

on the IRA’s 12-month certificate of deposit 

will be 0.35% APY rather than 0.45% APY. 

If the proposed exemption is granted, the 

client will qualify for program participation 

due to the IRA’s inclusion as an eligible 

account. Therefore, the client will receive 

more favorable interest rates and waived fees 

under the program. 

Statutory Findings 

10. The Applicant represents that the 

statutory criteria needed to grant an 

exemption under ERISA section 408(a) 

and Code section 4975(c)(2) will be 

satisfied. First, the proposed exemption 

is administratively feasible because: (1) 

The conditions and relief of the 

requested exemption are comparable to 

those described in PTEs 93–33, 97–11, 

and 2008–02; and (2) the requested 

exemption will not require continued 

monitoring or other involvement on 

behalf of the Department. Second, the 

Applicant claims that the proposed 

exemption is in the interest of the 

Covered Plans because the plans will 

benefit from access to better products 

and services available through the 

Relationship Benefits program. Finally, 

the Applicant claims that the proposed 

exemption is protective of the rights of 

the Covered Plan participants and 

beneficiaries because: 

(a) The Covered Plan whose account 

value, or whose fees paid, are taken into 

account for purposes of determining 

eligibility to receive Relationship 

Benefits under the arrangement will be 

established and maintained for the 

exclusive benefit of the participant 

covered under the Covered Plan, his or 

her spouse, or their beneficiaries. 

(b) The Relationship Benefits offered 

under the arrangement will be of a type 

that a qualified affiliate could offer 

consistent with all applicable federal 

and state banking laws and all 

applicable federal and state laws 

regulating broker-dealers. 

(c) Where account values are taken 

into account for purposes of 

determining eligibility to receive 

benefits under the arrangement, the 

account values of Covered Plan 

accounts will be treated as favorably, for 

purposes of satisfying such eligibility 

requirements, as the account values of 

other types of customer accounts. 

(d) Where levels of fees incurred are 

taken into account for purposes of 

determining eligibility to receive 

benefits under the arrangement, the 

levels of fees incurred by Covered Plan 

accounts will be treated as favorably for 

purposes of satisfying such eligibility 

requirements, as the levels of fees 

incurred by other types of customer 

accounts. 

(e) The Relationship Benefits offered 

under the arrangement will be provided 

by a BAC affiliate in the ordinary course 

of its business as a bank or broker-dealer 

to customers who qualify for such 

benefits, but who do not maintain 

Covered Plans with a BAC affiliate. 

(f) The combined total of fees for the 

provision of services to a Covered Plan 

will not be in excess of reasonable 

compensation within the meaning of 

ERISA section 408(b)(2) and Code 

section 4975(d)(2). 

(g) The investment performance of the 

investments made by the Covered Plan 

will be no less favorable than the 

investment performance of identical 

investments that could have been made 

at the same time by a customer of BAC 

who is not eligible for (or who does not 

receive) Relationship Benefits. 

(h) The Relationship Benefits offered 

under the arrangement to the Covered 

Plan customer will be the same as are 

offered to non-Covered Plan customers 

of BAC affiliates having the same 

aggregate account value or the same 

amount of fees generated. 

Notice to Interested Persons 

The Applicant represents that since 

the number of interested persons is very 

large, it will post notice of this proposed 

exemption on its principal consumer 

banking and brokerage Web sites in 

addition to publication of this notice in 

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Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 66773 

8The AD&D Plan and the Life Plan are together 

referred to herein as the ‘‘Plans.’’ 

the Federal Register. The Department 

must receive written comments and/or 

requests for a public hearing no later 

than 45 days from the date this notice 

is published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Erin Hesse, U.S. Department of Labor, 

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

a toll-free number.) 

Intel Corporation (Intel or the 

Applicant) Located in Santa Clara, CA 

[Application No. L–11760] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the Act 

and in accordance with the procedures 

set forth in 29 CFR part 2570, Subpart 

B (76 FR 66637, 66644, October 27, 

2011). 

Section I. Transactions 

If the proposed exemption is granted, 

the restrictions of sections 406(a)(1)(D) 

and 406(b) of the Act shall not apply to: 

(a) The reinsurance of risks and the 

receipt of premiums therefrom by 

Technology Assurance Limited (TAL), 

an affiliate of Intel, as the term 

‘‘affiliate’’ is defined in Section III(a) 

below, in connection with basic and 

supplemental group term life insurance 

sold by the Minnesota Life Insurance 

Company (MN Life), or any successor 

insurance company which is unrelated 

to Intel (the Fronting Insurer), to the 

Intel Group Life Insurance Plan (the Life 

Plan); and 

(b) The reinsurance of risks and the 

receipt of premiums therefrom by TAL, 

in connection with basic and 

supplemental accidental death and 

dismemberment (AD&D) insurance sold 

by the Fronting Insurer to the Intel 

Group Accidental Death and 

Dismemberment Plan (the AD&D Plan); 8

provided the conditions set forth in 

Section II, below, are satisfied. 

