56568 Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 

3The Department notes that consistent with the 

prudence requirements of section 404, a fiduciary 

has a duty to consider all available relevant 

information regardless whether the information is 

actually provided to the fiduciary. 

4Unless otherwise stated herein, the Facility and 

the Land are together referred to as the ‘‘Property.’’ 

and section II(m)(1) of PTE 2009–22 that 

wherever a ‘‘prospectus’’ is required to 

be provided by those sections, such 

requirement can also be satisfied by the 

provision of a ‘‘summary prospectus.’’ 3

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 April 30, 2010 at 75 

FR 22853. 

For Further Information Contact: Mr. 

Anh-Viet Ly of the Department at (202) 

693–8648. (This is not a toll-free 

number.) 

The Finishing Trades Institute of the MidAtlantic Region (the Plan) 

Located in Philadelphia, Pennsylvania 

[Prohibited Transaction Exemption 2010– ; 

Exemption Application No. L–11609]. 

Exemption 

The restrictions of sections 406(a)(1)(A) 

through (D) and 406(b)(1) and (b)(2) of the 

Act shall not apply to the proposed loan of 

approximately $1,081,416 (the Loan) to the 

Plan by the International Union of Painters 

and Allied Trades, District Council 21 (the 

Union), a party in interest with respect to the 

Plan, for (1) the repayment of an outstanding 

loan (the Original Loan) made to the Plan by 

Commerce Bank and currently held by TD 

Bank, both of which are unrelated parties; 

and (2) to facilitate the expansion of a 

training facility (the Facility) that is situated 

on certain real property (the Land) 4 owned 

by the Plan, provided that the following 

conditions are met: 

(a) The terms and conditions of the Loan 

are at least as favorable to the Plan as those 

which the Plan could have obtained in an 

arm’s length transaction with an unrelated 

party; 

(b) The Plan’s trustees determine in writing 

that the Loan is appropriate for the Plan and 

in the best interests of the Plan’s participants 

and beneficiaries; 

(c) A qualified, independent fiduciary that 

is acting on behalf of the Plan (the Qualified 

Independent Fiduciary) reviews the terms of 

the Loan and determines that the Loan is an 

appropriate investment for the Plan and 

protective of and in the best interests of the 

Plan and its participants and beneficiaries; 

(d) In determining the fair market value of 

the Property that serves as collateral for the 

Loan, the Qualified Independent Fiduciary 

(1) obtains an appraisal of the Property from 

a qualified, independent appraiser (the 

Qualified Independent Appraiser); and (2) 

ensures that the appraisal prepared by the 

Qualified Independent Appraiser is 

consistent with sound principles of 

valuation; 

(e) The Qualified Independent Fiduciary 

monitors the Loan, as well as the terms and 

conditions of the exemption, and takes 

whatever actions are necessary and 

appropriate to safeguard the interests of the 

Plan and its participants and beneficiaries 

under the Loan; 

(f) The Loan is repaid by the Plan solely 

with the funds the Plan retains after paying 

all of its operational expenses; and 

(g) The Plan does not pay any fees or other 

expenses in connection with the servicing or 

administration of the Loan. 

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 July 2, 2010 at 75 FR 

38561. 

For Further Information Contact: 

Brian Shiker of the Department, 

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

a toll-free number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

4975(c)(2) of the Code does not relieve 

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions to which the 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 10th day of 

September, 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–23058 Filed 9–15–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[D–11400; D–11585; D–11603–07] 

Application Nos. and Proposed 

Exemptions; D–11400, Wasatch 

Advisors, Inc.; D–11585, Retirement 

Plan for Employees of the 

Rehabilitation Institute of Chicago (the 

Plan); D–11603–07, Chrysler Group 

LLC and Daimler AG; 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. llll, 

stated in each Notice of Proposed 

Exemption. Interested persons are also 

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Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 56569 

1For purposes of this proposed exemption, 

references to section 406 of ERISA should be read 

to refer as well to the corresponding provisions of 

section 4975 of the Code. 

2 49 FR 9494 (Mar. 13, 1984), as corrected at 50 

FR 41430 (Oct. 10, 1985), and amended at 70 FR 

49305 (Aug. 23, 2005) and at 75 FR 38837 (Jul. 6, 

2010). 

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 publicly-disclosed. 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. 

Wasatch Advisers, Inc., Located in Salt 

Lake City, Utah 

[Exemption Application Number D–11400.] 

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 or the Act) and 

section 4975(c)(2) of the Internal 

Revenue Code of 1986, as amended (the 

Code), and in accordance with the 

procedures set forth in 29 CFR Part 

2570, Subpart B (55 FR 32836, 32847, 

August 10, 1990).1

Section I—Exemption and Conditions 

If the proposed exemption is granted, 

Wasatch Advisors, Inc. (Wasatch) shall 

not be precluded from qualifying as a 

‘‘qualified professional asset manager’’ (a 

QPAM) pursuant to Prohibited 

Transaction Exemption 84–14 

(hereinafter, either PTE 84–14 or the 

QPAM Class Exemption) 2 for the period 

from April 19, 2006 through July 13, 

2007, solely because of its failure to 

satisfy the shareholders’ equity 

requirement of PTE 84–14, section 

V(a)(4) (the Shareholders’ Equity 

Requirement), provided that the 

following conditions were met: 

(a) Upon learning that it did not have 

adequate shareholders’ equity to satisfy 

the Shareholders’ Equity Requirement, 

Wasatch took all steps necessary to 

protect the interests of its ERISA Clients 

(as defined in section II(b)), including 

obtaining a letter of credit (the Letter of 

Credit); 

(b) The Letter of Credit was an 

irrevocable standby letter of credit for 

$1,000,000, structured in a manner that 

covered any ERISA Claim (as defined in 

section II(a)) occurring from April 19, 

2006 (the date Wasatch learned it did 

not satisfy the Shareholders’ Equity 

Requirement) through July 13, 2007 (the 

date on which Wasatch determined it 

satisfied the Shareholders’ Equity 

Requirement); 

(c) The Letter of Credit was issued by 

Zions First National Bank, which was 

independent of Wasatch and regulated 

by Federal banking authorities; 

(d) The Letter of Credit was held by 

Zions First National Bank for the benefit 

of all ERISA Clients; 

(e) The Letter of Credit was payable 

on demand solely to an ERISA Client (or 

its agent) if the ERISA Client provided: 

(1) A certified copy of the final order 

for damages against Wasatch based on 

an ERISA Claim from a court of 

competent jurisdiction with all rights of 

appeal having expired or having been 

exhausted; or a true copy of a settlement 

agreement between the ERISA Client 

and Wasatch providing for damages to 

the ERISA Client with respect to an 

ERISA Claim; 

(2) In the case of a final court 

judgment, a certified true copy of a 

Sheriff’s or Marshall’s levy and 

execution on the judgment, returned 

unsatisfied, or such other 

documentation, certified by an officer of 

the court in which the judgment was 

entered, stating that the judgment 

remains unsatisfied following attempts 

to collect the judgment in accordance 

with local court rules; and 

(3) A certificate of an authorized 

representative of the ERISA Client 

stating the amount of the judgment or 

settlement which remains unsatisfied; 

(f) From 1996 through 2007, Joseph S. 

Call, a certified public accountant who 

is independent of Wasatch, performed a 

yearly audit on Wasatch, using generally 

acceptable accounting principles to 

quantify Wasatch’s shareholders’ equity; 

and 

(g) From 1996 through 2007, 

Wasatch’s reliance on Mr. Call’s 

determinations as to the dollar amount 

relevant to the Shareholders’ Equity 

Requirement was reasonable. 

Section II—Definitions 

(a) The term ‘‘ERISA Claim’’ means: a 

civil proceeding for monetary relief 

which is commenced by the filing or 

service of a civil complaint or similar 

pleading or a request for monetary relief 

which could have been the subject of 

such a complaint or pleading but for a 

settlement agreement, filed against 

Wasatch or with respect to which a 

settlement is reached prior to July 13, 

2007, by reason of Wasatch’s breach or 

violation of a duty described in sections 

404 or 406 of ERISA; 

(b) The term ‘‘ERISA Client’’ means 

any employee benefit plan covered by 

Title I of ERISA to which Wasatch 

provides or provided investment 

management services on or before July 

13, 2007; 

(c) A person will be ‘‘independent’’ of 

another person only if: 

(i) For purposes of this exemption, 

such person is not an affiliate of that 

other person; and 

(ii) The other person, or an affiliate 

thereof, is not a fiduciary that has 

investment management authority or 

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56570 Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 

3As noted in footnote 2, the QPAM Class 

Exemption was amended on August 23, 2005. 

