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[Federal Register Volume 90, Number 7 (Monday, January 13, 2025)]
[Notices]
[Pages 2748-2756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00405]

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Prohibited Transaction Exemption 2025-01; Exemption Application No. D-
12084]

Exemption From Certain Prohibited Transaction Restrictions 
Involving United Brotherhood of Carpenters and Joiners of America (UBC 
or the Applicant) Located in Washington, DC

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice of exemption.

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SUMMARY: This document gives notice of an individual exemption from 
certain prohibited transaction restrictions of the Employee Retirement 
Income Security Act of 1974, as amended (ERISA) and the Internal 
Revenue Code of 1986 (the Code). This exemption permits the Trustees of 
the United Brotherhood of Carpenters Pension Fund (the Plan) to sell 
19.25 acres of improved real property (the Property) on behalf of the 
Plan to the UBC for cash (the Sale).

DATES: The exemption will be in effect on January 13, 2025.

FOR FURTHER INFORMATION CONTACT: Ms. Anna Mpras Vaughan, Office of 
Exemption Determinations, Employee Benefits Security Administration, 
U.S. Department of Labor, (202) 693-8565 (this is not a toll-free 
number).

SUPPLEMENTARY INFORMATION: UBC requested an exemption pursuant to ERISA 
section 408(a) and Code section 4975(c)(2) and supplemented the request 
with certain additional information (that is collectively, referred to 
as the ``Application'').\1\ On October 1, 2024, the Department 
published a notice of proposed exemption in the Federal Register (the 
Proposed Exemption).\2\
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    \1\ The procedures that govern the Applicant's request for an 
exemption (the Exemption Procedures) are set forth in 29 CFR part 
2570, subpart B at 76 FR 66637, 66644 (October 27, 2011). Although 
the Applicant's submission is being processed under the Exemption 
Procedures in effect as of December 27, 2011, the Exemption 
Procedures were recently amended at 89 FR 4662, 4691 (January 24, 
2024). Effective December 31, 1978, section 102 of the 
Reorganization Plan No. 4 of 1978, 5 U.S.C. app. 1 (1996), 
transferred the authority of the Secretary of the Treasury to issue 
administrative exemptions under the Code section 4975(c)(2) to the 
Secretary of Labor. Accordingly, the Department grants this 
exemption under its sole authority. Furthermore, references herein 
to provisions of Title I of ERISA shall be deemed to refer to their 
applicable corresponding provision in Code section 4975, unless 
specified otherwise.
    \2\ 89 FR 79953.
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    Based on UBC's representations in its Application and the 
administrative record, the Department has determined to grant the 
Proposed Exemption. This exemption provides only the relief specified 
herein and does not provide relief from violations of any law other 
than the prohibited transaction provisions of ERISA and the Code.
    Benefits of the Exemption: The Department is granting relief based, 
in part, on UBC's representations that the Plan will receive 
approximately $4,317,500 to $4,620,000 more in net proceeds by selling 
the property to UBC than it would receive in a sale to an unrelated 
third party. Other expected benefits to the Plan are described below.
    As discussed below, the Department makes the requisite findings 
under ERISA section 408(a) based on the Applicant's adherence to all 
the exemption's conditions at all times. Accordingly, affected parties 
should be aware that the conditions incorporated in this exemption are 
necessary for the Department to grant the relief requested by the 
Applicant, and that the Department would not have granted this 
exemption without these conditions.

