[Federal Register Volume 63, Number 95 (Monday, May 18, 1998)]
[Notices]
[Pages 27330-27334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13145]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration
[Application No. D-10583, et al.]


Proposed Exemptions; McClain's R.V., Inc. 401(k)

AGENCY: Pension and Welfare Benefits 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 (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 
request 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 request for a hearing (at least 
three copies) should be sent to the Pension and Welfare Benefits 
Administration, Office of Exemption Determinations, Room N-5649, U.S. 
Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210. 
Attention: Application No. ______, stated in each Notice of Proposed 
Exemption. The applications for exemption and the comments received 
will be available for public inspection in the Public Documents Room of 
Pension and Welfare Benefits Administration, U.S. Department of Labor, 
Room N-5507, 200 Constitution Avenue, NW, Washington, DC 20210.

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 (43 FR 47713, October 17, 1978) 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.

McClain's R.V., Inc. 401(k) Profit Sharing Plan (the Plan) Located in 
Lake Dallas, Texas

[Application No. D-10583]

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). If the exemption 
is granted, 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 of the Code, by reason of section 4975(c)(1)(A) through (E) of the 
Code, shall not apply to the proposed sale of certain unimproved real 
property (the Land) by the Plan to Larry McClain (Mr. McClain), the 
sole shareholder of McClain's R.V. Inc., the sponsor of the Plan, and a 
party in interest with respect

[[Page 27331]]

to the Plan, provided that the following conditions are satisfied:
    (a) the proposed sale will be a one-time cash transaction;
    (b) the Plan will receive the greater of: (1) the original 
acquisition cost of the Land plus the aggregate holding costs incurred 
by the Plan; or (2) the current fair market value of the Land (plus an 
appropriate premium related to the adjacency of the Land to other real 
property owned by McClain's R.V. Inc.), as established by an 
independent qualified appraiser at the time of the sale; and
    (c) the Plan will pay no commissions or other expenses associated 
with the proposed sale.

Summary of Facts and Representations

    1. The Plan is a 401(k) profit sharing plan that was established 
effective January 1, 1981. As of December 31, 1996, the Plan had 73 
participants and beneficiaries. As of December 31, 1997, the Plan had 
total assets of $3,419,103. Chase Texas, N.A. (formerly known as Texas 
Commerce Bank) is a directed trustee of the Plan.
    The sponsor of the Plan is McClain's R.V. Inc. (the Employer), 
which is a subchapter ``C'' corporation, incorporated in the State of 
Oklahoma. The Employer sells and services recreational vehicles and 
travel trailers. Mr. McClain is the sole shareholder of the Employer 
and a Plan participant.
    2. On or about November 7, 1985, the Plan purchased the Land from 
Mr. Pertells, an independent third party, for approximately $57,000. 
This original purchase transaction was made in cash with no extension 
of credit involved.
    The Land is located at S.W. 2nd Street and Rockwell Avenue in 
Oklahoma City, Oklahoma. The Land consists of two tracts which comprise 
approximately 21,855 square feet, and is adjacent to certain real 
property that is owned by the Employer. The Land has been used 
sporadically by the Employer for overflow or customer parking. The 
applicant represents that the Employer's customers would occasionally 
park on the Land rather than in the Employer's main parking lot. In the 
interest of maintaining good customer relations, the Employer did not 
require the customers to move their vehicles to the regular parking 
area. Additionally, when the Employer's main parking lot was full, the 
employees of the Employer would temporarily park their vehicles on the 
Land, and would move their vehicles to the Employer's parking lot later 
in the day. The applicant represents that the Employer does not require 
its employees or customers to pay for parking on the Land or in the 
Employer's parking lot.<SUP>1</SUP> As such, there have been no formal 
leases or arrangements made between the Plan and the Employer to 
compensate the Plan for parking on the Land. Furthermore, the Land has 
yielded no other revenue for the Plan from the date of its original 
acquisition to the present.<SUP>2</SUP>
---------------------------------------------------------------------------

