Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices 33727

will be protective of the rights of the

participants and beneficiaries because

the Fund will receive a purchase price

which is an amount representing the

greater of: (1) the total cost to the Fund

of acquiring the Property; or (2) the fair

market value of the Property on the date

of Sale as determined by a qualified,

independent appraiser.

6. In summary, the applicant

represents that the proposed transaction

satisfies the criteria of section 408(a) of

the Act for the following reasons: (a) the

Sale is a one-time transaction for cash;

(b) the terms and conditions are at least

as favorable to the Fund as those

obtainable in an arm’s length

transaction with an unrelated party; (c)

the Sales price is an amount which

represents the greater of: (1) the total

cost to the Fund of acquiring the

Property; or (2) the fair market value of

the Property on the date of Sale as

determined by a qualified, independent

appraiser; and (d) the Fund does not

incur any expenses with respect to the

Sale.

Notice to Interested Persons: Notice of

the proposed exemption shall be given

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 pendency of the exemption as

published in the Federal Register and

shall inform interested persons of their

right to comment and request a hearing

with respect to the proposed exemption.

Comments and requests for a hearing are

due on or before ll.

For Further Information Contact: Mr.

James Scott Frazier, 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 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

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 16th day of

June, 1998.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

U.S. Department of Labor.

[FR Doc. 98–16335 Filed 6–18–98; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Prohibited Transaction Exemption 98–28;

Exemption Application No. D–10396, et al.]

Grant of Individual Exemptions;

Massachusetts Mutual Life Insurance

Company

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, D.C. 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.

Massachusetts Mutual Life Insurance

Company (MM) Located in Springfield,

Massachusetts [Prohibited Transaction

Exemption 98–28; Exemption

Application No. D–10396]

Exemption

Section I—Exemption for Certain

Transactions Involving the Management

of Investments Shared by Two or More

Accounts Maintained by MM

The restrictions of certain sections of

the Act and the sanctions resulting from

the application of certain parts of

section 4975 of the Code shall not apply

to the following transactions if the

conditions set forth in Section IV are

met:

(a) Transfers Between Accounts

(1) The restrictions of section

406(b)(2) of the Act shall not apply to
33728 Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices

the sale or transfer of an interest in a

shared investment (including a shared

joint venture interest) between two or

more Accounts (except the General

Account), provided that each ERISACovered Account pays no more, or

receives no less, than fair market value

for its interest in a shared investment.

(2) 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 or transfer of an interest in

a shared investment (including a shared

joint venture interest) between ERISACovered Accounts and the General

Account, provided that such transfer is

made pursuant to stalemate procedures,

described in the notice of proposed

exemption, adopted by the independent

fiduciary for the ERISA-Covered

Account, and provided further that the

ERISA-Covered Account pays no more

or receives no less than fair market

value for its interest in a shared

investment.

(b) Joint Sales of Property—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 to a

third party of the entire interest in a

shared investment (including a shared

joint venture interest) by two or more

Accounts, provided that each ERISACovered Account receives no less than

fair market value for its interest in the

shared investment.

(c) Additional Capital Contributions—

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

either to the making of a pro rata equity

capital contribution by one or more of

the Accounts to a shared investment; or

to the making of a Disproportionate [as

defined in Section V(e)] equity capital

contribution by one or more of such

Accounts which results in an

adjustment in the equity ownership

interests of the Accounts in the shared

investment on the basis of the fair

market value of such interests

subsequent to such contribution,

provided that each ERISA-Covered

Account is given an opportunity to

make a pro rata contribution.

(d) Lending of Funds—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 lending of

funds from the General Account to an

ERISA-Covered Account to enable the

ERISA-Covered Account to make an

additional pro rata contribution,

provided that such loan—

(A) is unsecured and non-recourse

with respect to participating plans,

(B) bears interest at a rate not to

exceed the greater of the prime rate plus

two percentage points or the prevailing

rate on 90-day Treasury Bills,

(C) is not callable at any time by the

General Account, and

(D) is prepayable at any time without

penalty.