Background

    1. The UBC is an international labor organization with 725 local 
unions (UBC Local Unions) and 37 councils (the UBC Councils). The UBC 
Local Unions are chartered by and affiliated with the UBC and represent 
the individual members of the UBC in their respective geographic area. 
Each UBC Council is affiliated with a UBC Local Union and the various 
UBC Councils are affiliated to the UBC by the UBC Constitution. 
According to the Applicant, the UBC Councils are separate legal 
entities from the UBC and the UBC does not control the UBC Councils 
that are affiliated with it. Further, the Applicant states that none of 
the trustees appointed by the UBC Councils are officers of the UBC, and 
no agency relationship exists between the UBC and the UBC Councils.
    2. The Plan is a multiemployer defined benefit pension plan located 
in Las Vegas, Nevada.\3\ The Plan provides pension benefits to full-
time officers or representatives employed by a UBC Local Union, UBC 
Council, other designated representatives of a UBC Local Union or UBC 
Council, or persons who are United States residents and are determined 
to be representative of, or professional, management, or confidential 
employees of, the UBC.\4\ As of December 31, 2022, the Plan had 4,627 
participants and as of June 30, 2023, the Plan had approximately 
$931,860,235 in assets. According to the Plan's annual funding notice 
issued in April 2022, the Plan had a funded percentage of 99.3% as of 
January 1, 2021.
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    \3\ The Applicant states that the Plan elected to become a 
multiemployer plan in accordance with ERISA section 3(37)(G) and 
meets the legislative definition of a multiemployer plan under 
3(37)(G)(vi). That section reads, ``(vi) A plan is described in this 
clause if it is a plan sponsored by an organization which is 
described in section 501(c)(5) of the Internal Revenue Code of 1986 
[26 U.S.C. 501(c)(5)] and exempt from tax under section 501(a) of 
such Code 1986 [26 U.S.C. 501(a)] and which was established in 
Chicago, Illinois, on August 12, 1881.'' The United Brotherhood of 
Carpenters Pension Fund is sponsored by the UBC, which is a 
501(c)(5) organization, tax exempt under Code section 501(a), and 
was established in Chicago, Illinois, on August 12, 1881.
    \4\ Employees of the Carpenters International Training Fund, The 
International Labor-Management Committee for the Floor and Wall 
Covering Industry, the UBC National Job Corps Training Fund, The 
United Brotherhood of Carpenters Pension Fund, and the Carpenters 
Legislative Improvement Committee may also be eligible for 
participation in the Plan.
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    3. The Plan is sponsored and administered by a Board of Trustees 
(the Board) comprised of up of six (6) trustees who are current and 
former members of the UBC Executive Board (the UBC Trustees) and five 
(5) trustees who are appointed by officers of UBC Local Unions or UBC 
Councils (the Council Trustees).\5\ The UBC Trustees and the Council 
Trustees are referred to collectively as the ``Trustees.'' The 
Applicant represents that the UBC is an employee organization whose 
members are covered by the Plan and an employer of employees who are 
covered by the Plan; therefore, it is a party in interest to the Plan 
pursuant to ERISA section 3(14)(C) and (D).
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    \5\ The Applicant represents that, unlike other multiemployer 
plans, the Plan is not maintained by a collective bargaining 
agreement and, therefore, is not a ``Taft-Hartley'' plan, pursuant 
to Labor Management Relations Act section 305(c)(5). Because the 
Trustees of the Plan are appointed by either the UBC or UBC Local 
Unions and UBC Councils, none of the Trustees could be considered 
``employer representatives,'' which would be required for the Plan 
to constitute a Taft-Hartley multiemployer plan.
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The Property

    4. The Plan owns the Property through its wholly-owned limited 
liability company, Bermuda Hidden Well, LLC (Bermuda LLC), that was 
incorporated by the Plan on April 19, 2001 in the State of Delaware. 
Bermuda LLC was originally formed to hold real property on behalf of 
the Plan and is managed on behalf of the Plan by Washington Capital 
Management, Inc.

[[Page 2749]]

(WCM), which serves as the Plan's Qualified Professional Asset Manager 
for real estate and ERISA 3(38) fiduciary investment manager.
    5. The Property is comprised on 19.25 acres and located at 6855 
Bermuda Road, Las Vegas, Clark County, Nevada. It was specifically 
developed for car rental operations and includes a passenger terminal, 
car wash, car repair facility with a service bay, and covered parking.
    6. The Plan currently leases the Property to Enterprise Leasing 
Company-West, LLC (Enterprise) pursuant to a long-term lease that has 
been extended via several short-term extensions since 2021. Most 
recently, the Plan and Enterprise amended the lease to extend the 
expiration date for a portion of the Property through March 31, 2025. 
UBC represents that the Plan has the ability to terminate the amended 
lease early. Enterprise's footprint of the premises (and the rent it 
owes the Plan) has decreased significantly since March 2023 as 
Enterprise gradually transitions its operational components to other 
locations.
    7. The Property is adjacent to a 10.89-acre parcel owned by UBC 
(the Adjacent Property) and both parcels abut the Carpenters 
International Training Center (ITC), which also is owned by UBC. The 
ITC is designed to provide apprenticeship and training programs to the 
Plan's participants. The Property, Adjacent Property, and ITC all sit 
upon an integrated block of land that also houses the UBC offices and 
several hotels that are owned by UBC and used to host visitors to the 
UBC Campus.