    \1\ In this regard, the Department notes that section 
406(a)(1)(D) of the Act prohibits, in relevant part, a plan 
fiduciary from causing a plan to engage in a transaction which 
constitutes a direct or indirect transfer to, or use by or for the 
benefit of, a party in interest, of any assets of the plan. However, 
the Department is not providing any relief herein for any violations 
of part 4 of Title I of the Act which may have occurred during the 
Plan's ownership of the Land.
    \2\ The Department expresses no opinion in this proposed 
exemption as to whether the acquisition and the subsequent holding 
of the Land by the Plan violated section 404(a) of the Act. Section 
404(a) of the Act requires, among other things, that a fiduciary of 
a plan must act prudently, solely in the interest of the plan's 
participants and beneficiaries, and for the exclusive purpose of 
providing benefits to participants and beneficiaries when making 
investment decisions on behalf of a plan.
    The Department notes further that the decision to propose this 
exemption is based on the applicant's representations, as discussed 
herein, that any attempts to sell the Land to a third party would 
result in further losses to the Plan.
---------------------------------------------------------------------------

    3. The original decision to purchase the Land as a long term 
investment was made by the trustees of the Plan in 1985. The applicant 
maintains that at the time the Land was originally purchased, land 
values were stable and there was no indication that property values 
would plummet shortly thereafter. The trustees also intended to lease 
the Land to the Employer for use as necessary, thus providing some 
income to the Plan. However, the intended leasing of the Land did not 
occur because the trustees were informed that such a lease would 
violate the prohibited transaction rules of the Act.
    The Plan's estimated aggregate holding costs relating to the Land 
for the period 1985-1997 were $3,473.23. This amount includes the 
property taxes that were due on the Land for that period, and certain 
periodic appraisals of the Land that were paid for by the 
Plan.<SUP>3</SUP> Therefore, the Plan's total cost for the acquisition 
and holding of the Land was $60,473.23 as of April, 1998.<SUP>4</SUP>
---------------------------------------------------------------------------

    \3\ The applicant represents that the appraisals for the years 
1996, 1997 and 1998 have been paid by the Employer.
    \4\ This amount represents the sum of the Plan's original 
acquisition cost of $57,000 plus the aggregate holding costs of 
$3,473.23.
---------------------------------------------------------------------------

    4. The Land was appraised on January 15, 1998, (the Appraisal) by 
Bennie W. Vowell (Mr. Vowell), an independent qualified appraiser 
certified in the State of Oklahoma. The Appraisal is an update of an 
earlier appraisal of the Land, which was also conducted by Mr. Vowell. 
The Appraisal was prepared in accordance with the Uniform Standards of 
Professional Appraisal Practice and analyzed appropriate market data 
for determining the fair market of the Land, including recent sales of 
similar properties as well as the ``highest and best use'' value of the 
Land. The Appraisal also considered the adjacency of the Land to real 
property owned by the Employer and, accordingly, added a premium to the 
value of the Land in any sale to the Employer. The Appraisal concluded 
that the fair market value of the Land was $49,000, as of January 15, 
1998.
    5. Mr. McClain proposes to purchase the Land from the Plan in a 
one-time cash transaction. As of December 31, 1997, the Land 
represented approximately 1.4 percent of the Plan's total assets. The 
applicant represents that the Land has been declining in value since 
the original acquisition. This decline in value has been adversely 
affecting the value of the participants' accounts in the 
Plan.<SUP>5</SUP>
---------------------------------------------------------------------------

    \5\ The applicant represents that a portion of the Land's value 
is allocated to each participant's account.
---------------------------------------------------------------------------

    The applicant represents that the amount Mr. McClain would pay for 
the Land in this proposed transaction is in excess of the Land's 
current fair market value. If the Land was sold on the open market, it 
would not sell for as much as Mr. McClain is willing to pay. In 
addition, the Plan's price in a sale of the Land to an independent 
third party would not include the adjacency premium, which the 
Appraisal indicates is appropriate in a sale to Mr. McClain as a result 
of the Employer's ownership of adjacent property. The sale of the Land 
to an independent third party at a lower price would cause the Plan and 
its participants to suffer a financial loss. Alternatively, if the Land 
remains in the Plan, the participants will not be able to invest the 
portions of their accounts which are currently attributable to the Land 
in other investment vehicles with a higher yield. The applicant thus 
maintains that the terms and conditions of the proposed sale are 
superior alternatives to selling the Land to a third party or retaining 
the Land as a Plan asset.
    6. Therefore, the applicant represents that the proposed 
transaction is in the best interest and protective of the Plan because 
the transaction will enable the Plan to divest of an asset that has 
depreciated in value and generated no income to the Plan. The Plan will 
be able to reinvest the proceeds in other investments with higher rates 
of return. The transaction is protective of the Plan,

