48672 Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Notices

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Prohibited Transaction Exemption 97–49;

Exemption Application No. D–10310, et al.]

Grant of Individual Exemptions;

Bricklayers and Allied Crafts, Local No.

74 of DuPage County

AGENCY: Pension and Welfare Benefits

Administration, Labor.

ACTION: Grant of Individual Exemptions.

SUMMARY: This document contains

exemptions issued by the Department of

Labor (the Department) from certain of

the prohibited transaction restrictions of

the Employee Retirement Income

Security Act of 1974 (the Act) and/or

the Internal Revenue Code of 1986 (the

Code).

Notices were published in the Federal

Register of the pendency before the

Department of proposals to grant such

exemptions. The notices set forth a

summary of facts and representations

contained in each application for

exemption and referred interested

persons to the respective applications

for a complete statement of the facts and

representations. The applications have

been available for public inspection at

the Department in Washington, DC. The

notices also invited interested persons

to submit comments on the requested

exemptions to the Department. In

addition the notices stated that any

interested person might submit a

written request that a public hearing be

held (where appropriate). The

applicants have represented that they

have complied with the requirements of

the notification to interested persons.

No public comments and no requests for

a hearing, unless otherwise stated, were

received by the Department.

The notices of proposed exemption

were issued and the exemptions are

being granted solely by the Department

because, effective December 31, 1978,

section 102 of Reorganization Plan No.

4 of 1978 (43 FR 47713, October 17,

1978) transferred the authority of the

Secretary of the Treasury to issue

exemptions of the type proposed to the

Secretary of Labor.

Statutory Findings

In accordance with section 408(a) of

the Act and/or section 4975(c)(2) of the

Code and the procedures set forth in 29

CFR part 2570, subpart B (55 FR 32836,

32847, August 10, 1990) and based upon

the entire record, the Department makes

the following findings:

(a) The exemptions are

administratively feasible;

(b) They are in the interests of the

plans and their participants and

beneficiaries; and

(c) They are protective of the rights of

the participants and beneficiaries of the

plans.

Pension Fund of the Bricklayers and

Allied Crafts, Local No. 74 of DuPage

County, Illinois, a/k/a Masons’ and

Plasterers’, Local No. 74 of DuPage

County, Illinois (the Pension Plan) and

Bricklayers and Allied Craftsmen Local

No. 74 Apprenticeship, Education and

Training Trust Fund (the

Apprenticeship Plan; together, the

Plans), Located in Westmont, Illinois

[Prohibited Transaction Exemption 97–49;

Exemption Application Nos. D–10310 and L–

10311]

Exemption

The restrictions of section 406(b)(2) of

the Act shall not apply to the sale of

certain real property (the Property) by

the Apprenticeship Plan to the Pension

Plan, provided the following conditions

are satisfied: (1) The sale is a one-time

transaction for cash; (2) no commissions

or other expenses are paid by the Plans

in connection with the sale; (3) the

purchase price for the Property

represents its fair market value as

determined by a qualified, independent

appraiser; and (4) the Pension Plan’s

independent fiduciary and the

Apprenticeship Plan’s trustees have

reviewed the transaction and have

determined that the transaction is

appropriate for each of the Plans and in

the best interest of the Plans’

participants and beneficiaries.

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

21, 1997 at 62 FR 39027.

FOR FURTHER INFORMATION CONTACT: Gary

H. Lefkowitz of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

McLane Company, Inc. Profit Sharing

Plan and Trust (the Plan), Located in

Temple, Texas

[Prohibited Transaction Exemption 97–50;

Exemption Application No. D–10340]

Exemption

The restrictions of sections 406(a),

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

sanctions resulting from the application

of section 4975 (a) and (b) of the Code,

by reason of section 4975(c)(1) (A)

through (E) of the Code, shall not apply

to the past sale (the Sale) by the Plan of

two parcels of unimproved real property

located in Temple, Texas and Goodyear,

Arizona (the Properties) to McLane

Company, Inc. (McLane), the Plan

sponsor and a party in interest with

respect to the Plan, provided that the

following conditions were satisfied: (a)

The Sale was a one time transaction for

a lump sum cash payment; (b) the

purchase prices were the fair market

values of the Properties as of the date of

the Sale; (c) the Properties have been

appraised by qualified independent real

estate appraisers; (d) a qualified,

independent fiduciary determined that

the Sale was in the best interests of the

Plan; and (e) the Plan paid no

commissions or other expenses relating

to the Sale.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption, refer to the notice of

proposed exemption published on May

20, 1997 at 62 FR 27625.

EFFECTIVE DATE: The effective date of

this exemption is April 21, 1993.

Written Comments

The Department received no requests

for a public hearing on the proposed

exemption. The Department received

one written comment which was

submitted by Sarofim Realty Advisors

(the Applicant). The Applicant’s

comment, and the Department’s

response thereto, is summarized below.

First, the Applicant requests that the

words ‘‘the IMA’’ should be inserted in

the first sentence of Paragraph 7 of the

Summary of Facts and Representations

(SFR) at page 27627 in lieu of the phrase

‘‘Investment Management Agreement’’

(as such words are set forth in

quotations). The Department concurs.

The third paragraph in Paragraph 9 of

the SFR at page 27628 states:

McLane also represents that, if McLane had

treated the excess of the purchase price for

the properties over their fair market values as

a Plan contribution in 1993, the resulting

allocations would not have violated the

limitations of Internal Revenue Code section

415.