(e) Shared Debt Investments—In the

case of a debt investment that is shared

between two or more Accounts,

including one or more of the ERISACovered Accounts, (1) the restrictions of

sections 406(a) and 406(b)(1) and (2) of

the Act and the sanctions resulting from

the application of section 4975 of the

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

through (E) of the Code shall not apply

to any material modification in the

terms of the loan agreement resulting

from a request by the borrower, any

decision regarding the action to be

taken, if any, on behalf of the Accounts

in the event of a loan default by the

borrower, or any exercise of a right

under the loan agreement in the event

of such default, and (2) the restrictions

of section 406(b)(2) of the Act shall not

apply to any decision by MM thereof on

behalf of two or more ERISA-Covered

Accounts: (A) not to modify a loan

agreement as requested by the borrower;

or (B) to exercise any rights provided in

the loan agreement in the event of a loan

default by the borrower, even though

the independent fiduciary for one (but

not all) of such Accounts has approved

such modification or has not approved

the exercise of such rights.

Section II—Exemption for Certain

Transactions Involving the Management

of Joint Venture Interests Shared by Two

or More Accounts Maintained by MM

The restrictions of certain sections of

the Act and the sanctions resulting from

the application of certain parts of

section 4975 of the Code shall not apply

to the following transactions resulting

from the sharing of an investment in a

real estate joint venture between two or

more Accounts, if the conditions set

forth in Section IV are met:

(a) Additional Capital Contributions—

(1) 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 making of additional pro rata

equity capital contributions by one or

more Accounts participating in the joint

venture.

(2) 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 lending of funds from the General

Account to an ERISA-Covered Account

to enable the ERISA-Covered Account to

make an additional pro rata capital

contribution, provided that such loan—

(A) is unsecured and non-recourse

with respect to the participating plans,

(B) bears interest at a rate not to

exceed the greater of the prime rate plus

two percentage points or the prevailing

rate on 90-day Treasury Bills,

(C) is not callable at any time by the

General Account, and

(D) is prepayable at any time without

penalty.

(3) 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 making of Disproportionate [as

defined in section V(e)] additional

equity capital contributions (or the

failure to make such additional

contributions) in the joint venture by

one or more Accounts which result in

an adjustment in the equity ownership

interests of the Accounts in the joint

venture on the basis of the fair market

value of such joint venture interests

subsequent to such contributions,

provided that each ERISA-Covered

Account is given an opportunity to

provide its proportionate share of the

additional equity capital contributions;

and

(4) In the event a co-venturer fails to

provide all or any part of its pro rata

share of an additional equity capital

contribution, 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 making of Disproportionate

additional equity capital contributions

to the joint venture by the General

Account and an ERISA-Covered

Account up to the amount of such

contribution not provided by the coventurer which result in an adjustment

in the equity ownership interests of the

Accounts in the joint venture on the

basis provided in the joint venture

agreement, provided that such ERISACovered Account is given an

opportunity to participate in all
Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices 33729

additional equity capital contributions

on a proportionate basis.

(b) Third Party Purchase Offers—(1)

In the case of an offer by a third party

to purchase any property owned by the

joint venture, 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 acquisition by the Accounts,

including one or more ERISA-Covered

Account[s], on either a proportionate or

Disproportionate basis of a co-venturer’s

interest in the joint venture in

connection with a decision on behalf of

such Accounts to reject such purchase

offer, provided that each ERISA-Covered

Account is first given an opportunity to

participate in the acquisition on a

proportionate basis; and

(2) The restrictions of section

406(b)(2) of the Act shall not apply to

any acceptance by MM on behalf of two

or more Accounts, including one or

more ERISA-Covered Account[s], of an

offer by a third party to purchase a

property owned by the joint venture

even though the independent fiduciary

for one (but not all) of such ERISACovered Account[s] has not approved

the acceptance of the offer, provided

that such declining ERISA-Covered

Account[s] are first afforded the

opportunity to buy out both the coventurer and ‘‘selling’’ Account’s

interests in the joint venture.