[[Page 27332]]

because the Plan will receive the greater of: (a) the total cost of the 
Land; or (b) the current fair market value of the Land (plus an 
appropriate premium related to the Land's adjacency to the Employer's 
property) as established by an independent qualified appraiser at the 
time of the sale. The Plan will not pay any commissions or other 
expenses associated with the sale. Furthermore, the applicant 
represents that any amounts received by the Plan as a result of the 
proposed transaction, which are in excess of the fair market value of 
the Land will be treated as a contribution to the Plan, but that this 
contribution will not exceed limitations of section 415 of the Internal 
Revenue Code.
    7. In summary, the applicant represents that the transaction 
satisfies the statutory criteria of section 408(a) of the Act and 
section 4975(c)(2) of the Code because:
    (a) the proposed sale will be a one-time cash transaction;
    (b) the Plan will receive the greater of: (i) the total cost of the 
Land; or (ii) the current fair market value of the Land (plus an 
appropriate premium related to the Land's adjacency to the Employer's 
property) as established by an independent qualified appraiser at the 
time of the sale;
    (c) the Plan will not pay any commissions or other expenses 
associated with the proposed sale; and
    (d) the sale of the Land to the Employer will enable the Plan to 
divest of an illiquid asset which has depreciated in value and yielded 
no income. Also, the sale will enable the Plan to reinvest the sale 
proceeds in investments with higher rates of return.

Tax Consequences of Transaction

    The Department of the Treasury has determined that if a transaction 
between a qualified employee benefit plan and its sponsoring employer 
(or an affiliate thereof) results in the plan either paying less or 
receiving more than fair market value, such excess may be considered to 
be a contribution by the sponsoring employer to the plan, and therefore 
must be examined under the applicable provisions of the Internal 
Revenue Code, including sections 401(a)(4), 404 and 415.
    For Further Information Contact: Ekaterina A. Uzlyan of the 
Department at (202) 219-8883. (This is not a toll-free number.)

Karen J. Hartley Profit Sharing Plan (P/S Plan) and Karen J. Hartley 
Money Purchase Pension Plan and Trust Agreement (M/P Plan, 
Collectively; the Plans) Located in Eugene, Oregon

[Application Nos. D-10588 and D-10589]

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of 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.) If the exemption is granted, 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 proposed loan (the Loan) by the Plans to Karen J. Hartley (Ms. 
Hartley), the trustee and sole participant of the Plans and, a 
disqualified person with respect to the Plans; <SUP>6</SUP> provided 
that the following conditions will be met:
---------------------------------------------------------------------------

    \6\ Pursuant to CFR 2510.3-3(b) and (c), the Department has no 
jurisdiction with respect to the Plans under Title I of the Act. 
However, there is jurisdiction under Title II of the Act pursuant to 
section 4975 of the Code.
---------------------------------------------------------------------------

    1. The Loan will be structured such that each Plan will lend up to 
25% of its assets. However, the aggregate amount of the Loan will not 
exceed $40,000 at any time;
    2. The outstanding balance of the Loan will at no time exceed 25% 
of the Plans' aggregate assets;
    3. The Plans will bear no expenses with respect to the proposed 
transaction;
    4. The terms and conditions of the Loan will be at least as 
favorable to the Plans as those obtainable in arm's-length transaction 
with an unrelated party; and
    5. The Loan will be adequately secured by collateral, which at all 
times will be equal to 100% of the outstanding principal amount of the 
Loan plus 6 months interest at the Loan's interest rate of 8.2%. In the 
event the collateral amount falls below this required amount, this 
proposed exemption, if granted, will no longer be available.