The Applicant requests that the

paragraph be deleted in its entirety and

replaced by a new paragraph that

provides as follows:

The Applicant represents that McLane’s

motives for consummating the Sale were not

relevant to the process employed by the

Applicant in evaluating whether or not, in

the professional opinion of the Applicant, it

would be prudent and in the best interest of

Plan participants for the Applicant to direct

the Trustee to consummate the Sale. The

Applicant further represents that in

connection with its negotiations with

McLane, the Applicant sought and obtained

for the Plan what the Applicant determined

was the highest possible sales price for the
Federal Register / Vol. 62, No. 179 / Tuesday, September 16, 1997 / Notices 48673

*The original acquisition cost is determined as

follows: (original purchase price + aggregate real

estate taxes + aggregate condominium association

fees)—aggregate rental income = original

acquisition cost.

subject Properties. Such price, coupled with

the Applicant’s determination that continued

holding of the Properties would likely result

in further lost opportunities for the Plan to

provide enhanced benefits from alternative

investments, resulted in the Applicant’s

decision to direct the Trustee to consummate

the Sale.

Although the Department has no

objection to the new paragraph

suggested by the Applicant, the

Department continues to believe that the

original language of the third paragraph

in Paragraph 9 of the SFR is relevant to

the issues addressed in the proposed

exemption.

Finally, the Applicant requests that

the Department modify the first

sentence in Paragraph 10 of the SFR at

page 27628. The Department does not

object to this requested revision and

amends the sentence to provide as

follows:

In summary, the Applicant represents that

it now understands that the Department is of

the view that the conditions of PTE 84–14

may not have been satisfied with respect to

the Sale.

The Department has considered the

entire record, including the comments

submitted by the Applicant, and has

determined to grant the exemption as

amended in response to the Applicant’s

comments.

FOR FURTHER INFORMATION CONTACT:

Wendy McColough of the Department,

telephone (202) 219–8971. (This is not

a toll-free number.)

H. Weiss & Company, Incorporated

Defined Benefit Pension Plan (The

Plan), Located in New York, New York

[Prohibited Transaction Exemption 97–51;

Application No. D–10402]

Exemption

The restrictions of sections 406(a),

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

the sanctions resulting from the

application of section 4975 of the Code,

by reason of section 4975(c)(1) (A)

through (E) of the Code shall not apply

to the sale by the Plan of a certain

condominium unit (the Property)

located in New York, New York, to

Hanna Weiss, a party in interest with

respect to the Plan, provided that the

following conditions are satisfied:

(A) All terms of the transaction are at

least as favorable to the Plan as those

which the Plan could obtain in an

arm’s-length transaction with an

unrelated party

(B) The sale is a one-time transaction

for cash

(C) The Plan pays no commissions nor

other expenses relating to the sale

(D) The purchase price is the greater

of: (1) The fair market value of the

Property as determined by a qualified,

independent appraiser, or (2) the

original acquisition price *;

(E) Before the transaction is

consummated, the Plan has received

rental payments of no less than the

Property’s fair market rental value for

each month of the Plan’s ownership of

the Property during which it was

occupied by Hanna Weiss, a party in

interest with respect to the Plan; and

(F) Within 60 days of the publication

in the Federal Register of this Notice,

Weiss makes final payment to the

Internal Revenue Service of any

remaining unpaid excise taxes which

are applicable under section 4975(a) of

the Code by reason of the Plan’s rental

of the Property to a party in interest.

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

21, 1997 at 62 FR 39028.

FOR FURTHER INFORMATION CONTACT:

Janet L. Schmidt of the Department,

telephone (202) 219–8883 (This is not a

toll-free number.)

Smart Chevrolet Co. Employees’ Profit

Sharing Retirement Plan (the Plan),

Located in Pine Bluff, Arkansas

[Prohibited Transaction Exemption 97–52;

Exemption Application No. D–10445]

Exemption

The restrictions of sections 406(a),

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

the sanctions resulting from the

application of section 4975 of the Code,

by reason of sections 4975(c)(1) (A)

through (E) of the Code shall not apply

to: (1) The secured loans (the Loans) by

the Plan to Motors Finance Company

(Motors), a party in interest with respect

to the Plan, and (2) the guaranty of such

Loans (the Guaranty) by the individual

partners of Motors; provided that the

following conditions are met: (a) The

terms and conditions of the Loans are at

least as favorable as those which the

Plan could have received in similar

transactions with an unrelated third

party; (b) an independent fiduciary

negotiates, reviews, approves, and

monitors the Loans and the Guaranty

under the terms and conditions, as set

forth in paragraph # 6 of the notice of

proposed exemption; and (c) the balance

of all Loans will at no time exceed 15%

of the assets of the Plan.

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

11, 1997 at 62 FR 37307.

Temporary Nature of Exemption

The exemption is temporary and will

expire five (5) years after the date of the

grant. However, the exemption will

extend until the maturity of any of the

90 day Loans made within the 5 year

period.

FOR FURTHER INFORMATION CONTACT: Mr.

Gary H. Lefkowitz of the Department,

telephone (202) 219–8881. (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) These exemptions are

supplemental to and not in derogation

of, any other provisions of the Act and/

or the Code, including statutory or

administrative exemptions and

transactional rules. Furthermore, the

fact that a transaction is subject to an

administrative or statutory exemption is

not dispositive of whether the

transaction is in fact a prohibited

transaction; and

(3) The availability of these

exemptions is subject to the express

condition that the material facts and

representations contained in each

application accurately describes all

material terms of the transaction which

is the subject of the exemption.

Signed at Washington, DC, this 10th day of

September, 1997.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 97–24462 Filed 9–15–97; 8:45 am]

BILLING CODE 4510–29–P