Section II. Conditions 

(a) TAL— 

(1) Is a party in interest with respect 

to the Plans by reason of a stock or 

partnership affiliation with Intel that is 

described in section 3(14)(E) or 3(14)(G) 

of the Act; 

(2) Is licensed to sell insurance or 

conduct reinsurance operations in at 

least one ‘‘State,’’ as defined in section 

3(10) of the Act; 

(3) Has obtained a Certificate of 

Authority from the Hawaii Department 

of Insurance (HIDOI), which has neither 

been revoked nor suspended; 

(4)(A) Will undergo an examination 

by an independent certified public 

accountant for its last completed taxable 

year immediately prior to the taxable 

year of the reinsurance transaction 

covered by this proposed exemption, if 

granted; or 

(B) Has undergone a financial 

examination by the HIDOI within five 

(5) years prior to the end of the year 

preceding the year in which such 

reinsurance transaction has occurred; 

and 

(5) Is licensed to conduct reinsurance 

transactions by Hawaii, whose law 

requires that an actuarial review of 

reserves be conducted annually by an 

independent firm of actuaries and 

reported to the appropriate regulatory 

authority. 

(b) The Plans pay no more than 

adequate consideration for the 

insurance contracts. 

(c) No commissions are paid by the 

Plans with respect to the direct sale of 

such contracts or the reinsurance 

thereof. 

(d) In the initial year of every 

reinsurance contract involving TAL and 

a Fronting Insurer, there is an 

immediate and objectively determined 

benefit to participants and beneficiaries 

of the Plans in the form of increased 

benefits, and such benefits continue in 

all subsequent years of each such 

contract of reinsurance and in every 

renewal of each such contract, and will 

at least approximate the increase in 

benefits that will be effective as of the 

publication of the final exemption in the 

Federal Register, as described in this 

Notice of Proposed Exemption (the 

Notice). 

(e) In the initial year and in 

subsequent years of coverage provided 

by a Fronting Insurer, the formula used 

by the Fronting Insurer to calculate 

premiums will be similar to formulae 

used by other insurers providing 

comparable coverage under similar 

programs. Furthermore, the premium 

charge calculated in accordance with 

the formula will be reasonable and will 

be comparable to the premium charged 

by the Fronting Insurer and its 

competitors with the same or a better 

rating providing the same coverage 

under comparable programs. 

(f) The Fronting Insurer has a 

financial strength rating of ‘‘A’’ or better 

from A. M. Best Company (A. M. Best). 

The reinsurance arrangement between 

the Fronting Insurer and TAL will be 

indemnity insurance only, (i.e., the 

Fronting Insurer will not be relieved of 

liability to the Plans should TAL be 

unable or unwilling to cover any 

liability arising from the reinsurance 

arrangement). 

(g) The Plans retain an independent, 

qualified fiduciary (the I/F) or successor 

to such fiduciary, as defined in Section 

III(c), below, to analyze the transactions 

and to render an opinion that the 

requirements of Section II(a) through (f) 

and (h) of this proposed exemption have 

been satisfied. 

(h) Participants and beneficiaries in 

the Plans will receive in subsequent 

years of every contract of reinsurance 

involving TAL and the Fronting Insurer 

no less than the immediate and 

objectively determined increased 

benefits such participants and 

beneficiaries received in the initial year 

of each such contract involving TAL 

and the Fronting Insurer. 

(i) The I/F will: Monitor the 

transactions proposed herein on behalf 

of the Plans on a continuing basis to 

ensure such transactions remain in the 

interest of the Plans; take all appropriate 

actions to safeguard the interests of the 

Plans; and enforce compliance with all 

conditions and obligations imposed on 

any party dealing with the Plans. 

(j) In connection with the provision to 

participants in the Plans of the 

insurance coverage provided by the 

Fronting Insurer which is reinsured by 

TAL, the I/F will review all contracts 

(and any renewal of such contracts) of 

the reinsurance of risks and the receipt 

of premiums therefrom by TAL and 

must determine that the requirements of 

this exemption, if granted, and the terms 

of the increased benefits continue to be 

satisfied. 

Section III. Definitions 

(a) The term ‘‘affiliate’’ of a person 

includes any person directly or 

indirectly, through one or more 

intermediaries, controlling, controlled 

by, or under common control with the 

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 ‘‘I/F’’ describes a person, 

or a successor to such person, who is 

not Intel or TAL or an affiliate of either 

entity; and: 

(1) Does not have an ownership 

interest in Intel, in TAL, or in an 

affiliate of either; 

(2) Is not a fiduciary with respect to 

the Plans prior to its appointment to 

serve as the I/F; 

(3) Has acknowledged in writing 

acceptance of fiduciary responsibility 

and has agreed not to participate in any 

decision with respect to any transaction 

in which it has an interest that might 

affect its best judgment as a fiduciary; 

and 

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(4) Has appropriate training, 

experience, and facilities to act on 

behalf of the Plans regarding the subject 

transactions in accordance with the 

fiduciary duties and responsibilities 

prescribed by the Act. 

For purposes of this definition of an 

‘‘I/F,’’ no organization or individual 

may serve as an I/F for any fiscal year 

if the gross income received by such 

organization or individual (or 

partnership or corporation of which 

such individual is an officer, director, or 

10 percent or more partner or 

shareholder) for that fiscal year exceeds 

two percent (2%) of that organization’s 

or individual’s annual gross income 

from all sources for the prior fiscal year 

from Intel or from TAL, or from an 

affiliate of either (including amounts 

received for services as I/F under any 

prohibited transaction exemption 

granted by the Department). 