(c) Rights of First Refusal—(1) In the

case of the right to exercise a right of

first refusal described in a joint venture

agreement to purchase a co-venturer’s

interest in the joint venture at the price

offered for such interest by a third party,

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 acquisition by such Accounts,

including one or more ERISA-Covered

Account[s], on either a proportionate or

Disproportionate basis of a co-venturer’s

interest in the joint venture in

connection with the exercise of such a

right of first refusal, provided that each

ERISA-Covered Account is first given an

opportunity to participate on a

proportionate basis; and

(2) The restrictions of section

406(b)(2) of the Act shall not apply to

any decision by MM on behalf of the

Accounts not to exercise such a right of

first refusal even though the

independent fiduciary for one (but not

all) of such ERISA-Covered Accounts

has approved the exercise of the right of

first refusal, provided that none of the

ERISA-Covered Accounts that approved

the exercise of the right of first refusal

decides to buy-out the co-venturer on its

own.

(d) Buy-Sell Options—(1) In the case

of the exercise of a buy-sell option set

forth in the joint venture agreement, 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 acquisition

by one or more of the Accounts on

either a proportionate or

Disproportionate basis of a co-venturer’s

interest in the joint venture in

connection with the exercise of such a

buy-sell option, provided that each

ERISA-Covered Account is first given

the opportunity to participate on a

proportionate basis; and

(2) The restrictions of section

406(b)(2) of the Act shall not apply to

any decision by MM on behalf of two or

more Accounts, including one or more

ERISA-Covered Account[s], to sell the

interest of such Accounts in the joint

venture to a co-venturer even though the

independent fiduciary for one (but not

all) of such ERISA-Covered Account[s]

has not approved such sale, provided

that such disapproving ERISA-Covered

Account is first afforded the opportunity

to purchase the entire interest of the coventurer.

Section III—Exemption for Transactions

Involving a Joint Venture or Persons

Related to a Joint Venture

The restrictions of section 406(a) 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 (D) of the Code shall not apply,

if the conditions in Section IV are met,

to any additional equity or debt capital

contributions to a joint venture by an

ERISA-Covered Account that is

participating in an interest in the joint

venture, or to any material modification

in the terms of, or action taken upon

default with respect to, a loan to the

joint venture in which the ERISACovered Account has an interest as a

lender, where the joint venture is a

party in interest solely by reason of the

ownership on behalf of the General

Account of a 50 percent or more interest

in such joint venture.

Section IV—General Conditions

(a) The decision to participate in any

ERISA-Covered Account that shares real

estate investments must be made by

plan fiduciaries who are totally

unrelated to MM and its affiliates. This

condition shall not apply to plans

covering employees of MM.

(b) Each contractholder or prospective

contractholder in an ERISA-Covered

Account which shares or proposes to

share real estate investments that are

structured as shared investments under

this exemption is provided with a

written description of potential conflicts

of interest that may result from the

sharing, a copy of the notice of

pendency, and a copy of the final

exemption.

(c) An independent fiduciary must be

appointed on behalf of each ERISACovered Account participating in the

sharing of investments. The

independent fiduciary shall be either

(1) a business organization which has

at least five years of experience with

respect to commercial real estate

investments,

(2) a committee composed of three to

five individuals (who may be investors

or investor representatives approved by

the plans participating in the ERISACovered Account, and) who each have

at least five years of experience with

respect to commercial real estate

investments, or

(3) the plan sponsor (or its designee)

of a plan (or plans) that is the sole

participant in an ERISA-Covered

Account.

(d) The independent fiduciary or

independent fiduciary committee

member shall not be or consist of MM

or any of its affiliates.

(e) No organization or individual may

serve as an independent fiduciary for an

ERISA-Covered Account for any fiscal

year if the gross income (other than

fixed, non-discretionary retirement

income) received by such organization

or individual (or any partnership or

corporation of which such organization

or individual is an officer, director, or

ten percent or more partner or

shareholder) from MM, its affiliates and

the ERISA-Covered Accounts for that

fiscal year exceeds five percent of its or

his or her annual gross income from all

sources for the prior fiscal year. If such

organization or individual had no

income for the prior fiscal year, the five

percent limitation shall be applied with

reference to the fiscal year in which

such organization or individual serves

as an independent fiduciary. The

income limitation shall not include

compensation for services rendered to a

single-customer ERISA-Covered

Account by an independent fiduciary

who is initially selected by the Plan

sponsor for that ERISA-Covered

Account.