Among other things, the amendment increases the 

dollar amount set forth in section V(a)(4) of the 

QPAM Class Exemption from $750,000 to 

$1,000,000. This increase, as it applies to Wasatch, 

is effective December 31, 2006, which is the last day 

of the first fiscal year of Wasatch beginning on or 

after August 23, 2005. References herein to the 

Shareholders’ Equity Requirement with respect to 

any date that occurs prior to December 31, 2006 

thus corresponds to the lesser (i.e., $750,000) dollar 

amount. 

4According to the Applicant, the nature and 

terms of the Agreements have been fully disclosed 

in Wasatch’s audited financial statements since 

1996. 

renders investment advice with respect 

to the assets of such person; 

(d) An ‘‘affiliate’’ of a person means: 

(i) Any person directly or indirectly 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with the person. For 

purposes of this paragraph, the term 

‘‘control’’ means the power to exercise a 

controlling influence over the 

management or policies of a person 

other than an individual; 

(ii) Any officer, director, employee or 

relative (as defined in section 3(15) of 

the Act) of any such other person or any 

partner in any such person; and 

(iii) Any corporation or partnership of 

which such person is an officer, director 

or employee or in which such person is 

a partner. 

Summary of Facts and Representations 

1. The applicant is Wasatch 

(hereinafter, either Wasatch or the 

Applicant), a registered investment 

advisor located in Salt Lake City, Utah. 

Wasatch, which was founded in 1976, 

has more than $9 billion in assets under 

its management, including 

approximately $1.5 billion in ERISA 

plan assets. Wasatch employs 

approximately 110 people, and has been 

structured as a privately-held, 100% 

employee-owned Subchapter S 

corporation since 1996. 

2. The Applicant represents that for 

several years prior to April 19, 2006, 

Wasatch acted as a ‘‘qualified 

professional asset manager,’’ as such 

term is defined in section V(a)(4) of the 

QPAM Class Exemption. The Applicant 

states that, to the best of its knowledge, 

during that time, Wasatch complied 

with all relevant provisions of that class 

exemption. 

3. The Applicant also represents that, 

for the period from April 19, 2006 

through July 13, 2007, Wasatch failed to 

satisfy section V(a)(4) of the QPAM 

Class Exemption. In this regard, section 

V(a)(4) of the QPAM Class Exemption 

requires, among other things, that an 

investment advisor have in excess of 

$1,000,000 in shareholders’ or partners’ 

equity; and section VI(m) of the QPAM 

Class Exemption defines ‘‘shareholders’ 

or partners’ equity’’ as meaning the 

equity shown in the most recent balance 

sheet prepared within the two years 

immediately preceding a transaction 

undertaken pursuant to the QPAM Class 

Exemption, in accordance with 

generally accepted accounting 

principles.3

4. The Applicant describes Wasatch’s 

failure to meet the Shareholders’ Equity 

Requirement as a one-time event 

resulting from unanticipated changes in 

certain factors affecting: deferred 

compensation agreements (the 

Compensation Agreements) covering 

key Wasatch employees (the 

Recipients); and a stock buy-sell 

agreement (the Buy-Sell Agreement). 

The Applicant makes the following 

representations regarding the 

Compensation Agreements. 

Beginning in 1996, Wasatch entered 

into Compensation Agreements with 

Recipients to pay the Recipients a 

multiple of net revenue for each of the 

sixteen quarters following a Recipient’s 

termination of employment with 

Wasatch. Many of the factors involved 

(i.e., the separation dates of the 

Recipients and Wasatch’s revenues 

during the four years following these 

dates) were difficult to quantify prior to 

2005. 

5. The Applicant makes the following 

representation regarding the Buy-Sell 

Agreement. The Buy-Sell Agreement 

was put in place to address succession 

planning. The Agreement, among other 

things, limits stock ownership to current 

employees and places a specific value 

on the shares. As with the 

Compensation Agreements, the value of 

the stock is based on a set multiple of 

net revenues and is paid out over the 

sixteen quarters following sale of the 

stock (which is required upon 

termination.) 

6. For the years 1996–2004, Wasatch 

did not accrue for deferred 

compensation liability on its balance 

sheets. During this period, Wasatch took 

the position that there were too many 

variables to reasonably estimate its 

liabilities under the Compensation 

Agreements and the Buy-Sell 

Agreements (collectively, the 

Agreements). In this regard, the 

Applicants represent that: (1) Future 

revenues were extremely difficult to 

predict historically since: (A) Client 

assets can flood or exit a manager very 

rapidly; (B) during the fifteen years from 

1989–2004 Wasatch’s gross revenues 

showed a compound annual growth rate 

of 35%, with a standard deviation of 

44%, a low of ¥11% and a high of 

130%; and (C) Wasatch had a relatively 

small number of employees and many of 

Wasatch’s assets were new, such that it 

was reasonable to expect a large portion 

of those assets would exit the company 

upon the departure of key employees; 

(2) it was extremely difficult to predict 

retirement dates given that the average 

age of employees was 33; and (3) 

structural aspects of the Agreements 

caused the timing of payments to be 

quite variable.4

7. The Applicant represents that with 

respect to Wasatch’s 2005 calendar year, 

Mr. Joseph S. Call, Wasatch’s 

independent auditor, determined that 

enough of these key variables had 

changed such that it was: (1) Possible to 

reasonably estimate the liability accrued 

under the Compensation Agreements; 

and (2) necessary to accrue a discounted 

value for the liability on Wasatch’s 

financial statements. This determination 

was described in an audit report 

received by Wasatch on April 19, 2006 

(the Audit Report). Specifically, the 

Audit Report stated that: (1) Wasatch 

had observed a relative stabilization in 

its business; (2) at least one key 

retirement date was set; and (3) changes 

in the tax law for deferred compensation 

caused Wasatch to modify the 

Compensation Agreements by taking 

away some of the provisions for prepayment or delay of payment. 

Accordingly, Wasatch’s 2005 balance 

sheet took into account accrued liability 

for the Compensation Agreements, and 

quantified such liability as 

approximating $25 million, putting 

Wasatch in an unexpected and 

unplanned-for negative equity position 

of $13 million. 

8. The Applicant states that, prior to 

April 19, 2006, Wasatch did not know, 

nor have reason to anticipate, that its 

financial statements for the year ending 

December 31, 2005 would reflect less 

than the minimum amount of 

shareholders’ equity set forth in the 

Shareholders’ Equity Requirement. In 

this regard, the Applicant represents 

that Wasatch received no prior notice 

(other than in the Audit Report) that 

certain factors relevant to the 

quantification of Wasatch’s 

shareholders’ equity had stabilized and/ 

or that the amount of Wasatch’s 

shareholders’ equity was in jeopardy of 

dropping below the amount required by 

the Shareholders’ Equity Requirement. 

The Applicant represents further that 

Wasatch’s reliance on the financial 

audits performed by Mr. Call, including 

those covering Wasatch’s fiscal years 

prior to 2005, was reasonable. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 56571 

5For purposes of this proposed exemption, 

references to specific provisions of Title I of the 

Act, unless otherwise specified, refer also to the 

corresponding provisions of the Code. 

6Hewitt, PBGC, IRS, and Deloitte are collectively 

referred to, herein, as the Service Providers. 

9. The Applicant represents that 

Wasatch, upon learning it no longer had 

an amount of shareholders’ equity 

necessary to satisfy the Shareholders’ 

Equity Requirement, took immediate 

steps to protect its ERISA clients. In this 

regard, the Applicant states that after 

receiving the April 19, 2006 Audit 

Report, Wasatch stopped paying 

dividends and bonuses, and began 

retaining cash in an effort to offset the 

accrued deferred compensation liability. 

The Applicant represents that 

unaudited financial statements prepared 

by Wasatch for the quarter ended 

September 30, 2006 reflected 

shareholders’ equity in excess of 

$1,000,000 due to Wasatch’s efforts to 

retain cash. 

10. The Applicant represents further 

that Wasatch, upon learning it no longer 

had a sufficient amount of shareholders’ 

equity, set in motion the process of 

obtaining an irrevocable letter of credit 

in order to protect the interests of its 

ERISA Clients until Wasatch was able to 

once again meet the Shareholders’ 

Equity Requirement. In this regard, on 

October 30, 2006, Wasatch executed the 

Letter of Credit, which is a $1,000,000 

Letter of Credit with Zions First 

National Bank. The Applicant 

represents that, following October 30, 

2006, Zions First National Bank held the 

Letter of Credit for the benefit of all 

ERISA Clients. The Applicant 

represents that the Letter of Credit was 

structured in a manner that allowed it 

to be applicable to ERISA Claims arising 

on or after April 19, 2006. The 

Applicant states further that the Letter 

of Credit remained in effect through July 

13, 2007, which is the date on which 

Wasatch determined that it met the 

Shareholders’ Equity Requirement. The 

Applicant notes that the Letter of Credit 

could be reduced only by ERISA Claims 

paid on behalf of ERISA Clients, if the 

ERISA Client provided: A certified copy 

of the final order for damages against 

Wasatch; or (2) a true copy of a 

settlement agreement between the 

ERISA Client and Wasatch. The 

Applicant states that there have been no 

judgments or settlements made by 

ERISA Clients, and there are no pending 

ERISA Claims. 