In addition, no organization or 

individual who is an I/F, and no 

partnership or corporation of which 

such organization or individual is an 

officer, director, or 10 percent (10%) or 

more partner or shareholder, may 

acquire any property from, sell any 

property to, or borrow any funds from 

Intel or from TAL, or from any affiliate 

of either during the period that such 

organization or individual serves as an 

I/F, and continuing for a period of six 

(6) months after such organization or 

individual ceases to be the I/F, or 

negotiates any such transaction during 

the period that such organization or 

individual serves as the I/F. 

In the event a successor I/F is 

appointed to represent the interests of 

the Plans with respect to the subject 

transactions, there may be no lapse in 

time between the resignation or 

termination of the former I/F and the 

appointment of the successor I/F. 

Summary of Facts and Representations 

1. Intel, which is headquartered in 

Santa Clara, California, develops 

advanced integrated digital technology 

products (primarily integrated circuits) 

for industries such as computing and 

communications. Intel also designs and 

manufactures computing and 

communications components, wireless 

and wired connectivity products, as 

well as platforms that incorporate these 

components. 

For the fiscal year ending December 

31, 2012, Intel earned revenue of $53.3 

billion and net income of $11.0 billion. 

Intel reported a global employee 

workforce of 101,671 as of December 31, 

2011 (with approximately 55,500 

employees in the United States). Intel is 

a party in interest with respect to the 

Plans, pursuant to section 3(14)(C) of 

the Act, as an employer whose 

employees are covered by the Plans. 

2. TAL is an insurance company that 

is wholly owned by Intel. TAL was 

originally incorporated in Hawaii on 

August 5, 2004, and subsequently 

licensed to commence business on 

September 1, 2004, for the purpose of 

reinsuring property and casualty risks of 

Intel. TAL is a party in interest with 

respect to the Plans pursuant to section 

3(14)(G) of the Act because it is a 

corporation of which 50 percent (50%) 

or more of the combined voting power 

of all classes of stock entitled to vote is 

owned directly or indirectly held by 

Intel, an employer any of whose 

employees are covered by the Plans, as 

described in section 3(14)(C) of the Act. 

3. TAL writes Intel’s Terrorism Risk 

Insurance Act coverage to Intel and its 

subsidiaries. For the period and year-todate ended December 31, 2012, TAL 

reported total assets of $9,570,558, gross 

written premiums of $3,300,636, and 

earned premiums of $166,200. TAL is 

subject to regulation by HIDOI, which 

requires that at least 100% of TAL’s 

reserves be in some combination of 

cash, letters of credit, investments in 

approved investment policy, premiums 

in the course of collection, or other 

forms approved by HIDOI. 

4. The Plans are welfare benefit plans 

that provide basic and supplemental 

group term life insurance and basic and 

supplemental AD&D coverage to active 

full-time and part-time employees of 

Intel. The Plans are funded through 

insurance. 

Intel’s general full-time employees, 

part-time employees, and contract 

employees are automatically enrolled in 

the basic Life Plan and the basic AD&D 

Plan. These employees are eligible to 

participate in supplemental and 

dependent coverage, regardless of age, 

sex, salary or position. The Life Plan 

had approximately 48,717 participants, 

as of August 31, 2012. Basic group term 

life insurance is paid for by Intel 

through employer premium 

contributions. 

5. Under the terms of the Life Plan, 

basic group term life insurance is 

available to active full-time and contract 

employees at two times eligible annual 

earnings, multiplied by 100% and then 

rounded to the next higher $1,000 if not 

already a multiple thereof, subject to a 

maximum of $1,000,000 of coverage. For 

example, according to the Summary 

Plan Description (SPD) for the Life Plan, 

an employee earning $25,000 per year 

would have ‘‘basic life amount’’ 

coverage of $50,000, an employee 

earning $50,000 per year would have 

‘‘basic life amount’’ coverage of 

$100,000, and so forth up to the 

maximum of $1,000,000. 

In addition, basic group term life 

insurance is available to active part-time 

employees at two times full-time 

equivalent eligible annual earnings, 

multiplied by 62.5% and then rounded 

to the next higher $1,000 if not already 

a multiple thereof, subject to a 

maximum of $1,000,000 of coverage. For 

example, an employee earning $25,000 

per year would have ‘‘basic life amount’’ 

coverage of $32,000, an employee 

earning $50,000 per year would have 

‘‘basic life amount’’ coverage of $63,000, 

and so forth up to the maximum of 

$1,000,000. 

6. The Life Plan also provides 

supplemental group term life coverage 

to full-time and part-time employees of 

Intel, but not to Intel contract 

employees. Under the current terms of 

the Life Plan, basic supplemental life 

insurance is available to active full-time 

employees at one to seven times annual 

earnings as elected by the employee, 

multiplied by 100% and then rounded 

to the next higher $1,000 if not already 

a multiple thereof, subject to a 

maximum of $2,000,000. Basic 

supplemental life insurance is available 

to active part-time employees at one to 

seven times annual earnings as elected 

by the employee, multiplied by 62.5% 

and then rounded to the next higher 

$1,000, if not already a multiple thereof, 

subject to a maximum of $2,000,000. 

Supplemental insurance is paid for by 

Intel’s employees through premium 

contributions. All insurance terminates 

at retirement, except as provided for 

under the portability provision found in 

the SPD of the Life Plan. 