Decision To Sell the Property

    8. As described in the Proposed Exemption, the Plan fiduciaries, 
with the assistance of WCM, determined that the most prudent course of 
action for the Plan upon the termination of the lease is to sell the 
Property to UBC for the following reasons:
     a new tenant was unlikely to enter a long-term lease at 
the Property's current fair market rental value;
     the Property had been modified to specifications that 
suited Enterprise's operations;
     it was unlikely that the Plan could secure another long-
term lease without significantly redeveloping the Property; and
     the highest and best use of the Property would be to 
redevelop it with light industrial buildings.
    9. Shumaker, Loop & Kendrick LLP (Shumaker, the Independent 
Fiduciary, or QIF) was engaged by the Plan to act as its independent 
fiduciary with respect to the Sale, and is required to ultimately 
determine whether the Plan proceeds with the Sale.\6\ Shumaker engaged 
the appraisal firm Cushman (the QIA) to conduct an appraisal of the 
Property in December of 2022 (the 2022 Appraisal).\7\ The 2022 
Appraisal valued the Property at $33,930,000, which includes an 
``assemblage increase'' (the Assemblage Increase) \8\ resulting from 
UBC's ownership of the Adjacent Property and certain ``contributory 
costs'' (the Contributory Costs) spent by the Plan for the proposed re-
development of the Property.\9\
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    \6\ As described in the Proposed Exemption, Shumaker, as the 
Plan's independent fiduciary with respect to the Sale, must 
prudently and loyally: (i) represent the interests of the Plan in 
the Sale; (ii) determine that the Sale and the Sale price is in the 
interest and protective of the rights of the Plan and its 
participants and beneficiaries; (iii) review and approve the terms 
and conditions of the Sale and further negotiate any conditions they 
consider to be in the interest of the Plan; (iv) independently and 
prudently engage the qualified independent appraiser for the Sale; 
(v) review and approve the methodology used by the appraiser and 
ensure that such methodology is properly applied in determining the 
Property's fair market value on the date of the Sale; (vi) monitor 
the Sale throughout its duration consistent with its duties as a 
prudent plan fiduciary; (vii) ensure that Cushman & Wakefield of 
Nevada, Inc. in its role as qualified independent appraiser (Cushman 
or the QIA) renders an updated fair market valuation of the Property 
as of the date of the Sale; (viii) determine whether it is prudent 
to proceed with the Sale; (ix) refrain from entering into any 
agreement, arrangement or understanding that violates ERISA section 
410; (x) ensure compliance with the general terms of the transaction 
and with the conditions of the exemption; (xi) take any appropriate 
actions to safeguard the interests of the Plan and its participants 
and beneficiaries; and (xii) submit a written report to the 
Department not later than 90 days after the Sale has been completed 
demonstrating that each exemption condition has been met.
    \7\ The 2022 Appraisal contains detailed analysis which is 
available by contacting the Public Disclosure Room of the Employee 
Benefits Security Administration, U.S. Department of Labor, Room N-
1515, 200 Constitution Avenue NW, Washington, DC 20210. Please 
reference D-12084.
    \8\ As described above, the Original Parcel (30.14 acres 
previously owned by the Plan in its entirety) was subdivided into 
the Property (19.25 acres currently owned by the Plan) and the 
Adjacent Parcel (10.89 acres currently owned by the UBC). The 2022 
Appraisal increased the $30,325,000 ``as is'' fair market value of 
the Property by $3,410,000 (i.e., the Assemblage Increase) to 
$33,930,000 to account for the special value that the Property has 
to the UBC because it is adjacent to the UBC-owned Adjacent Parcel.
    \9\ At the request of the Independent Fiduciary, the QIA valued 
the architect, engineer, and development studies and other 
activities paid for by the Plan in connection with the potential 
development of the Property, referred to in the Proposed Exemption 
as the ``Contributory Costs.'' The 2022 Appraisal determined these 
costs to be approximately $270,000. The QIA stated in the 2022 
Appraisal that these costs represent the value of costs spent by the 
Plan to date for the benefit of the adjacent property to the 
proposed buyer (i.e., the UBC) and not the value to the general 
market. The Contributory Costs further increased the value of the 
Property if purchased by the UBC to a total of $34,090,000.
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Exemptive Relief