11. In summary, the Applicant 

represents that the transactions 

described herein satisfy the statutory 

criteria set forth in section 408(a) of the 

Act and section 4975(c)(2) of the Code 

because: 

(a) Wasatch, upon learning that it did 

not have adequate shareholders’ equity 

to satisfy the Shareholders’ Equity 

Requirement, took all steps necessary to 

protect the interests of its ERISA 

Clients, including obtaining the Letter of 

Credit from Zions First National Bank; 

(b) The Letter of Credit was structured 

to cover any ERISA Claim occurring 

from April 19, 2006 through July 13, 

2007; 

(c) The amount available under the 

Letter of Credit was at least $1,000,000 

on both October 31, 2006 and July 13, 

2007, the former date being the date on 

which Wasatch obtained the Letter of 

Credit from Zions First National Bank 

and the latter date being the date on 

which Wasatch determined it satisfied 

the Shareholders’ Equity Requirement; 

(d) Wasatch caused the Letter of 

Credit to be issued by Zions First 

National Bank, and Zions First National 

Bank held the Letter of Credit for the 

benefit of all ERISA Clients; 

(e) The Letter of Credit was payable 

on demand solely to an ERISA Client (or 

its agent) if the ERISA Client provided: 

(1) A certified copy of the final order 

for damages against Wasatch based on 

the ERISA Claim from a court of 

competent jurisdiction with all rights of 

appeal having expired or having been 

exhausted; or a true copy of a settlement 

agreement between the ERISA Client 

and Wasatch providing for damages to 

the ERISA Client with respect to the 

ERISA Claim; 

(2) In the case of a final court 

judgment, a certified true copy of a 

Sheriff’s or Marshall’s levy and 

execution on the judgment, returned 

unsatisfied, or such other 

documentation, certified by an officer of 

the court in which the judgment was 

entered, stating that the judgment 

remains unsatisfied following attempts 

to collect the judgment in accordance 

with local court rules; and 

(3) A certificate of an authorized 

representative of the ERISA Client 

stating the amount of the judgment or 

settlement which remains unsatisfied; 

(f) From 1996 through 2007, Joseph S. 

Call, a certified public accountant who 

is independent of Wasatch, performed a 

yearly audit on Wasatch, using generally 

accepted accounting principles to 

quantify Wasatch’s shareholders’ equity; 

and 

(g) Each year, from 1996 through 

2007, Wasatch’s reliance on Mr. Call’s 

determinations as to the dollar amount 

of Wasatch’s shareholders’ equity was 

reasonable. 

Notice to Interested Persons 

The persons who may be interested in 

the publication in the Federal Register 

of the Notice of Proposed Exemption 

(the Notice) include ERISA plans that 

used Wasatch as a QPAM during the 

period from April 19, 2006 through July 

13, 2007 and that still (currently) use 

Wasatch as a QPAM. Wasatch will 

notify this class of interested persons, 

by mail, within fifteen (15) calendar 

days of publication of the Notice in the 

Federal Register; and such mailing will 

contain a copy of the Notice, a 

supplemental statement (as required 

pursuant to 29 CFR 2570.43(b)(2)), and 

a supplemental letter explaining the 

circumstances that gave rise for the need 

for a temporary exemption. Any written 

comments and/or requests for a hearing 

must be received by the Department 

from interested persons within 45 days 

of the publication of this proposed 

exemption in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Chris Motta of the Department, 

telephone (202) 693–8540. (This is not 

a toll-free number.) 

Retirement Plan for Employees of the 

Rehabilitation Institute of Chicago (the 

Plan), Located in Chicago, Illinois. 

[Application No. D–11585] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the Act 

and section 4975(c)(2) of 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 

If the proposed exemption is granted, 

the restrictions of sections 406(a)(1)(B), 

406(a)(1)(D), and 406(b)(2) of the Act 

and the sanctions resulting from the 

application of section 4975 of the Code, 

by reason of section 4975(c)(1)(B) and 

4975(c)(1)(D) of the Code,5 shall not 

apply: 

(1) To a series of interest-free 

Advances in the aggregate amount of 

$701,117 (the Advances or individually, 

an Advance), made to Hewitt 

Associates, LLC (Hewitt), the Pension 

Benefit Guaranty Corporation (PBGC), 

the Internal Revenue Service (the IRS), 

and Deloitte and Touche, LLP 

(Deloitte),6 during the period from 

September 28, 2006, through June 2, 

2009, by the Rehabilitation Institute of 

Chicago (RIC), for the purpose of paying 

ordinary operating expenses incurred on 

behalf of the Plan; and 

(2) To the reimbursement to RIC by 

the Plan of such Advances made during 

the period from September 28, 2006, 

through June 2, 2009, in an aggregate 

amount not to exceed $701,117, where 

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56572 Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 

7 71 FR 17917, April 7, 2006. 8 70 FR 17516, April 6, 2005. 

each such reimbursement occurred at 

least sixty (60) days but no more than 

365 days after the date of each such 

Advance; provided that the conditions 

as set forth in section II of this proposed 

exemption were satisfied. 

Section II—Conditions 

(1) During the period from September 

28, 2006, through June 2, 2009, when 

RIC made each of the Advances and 

during the period at least sixty (60) days 

but no more than 365 days after the date 

of each such Advance, when the Plan 

reimbursed each such Advance, all of 

the requirements of Prohibited 

Transaction Exemption 80–26 (PTE 80– 

26), as amended, effective December 15, 

2004,7 were satisfied, except for the 

requirement in Section IV (f)(1) of PTE 

80–26 that loans made on or after April 

7, 2006, with a term of sixty (60) days 

or longer be made pursuant to a written 

loan agreement that contains all of the 

material terms of such loan; 

(2) With regard to any reimbursement 

covered by the proposed exemption, an 

independent, qualified auditor certifies 

that such reimbursement matches each 

of the Advances, during the period from 

September 28, 2006, through June 2, 

2009, made by RIC to the Service 

Providers on behalf of the Plan; and 

such reimbursements were made by the 

Plan to RIC during the period at least 

sixty (60) days but no more than 365 

days after the date of each such 

Advance; 

(3) The Advances made by RIC to the 

Service Providers, during the period 

from September 28, 2006, through June 

2, 2009, were for the payment of 

ordinary operating expenses of the Plan 

which were properly incurred on behalf 

of the Plan; 

(4) Within ninety (90) days of the 

publication in the Federal Register of 

the final exemption for the transactions 

which are the subject of this proposed 

exemption, RIC must refund to the Plan 

an amount equal to $74,555 (the Refund 

Amount), plus earning and interest. 

Such Refund Amount represents the 

total for certain reimbursements to RIC 

by the Plan in connection with 

payments by RIC to Monticello 

Associates Inc. (Monticello), Deloitte, 

the IRS, and the Department in the 

amounts, respectively of $55,500, 

$18,530, $375, and $150. Furthermore, 

RIC must refund to the Plan an 

additional amount attributable to lost 

earnings experienced by the Plan on the 

Refund Amount, and interest on such 

lost earnings, for the period from April 

7, 2006, to the date upon which RIC has 

returned to the Plan the entire Refund 

Amount, the lost earnings on such 

Refund Amount, plus interest on such 

lost earnings. For the purpose of 

calculating the lost earnings on the 

Refund Amount due to the Plan, plus 

interest, on such lost earnings, RIC must 

use the Online Calculator for the 

Voluntary Fiduciary Correction 

Program 8 that appears on the Web site 

of the Employee Benefits Security 

Administration; and 

(5) Within ninety (90) days of the 

publication in the Federal Register of 

the final exemption for the transactions 

which are the subject of this proposed 

exemption, RIC must file a Form 5330 

with the IRS and pay to the IRS all 

applicable excise taxes, and any interest 

on such excise taxes deemed to be due 

and owing with respect to the Refund 

Amount. 

Effective Date: This proposed 

exemption, if granted, will be effective, 

for each Advance to the Service 

Providers made by RIC from September 

28, 2006, through June 2, 2009, and for 

reimbursements to RIC by the Plan of 

such Advances covered by this 

proposed exemption. 

Summary of Facts and Representations 

1. The Plan is a defined benefit 

pension plan. The estimated number of 

participants and beneficiaries in the 

Plan, as of November 3, 2009, was 

2,457. The fair market value of the total 

assets of the Plan, as of August 31, 2009, 

was $52,895,253.39. 

2. The administrator of the Plan is a 

committee (the Committee) composed of 

members who are appointed by the 

Board of Directors of RIC. The members 

of the Committee are employees and 

officers of RIC. As of March 13, 2006, 

and at the start of the relevant period for 

which relief is requested in this 

proposed exemption, the members of 

the Committee, were: (a) Wayne M. 