7. The Life Plan further provides 

supplemental dependent term life 

insurance to full-time and part-time 

employees of Intel. Contract employees 

are not eligible for this coverage. 

Dependent term life insurance for the 

spouses and domestic partners of Intel’s 

employees is available to active fulltime and part-time employees in the 

following amounts: $20,000, $50,000, 

$100,000, $150,000, $200,000 or 

$250,000, as elected by the employee. 

Dependent term life insurance for the 

children of Intel’s employees is 

available to active full-time and parttime employees in the following 

amounts: $5,000, $10,000, $15,000 or 

$20,000, as elected by the employee. 

Dependent term life insurance 

coverage is paid for by Intel’s employees 

through premium contributions. All 

dependent insurance terminates upon 

the employee’s retirement except as 

provided under the portability provision 

found in the Plans’ SPD. 

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8. Under the terms of the AD&D Plan, 

basic AD&D insurance is available to 

active full-time and contract employees 

of Intel at two times the employee’s 

eligible annual earnings, multiplied by 

100%, and then rounded to the next 

higher $1,000, if not already a multiple 

thereof. Such AD&D coverage is subject 

to a maximum of $1,000,000 of 

coverage. In addition, basic AD&D 

insurance is available to active part-time 

employees of Intel at two times the 

employee’s annual earnings, multiplied 

by 62.5% and then rounded to the next 

higher $1,000, if not already a multiple 

thereof. Such AD&D coverage is also 

subject to a maximum of $1,000,000. All 

basic AD&D insurance that is available 

to Intel employees is non-contributory 

insurance, which means that the 

employer is required to make premium 

contributions. 

9. The AD&D Plan also provides 

supplemental AD&D insurance to fulltime and part-time employees of Intel, 

but not to Intel’s contract employees. 

AD&D supplemental coverage is 

available to an active full-time employee 

at one to seven times the annual 

earnings as elected by the employee, 

multiplied by 100% and then rounded 

to the next higher $1,000 if not already 

a multiple thereof. The maximum 

amount of coverage for an active fulltime Intel employee is $1,000,000. 

AD&D coverage is also available to an 

active part-time employee of Intel at one 

to seven times the employee’s full-time 

equivalent eligible annual earnings, 

multiplied by 62.5% and then rounded 

to the next higher $1,000, if not already 

a multiple thereof. The maximum 

amount of coverage is capped at 

$1,000,000. 

Under the current terms of the AD&D 

Plan, all supplemental AD&D insurance 

is paid for by Intel’s employees through 

premium contributions. Therefore, 

supplemental AD&D insurance is 

contributory insurance, which means 

that the employee is required to make 

premium contributions. All AD&D 

insurance terminates at retirement, 

except as provided for under the 

portability provision found in the SPD. 

There are 48,437 participants in the 

basic AD&D Plan, of which 21,202 

participants have elected supplemental 

AD&D coverage. 

10. The AD&D Plan further provides 

insurance coverage to dependents of 

full-time and part-time employees of 

Intel, but not to dependents of Intel’s 

contract employees. Dependent AD&D 

insurance for the spouses, domestic 

partners and children of Intel’s 

employees is available to active fulltime and part-time employees in the 

following amounts: (a) Option 1: 

spouse/same sex domestic partner 

$50,000; child(ren) $10,000; (b) Option 

2: spouse/same sex domestic partner 

$100,000; child(ren) $20,000; (c) Option 

3: Spouse/same sex domestic partner 

$150,000; child(ren) $30,000; (d) Option 

4: Spouse/same sex domestic partner 

$200,000; child(ren) $40,000; and (e) 

Option 5: spouse/same sex domestic 

partner $250,000; child(ren) $50,000. 

Dependent AD&D insurance coverage is 

paid for by Intel’s employees through 

premium contributions. Benefits will 

terminate at the end of the calendar 

month in which the dependent is no 

longer eligible. 

11. From January 1, 2007, until 

December 31, 2012, the Plans’ benefits 

were insured by the Metropolitan Life 

Insurance Company (MetLife). Since 

January 1, 2013, MN Life has been 

providing direct insurance for the basic 

and supplemental group term life 

insurance and the basic and 

supplemental AD&D coverage offered 

under the Plans in accordance with an 

agreement MN Life entered into with 

Intel. As of September 30, 2012, MN 

Life had total assets of approximately 

$28.4 billion. MN Life has agreed to a 

rate guarantee for a 7 year period 

beginning January 1, 2013, through 

December 31, 2019. It is represented 

that Intel selected MN Life based upon 

consideration of relevant factors to the 

arrangement, including the 

reasonableness of the fees and the 

quality and quantity of the benefits 

offered. Both MN Life and MetLife are 

rated ‘‘A+’’ by A. M. Best. 

The Applicant states that the change 

in insurance carriers from MetLife to 

MN Life has not reduced Intel’s or the 

employees’ overall costs for insurance 

benefits. The costs remain the same for 

both Intel and the employees. However, 

the Applicant represents that the change 

in carriers has resulted in several 

increased benefits for Intel employees, 

as described below. 