    10. In the proposal, the Department proposed exemptive relief from 
ERISA sections 406(a)(1)(A) and (D) and 406(b)(1) and (2) for the Sale 
of the Property by the Plan to the UBC in exchange for an amount of 
cash equal to the greater of (1) $34,090,000, or (2) the fair market 
value of the Property (which includes the Assemblage Increase and 
Contributory Costs) as established in an updated appraisal of the 
Property's fair market value on the date of the Sale (the Sale 
Proceeds).\10\
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    \10\ The legal analysis regarding the requested exemptive relief 
is provided in the Proposed Exemption and can be found in the 
Federal Register at 89 FR 79958 (October 1, 2024).
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Plan Benefits

    11. The Department finds that the exemption would be in the Plan's 
interest, based on the Plan's receipt of additional compensation due to 
the Assemblage Increase and Contribution Costs, and the QIF's 
representations that it would not be prudent for the Plan to expend the 
time and resources that would be necessary to prepare the Property for 
sale to a third party. According to the QIF, a sale of the Property by 
the Plan to an unrelated third-party at its ``As Is'' fair market value 
would be anticipated to result in approximately $4,317,500 to 
$4,620,000 less in net proceeds than the proposed Sale to UBC, because 
the Assemblage Increase and Contributory Costs would not be recouped, 
and brokerage fees and additional transaction costs would be incurred. 
According to UBC and the QIF, selling the property to UBC would be in 
the best interest of the Plan and its participants and beneficiaries, 
because it would provide the Plan with the opportunity to sell an asset 
for a significant gain due to the Assemblage Increase, eliminate the 
risk of losing an investment opportunity associated with the 
redevelopment of the Property (and the time associated with that 
process), and diversify the Plan's investments by reinvesting the sale 
proceeds in accordance with the Plan's investment policy statement.\11\
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    \11\ A description of the Independent Fiduciary's analysis and 
conclusions can be found in the Proposed Exemption in paragraphs 28-
35 at 89 FR 79957 through 58.
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    12. Nevertheless, in its initial review of the application, the 
Department was concerned about the possibility that the transaction was 
designed to transfer a valuable asset to a party in interest (UBC) 
solely for UBC's benefit.\12\ In

[[Page 2750]]