Lerner, President and Chief Executive 

Officer of RIC; (b) Edward B. Case (Mr. 

Case), Executive Vice President and 

Chief Financial Officer of RIC; (c) Susan 

H. Cerletty, Executive Vice President, 

Clinical, of RIC and (d) Nancy Paridy, 

Esq. (Ms. Paridy), Senior Vice President 

of RIC and General Counsel to RIC. The 

following individuals have been 

members of the Committee, since 

December 1, 2007: (a) Joanne C. Smith, 

M.D., President and Chief Executive 

Officer of RIC, (b) Mr. Case, and (c) Ms. 

Paridy. The Committee is a party in 

interest with respect to the Plan, as the 

administrator of the Plan, pursuant to 

section 3(14)(A) of the Act. 

The persons who have investment 

discretion over the assets involved in 

the proposed transactions are the 

Executive Vice President, the Chief 

Executive Officer, and the Chief 

Financial Officer of RIC, the members of 

the investment committee, and the 

advisors to RIC at Monticello. As 

persons or entities who have investment 

discretion over the assets of the Plan, 

each is a fiduciary with respect to the 

Plan, pursuant to section 3(21)(A) of the 

Act. As fiduciaries of the Plan, each is 

also a party in interest with respect to 

such Plan, pursuant to section 3(14)(A) 

of the Act. 

Northern Trust Company, as the 

trustee for the Plan, is a fiduciary with 

respect to such Plan, pursuant to section 

3(21)(A) of the Act. Further, as trustee 

for the Plan, Northern Trust Company is 

a party in interest with respect to such 

Plan, pursuant to section 3(14)(A) of the 

Act. 

3. RIC, the sponsor of the Plan, is an 

Illinois not-for-profit corporation. RIC is 

a provider of rehabilitative medicine 

and services to severely injured and 

handicapped individuals. As an 

employer any of whose employees are 

covered by the Plan, RIC is a party in 

interest with respect to the Plan, 

pursuant to section 3(14)(C) of the Act. 

4. The applicant has requested a 

retroactive administrative exemption for 

Advances and for the reimbursement of 

such Advances to RIC by the Plan. Such 

transactions constitute the lending of 

money or other extension of credit 

between the Plan and RIC in violation 

of section 406(a)(1)(B) of the Act, and 

constitute the transfer to, or use by or 

for the benefit of RIC of the assets of the 

Plan in violation of 406(a)(1)(D) of the 

Act. The subject transactions also raise 

conflict of interest issues by fiduciaries 

of the Plan for which relief from the 

prohibitions of 406(b)(2) of the Act is 

needed. 

Specifically, the applicants have 

requested retroactive relief for: (a) 

Advances made by RIC to the Service 

Providers for expenses incurred on 

behalf of the Plan, during the period 

from April 7, 2006, through August 28, 

2009; and (b) for the subsequent 

reimbursements of such Advances to 

RIC by the Plan during the period at 

least sixty (60) days but no more than 

365 days after the date of each such 

Advance. 

Although, as stated above, the 

applicant requested relief for the period 

from April 7, 2006, through August 28, 

2009, the Department has determined to 

propose relief for a shorter period of 

time than that requested by the 

applicant. In this regard, the Department 

is proposing relief only for Advances 

made during the period from September 

28, 2006, through June 2, 2009, because 

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Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 56573 

9The Department is offering no view, herein, as 

to RIC’s reliance on PTE 80–26 for payments RIC 

made on behalf of the Plan or to reimbursements 

of such payments to RIC by the Plan. Further, the 

Department is not opining as to whether RIC 

satisfied the conditions of PTE 80–26 in connection 

with such payments made by RIC on behalf of the 

Plan, or in connection with the reimbursement of 

such payments to RIC by the Plan. Further, the 

Department, herein, is not providing relief for any 

payments made by RIC on behalf of the Plan or any 

reimbursements of such amounts to RIC by the Plan 

beyond that which is proposed herein. 

an audit prepared by Deloitte, as 

described in more detail in paragraph 

number 15, below, covers transactions 

only for the period from September 28, 

2006, through June 2, 2009. 

Further, the Department proposes to 

limit relief, during the period from 

September 28, 2006, through June 2, 

2009, only to those Advances which 

were reimbursed to RIC by the Plan, at 

least sixty (60) days but no more than 

365 days from the date of each such 

Advance, because: (i) PTE 80–26 would 

be available for loans or extensions of 

credit which were repaid in less than 

sixty (60) days, provided the conditions 

of PTE 80–26 were satisfied; and (ii) as 

discussed in paragraph number 8, below 

the applicant has already filed a Form 

5330, paid excise tax, and refunded to 

the Plan certain reimbursements paid to 

RIC more than a year after RIC advanced 

payments on behalf of the Plan. 

No relief from the prohibited 

transaction provisions of the Act is 

proposed, herein, during the period 

April 7, 2006, when the requirement for 

a written loan agreement, pursuant to 

PTE 80–26 became effective, through 

September 27, 2006, when RIC failed to 

comply with the conditions of PTE 80– 

26, as amended, but made payments for 

expenses incurred on behalf of the Plan 

and received reimbursements from the 

Plan, because an audit prepared by 

Deloitte, as described in more detail in 

paragraph number 15, below, did not 

cover that period. Further, no relief from 

the prohibited transaction provisions of 

the Act is proposed, herein, for 

payments by RIC on behalf of the Plan 

and subsequent reimbursement to RIC 

by the Plan after Deloitte had informed 

RIC of the amendment to PTE 80–26, on 

June 3, 2009. 

5. It is represented that RIC did not 

make the Advances which are the 

subject of this proposed exemption as 

gifts to the Plan. In this regard, it is 

represented that a significant portion of 

the operating revenue of RIC comes 

from non-patient sources, such as 

donors and grants. Such sources prefer 

their awards to be utilized for providing 

patient care and other mission related 

programs. It is represented that 

including the administrative expenses 

of the Plan in the general administrative 

expenses of RIC, rather than as benefits 

expenses, would make RIC appear less 

efficient to such non-patient sources of 

revenue. Accordingly, it is represented 

that it was always the intention of RIC 

to have the administrative expenses of 

the Plan paid for from the assets of the 

Plan, rather than from RIC’s assets. In 

this regard, it is represented that from 

the inception of the Plan, the Plan 

documents and the accompanying trust 

documents have provided that 

administrative expenses of the Plan 

would be paid out of the assets of the 

Plan. Specifically, section 3.3 of the 

trust states that the trustee may pay out 

of the trust the administrative expenses 

of the Plan, including any accounting, 

actuarial, investment and legal expenses 

and premiums, any taxes of any and all 

kinds that may be levied or assessed 

under existing or future laws upon the 

trust or the income thereof, and any 

other amounts payable pursuant to Title 

IV of the Act, as the plan administrator 

shall direct. 

It is represented that RIC has 

employed an administrative and 

accounting procedure which has been in 

place for a long time and which has 

been consistently followed with respect 

to the payments made by RIC to certain 

service providers of various expenses 

incurred on behalf of the Plan. In this 

regard, the procedure involves RIC 

paying for such expenses directly to 

such service providers on behalf of the 

Plan and then posting the amount of 

such payments as receivables from the 

Plan in the accounting records of RIC. 

It is represented that RIC would 

generally make the payments incurred 

on behalf of the Plan for up to an entire 

Plan year. Further, it is represented that 

the reimbursements to RIC by the Plan 

were made in lump sums generally on 

an annual basis. 

6. It is represented that RIC intended 

the accounting procedure, described in 

paragraph number 5, above, to comply 

with PTE 80–26.9 PTE 80–26 is a class 

exemption that, among other 

transactions, permits parties in interest 

with respect to an employee benefit 

plan to make certain interest free loans 

or other extensions of credit to such 

plan and permits such parties in interest 

to receive repayment of such loans or 

other extensions of credit. The relief 

provided by PTE 80–26 is subject to the 

conditions that the proceeds of such 

loans or extensions of credit are 

unsecured, are not, directly or 

indirectly, made by an employee benefit 

plan, and are used only for the payment 

of ordinary operating expenses of a 

plan, including the payment of benefits 

in accordance with the terms of such 

plan and periodic premiums under an 

insurance or annuity contract or are 

used for a purpose incidental to the 

ordinary operation of such plan. 

Pursuant to an amendment of PTE 80– 

26, effective as of December 15, 2004, 

any loan or extension of credit the 

proceeds of which are used for the 

payment of ordinary operating expenses 

that are entered into on or after April 7, 

2006, and that have a term of sixty (60) 

days or longer must be made pursuant 

to a written loan agreement that 

contains all of the material terms of 

such loan or extension of credit. Any 

loan or extension of credit made for a 

purpose incidental to the ordinary 

operation of a plan that has a term of 

sixty (60) days or longer must also be 

made pursuant to a written loan 

agreement that contains all of the 

material terms of such loan or extension 

of credit. 