The income limitation will include

income for services rendered to the

Accounts as independent fiduciary

under any prohibited transaction

exemption(s) granted by the
33730 Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices

Department. Notwithstanding the

foregoing, such income limitation shall

not include any income for services

rendered to a single customer ERISACovered Account by an independent

fiduciary selected by the Plan sponsor to

the extent determined by the

Department in any subsequent

prohibited transaction exemption

proceeding.

In addition, no organization or

individual who is an independent

fiduciary, and no partnership or

corporation of which such organization

or individual is an officer, director or

ten percent or more partner or

shareholder, may acquire any property

from, sell any property to, or borrow any

funds from, MM, its affiliates, or any

Account maintained by MM or its

affiliates, during the period that such

organization or individual serves as an

independent fiduciary and continuing

for a period of six months after such

organization or individual ceases to be

an independent fiduciary, or negotiate

any such transaction during the period

that such organization or individual

serves as independent fiduciary.

(f) The independent fiduciary acting

on behalf of an ERISA-Covered Account

shall have the responsibility and

authority to approve or reject

recommendations made by MM or its

affiliates for each of the transactions in

this exemption. In the case of a possible

transfer or exchange of any interest in a

shared investment between the General

Account and an ERISA-Covered

Account, the independent fiduciary

shall also have full authority to

negotiate the terms of the transfer. MM

and its affiliates shall involve the

independent fiduciary in the

consideration of contemplated

transactions prior to the making of any

decisions, and shall provide the

independent fiduciary with whatever

information may be necessary in making

its determinations.

In addition, the independent fiduciary

shall review on an as-needed basis, but

not less than twice annually, the shared

real estate investments in the ERISACovered Account to determine whether

the shared real estate investments are

held in the best interest of the ERISACovered Account.

(g) MM maintains for a period of six

years from the date of the transaction

the records necessary to enable the

persons described in paragraph (h) of

this Section to determine whether the

conditions of this exemption have been

met, except that a prohibited transaction

will not be considered to have occurred

if, due to circumstances beyond the

control of MM or its affiliates, the

records are lost or destroyed prior to the

end of the six-year period.

(h)(1) Except as provided in paragraph

(2) of this subsection (h) and

notwithstanding any provisions of

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

of the Act, the records referred to in

subsection (g) of this Section are

unconditionally available at their

customary location for examination

during normal business hours by—

(A) Any duly authorized employee or

representative of the Department or the

Internal Revenue Service,

(B) Any fiduciary of a plan

participating in an ERISA-Covered

Account engaging in transactions

structured as shared investments under

this exemption who has authority to

acquire or dispose of the interests of the

plan, or any duly authorized employee

or representative of such fiduciary,

(C) Any contributing employer to any

plan participating in an ERISA-Covered

Account engaging in transactions

structured as shared investments under

this exemption or any duly authorized

employee or representative of such

employer, and

(D) Any participant or beneficiary of

any plan participating in an ERISACovered Account engaging in

transactions structured as shared

investments under this exemption, or

any duly authorized employee or

representative of such participant or

beneficiary.

(2) None of the persons described in

subparagraphs (B) through (D) of this

subsection (h) shall be authorized to

examine trade secrets of MM, any of its

affiliates, or commercial or financial

information which is privileged or

confidential.

Section V—Definitions

For the purposes of this exemption:

(a) An ‘‘affiliate’’ of MM includes—

(1) Any person directly or indirectly

through one or more intermediaries,

controlling, controlled by, or under

common control with MM,

(2) Any officer, director or employee

of MM or person described in section

V(a)(1), and

(3) Any partnership in which MM is

a partner.

(b) An ‘‘Account’’ means the General

Account (including the general accounts

of MM affiliates which are managed by

MM), any separate account managed by

MM, or any investment advisory

account, trust, limited partnership or

other investment account or fund

managed by MM.