particular, the Department was concerned about the possible sale of the 
Property to UBC on terms that would enable UBC to later sell the 
Property at a higher price than its appraised fair market value. The 
Department's concerns were allayed by the Applicant's representations 
in its comment letter that the UBC has no intentions of purchasing the 
property and immediately selling it for gain. Based on these 
representations, the Department added a condition providing that if UBC 
sold the Property during the 10-year period that commences immediately 
following the date it purchased the Property from the Plan, UBC would 
have to contribute the amount of any profit it receives to the Plan 
(the Sale Proceeds Clawback Condition).\13\
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    \12\ The Department notes that the prohibited transaction 
provisions of ERISA are designed to prevent a fiduciary of plan from 
using the assets of the plan in a way that is inconsistent with the 
best exercise of that fiduciary's responsibilities under ERISA. For 
example, the prohibited transaction provisions prevent a fiduciary 
from causing a plan to transfer property to a party in interest for 
the purpose of benefitting that party in interest.
    \13\ In such event, the UBC must contribute an amount of cash 
generally equal to the profit on the subsequent sale to the Plan as 
of the end of the Plan year following the date of such subsequent 
sale. The Revenue-Sharing Condition would apply if UBC sells the 
whole Property or subdivides and sells a portion of the Property. 
See 89 FR 79956, 79957 and section III(h)(1) of the Proposed 
Exemption.
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    13. The Proposed Exemption also included a condition requiring the 
UBC to contribute to the Plan an amount in cash equal to 51 percent of 
any gross revenue it earns in any calendar year from using the 
Property, including in connection with leasing the Property to a third 
party in a manner or for a purpose that is inconsistent with UBC's 
stated intention articulated in the proposal to expand its 
International Training Center and/or the provision of union-related 
services permitted under the UBC's governing documents (the Revenue-
Sharing Clawback Condition).\14\ The Department proposed to include 
this condition in the exemption because it was concerned that UBC's 
intention might have been to purchase the Property to develop it to 
take advantage of its proximity to the Las Vegas Strip.
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    \14\ The condition as proposed required the UBC to contribute 
cash to the Plan equal to 51 percent of the gross revenue received 
from UBC's use of the Property (including the leasing of the 
Property) for a purpose or in a manner inconsistent with what was 
represented to the Department. See 89 FR 79957. See also section 
III(h)(2) of the Proposed Exemption.
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    14. The proposed Revenue-Sharing Condition was based on a 
representation the Department received from UBC's representative 
stating the UBC's development of the Property ``is primarily [emphasis 
added] meant to accommodate the Union's expansion of its International 
Training Center (ITC).'' \15\ The requirement, as described in the 
preamble to the proposal, would be effective for 10 years from the date 
the revenue was earned by UBC.
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    \15\ Email from Diana Cohn, O'Donoghue & O'Donoghue LLP, counsel 
for Applicant, to the Department on July 19, 2024. A copy of this 
email and others can be found in the record for this exemption.
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Plan Protections

    15. To ensure that the Plan, and its participants and 
beneficiaries, are adequately protected, Shumaker will continue to 
monitor the Sale, enforce the final terms, and take whatever actions 
are necessary to protect the interests of the Plan's participants and 
beneficiaries through closing of the Sale. Shumaker reviewed and 
approved the terms and conditions of the Sale in Shumaker's sole 
discretion and will further negotiate any conditions Shumaker concludes 
are in the interests of the Plan, in accordance with Shumaker's 
fiduciary duties. Shumaker, acting on behalf of the Plan in Shumaker's 
fiduciary capacity, determined that the proposed terms and conditions 
of the Sale Agreement are at least as favorable to the Plan as those 
obtainable in an arm's length transaction with an unrelated third 
party, and will make the final determination regarding whether to 
proceed with the transaction. Subject to the terms of the exemption, 
UBC has borne and will continue to bear the costs of the Application, 
and the Plan will bear the costs of the Independent Fiduciary and the 
QIA.

Comments Received Regarding the Proposed Exemption 16
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    \16\ All information submitted to the Department in connection 
with this exemption, including the written comments, is available 
through the Department's Public Disclosure Room by referencing 
Exemption Application D-12084.
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    16. In the Proposed Exemption, the Department invited all 
interested persons to submit written comments on the proposal and/or 
requests for a public hearing by November 15, 2024.
    17. During the comment period, the Department received 51 phone 
calls from Plan participants and beneficiaries. Forty-nine of the calls 
were general inquiries. The other two calls involved substantive 
comments on the Proposed Exemption. One caller stated their support for 
the protections afforded to the Plan by the proposed Sales ``Clawback'' 
condition and Revenue Sharing ``Clawback'' condition in section 
III(h)(1) and (2) of the Proposed Exemption, because they did not want 
the Plan to sell the Property without benefitting from the Sale, based 
on their belief that the Property is valuable and will increase in 
value. The other caller stated their support for the Sale if it would 
help the UBC expand the ITC, as that would be beneficial to the Plan 
participants who use the ITC.
    18. The Department received four written comments. Three of these 
comments were from the UBC and are considered together (the Applicant's 
Comment) and one comment was from a Plan participant. UBC's comment (1) 
requested a clarification of the Summary of Facts and Representations 
(the Summary) in the Proposed Exemption to better explain the UBC's 
motivations to purchase the Property; (2) provided further 
justification for the Plan's sale of the Property to the UBC; (3) 
objected to the proposed Revenue-Sharing Condition; (4) expressed 
agreement with respect to proposed Sale Proceeds Clawback Condition; 
and (5) requested the Department to correct two ministerial errors in 
the preamble of the Proposed Exemption with respect to the gross 
revenue percentages received by Shumaker from the Plan for the years 
2021 and 2022.
    19. The written comment from the Plan participant requested a 
hearing on the issue of selling plan assets to a party in interest. The 
commenter also maintained that the Department only could approve the 
Sale if the Property were put out for a public request for proposal to 
ensure the Plan maximizes its revenue.
    20. The Department responds to the material issues and the material 
information provided in the comments below.