7. After the December 15, 2004, 

amendment to PTE 80–26 and after 

April 6, 2006, the effective date of the 

requirement for a written loan 

agreement for certain loans, RIC 

continued to make payments to service 

providers on behalf of the Plan and to 

seek reimbursements of such payments 

from the Plan, pursuant to the 

accounting procedure which is 

described in paragraph number 4, 

above. In this regard, on and after April 

7, 2006, it is represented that any 

payments made on behalf of the Plan by 

RIC to service providers with a term of 

sixty (60) days or longer were not made 

pursuant to written loan agreements that 

contained all of the material terms of 

such loan or extension of credit. 

On or about June 2, 2009, during the 

course of audits for the Plan Years 

ending August 31, 2007, and August 31, 

2008, Deloitte, the auditor of the Plan, 

brought to the attention of RIC the 

amendment to PTE 80–26, effective 

December 15, 2004. It is represented by 

the applicant that after the amendment 

to PTE 80–26, the accounting procedure 

employed by RIC no longer met the 

requirements of PTE 80–26, with respect 

to the payments by RIC on behalf of the 

Plan to service providers (and 

subsequent reimbursements to RIC by 

the Plan of such payments). 

8. Upon consultation with its legal 

counsel, Greenberg Traurig, LLP, RIC 

determined that the subject transactions 

are similar to the terms of a revolving 

note which typically must be paid down 

on at least an annual basis. It is 

represented that RIC evaluated 

payments made by RIC on behalf of the 

Plan to certain service providers and the 

subsequent receipt of reimbursements 

by RIC from the Plan and determined 

that any such payments made on behalf 

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56574 Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 

10The Department, herein, is expressing no views 

on the conclusions reached regarding the 

application of PTE 80–26 to these amounts. 

11 In AO 2001–01, the Department expressed its 

view that in the context of tax-qualification 

activities, that ‘‘the formation of a plan as a taxqualified plan is a settlor activity for which a plan 

may not pay. Where a plan is intended to be a taxqualified plan, however, implementation of this 

settlor decision may require plan fiduciaries to 

undertake activities relating to maintaining the 

plan’s tax-qualified status for which a plan may pay 

reasonable expenses (i.e., expenses reasonable in 

light of the services rendered). Implementation 

activities might include drafting plan amendments 

required by changes in the tax law, 

nondiscrimination testing, and requesting IRS 

determination letters. If, on the other hand, 

maintaining the plan’s tax-qualified status involves 

analysis of options for amending the plan from 

which the plan sponsor makes a choice, the 

expenses incurred in analyzing the options would 

be settlor expenses.’’ 

12Section 4007(a) of Title IV of the Act provides, 

in part, that the ‘‘designated payor’’ of each plan 

shall pay premiums imposed by the PBGC when 

they are due. Section 4007(e)(1)(A) of Title IV of the 

Act defines the term, ‘‘designated payor,’’ to mean 

either the ‘‘contributing sponsor’’ or the plan 

administrator, in the case of a single-employer plan. 

Section 29 CFR 2610.26(a) of the PBGC regulations 

clarifies that both the plan administrator and the 

contributing sponsor of a single employer plan are 

liable for premiums. With respect to ongoing plans, 

the PBGC has interpreted these provisions to permit 

the payment of premiums from plan assets. 

of the Plan by RIC which were 

reimbursed within sixty (60) days 

complied with PTE 80–26. In this 

regard, the applicant represents that 

there were no reimbursements made on 

the sixtieth (60th) day following the 

date of any such payments.10

RIC determined that the receipt by 

RIC from the Plan of reimbursements 

more than a year after the date of such 

payments were not exempted by PTE 

80–26 and that the amount of such 

payments reimbursed to RIC by the Plan 

should be returned by RIC to the Plan. 

The total amount RIC returned to the 

Plan on August 28, 2009, is represented 

to have been $110,711, plus lost 

earnings in the amount of $766.96 for a 

total of $111,477.96. In addition, Form 

5330 was completed by RIC, filed on 

September 2, 2009, by RIC with a check 

in the amount of $115.04 to the IRS, as 

payment of excise taxes due. It is 

represented that the excise taxes were 

calculated on the $766.96 of interest on 

the amount of $110,711 returned to the 

Plan by RIC. 

9. It is represented that the total 

amount of the payments made by RIC on 

behalf of the Plan after April 7, 2006, 

which were reimbursed to RIC by the 

Plan sixty (60) days or more after the 

date of each such payment is $886,383. 

After RIC returned $110,711 to the Plan 

on August 28, 2009, as described in 

paragraph number 8, above, in 

connection with the filing by RIC of 

Form 5330, the amount for which relief 

is requested is $775,672 (i.e., $886,383 

minus $110,711). 

Notwithstanding the applicant’s 

request for relief for certain payments 

made by RIC on behalf of the Plan and 

certain reimbursements received by RIC 

from the Plan in the amount of 

$775,672, the Department is proposing 

relief for $701,117. In this regard, of the 

$775,672 for which the applicant 

requested relief, the Department has 

disallowed, for various reasons 

discussed in the paragraphs 

immediately below, payments made by 

RIC on behalf of the Plan and 

reimbursement received by RIC from the 

Plan totaling $74,555. Accordingly, RIC 

has agreed to refund to the Plan an 

amount equal to $74,555 with interest 

calculated using the Department’s 

online calculator. Further, within ninety 

(90) days of the publication in the 

Federal Register of the final exemption 

for the transactions which are proposed, 

herein, RIC will file Form 5330 with the 

IRS and pay any excise taxes, deemed 

to be due and owing on such Refund 

Amount. 

Specifically, the Department is not 

proposing relief for certain payments 

made by RIC to Monticello, an 

investment advisor/manager to RIC and 

to the Plan, in the amount of $55,500 

that was reimbursed to RIC by the Plan. 

In this regard, rather than the actual cost 

of services provided to the Plan by 

Monticello, the amount of payments 

made by RIC to Monticello represented 

an estimated 15 percent (15%) 

allocation of the cost for the investment 

management consulting services 

provided by Monticello both to the Plan 

and to RIC. 

Further, the Department is not 

proposing relief for a certain payment 

made by RIC to the Department in the 

amount of $150 that was reimbursed to 

RIC by the Plan. In this regard, the 

applicant did not provide 

documentation that such amount was a 

Plan expense. 

In addition the Department is not 

proposing relief for payments made by 

RIC to the IRS that was reimbursed to 

RIC by the Plan in the amount of $375 

for fees for a Voluntary Correction 

Program filing which has been deemed 

a ‘‘settlor function,’’ as set forth on 

January 18, 2001, in Advisory Opinion 

2001–01A (AO 2001–01).11

Finally, the Department is not 

proposing relief for certain payments 

made by RIC to Deloitte, an accountant 

for the Plan and for RIC, in the amount 

of $18,530 that was reimbursed to RIC 

by the Plan. The $18,530 amount 

consists of overrun charges of $14,530 

and out-of-pocket expenses of $4,000 

which were paid to Deloitte by RIC and 

then subsequently reimbursed to RIC by 

the Plan. The Department is not 

proposing relief for the $14,530 paid by 

RIC on behalf of the Plan and 

subsequently reimbursed to RIC by the 

Plan, because, RIC does not have a 

specific invoice to document this 

amount was a Plan audit expense. 

Further, the Department is not 

proposing relief for an additional $4,000 

in out-of-pocket expenses paid to 

Deloitte by RIC on behalf of the Plan 

and subsequently reimbursed to RIC by 

the Plan. In this regard, RIC has failed 

to sufficiently document that the $4,000 

amount represented the correct 

allocation of out-of-pocket expenses to 

the Plan. 

10. The Department has determined to 

provide relief, herein, for Advances 

made by RIC on behalf of the Plan, 

during the period from September 28, 

2006, through June 2, 2009, and which 

were reimbursed to RIC by the Plan, at 

least sixty (60) days but no more than 

365 days from the date of each such 

Advance to the following Service 

Providers in the following amounts: 

(a) For Advances to Hewitt by RIC and 

for reimbursements of such Advances 

by the Plan to RIC in an amount totaling 

$478,857; 

(b) For Advances to IRS by RIC and 

for reimbursements of such Advances 

by the Plan to RIC in amounts totaling 

$700, provided that such Advances 

were not expenses associated with 

settlor functions, as set forth in AO 

2001–01; 

(c) For Advances for the payment of 

premiums to the PBGC by RIC and to 

reimbursements of such Advances by 

the Plan to RIC in amounts totaling 

$139,060, where the payment of PBGC 

premiums by a plan is permitted under 

Title IV of the Act; 12 and 

(d) For Advances to Deloitte by RIC 

and to reimbursements by the Plan to 

RIC in amounts totaling $82,500. 