12. Also, on January 1, 2013, MN Life 

entered into a reinsurance agreement 

with TAL to reinsure up to 100% of the 

Plans’ risks with TAL. However, TAL 

will not receive any premiums from MN 

Life until this proposed exemption is 

granted. MN Life’s reinsurance 

agreement with TAL (the Reinsurance 

Agreement) is ‘‘indemnity only’’—that 

is, MN Life will not be relieved of its 

liability for benefits under the Plans if 

TAL is unable or unwilling to satisfy the 

liabilities arising from the reinsurance 

arrangement. 

13. As TAL is a party in interest with 

respect to the Plans, the reinsurance of 

the risks associated with the basic and 

supplemental group term life insurance 

and basic and supplemental AD&D 

coverage offered to the Plans by MN Life 

results in the indirect transfer to TAL of 

the Plans’ premium payments, which 

are plan assets. Section 406(a)(1)(D) of 

the Act prohibits the transfer to, or use 

by or for the benefit of, a party in 

interest, of any assets of a plan. 

Accordingly, this proposed exemption, 

if granted, would provide relief from the 

prohibitions set forth in section 

406(a)(1)(D) of the Act for the 

reinsurance of risks and the receipt of 

premiums therefrom by TAL, in 

connection with basic and supplemental 

group term life insurance and basic and 

supplemental AD&D coverage. 

In addition, because the reinsurance 

by TAL of such insurance coverage was 

contemplated by Intel at the time that 

the Plans obtained insurance coverage 

from MN Life, such transactions could 

constitute violations by Intel of section 

406(b) of the Act. In this regard, section 

406(b)(1) of the Act prohibits a fiduciary 

from dealing with the assets of a plan in 

his own interest or for his own account. 

Section 406(b)(2) of the Act prohibits a 

fiduciary from acting in a transaction 

involving plan assets on behalf of a 

party whose interests are adverse to 

those of the plan. Section 406(b)(3) of 

the Act prohibits a fiduciary from 

receiving any consideration for his own 

personal account from any party dealing 

with a plan in connection with a 

transaction involving plan assets. 

14. With respect to the Reinsurance 

Agreement between MN Life and TAL, 

the Applicant represents that all eligible 

active full-time and part-time employee 

participants in the Plans have been 

receiving certain increases to their basic 

and supplemental group term life 

insurance since January 1, 2013. In this 

regard, the supplemental group term life 

and supplemental AD&D benefit 

coverage under the Plans has been 

increased. According to the Applicant, 

as noted above, Intel employees are 

currently eligible to elect up to seven 

times their annual salary for 

supplemental group term life insurance 

and up to six times or seven times their 

annual salaries for supplemental AD&D 

benefits. Formerly, employees who 

elected supplemental group term life 

insurance and supplemental AD&D 

coverage were eligible to elect up to five 

times and six times their annual 

earnings, respectively. The maximum 

amount of coverage for these benefits 

will remain the same (capped at 

$2,000,000 for the supplemental group 

term life insurance, and $1,000,000 for 

the supplemental AD&D insurance). 

The Applicant represents that the 

insurance premiums employees pay for 

these increases will not be raised unless 

the employees elect to increase their 

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66776 Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 

supplemental life and/or supplemental 

AD&D coverage. The Applicant also 

explains that if Intel employees seek 

supplemental group term life insurance 

or AD&D insurance outside of their 

respective Plans, they would be doing 

so in the individual insurance market of 

the state in which they live. In most 

states, the employee would be subjected 

to individual underwriting, and would 

on average, pay higher premiums than 

on a group basis. 

15. Intel is providing all of its 

employees who are participants in the 

Plans with access to Ceridian’s Will 

Preparation and Legal Services program. 

This benefit enhancement includes the 

following services: (a) A free 30-minute 

initial consultation per legal issue with 

an attorney in the Plan participant’s 

state of residence; (b) the creation of 

various legal documents, such as a will 

or a financial power of attorney; (c) a 

referral to a local attorney, access to a 

variety of legal forms, and access to an 

online legal library; and (d) a 25% 

discount off an attorney’s normal hourly 

rate should an employee retain an 

attorney after an initial consultation. 

Intel is bearing the cost of this benefit 

enhancement. 

According to the Applicant, 

previously, only Intel employees who 

were enrolled in the supplemental 

group term life insurance program had 

access to the free will preparation 

service offered by Hyatt Legal Plans. 

16. Further, Intel is providing legacy 

planning services to employees to assist 

them in their time of need. These 

services relate to: (a) Asset distributions; 

(b) last wishes; (c) estate planning; (d) 

last will and testament; (e) power of 

attorney; (f) healthcare directives; (g) 

beneficiary designations; and (h) 

document locator. Legacy planning 

services are provided to all active Intel 

employees through secure Web site 

access. Intel is bearing the full cost of 

this enhancement to the Plan. 

17. Finally, Intel is providing new 

beneficiary financial counseling services 

to beneficiaries of all active employees 

as part of the Plan. In effect, eligible 

individuals are able to receive financial 

services through 

PriceWaterhouseCoopers LLP. The 

beneficiary financial counseling services 

(BFC Services) are available to all 

beneficiaries receiving life benefits at no 

additional cost. The BFC Services 

provide the following benefits to 

beneficiaries of Intel employees: (a) A 

beneficiary guide giving information on 

estate issues, survivor benefits, financial 

planning and non-financial issues; (b) 

eAdvisor, an integrated planning tool 

giving beneficiaries access to online 

financial calculators, life event guides 

and related services; (c) access to the bimonthly electronic financial planning 

newsletter, ‘‘Your Money, Your Future;’’ 

(d) a computer-generated personalized 

financial analysis; (e) ConseLine, an 

unlimited toll-free telephone access for 

one year on financial planning issues; 

and (f) six-months of personal financial 

counseling. 