The Applicant's Comments and the Department's Responses

Comment 1--Clarification of the UBC's Motivations for the Purchase

    21. UBC states that the Department's Summary in the Proposed 
Exemption misstates UBC's intent in acquiring and developing the 
Property. In this regard, representation 11 of the Summary provides 
that ``[T]he UBC plans to develop the Property into two light 
industrial buildings to accommodate the UBC's expansion of its 
International Training Center [ITC].''
    22. In its comment, the Applicant clarifies that the UBC's intended 
future use of the Property is to combine its 10.89-acres Adjacent 
Property with the 19.25-acre subject Property into a consolidated 
30.14-acre block (the Consolidated Property). In its comment letter, 
UBC states that combining these properties would allow the UBC to 
redevelop the Consolidated Property by building two industrial 
warehouses that

[[Page 2751]]

will be leased to third-party tenants. UBC represents that its intended 
use of the Property is consistent with the QIA's determination that the 
``highest and best use'' of the Property is for it to be redeveloped 
for industrial or mixed use that includes industrial, office and 
supporting commercial uses. According to UBC's comment, its intended 
use of the Property is also consistent with the current zoning 
restrictions on the Property. Referring to the Qualified Independent 
Appraiser's Report, UBC represents that the Property is zoned ``M-1, 
Light Manufacturing,'' which may be used for ``office, distribution 
centers, warehouse/flex space, technology and light industry.'' The UBC 
also maintains that its intention to use the Consolidated Property 
conforms with the QIA's determination of the Property's highest and 
best use and applicable land use laws.
    23. Moreover, UBC states that, in the event the ITC should need 
additional training space in the future, the UBC would be in a position 
to convert the Property for such purposes at that time. In its comment 
letter, UBC reports that, over the past 24 years, the ITC has added 
approximately 189,000 square feet of industrial-type space on its 
campus, and that the ITC's 25-acre campus is now fully built out except 
for one vacant lot reserved for a hotel to accommodate an overflow of 
attendees at the ITC campus. Thus, the Applicant represents that it is 
quite possible that the ITC will require further expansion in the 
future. The Applicant states that, although the ITC does not have an 
immediate need for expansion, it is prudent for UBC to purchase the 
Property while it is available, because there is no guarantee UBC would 
be able to purchase or lease the Property if the Plan sold it to an 
unrelated third party.
    24. The Department notes the UBC's requested clarifications to the 
Summary regarding UBC's intended use of the property.\17\ The 
Department notes further, however, that as stated previously in this 
preamble, the Summary was based on representations made by UBC's legal 
counsel (the Representative) in a July 19, 2024 email sent to the 
Department. In the email, the Representative stated that, ``[a]s 
further explained in its December 28, 2022 exemption application and 
throughout its responses to the [Department's] information requests, 
the [UBC] will develop the [P]roperty into two light industrial 
buildings, each spanning 300,000 square feet across the two lots. The 
development is primarily meant to accommodate the [UBC's] expansion of 
its International Training Center (ITC) [emphasis added]. Apart from 
the subject property, which is adjacent to the ITC, the [UBC] has no 
other land to expand its campus further.'' \18\
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    \17\ The Department notes that section III(n) requires that all 
the material facts and representations made by the Applicant that 
are set forth in the Summary are true and accurate at all times. The 
Department views the Applicant's prompt clarification of portions of 
the Summary as satisfying this requirement.
    \18\ The Applicant provided the July 19, 2024 representation in 
response to a request by the Department that the Applicant clarify 
the UBC's intended use of the Property.
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    Department's Response: The Department accepts UBC's clarifications 
as described above.