Summary of Facts and Representations

    1. The P/S Plan was established on January 1, 1989, and the M/P 
Plan was adopted on January 1, 1993. Ms. Hartley is the sole 
participant <SUP>7</SUP> and trustee of both Plans. Ms. Hartley has 
investment discretion over the Plans' assets. Charles Schwab and 
Company (Schwab) is the current custodian of the Plans. As of January 
31, 1998, the P/S Plan had total assets of $142,171.59, and the M/P 
Plan had total assets of $35,031.71. Thus, as of January 31, 1998, the 
aggregate balance of the Plans' assets was $177,203.30. Ms. Hartley is 
a sole proprietor engaged in the practice of law in Eugene, Oregon.
---------------------------------------------------------------------------

    \7\ The applicant represents that each of the Plans will have no 
other participants during the Loan's existence, from its initial 
making until the outstanding principal balance has been paid in 
full, and the Loan is terminated.
---------------------------------------------------------------------------

    2. The Loan will have a ten year duration and a fixed interest rate 
of 8.2% per annum. The Loan will be payable in equal monthly 
installments of principal and interest. The promissory note (the Note) 
which will evidence the Loan provides for no penalty, premium or 
prepayment charge in the event of a full or partial prepayment. The 
Loan will be structured such that each Plan will lend up to 25% of its 
assets. However, the aggregate amount of the Loan will at no time 
exceed $40,000. Furthermore, the outstanding principal balance of the 
Loan will at no time exceed 25% of the Plans' aggregate assets.
    Ms. Hartley represents that the terms of the Loan will comply with 
section 72(p) of the Code.<SUP>8</SUP> The Loan proceeds will be used 
by Ms. Hartley to acquire a dwelling unit, which shall be her principal 
residence.
---------------------------------------------------------------------------

    \8\ In this regard, section 72(p)(1) of the Code treats a loan 
from a qualified plan to a participant as a ``premature 
distribution'' unless the loan meets certain conditions to qualify 
for ``exception for certain loans'' contained in section 72(p)(2) of 
the Code. However, with respect to the Loan, the Department has no 
jurisdiction to determine whether the requirements of section 72(p) 
of the Code are met.
---------------------------------------------------------------------------

    3. The Loan will be secured by cash or cash equivalents, such as 
money market funds and/or certificates of deposit (the Collateral). The 
Collateral amount will at all times equal 100% of the outstanding 
principal amount of the Loan, plus 6 months of interest on such 
principal at the rate of 8.2% per annum. The Collateral will be 
maintained in a separate account with Schwab (the Collateral Account). 
The applicant represents that at no time will the Collateral Account 
contain less than the amount of assets required to fully secure the 
Loan, in accordance with this proposed exemption. In the event that the 
amount in the Collateral Account falls below the required amount, as 
specified herein, the proposed exemption, if granted, will no longer be 
available.
    A security agreement (Security Agreement) will be signed by the 
parties to create a perfected security interest for the Plans in the 
Collateral. Ms. Hartley will perfect the Plans' security interest by a 
proper filing of a state financing statement with the Corporation 
Division

[[Page 27333]]

of the State of Oregon. Ms. Hartley will retain rights to and 
possession of the Collateral, subject to the terms of the Security 
Agreement and the rights and obligations of Schwab, through its 
maintenance of the Collateral Account.
    4. Ms. Hartley will monitor the Collateral. On a monthly basis, Ms. 
Hartley will receive from Schwab a statement for the Collateral Account 
(Schwab Statement). Ms. Hartley will determine if the amount in the 
Collateral Account contains at least the required Collateral amount.
    On an annual basis, Ms. Hartley will examine the Schwab Statements 
for the Collateral Account, and will determine whether the amount in 
the Collateral Account exceeds the required amount of the Collateral. 
This determination may be made using monthly interest amortization 
tables, or a computer program. If the Collateral Account exceeds the 
required Collateral amount (an Excess Amount), Ms. Hartley may transfer 
the Excess Amount to her personal account, as long as the required 
Collateral amount remains in the Collateral Account. Alternatively, Ms. 
Hartley may leave any portion of the Excess Amount in the Collateral 
Account. However, any Excess Amount in the Collateral Account shall not 
modify the required Collateral amount.
    If the Loan is ever in default, Ms. Hartley as trustee for the 
Plans will seek to remedy the default and use all legal means available 
in the State of Oregon.
    5. With respect to the rights of the Plans as a secured creditor, 
the Security Agreement contains the following provisions. Section 4.2 
of the Security Agreement states that the Debtor (i.e., Ms. Hartley) 
shall not remove the Collateral from the Collateral Account without the 
written consent of the Secured Party (i.e., the Plans). Section 4.3 of 
the Security Agreement also states that the Debtor agrees to execute 
and file a financing statement and do whatever may be necessary under 
the applicable provisions contained in the Uniform Commercial Code for 
the State of Oregon to perfect and continue the Secured Party's 
interest in the Collateral. Section 4.4 of the Security Agreement 
provides that the Debtor will not sell or otherwise transfer or dispose 
of any interest in the Collateral without the prior written consent of 
the Secured Party. Furthermore, Section 4.5 of the Security Agreement 
provides that, among other things, except where it has received the 
prior written consent of the Secured Party, the Debtor shall keep the 
Collateral free from any adverse liens or other security interests. The 
Debtor will not use or permit anyone to use the Collateral in violation 
of any statute, ordinance, or state or federal regulation, and the 
Secured Party may examine and inspect the Collateral at any time.
    6. Ms. Hartley desires to enter into the loan transaction because 
the transaction is administratively feasible, protective and in the 
best interest of the Plans. The Plans will bear no expenses with 
respect to the proposed transaction. The Loan will not exceed 25% of 
each of the Plan's total net assets, and the aggregate amount of the 
Loan will not exceed $40,000. In addition, the outstanding balance of 
the Loan will at no time exceed 25% of the Plans' aggregate assets. The 
Loan will be adequately secured by the Collateral, which at all times 
will be equal to 100% of the outstanding principal amount of the Loan 
plus 6 months interest. Also, Ms. Hartley represents that the Loan is 
consistent with the Plans' liquidity needs and investment objectives, 
including the Plans' overall investment strategy to invest only in so-
called ``socially responsible investments''.<SUP>9</SUP>
---------------------------------------------------------------------------