Intel states that the benefit 

enhancements described above will 

impose a financial burden on the 

sponsor of the Plans because, with the 

exception of employees electing 

increased supplemental group term life 

and AD&D coverage, Intel will be 

bearing the $94,000 annual costs. 

18. In connection with this exemption 

request, Milliman, Incorporated 

(Milliman) has been engaged to act as 

the I/F on behalf of the Plans for the 

purpose of evaluating, and if 

appropriate, approving the subject 

transactions. Specifically, William J. 

Thomson, FSA, MAAA, Principal and 

Consulting Actuary with Milliman has 

been appointed to undertake the duties 

of the independent fiduciary. In this 

regard, Milliman is responsible for 

conducting a due diligence review and 

analysis of the proposed transactions 

and for providing a written opinion as 

to whether the arrangement complies 

with the Department’s requirements for 

an administrative exemption. Milliman 

certifies that it is qualified to serve as 

the I/F and the personnel who comprise 

Milliman are experienced in prohibited 

transaction exemptions issued by the 

Department. Milliman represents that it 

is independent in that it does not have 

and has not previously had, any 

relationship with any party in interest 

(including any affiliates thereof) 

engaging in the transactions described 

above. Further, Milliman represents that 

the gross income it received from Intel, 

TAL or MN Life for its fiscal year does 

not exceed two percent of its gross 

annual income from all sources. 

19. In connection with the 

transactions that are the subject of this 

proposed exemption, Milliman, among 

other things: (a) Reviewed a draft of 

Intel’s request for an administrative 

exemption from the Department; (b) 

conferred with Intel’s representative to 

discuss the transactions and the Plans; 

and (c) conducted such other due 

diligence reviews as were deemed 

necessary. Milliman also considered the 

premiums to be paid by the Plans for the 

proposed coverage, and determined that 

the premiums were comparable to the 

premiums that would have been 

charged by a competitor insurer. 

Milliman notes that the premium rate 

agreed to with MN Life includes a 

percentage allocation for non-claims 

expenses, which expenses here include 

fronting fees, expenses and taxes. 

20. Milliman has determined that the 

reinsurance arrangement will result in 

an immediate and objectively 

determined benefit in the form of 

increased supplemental life insurance 

and AD&D benefits, enhanced will 

preparation and legal services, and new 

legacy planning and beneficiary 

financial counseling services to all 

participants and beneficiaries of the 

Plans. Milliman states that the benefit 

enhancements provide a means of 

reducing personal financial risks that 

may be unavailable to many of the 

Plans’ participants as individuals, 

which provides a value to these persons 

even if they never file a claim. 

21. The Applicant represents that the 

proposed exemption is administratively 

feasible because the reinsurance of the 

Plans’ risks under the terms of the group 

term life insurance and AD&D coverage 

is, among other things, subject to review 

by an I/F, which can be audited. In 

addition, the Applicant notes that Intel 

has and will bear the cost of the 

exemption application and of notifying 

the interested persons. Further, the 

Applicant explains that the proposed 

exemption does not require continued 

monitoring or other involvement by the 

Department. 

The Applicant also represents that the 

proposed exemption is in the interest of 

the Plans because the Plans will pay no 

more than adequate consideration for 

the insurance contracts with MN Life. 

The Applicant further represents that 

the proposed exemption is protective of 

the rights of the participants and 

beneficiaries of the Plans because the 

exemption requires the review and 

approval of an I/F, at Intel’s expense. 

Specifically, the proposed exemption, if 

granted, requires that the I/F analyze the 

subject transactions and render an 

opinion regarding whether certain of the 

conditions of the exemption were 

satisfied, including that: (a) The Plans 

pay no more than adequate 

consideration for the insurance 

contracts; (b) the Plans pay no 

commissions with respect to the direct 

sale of such contracts or the reinsurance 

thereof; (c) in the initial year of every 

contract involving TAL and a Fronting 

Insurer, there is an immediate and 

objectively determined benefit to 

participants and beneficiaries of the 

Plans in the form of increased benefits 

approximating the increase in benefits 

that is effective January 1, 2013, as 

described herein, and such benefits 

continue in all subsequent years of each 

contract and in every renewal of each 

contract; and (d) in the initial year and 

in subsequent years of coverage 

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Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 66777 

provided by a Fronting Insurer, the 

formula used by the Fronting Insurer to 

calculate premiums is similar to 

formulae used by other insurers 

providing comparable coverage under 

similar programs. Furthermore, the 

premium charge calculated in 

accordance with the formula will be 

reasonable and comparable to the 

premium charged by the Fronting 

Insurer and its competitors with the 

same or a better rating providing the 

same coverage under comparable 

programs. 

The Applicant states that if exemptive 

relief is granted, any Fronting Insurer 

will have a financial strength rating of 

‘‘A’’ or better from A. M. Best, and the 

reinsurance arrangement between the 

Fronting Insurer and TAL will be 

indemnity insurance only. 