Comment 2. Justification for the Plan's Sale of the Property to the UBC

    25. UBC's second comment addresses why it is in the Plan's interest 
to sell the Property, rather than to redevelop and lease it. The 
Department solicited this explanation from UBC, in order to address the 
Department's concern that the Sale may be designed to transfer a 
valuable development opportunity from the Plan to its party in 
interest.
    26. According to the UBC, the Plan's only source of income from the 
Property is the rental income it generates, and no other potential 
tenants have expressed interest in leasing the Property once 
Enterprise's lease expires. Moreover, UBC points out that it is highly 
unlikely the Plan will secure a long-term lease with another tenant 
without significant redevelopment of the Property.\19\ Thus, according 
to UBC, once Enterprise left the Property, the Plan would be left 
owning an illiquid, unprofitable investment with no potential new 
tenants on the horizon.
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    \19\ According to the UBC, the Property was modified to 
specifications that suited Enterprise's operations (rental car 
business with attached storage and maintenance facilities). 
Furthermore, the high fair market value rental rate made a lease for 
use by a different car rental agency unlikely. See Proposed 
Exemption at 89 FR 79955.
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    27. UBC maintains that the Plan is not seeking to devote the 
significant time and plan assets it would take to redevelop the 
Property itself because of the high cost and time required for 
redevelopment, the associated risks, and the Plan's significant real 
estate portfolio. In this regard, the Plan's Independent Fiduciary 
stated, among other things, that the potential lack of income or 
investment gain from the Property over a several year development 
period (compared to an assumed 7.5 percent return on Fund investments), 
the up-front cost of any development (including risk of escalating 
costs), and the risk of selecting the right type of redevelopment to 
increase the value of the Property above what would be realized by the 
Proposed Transaction, all seem unnecessary and speculative risks for 
the Plan to take on when compared to the availability of a one-time 
Sale to a willing buyer. In addition to avoiding the above costs and 
risks, according to UBC, the Sale allows the Plan to secure significant 
profits and diversify its plan assets into more liquid investments.\20\ 
UBC notes again that if its Application is granted, UBC will pay the 
Plan at least $34,090,000, which includes $3,410,000 in additional 
proceeds due to the Assemblage Increase, which would not be received by 
the Plan in a third-party sale.
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    \20\ See the Proposed Exemption at 89 FR 79957 through 58 for an 
extended discussion of the Independent Fiduciary's analysis and 
determinations.
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    28. UBC's comment provides further that the Plan does not have 
sufficient resources to purchase the Adjacent Property from UBC and 
develop and manage the entirety of the Consolidated Property (which is 
the UBC's intended use of the Property), which would be costly, risky, 
and result in an overweighting of real estate for the Plan's investment 
allocations. Noting the Appraisal Report, the UBC states in its comment 
that the estimated cost to redevelop the 19.25-acre Property with just 
one building alone could exceed $60 million. The UBC currently 
estimates that the cost of purchasing the Property and building two 
warehouses on the Consolidated Property will exceed $120 million and 
could take more than three years. According to the UBC, if the Plan 
attempted to redevelop the Consolidated Property, these high 
redevelopment costs would impose a tremendous amount of risk on the 
Plan's ability to maintain a sufficient amount of liquid investments 
for the payment of benefits to its participants and beneficiaries.
    29. The UBC also states that the Plan would lose the opportunity to 
reinvest sales proceeds into more liquid and diversified investments, 
which may have negative consequences for its participants and 
beneficiaries. In short, if the Plan were to purchase the UBC's parcel 
and develop the Consolidated Block, it would face an overconcentration 
of more than $120 million in a single real estate asset, along with the 
associated construction risks and lengthy development period. For all 
of these reasons, the Plan has decided not to redevelop and market the 
Property itself in the hopes of finding another buyer, or purchase the 
Adjacent Property and redevelop it, when there is

[[Page 2752]]

a motivated, ready and willing buyer for the Property: the UBC.
    Department's Response: The Department notes the Plan's rationale 
for its decision to sell the Property to the UBC.