11. It is represented that the total 

amount of Advances which were made 

on behalf of the Plan by RIC to the 

Service Providers during the period 

from September 28, 2006, through June 

2, 2009, and which were reimbursed to 

RIC by the Plan at least sixty (60) days 

but not more than 365 days after the 

date of each such Advance is $701,117. 

12. The applicant represents that the 

transactions which are the subject of 

this proposed exemption were in the 

interest of the Plan, because the 

Advances made by RIC to the Service 

Providers on behalf of the Plan, 

permitted the Plan to keep in the trust, 

until such time as the Advances were 

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13The Department is offering no view herein, as 

to whether the entry into a revolving loan 

agreement between RIC and the Plan is covered by 

the relief available under PTE 80–26, as amended, 

nor is the Department opining as to whether the 

entry into such a revolving loan agreement satisfies 

the conditions of PTE 80–26, as amended. Further, 

the Department is not providing, herein, any relief 

with respect to the entry between RIC and the Plan 

into any revolving loan agreement. 

reimbursed to RIC by the Plan, such 

amounts as would otherwise have been 

payable to such Service Providers. In 

addition, it is represented that the Plan 

retained any earnings and interest made 

from the amounts that remained 

invested in the trust for a longer period 

of time than were the Plan to have paid 

off expenses directly to the Service 

Providers as each such expense became 

due. Further, it is represented that there 

is no cost to the Plan, because RIC did 

not charge interest or fees to the Plan in 

connection with the transactions which 

are the subject of this proposed 

exemption. 

13. The applicant represents that the 

proposed exemption is feasible. In this 

regard, relief is requested for a finite 

number of Advances that occurred for 

the period from September 28, 2006, 

through June 2, 2009. 

14. The applicant represents that the 

proposed exemption provides sufficient 

safeguards for the protection of the Plan 

and its participants and beneficiaries. In 

this regard, it is represented that all of 

the requirements of PTE 80–26, as 

amended, effective December 15, 2004, 

were satisfied for the period from 

September 28, 2006, through June 2, 

2009, except for the requirement, as set 

forth in Section IV (f)(1) of PTE 80–26, 

as amended. In this regard, Section IV 

(f)(1) of PTE 80–26 requires that loans 

made on or after April 7, 2006, with a 

term of sixty (60) days or longer must 

be made pursuant to a written loan 

agreement that contains all of the 

material terms of such loan. 

In addition, Deloitte, an independent, 

qualified auditor: (a) Obtained a 

schedule prepared by Plan management 

(the Schedule) of Plan expenses, for the 

period September 28, 2006, through 

June 2, 2009, which were paid by RIC 

on behalf of the Plan; (b) tested the 

arithmetic accuracy of the Schedule and 

noted no errors; (c) reconciled each 

amount on the Schedule to a 

corresponding amount posted on RIC’s 

miscellaneous receivables ledger and 

noted no differences; and (d) for all Plan 

reimbursements to RIC listed on the 

Schedule, reconciled the amount and 

date to a copy of the wire transfer to 

RIC’s bank statement and noted no 

differences. 

15. It is represented that on 

September 1, 2009, RIC entered into an 

interest-free written revolving loan 

agreement for a principal amount of $1 

million or such lesser amount as shall 

be advanced from time to time. Such 

principal amount must be paid in full at 

least annually by the month of August, 

or as soon as administratively 

practicable thereafter. The principal 

may be prepaid in whole or in part at 

any time without penalty. All payments 

are applied to reduce the principal 

amount in the order of the earliest to the 

latest of the payments advanced by RIC. 

RIC has not sought relief for such future 

transactions in reliance on the belief 

that this revolving loan agreement 

between the RIC and the Plan satisfies 

the requirements of PTE 80–26.13

16. In summary, the applicant 

represents that the subject transactions 

satisfy the statutory criteria of section 

408(a) of the Act and section 4975(c)(2) 

of the Code because: 

(a) During the period from September 

28, 2006, through June 2, 2009, when 

RIC made each of the Advances and 

during the period of at least sixty (60) 

days but no more than 365 days after the 

date of each such Advance, when RIC 

received each of the reimbursements, all 

of the requirements of PTE 80–26, as 

amended, effective December 15, 2004, 

were satisfied, except for the 

requirement, as set forth in Section IV 

(f)(1) of PTE 80–26; 

(b) With regard to any reimbursement 

covered by the proposed exemption, 

Deloitte, an independent, qualified 

auditor certifies that such 

reimbursement matches each of the 

Advances, during the period from 

September 28, 2006, through June 2, 

2009, made by RIC to the Service 

Providers on behalf of the Plan; and 

such reimbursements were made by the 

Plan to RIC during the period at least 

sixty (60) days but no more than 365 

days after the date of each such 

Advance; 

(c) The Advances made by RIC to the 

Service Providers, during the period 

from September 28, 2006, through June 

2, 2009, were for the payment of 

ordinary operating expenses of the Plan 

which were properly incurred on behalf 

of the Plan; 

(d) Within ninety (90) days of the 

publication in the Federal Register of 

the final exemption for the transactions 

which are the subject of this proposed 

exemption, RIC will refund to the Plan 

an amount equal to $74,555. Such 

Refund Amount represents the total for 

certain reimbursements to RIC by the 

Plan in connection with payments by 

RIC to Monticello, Deloitte, IRS, and the 

Department in amounts, respectively of 

$55,500, $18,530, $375, and $150. 

Furthermore, RIC will refund to the Plan 

an additional amount attributable to lost 

earnings experienced by the Plan on the 

Refund Amount, and interest on such 

lost earnings, for the period from April 

7, 2006, to the date upon which RIC has 

returned to the Plan the entire Refund 

Amount, the lost earnings on such 

Refund Amount, plus interest on such 

lost earnings. For the purpose of 

calculating the lost earnings on the 

Refund Amount due to the Plan, plus 

interest, on such lost earnings, RIC will 

use the Online Calculator for the 

Voluntary Fiduciary Correction Program 

that appears on the Web site of the 

Employee Benefits Security 

Administration; and 

(e) Within ninety (90) days of the 

publication in the Federal Register of 

the final exemption for the transactions 

which are the subject of this proposed 

exemption, RIC must file a Form 5330 

with the IRS and pay to the IRS all 

applicable excise taxes, and any interest 

on such excise taxes deemed to be due 

and owing with respect to the Refund 

Amount. 

Notice to Interested Persons 

The persons who may be interested in 

the publication in the Federal Register 

of the Notice of Proposed Exemption 

(the Notice) include participants and 

beneficiaries of the Plan and retirees 

receiving benefits. 

It is represented that each of these 

classes of interested persons will be 

notified of the publication of the Notice 

by first class mail, within fourteen (14) 

days of publication of the Notice in the 

Federal Register. Such mailing 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(b)(2), which 

will advise all interested persons of 

their right to comment and to request a 

hearing. 

All written comments and/or requests 

for a hearing must be received by the 

Department from interested persons 

within 44 days of the publication of this 

proposed exemption in the Federal 

Register. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Angelena C. Le Blanc of the Department, 

telephone (202) 693–8540. (This is not 

a toll-free number.) 

Chrysler Group LLC and Daimler AG, 

Located in Auburn Hills, Michigan and 

Stuttgart, Germany, Respectively 

Exemption Application Number D–11603– 

07. 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

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56576 Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 

14For purposes of this proposed exemption, 

references to section 406 of ERISA should be read 

to refer as well to the corresponding provisions of 

section 4975 of the Code. 

15Hereinafter, unless expressly stated otherwise, 

the term ‘‘Chrysler Group’’ shall mean Chrysler LLC 

(for events that occurred prior to June 10, 2009) or 

Chrysler Group (for events that occur after June 9, 

2009). 

16The Applicants represent that, effective as of 

June 4, 2009, Daimler redeemed its interest in 

Chrysler LLC, and, as of that date, Daimler was no 

longer a party in interest to the Plans. 

17The Applicants represent that Daimler also 

obtained releases for certain claims that are not 

relevant to the transactions described herein. 

authority of section 408(a) of the 

Employee Retirement Income Security 

Act of 1974, as amended (ERISA or the 

Act), and section 4975(c)(2) of the 

Internal Revenue Code of 1986, as 

amended (the Code), and in accordance 

with the procedures set forth in 29 CFR 

Part 2570, Subpart B (55 FR 32836, 

32847, August 10, 1990).14

Section I—Chrysler Group Transactions 

If the proposed exemption is granted, 

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

and 406(b)(1) and (2) of ERISA and the 

sanctions resulting from the application 

of section 4975 of the Code, by reason 

of section 4975(c)(1)(A) and (E) of the 

Code, shall not apply to the contribution 

(the Contribution) of notes issued by 

Daimler AG (the Daimler Notes) by 

Chrysler Group LLC (Chrysler Group) to 

certain employee benefit plans 

sponsored by the Chrysler Group (the 

Plans), provided that the conditions set 

forth in section III have been met. 