Finally, the Applicant notes that 

participants and beneficiaries in the 

Plans will receive in subsequent years of 

every contract of reinsurance involving 

TAL and the Fronting Insurer no less 

than the immediate and objectively 

determined increased benefits such 

participant and beneficiary received in 

the initial year of each such contract 

involving TAL and the Fronting Insurer. 

22. In summary, the Applicant 

represents that the reinsurance 

transactions will meet the criteria of 

section 408(a) of the Act since, among 

other things: 

(a) The Plans will pay no more than 

adequate consideration for the 

insurance contracts; 

(b) No commissions will be paid by 

the Plans with respect to the direct sales 

of such contracts or the reinsurance 

thereof; 

(c) In the initial year of every contract 

involving TAL and a Fronting Insurer, 

there will be an immediate and 

objectively determined benefit to 

participants and beneficiaries of the 

Plans in the form of increased benefits, 

and such benefits will continue in all 

subsequent years of each contract and in 

every renewal of each contract, and will 

approximate the increase in benefits 

that are effective January 1, 2013, as 

described in the Notice; 

(d) In the initial year and in 

subsequent years of coverage provided 

by a Fronting Insurer, the formula used 

by the Fronting Insurer to calculate 

premiums will be similar to formulae 

used by other insurers providing 

comparable coverage under similar 

programs. Furthermore, the premium 

charge calculated in accordance with 

the formula will be reasonable and will 

be comparable to the premium charged 

by the Fronting Insurer and its 

competitors with the same or a better 

rating providing the same coverage 

under comparable programs; 

(e) The Fronting Insurer will have a 

financial strength rating of ‘‘A’’ or better 

from A. M. Best. The reinsurance 

arrangement between the Fronting 

Insurer and TAL will be indemnity 

insurance only; 

(f) The Plans will retain an I/F or 

successor to such fiduciary to analyze 

the transactions and to render an 

opinion that certain relevant 

requirements of the proposed 

exemption, if granted, have been 

satisfied; 

(g) Participants and beneficiaries in 

the Plans will receive in subsequent 

years of every contract of reinsurance 

involving TAL and the Fronting Insurer 

no less than the immediate and 

objectively determined increased 

benefits such participant and 

beneficiary received in the initial year of 

each such contract involving TAL and 

the Fronting Insurer; 

(h) The I/F will: Monitor the 

transactions proposed herein on behalf 

of the Plans on a continuing basis to 

ensure such transactions remain in the 

interest of the Plans; take all appropriate 

actions to safeguard the interests of the 

Plans; and enforce compliance with all 

conditions and obligations imposed on 

any party dealing with the Plans; and 

(i) In connection with the provision to 

participants in the Plans of the 

insurance coverage provided by the 

Fronting Insurer which is reinsured by 

TAL, the I/F will review all contracts 

(and any renewal of such contracts) of 

the reinsurance of risks and the receipt 

of premiums therefrom by TAL and will 

determine that the requirements of this 

exemption, if granted, and the terms of 

the benefit enhancements continue to be 

satisfied. 

Notice to Interested Persons 

It is represented that Intel will notify 

interested persons of the publication of 

the Notice in the Federal Register by 

email and then first class mail to each 

such interested person’s most recent 

address maintained in the records of the 

administrator of the Plans, if the email 

is undeliverable. The Notice will also be 

posted on Intel’s internal Web site. Such 

notification will contain a copy of the 

Notice, as it appears in the Federal 

Register on the date of publication, plus 

a copy of the Supplemental Statement, 

as required pursuant to 29 CFR 

2570.43(a)(2) which will advise all 

interested persons of their right to 

comment and to request a hearing. Intel 

will provide such notification to all 

such interested persons within 10 days 

of the date of publication of the Notice 

in the Federal Register. Intel will mail 

the letters within 10 days of the 

undeliverable response being received. 

All written comments and/or requests 

for a hearing must be received by the 

Department from interested persons no 

later than 50 days after publication of 

the Notice in the Federal Register. 

All comments will be made available 

to the public. 

Warning: Do not include any 

personally identifiable information 

(such as name, address, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. All comments may 

be posted on the Internet and can be 

retrieved by most Internet search 

engines. 

FOR FURTHER INFORMATION CONTACT: 

Blessed Chuksorji-Keefe of the 

Department, telephone (202) 693–8567. 

(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 of the Act and/or the Code, 

including any prohibited transaction 

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) Before an exemption may be 

granted under section 408(a) of the Act 

and/or section 4975(c)(2) of the Code, 

the Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemptions, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transitional 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 

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66778 Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices 

(4) The proposed exemptions, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in each 

application are true and complete, and 

that each application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 31st day of 

October 2013. 

Lyssa E. Hall, 

Director Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2013–26506 Filed 11–5–13; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Exemption Application No. D–11672] 

Withdrawal of Notice of Proposed 

Exemption Involving the Studley, Inc. 

Section 401(k) Profit Sharing Plan (the 

Plan) Located in New York, NY 

In the Federal Register dated 

November 16, 2012 (77 FR 68842), the 

Department of Labor (the Department) 

published a notice of proposed 

exemption (the Notice) from the 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974, as amended, and from 

certain taxes imposed by the Internal 

Revenue Code of 1986, as amended. The 

Notice concerned the proposed cash 

sale by the Plan of an 8.828121% 

partnership interest (the Interest) in the 

Julien J. Studley N Street Partnership, a 

general partnership (the JJS Partnership) 

to Studley, Inc. (the Employer), a party 

in interest with respect to the Plan. 