(c) The ‘‘General Account’’ means the

general asset account of MM and any of

its affiliates which are insurance

companies licensed to do business in at

least one State as defined in section

3(10) of the Act.

(d) An ‘‘ERISA-Covered Account’’

means any Account (other than the

General Account) in which employee

benefit plans subject to Title I or Title

II of the Act participate.

(e) ‘‘Disproportionate’’ means not in

proportion to an Account’s existing

equity ownership interest in an

investment, joint venture or joint

venture 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

February 6, 1998 at 63 FR 6217.

Written Comments and Hearing

Requests: The Department received no

hearing requests with respect to the

proposed exemption. The only written

comments were submitted by MM in

order to clarify certain of the

information contained in the summary

of facts and representations for the

proposed exemption (the Summary).

First, MM states that with regard to

the reference to health insurance in

Representation 1 of the Summary,

Footnote 1 is intended to indicate only

the extent to which MM currently offers

such health insurance. The footnote

states that MM sold its group life and

health subsidiary on March 31, 1996

and will no longer offer group life and

health insurance after the completion of

a transition period under the purchase

and sale agreement relating thereto.

Second, with respect to the second

paragraph of Representation 1 of the

Summary, MM wishes to clarify that the

exemption will cover Accounts

(including ERISA-Covered Accounts)

other than those currently in existence,

and which may invest in equity real

estate and mortgage investments.

Third, the last sentence of

Representation 7 of the Summary

concerns those persons to whom MM

must make certain disclosures regarding

its shared real estate investments. With

respect to the proposed exemption and

other information to be contained in

such disclosures, MM seeks to clarify

that it was only required to provide a

copy of the proposed exemption within

30 days of the publication of the

proposed exemption (i.e., March 8,

1998) to each current contractholder in

an ERISA-Covered Account that

proposes to engage in transactions

which are structured as shared

investments under the exemption. In

addition, MM states that it will provide

a copy of this exemption (as published

in the Federal Register) before the

Account begins to participate in such

investments.
Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices 33731

Fourth, concerning the first sentence

of Representation 8 of the Summary,

MM states that in order to more clearly

define the persons to whom certain

disclosures must be made, the sentence

should be rewritten to read as follows:

With respect to new contractholders in an

ERISA-Covered Account that participates in

the sharing of investments which are

structured as shared investments under this

exemption, each such contractholder must be

provided with the description outlined

above, a copy of the notice of pendency and

a copy of the exemption as granted, before

the Account begins to participate in the

sharing of such investments.

Fifth, with respect to Footnote 4 in

Representation 12 of the Summary,

relating to the sophistication of

investors participating in MM’s single

customer and pooled closed-end real

estate Accounts, MM states that this

footnote only refers to contractholders

in its ERISA-Covered Accounts which

engage in transactions structured as

shared investments under this

exemption.

Finally, the third sentence in

Representation 18 of the Summary and

the fourth paragraph of Representation

21 of the Summary both refer to the

partition and sale of undivided and

divided real estate investment interests,

respectively. In this regard, MM seeks to

clarify that the partition and sale of such

interests is meant to establish a possible

resolution to the stalemates which are

described in Representations 18 and 21

of the Summary. Such events would

involve the partition of property in

which Accounts own a fractional

undivided interest in the whole, and the

sale of one or more resulting divided

interests, including those interests

which are co-owned by some of the

Accounts. The Department confirms

that these scenarios are presented only

as examples of possible resolutions to

the stalemates which are described in

Representations 18 and 21 of the

Summary, and are not meant to describe

resolutions to other matters.

In addition, the Department

acknowledges all of the above-described

clarifications by MM to the record

which formed the basis for the proposed

exemption as published in the Federal

Register.

Accordingly, after considering the

entire record, including the comments

made by MM, the Department has

determined to grant the exemption as

proposed.

For Further Information Contact: Gary

H. Lefkowitz of the Department,

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

a toll-free number.)