Section II—Daimler AG Transactions 

If the proposed exemption is granted, 

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

and (B) of ERISA, and the sanctions 

resulting from the application of section 

4975 of the Code, by reason of section 

4975(c)(1)(A) and (B) of the Code, shall 

not apply to the issuance by Daimler of 

the Daimler Notes for purposes of the 

Contributions pursuant to an agreement 

that was previously entered into while 

Daimler was a party-in-interest to the 

Plans, provided that the condition set 

forth in section IV is met. 

Section III—Conditions Applicable to 

Section I 

(a) The terms of each Contribution are 

consistent with the terms set forth in a 

settlement agreement (the Settlement 

Agreement), effective as of June 5, 2009, 

between/among CG Investment Group, 

LLC, CG Investor, LLC, Chrysler 

Holding LLC, CARCO Intermediate 

HOLDCO I LLC, Chrysler LLC, Daimler 

AG, Daimler North America Finance 

Corporation, Daimler Investments US 

Corporation, and the Pension Benefit 

Guaranty Corporation (the PBGC). 

Notwithstanding the above, and also for 

purposes of condition (c) below, the 

terms of the Contributions shall not be 

viewed as being inconsistent with the 

terms of the Settlement Agreement 

solely because the Contributions take 

into account the March 1, 2010 merger 

(the Merger) of the Global Engineering 

Manufacturing Alliance UAW Pension 

Plan into the Pension Agreement 

between Chrysler Group LLC and the 

UAW, which occurred after the effective 

date of the Settlement Agreement; 

(b) The fair market value of each 

Daimler Note will be determined as of 

the date of the Contributions, by a 

qualified independent appraiser; 

(c) The fair market value of each 

Daimler Note contributed to a Plan will 

represent an amount that equates to the 

amount contemplated for such Plan 

under the Settlement Agreement; 

(d) Each Daimler Note will represent 

not more than 20% of the total fair 

market value of the Plan that receives 

such Note at the time of its 

Contribution; 

(e) Each Plan may immediately sell 

the Daimler Note it receives pursuant to 

a Contribution, except that neither 

Chrysler Group nor any of its affiliates 

or subsidiaries may be a party to such 

sale. Notwithstanding the above, 

restrictions may be imposed on a Plan’s 

ability to sell its Daimler Note if such 

restrictions are required under State or 

Federal securities laws or otherwise 

required by the terms of such Daimler 

Note; 

(f) The Plans do not waive any rights 

or claims in connection with the 

Contributions; 

(g) The Plans do not pay any fees, 

costs, or other charges in connection 

with the Contributions; and 

(h) Chrysler Group shall provide the 

PBGC with written evidence that 

Chrysler Group: (1) Contributed the 

Daimler Notes to the Plans; and (2) gave 

the Plans’ trustee instructions regarding 

the allocation of the Daimler Notes. 

Such written evidence must be provided 

within five business days after the 

receipt by Chrysler Group of such Notes. 

Section IV—Conditions Applicable to 

Section II 

(a) Daimler’s entering into the Daimler 

Notes is not part of an arrangement, 

agreement, or understanding designed 

to benefit Daimler. 

Effective Date: If granted, this 

proposed exemption will be effective as 

of September 16, 2010. 

Summary of Facts and Representations 

1. The applicants are Chrysler Group 

LLC, (Chrysler Group) and Daimler AG 

(Daimler). Chrysler Group is the entity 

that acquired certain of the assets of 

Chrysler LLC (Chrysler LLC) on June 10, 

2009 in a transaction approved by the 

United States Bankruptcy Court. 

Chrysler Group sponsors various 

defined benefit plans (the Plans) which 

cover employees of Chrysler Group and 

its affiliates.15 Chrysler Group describes 

the Plans as: (1) The Chrysler Group 

LLC Pension Plan, with 38,635 

participants and beneficiaries and 

approximately $2,712,643,000 in total 

assets as of April 14, 2010; (2) the JEEP 

Corporation-UAW Retirement Income 

Plan, with 8,705 participants and 

beneficiaries and approximately 

$774,824,500 in total assets as of April 

14, 2010; (3) the Pension Agreement 

between Chrysler Group and the UAW, 

with 131,604 participants and 

beneficiaries and approximately 

$11,600,000,000 in total asset as of April 

14, 2010; and (4) the American Motors 

Union Retirement Income Plan, with 

10,496 participants and beneficiaries 

and approximately $701,639,500 in total 

assets as of April 14, 2010. 

2. Daimler is an automotive 

manufacturer with its corporate 

headquarters located in Stuttgart, 

Germany. Daimler states that, at the 

time the arrangements described below 

were negotiated, agreed to, and entered 

into, Daimler was a ‘‘party in interest’’ to 

the Plans, as such term is defined in 

section 3(14) of ERISA. In this regard, 

during that period, Daimler had a 19.9% 

ownership interest in Chrysler LLC: The 

sponsor of the Plans.16

3. Chrysler Group and Daimler 

(collectively, the Applicants) state that, 

on May 13, 2007, Daimler entered into 

an agreement with the PBGC (the 2007 

PBGC Agreement), whereby Daimler 

agreed to guarantee up to $1 billion of 

unfunded liabilities of the Plans if: (i) 

One or more of the Plans were 

terminated in an involuntary or a 

distress termination; and (ii) upon the 

occurrence of specified events, 

including certain ‘‘change of control’’ 

transactions. In a Binding Term Sheet 

dated April 27, 2009 (the Binding Term 

Sheet), the PBGC agreed to reduce the 

amount of this guarantee to $200 

million and, in connection therewith, 

Daimler agreed to pay $600 million 

directly to the Plans.17 The Binding 

Term Sheet provides that these 

payments are to be made in three equal 

installments of $200 million each, with 

the second and third installments to be 

made on the first and second 

anniversaries of the date of a final 

settlement agreement. The Binding 

Term sheet provided further that 

Chrysler LLC would have no right, title 

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Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 56577 

18Hereinafter, the term ‘‘Chrysler Group’’ shall 

refer also to Chrysler LLC. 

or interest in the payments, which were 

intended to belong exclusively and 

unconditionally to the Plans. 

4. Chrysler Group represents that, on 

June 5, 2009, Chrysler LLC and various 

of its shareholders, Daimler and various 

of its affiliates, incorporated the terms of 

the Binding Term Sheet into a 

settlement agreement (the Settlement 

Agreement) with the Pension Benefit 

Guaranty Corporation (the PBGC). 

Chrysler Group states that the 

Settlement Agreement expressly 

supersedes the Binding Term Sheet. 

Under the terms of the Settlement 

Agreement, the PBGC agreed to release 

Daimler from its $1 billion guaranty 

and, in exchange, Daimler agreed to pay 

$600 million in three $200 million 

installments to Chrysler Group (the 

Installment Payments).18 Chrysler 

Group represents that Daimler made the 

first $200 million Installment Payment 

to Chrysler Group, in cash, on June 15, 

2009; and Chrysler Group, upon receipt 

of this payment, immediately 

contributed $200 million in cash to the 

Plans. Chrysler Group represents further 

that Daimler made a second $200 

million Installment Payment to Chrysler 

Group, in cash, on June 7, 2010; and 

Chrysler Group, upon receipt of this 

payment, immediately contributed $200 

million in cash to the Plans. Chrysler 

Group represents that, to date, of the 

$400 million in cash transferred from 

Chrysler Group by the Plans: (1) The 

JEEP Corporation-UAW Retirement 

Income Plan received approximately 

$62.8 million; (2) the Pension 

Agreement between Chrysler Group and 

the UAW received approximately 

$327.2 million; and (3) the American 

Motors Union Retirement Income Plan 

received approximately $9.6 million. 

Chrysler Group represents that these 

amounts were determined in accordance 

with the terms set forth in the 

Settlement Agreement (after taking into 

account the merging two employee 

benefit plans covered by the Settlement 

Agreement). Chrysler Group states that 

such apportionment reflects the terms of 

the Settlement Agreement, and takes 

into account, among other things, 

certain funding characteristics of the 

Plans. 

5. The Settlement Agreement provides 

that the third Installment Payment may 

be achieved in one of two ways: (1) In 

the form of a $200 million cash payment 

by Daimler to Chrysler Group by June 7, 

2011 (the Installment Due Date), after 

which Chrysler Group must 

immediately transfer $200 million in 

cash to the Plans; or (2) by means of four 

notes issued by Daimler (the Daimler 

Notes) and delivered to Chrysler Group, 

pursuant to an arrangement whereby 

Chrysler is obligated to immediately 

contribute the Notes (the Contributions) 

to the Plans. 

6. Chrysler Group states that the 

Contributions could be viewed as 

violating sections 406(a)(1)(A) and 

406(b)(1) and (b)(2) of ERISA since the 

Contributions would involve an in-kind 

contribution by Chrysler Group to the 

Plans, which are defined benefit plans. 