    \9\ The Department is providing no opinion in this proposed 
exemption as to whether particular investments or investment 
strategies would be considered ``socially responsible'' in nature. 
In this regard, the Department notes that the Internal Revenue 
Service (IRS) has taken the view that investment strategies for 
qualified retirement plans may raise questions with regard to the 
exclusive benefit rule under section 401(a) of the Code if, among 
other things, the safeguards and diversity that a prudent investor 
would adhere to are not present. [See, for example, IRS Rev. Rul. 
73-532, 1973-2 C.B. 128]
---------------------------------------------------------------------------

    With respect to the terms and conditions of the Loan, Washington 
Mutual Bank in Eugene, Oregon (the Bank), in a letter dated April 2, 
1998, has certified that it would enter into a similar loan with Ms. 
Hartley (the Bank Loan). Specifically, the original amount of the Bank 
loan would be $40,000. The Bank Loan would be payable in equal monthly 
payments of principal and interest, in the same amount as the Loan, 
over a 10 year period at an interest rate of 8.2%. Therefore, Ms. 
Hartley represents that the terms of the Loan will be at least as 
favorable to the Plans as those obtainable in arm's-length transaction 
with an unrelated party, as indicated by the letter from the Bank.
    7. In summary, the applicant represents that the transaction 
satisfies the statutory criteria of section 4975(c)(2) of the Code 
because:
    A. The Plans will bear no expenses with respect to the proposed 
transaction;
    B. The Loan will not exceed 25% of each of the Plan's total net 
assets. In addition, the aggregate amount of the Loan will not exceed 
$40,000;
    C. The outstanding principal balance of the Loan will at no time 
exceed 25% of the Plans' aggregate assets;
    D. The terms and conditions of the Loan will be at least as 
favorable to the Plans as those obtainable in arm's-length transaction 
with an unrelated party;
    E. The Loan will be adequately secured by the Collateral, which at 
all times will be equal to 100% of the principal amount of the Loan 
plus 6 months interest at the Loan's interest rate of 8.2%. In the 
event the Collateral Amount falls below this required amount, the 
proposed exemption, if granted, will no longer be available; and
    F. Ms. Hartley is the sole participant of the Plans and she desires 
that this transaction be consummated.

Notice to Interested Persons

    Because Ms. Hartley is the sole participant of the Plans, it has 
been determined that there is no need to distribute the notice of 
proposed exemption to interested persons. Comments and requests for a 
hearing are due thirty (30) days from the date of publication of this 
notice in the Federal Register.

    For Further Information Contact: Ekaterina A. Uzlyan of the 
Department at (202) 219-8883. (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 of 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

[[Page 27334]]

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 13th day of May, 1998.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 98-13145 Filed 5-15-98; 8:45 am]
BILLING CODE 4510-29-P