Knoxville Surgical Group Qualified

Retirement Plan (the Plan) Located in

Knoxville, Tennessee

[Prohibited Transaction Exemption 98–29;

Exemption Application No: D–10506]

Exemption

The restrictions of section 406(a) and

406(b) 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 the sale (the Sale) of

a medical office condominium (the

Property) by the Plan to Hugh C. Hyatt,

M.D., Richard A. Brinner, M.D., Randal

O. Graham, Michael D. Kropilak, M.D.,

and P. Kevin Zirkle, M.D., parties in

interest with respect to the Plan

provided the following conditions are

satisfied: (1) The Sale will be a one time

transaction for cash; (2) the Property

will be sold at a price equal to the

greater of $780,000 or the fair market

value of the Property on the date of the

Sale; and (3) the Plan will pay no

commissions or expenses associated

with the Sale.

For a more complete statement of the

summary of facts and representations

supporting the Department’s decision to

grant this exemption, refer to the Notice

of Proposed Exemption published on

February 6, 1998 at 63 FR 6216.

Written Comments: The Department

received one comment from the

applicant. The applicant noted that

during the Department’s consideration

of the exemption application, the

Knoxville Surgical Group had originally

planned to merge the Plan into the

Premier Surgical Plan. However, this

merger did not occur. Rather, the Plan

will remain a dormant plan with all

participants fully vested.

The Department has considered the

entire record, including the comment

submitted by the applicant, and has

determined to grant the exemption as

proposed.

For Further Information Contact:

Allison Padams Lavigne, U. S.

Department of Labor, telephone (202)

219–8971. (This is not a toll-free

number.)

Jack Mayesh Wholesale Florist, Inc.

Profit Sharing Plan (the Plan) Located

in Los Angeles, California

[Prohibited Transaction Exemption 98–30;

Exemption Application No. D–10524]

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 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 certain unimproved real

property (the Property) to Roy Dahlson,

a party in interest with respect to the

Plan, provided that the following

conditions are satisfied: (1) The sale is

a one-time transaction for cash; (2) the

Plan pays no commissions nor other

expenses relating to the sale; and (3) the

Plan receives an amount which is the

greater of either (a) the fair market value

of the Property as of the date of the sale,

as determined by a qualified,

independent appraiser, or (b) the

original acquisition cost of the Property

to the Plan, plus lost opportunity costs

attributable to the Property.

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

22, 1998 at 63 FR 19950.

For Further Information Contact: Ms.

Karin Weng of the Department,

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

a toll-free number.)

Pipefitters Local Union No. 537 Pension

Fund (the Plan) Located in Boston,

Massachusetts

[Prohibited Transaction Exemption No. 98–

31; Application No. D–10577]

Exemption

The restrictions of sections 406(a) and

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

sanctions resulting from the application

of section 4975 of the Code, by reason

of section 4975(c)(1)(A) through (E) of

the Code, shall not apply to the sale (the

Sale) of certain real property (the

Property) to the Plan by Local Union

537 (the Union) of the United

Association of Journeymen and

Apprentices of the Plumbing and

Pipefitting Industry of the United States

and Canada, a party in interest with

respect to the Plan; provided the

following conditions are satisfied:

(A) The terms and conditions of the

transaction are no less favorable to the

Plan than those which the Plan would

receive in an arm’s-length transaction

with an unrelated party;

(B) The Sale is a one-time transaction

for cash;

(C) The Plan incurs no expenses from

the Sale;

(D) The Plan pays as consideration for

the Property no more than the fair

market value of the Property as

determined by a qualified, independent

appraiser on the date of the Sale; and

(E) The independent fiduciary for the

Plan will undertake to monitor and

enforce the terms of the exemption.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this
33732 Federal Register / Vol. 63, No. 118 / Friday, June 19, 1998 / Notices

exemption, refer to the Notice of

Proposed Exemption published on April

22, 1998, at 63 FR 19953.

For Further Information Contact: Mr.

C. E. Beaver 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 exemptions

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, D.C., this 16th day

of June 1998.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

U.S. Department of Labor.