In addition, Daimler notes that, when 

the parties entered into the Binding 

Term Sheet and negotiated the 

Settlement Agreement, Daimler was a 

party in interest to the Plans. Daimler 

believes that its agreement to issue the 

Daimler Notes as well as the actual 

entering into of the Daimler Notes under 

an arrangement whereby the Daimler 

Notes will be Contributed by Chrysler 

Group to the Plans, as such acts are 

contemplated by the Binding Term 

Sheet and the Settlement Agreement, 

could therefore be viewed as an 

impermissible extension of credit or sale 

or exchange in violation of sections 

406(a)(1)(A) and (B) of ERISA. 

7. Chrysler Group views the 

deliverance of the Daimler Notes to 

Chrysler Group for purposes of the 

Contributions as being more beneficial 

to the Plans than the alternative, which 

is a cash payment by Daimler to 

Chrysler Group on the Installment Due 

Date. In this regard, Chrysler Group 

represents that, once a Daimler Note is 

transferred by the Chrysler Group to a 

Plan, as is required under the 

Settlement Agreement, the obligation 

under the Note would run directly from 

Daimler to the Plan. Chrysler Group 

states that this arrangement significantly 

reduces the ability of Chrysler Group’s 

creditors to reach the third Installment 

Payment. Additionally, once a Daimler 

Note is transferred to a Plan, the Plan 

could immediately sell the Note to 

parties other than Chrysler Group, 

subject to certain restrictions required 

by applicable securities laws. 

Accordingly, a Plan may receive the 

proceeds from the sale of a Daimler Note 

prior to the Installment Due Date. 

8. Chrysler Group represents that the 

Contributions would be structured in a 

manner that is protective of the Plans. 

In this regard, following a Contribution, 

a Daimler Note will represent not more 

than 20 percent of the total fair market 

value of each Plan that receives such 

Note. Additionally, the Plans will not 

pay any fees, costs, or other charges in 

connection with the Contributions. 

Chrysler Group represents further that 

the fair market value of each Daimler 

Note will be determined as of the date 

of the Contribution, by a qualified 

independent appraiser. In this regard, 

Chrysler Group has selected 

PriceWaterhouseCoopers (PWC) to 

determine the fair market value of the 

Daimler Notes. Chrysler Group 

represents that PWC is independent of 

Chrysler Group, having received less 

than one percent of its revenue from 

Chrysler Group over the last two fiscal 

years. In addition, Chrysler Group states 

that PWC anticipates receiving less than 

one percent of its revenue from Chrysler 

Group during the current fiscal year. 

9. Chrysler Group states that the 

exemption, if granted, will be 

administratively feasible because it 

involves a finite one-time transaction, 

and Daimler has no ownership in or ongoing relationship with Chrysler Group 

or any of its affiliates. According to 

Chrysler Group, the internal fiduciaries 

of the Plans would have no hesitation to 

enforce the claims of the Plans in the 

unlikely event that Daimler failed to 

make a payment on the Daimler Note, 

and the internal fiduciaries would have 

no conflict of interest that could cloud 

their judgment in this regard. Chrysler 

Group states also that the PBGC, as a 

party to the Settlement Agreement, has 

the full right on its own initiative to 

enforce the terms of the Settlement 

Agreement, including the obligation of 

Daimler to make the third $200 million 

Installment Payment to the Plans. 

10. Chrysler Group represent that, in 

addition to the safeguards described 

above, the Plans will not waive any 

rights or claims in connection with the 

Contributions. With respect to the 

issuance by Daimler of the Daimler 

Notes pursuant to an arrangement set 

forth while Daimler was a party-ininterest to the Plans, Daimler states that 

Daimler’s entering into the Daimler Note 

will not be part of an arrangement, 

agreement, or understanding designed 

to benefit Daimler. 

11. Chrysler Group states that the 

proposed transactions meet the 

requirements set forth in section 408(a) 

of ERISA since, among other things: 

(a) The terms of each Contribution 

will be consistent with the terms of the 

Settlement Agreement, after taking into 

account the Merger; 

(b) The fair market value of each 

Daimler Note will be determined as of 

the date of the Contribution, by a 

qualified independent appraiser; 

(c) The fair market value of each 

Daimler Note contributed to a Plan will 

represent an amount that equates to the 

amount contemplated for such Plan 

under the Settlement Agreement, after 

taking into account the Merger; 

(d) Each Daimler Note will represent 

not more than 20% of the total fair 

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56578 Federal Register / Vol. 75, No. 179 / Thursday, September 16, 2010 / Notices 

market value of the Plan that receives 

such Note at the time of the 

Contribution; 

(e) With only limited exceptions, each 

Plan may immediately sell the Daimler 

Note it receives pursuant to a 

Contribution; 

(f) The Plans will not waive any rights 

or claims in connection with the 

Contributions; 

(g) The Plans will not pay any fees, 

costs, or other charges in connection 

with the Contributions; and 

(h) Chrysler Group will provide the 

PBGC with written evidence that 

Chrysler Group: (1) Contributed the 

Daimler Notes to the Plans; and (2) gave 

the Plans’ trustee instructions regarding 

the allocation of the Daimler Notes. 

Such written evidence will be provided 

within five business days after the 

receipt by Chrysler Group of such Notes. 

12. Daimler states that the issuance by 

Daimler of the Daimler Notes pursuant 

to the Settlement Agreement meets the 

requirements set forth in section 408(a) 

of ERISA since Daimler’s entering into 

the Daimler Note will not be part of an 

arrangement, agreement, or 

understanding designed to benefit 

Daimler. 

Notice to Interested Persons 

Chrysler Group requests that notice be 

provided by posting a copy of the 

proposed exemption wherever 

employee notices are posted in the work 

places. In addition, Chrysler Group 

represents that it will work with the 

UAW, the union representing many of 

the participants in the Plans, to post a 

copy of the notice in the union halls and 

arrange for a copy of the proposal to be 

printed in the union newspapers. 

Chrysler Group will also arrange for a 

copy of the proposed exemption to be 

printed in the local newspapers 

covering the general vicinity of Chrysler 

Group’s current and closed plants and 

facilities. The notices shall advise each 

recipient of the recipient’s right to 

provide comments to the Department 

and/or to request a hearing with respect 

to the proposed exemption and the due 

date for any such comments/request. 

Such notice will be completed within 

60 days of the issuance of the proposed 

exemption. Any written comments must 

be received by the Department from 

interested persons within 75 days of the 

publication of this proposed exemption 

in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Chris Motta of the Department, 

telephone (202) 693–8544. (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 

(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 10th of 

September 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–23059 Filed 9–15–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

Renewal of the Advisory Committee on 

Apprenticeship (ACA), and an Open 

Meeting 

AGENCY: Employment and Training 

Administration, Labor. 

ACTION: Notice 

SUMMARY: Pursuant to section 10 of the 

Federal Advisory Committee Act (Pub. 

L. 92 463; 5 U.S.C. APP. 1), notice is 

hereby given to announce the renewal of 

the ACA, the new membership 

appointments, and an open meeting 

being held on October 27–28, 2010. 

The Employment and Training 

Administration (ETA) hereby announces 

the renewal of the ACA and that 

membership appointments have been 

made to fill committee vacancies. The 

ACA is an advisory board, authorized by 

29 U.S.C. 50a, which permits the 

Secretary of Labor to appoint a national 

advisory committee to serve without 

compensation, and complies with the 

requirements of the Federal Advisory 

Committee Act (5 U.S.C., App.). The 

ACA will provide advice and 

recommendations to the Secretary of 

Labor on a variety of matters facing the 

National Registered Apprenticeship 

System. The ACA membership is 

comprised of individuals that represent 

labor unions, employers, and members 

of the public. 

All members were appointed in July 

2010, for two-year terms expiring in July 

2012. Pursuant to the ACA Charter, the 

National Association of State and 

Territorial Apprenticeship Directors 

(NASTAD) and the National Association 

of Governmental Labor Officials 

(NAGLO) are both represented by their 

current Presidents on the public group 

of the ACA. The Secretary has 

appointed Ms. Phaedra Ellis-Lamkins, 

Chief Executive Officer from Green for 

All as the Chairperson of the ACA. 

TIME AND DATE: An open meeting of the 

ACA is scheduled for October 27–28, 

2010, in Washington, DC. The meeting 

will begin at approximately 9 a.m. on 

Wednesday, October 27, 2010, and 

continue until approximately 5 p.m. 

The meeting will reconvene on 

Thursday, October 28, 2010, at 

approximately 9 a.m. and adjourn at 

approximately 5 p.m. 

PLACE: U.S. Department of Labor, 

Frances Perkins Building, the Great 

Hall, 200 Constitution Avenue, NW., 

Washington, DC 20210. 

FOR FURTHER INFORMATION CONTACT: Mr. 

John V. Ladd, Administrator, Office of 

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