Subsequent to the publication of the 

Notice in the Federal Register, the 

Department was informed that Melvin 

Lenkin, Edward J. Lenkin and the EJL 

Trust, who are unrelated parties with 

respect to the Plan, purchased the 

Interest from the Plan. Accordingly, the 

Department hereby withdraws the 

Notice from the Federal Register. 

Signed at Washington, DC, this 31st day of 

October 2013. 

Lyssa E. Hall, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2013–26505 Filed 11–5–13; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–81,387] 

Eastman Kodak Company, IPS— 

Dayton Location, Including On-Site 

Leased Workers From Adecco, Dayton, 

Ohio; Notice of Negative Determination 

on Reconsideration 

On March 2, 2012, the Department of 

Labor (Department) initiated an 

investigation in response to a Trade 

Adjustment Assistance (TAA) petition 

filed on behalf of workers and former 

workers of Eastman Kodak Company, 

IPS-Dayton Location, including on-site 

leased workers from Adecco, Dayton, 

Ohio (hereafter referred to as ‘‘Eastman 

Kodak-IPS-Dayton’’). On May 18, 2012, 

the Department denied the petition for 

group eligibility to apply for TAA. The 

Department’s Notice of negative 

determination was published in the 

Federal Register on June 6, 2012 (77 FR 

33494). 

On August 1, 2012, the Department 

issued a Notice of Affirmative 

Determination Regarding Application 

for Reconsideration, applicable to 

Eastman Kodak-IPS-Dayton. The 

Department’s Notice of affirmative 

determination was published in the 

Federal Register on August 14, 2012 (77 

FR 48549). 

On March 19, 2013, the Department 

issued a Notice of Termination of 

Reconsideration Investigation to 

workers and former workers of Eastman 

Kodak-IPS-Dayton (TA–W–81,387) 

which stated that the worker group on 

whose behalf the request for 

reconsideration was filed is eligible to 

apply for TAA under the amended 

certification for TA–W–74,813A. The 

Department’s Notice of termination of 

reconsideration investigation was 

published in the Federal Register on 

April 9, 2013 (78 FR 21155). 

On June 21, 2013, the Department 

issued a Notice of Termination of 

Certification applicable to workers and 

former workers eligible to apply for 

TAA under TA–W–74,813A. The 

Department’s Notice of Termination of 

Certification was published in the 

Federal Register on July 5, 2013 (78 FR 

40507). In the Notice of Termination of 

Certification, the Department stated that 

the reconsideration investigation of TA– 

W–81,387 would be re-opened and a 

determination on reconsideration would 

be issued accordingly. 

During the re-opened reconsideration 

investigation, the Department contacted 

the workers who filed the initial 

petition for information and received 

additional information from one of the 

petitioners. 

The petition alleges that production of 

printers shifted from the Dayton, Ohio 

facility to a foreign country. In an 

attachment to the petition, the 

petitioners state that ‘‘a few years back 

our facility . . . shipped the 

manufacture of . . . fluid systems and 

controllers to . . . China’’; that ‘‘in 2010 

a large portion of the print head 

refurbishment for the 4′′ (four inch) 

product line was shipped to . . . 

China’’; that ‘‘all of the printed circuit 

board production and testing was 

moved to China’’; that a ‘‘portion of the 

new product under development 

(Stream) was moved to Mexico for 

manufacture’’ in 2011; that people from 

Malaysia spent months in the fall of 

2011 ‘‘to learn the processes of 

manufacture so equipment can be sent 

to their facility in Malaysia’’; and that 

‘‘production of the new Stream product 

is to be done in Malaysia.’’ 

During the re-opened reconsideration 

investigation, a former worker stated 

that separations at the Dayton, Ohio 

facility were due to the shift in 

production to China and/or Mexico; that 

production of ‘‘legacy’’ products were 

shifted to a facility in China that builds 

cameras and desktop printers; that the 

shift of production to China also 

resulted in reduced need for ‘‘testing 

and repair of new build circuit boards 

and electronic assembly’’; that 

production of ink jet print systems and 

the ‘‘Four Inch’’ product line were 

shifted to China; and that, in April 2012, 

three of the remaining workers were 

separated ‘‘because the remaining repair 

work was shifted to a third party 

company in the Dayton area.’’ 

During the re-opened reconsideration 

investigation, the Department obtained 

updated information from Eastman 

Kodak Company regarding operations at 

the Dayton, Ohio facility and responses 

to the afore-mentioned allegations. 

Based on information obtained during 

the re-opened reconsideration 

investigation, the Department 

determines that while there was some 

production shift abroad in 2006 to 2008, 

no such shift occurred in 2012 and 

2013, and that the shift which occurred 

during 2006 to 2008 did not contribute 

to worker separations at the Dayton, 

Ohio facility in 2012 and 2013. 

Rather, information obtained during 

the reconsideration investigation 

confirmed that worker separations at the 

Dayton, Ohio facility in 2012 and 2013 

have been part of bankruptcy-related 

activities, including restructuring and 

domestic outsourcing of some services, 

and have not resulted in a shift of 

production abroad. 

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