[FR Doc. 98–16337 Filed 6–18–98; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application Nos. D–10470 and D–10576]

Navistar International Transportation

Corporation (Navistar); Located in

Chicago, IL and the Supplemental

Program Committee of the Navistar

International Transportation

Corporation Retiree Health Benefit and

Life Insurance Plan (Supplemental

Program Committee) Located in

Euclid, OH

AGENCY: Department of Labor.

ACTION: Notice of proposed amendments

to Prohibited Transaction Exemption

(PTE) 93–69

SUMMARY: This document contains a

notice of pendency before the

Department of Labor (the Department) of

proposed amendments to PTE 93–69 [58

FR 51105, September 30, 1993]. PTE 93–

69 provides an exemption from certain

prohibited transaction restrictions of the

Employee Retirement Income Security

Act of 1974 for: (1) the acquisition and

holding by the Navistar International

Transportation Corporation Retiree

Health Benefit and Life Insurance Plan

(New Plan) of shares of Class B Common

Stock and Series A Preference Stock of

Navistar International Corporation

(NIC); (2) the holding by the New Plan

of shares of NIC Common Stock

resulting from the conversion of NIC

Class B Common Stock into such shares;

(3) the extension of credit between

Navistar and the New Plan, which may

occur in conjunction with Navistar’s

annual obligation to advance funds to

the Supplementary Benefit Program

Trust; and (4) the sale of shares of NIC

Class B Common Stock by the New Plan

to Navistar. The proposed amendments,

if granted, would affect participants and

beneficiaries of, and fiduciaries with

respect to the New Plan.

EFFECTIVE DATE: If granted, the proposed

amendments will be effective July 1,

1998.

DATES: Written comments and requests

for a public hearing must be received by

the Department of Labor on or before the

expiration of August 3, 1998.

ADDRESSES: All written comments and

requests for a hearing (at least three

copies) should be sent to the Office of

Exemption Determinations, Pension and

Welfare Benefits Administration, room

N–5649, U.S. Department of Labor, 200

Constitution Avenue, NW., Washington

DC 20210, Attention: Application Nos.

D–10470 and D–10576. The applications

for amendments and the comments

received will be available for public

inspection in the Public Documents

Room of the Pension and Welfare

Benefits Administration, U.S.

Department of Labor, room N–5638, 200

Constitution Avenue, NW., Washington

DC 20210.

FOR FURTHER INFORMATION CONTACT:

Lyssa E. Hall of the Department of

Labor, telephone (202) 219–8971. (This

is not a toll-free number.)

SUPPLEMENTARY INFORMATION: Notice is

hereby given of the pendency before the

Department of proposed amendments to

PTE 93–69. The proposed amendments

were requested in applications filed by

the Supplemental Program Committee

and Navistar pursuant to section 408(a)

of the Act and in accordance with

procedures set forth in 29 CFR part

2570, subpart B (55 FR 32836, 32847.

August 10, 1990). One of the proposed

amendments would permit William

Craig, a member of the Supplemental

Program Committee, to continue to

serve on the NIC board of directors

beyond the termination of the Lock-up

Period. The other amendment would

permit the sale of shares of NIC

Common Stock by the New Plan to NIC

or Navistar for not less than adequate

consideration as defined in section 3(18)

of the Act.

Summary of Facts and Representations

The applications contain

representations with regard to the

proposed amendments which are

summarized below. Interested persons

are referred to the applications on file

with the Department for the complete

representations of the applicants.

1. Background

(a) Navistar, a Delaware corporation

headquartered in Chicago, Illinois, is a

manufacturer of large and medium size

trucks and mid-range diesel engines.

(b) NIC is a publicly-traded

corporation which wholly owns

Navistar.

(c) The Supplemental Program

Committee is a five-member committee

which is responsible for managing the

assets of the Supplemental Benefit

Program Trust.

(d) In 1992 , Navistar proposed to

terminate its retiree health and life

insurance benefit program and to

replace it with a plan providing a

reduced schedule of benefits. The New

Plan was created as part of the 1993

settlement of a class action which was

filed by the Navistar retirees against

Navistar in response to the proposed