Comment 3--Removal of the Revenue-Sharing Condition in Section 
III(h)(2) of the Proposed Exemption

    30. As previously discussed in this preamble, section III(h)(2) of 
the Proposed Exemption states that ``[i]f UBC earns revenue from its 
use of the Property in any calendar year, including in connection with 
the lease of the Property to a third party, in a manner or for a 
purpose that is inconsistent with the UBC's stated intention to expand 
its International Training Center and/or the provision of union-related 
services permitted under the UBC's governing documents, then the UBC 
must contribute to the Plan an amount in cash equal to 51 percent of 
such gross revenue earned in each such calendar year. Such amounts must 
be contributed by the UBC to the Plan by the end of the Plan year 
following the year in which such revenue is earned.'' In its Comment, 
the UBC asserts that the Revenue-Sharing Condition would render the 
exemption useless to the Applicant for the following reasons:
    (I) The condition misapprehends the UBC's immediate intended use of 
the Property, inasmuch as there is no intention or need to immediately 
expand the ITC.
    (II) The condition would create a ``perpetual entanglement'' 
between the Plan and the UBC, because it would require revenue sharing 
in any calendar year in which the Property is not used to expand the 
ITC; the Sale would no longer be a one-time sale for cash (contrary to 
the condition in section III(a)); the exemption would require 
continuous monitoring by the Independent Fiduciary and expenditure of 
additional resources by the Plan; and the exemption would require 
continuous oversight by the Department. The Applicant also notes that 
while the preamble to the Proposed Exemption states that the revenue 
sharing obligation would only apply to revenue earned during the 10 
years following the date of the sale, the 10-year limit is not in the 
condition itself.
    (III) The valuation of the Property already considers the revenue 
that the UBC might generate from redeveloping the Consolidated Property 
into light industrial facilities and then leasing the facilities to 
third-party tenants. The Applicant states that requiring the UBC to pay 
the purchase price and share revenue as part of the Revenue-Sharing 
Condition, is illogical and inconsistent with prior exemptions the 
Department has granted for similar transactions. In addition, the 
Applicant notes that the UBC estimates it will need to invest at least 
$120 million to develop the Consolidated Property into industrial 
warehouses that it wishes to build. The Applicant states that requiring 
the UBC to share 51 percent of gross rental revenues after such an 
investment, in addition to the foregoing reasons, renders the 
transaction untenable.
    Department's Response: In response to the UBC's comment, the 
Department has removed the Revenue-Sharing Condition. The Department 
notes that, based on the representations of the Independent Fiduciary, 
the Sale will provide the Plan with a significantly greater amount of 
proceeds than a sale to an unrelated third party, providing a 
substantial benefit to the Plan's participants and beneficiaries. Based 
on this factor and the points raised by the UBC in its comment, the 
Department finds that the exemption is in the interest of the Plan 
without including the Revenue Sharing Condition.

Comment 4--Agreement to the Sale Proceeds Clawback Condition at Section 
III(h)(1) of the Proposed Exemption

    31. As previously discussed in this preamble, section III(h)(1) of 
the proposed exemption states that ``[i]f UBC sells the Property within 
10 years after the date of the Sale, for a sale price that is greater 
than the Sale Proceeds, then the amount of the subsequent sale price 
received by UBC that exceeds the Sale Proceeds (the Excess Amount) must 
be contributed by the UBC to the Plan in cash before the end of the 
Plan year following the date of such subsequent sale. If UBC subdivides 
the Property and a portion of the Property is subsequently sold by UBC, 
then the Excess Amount would be determined by subtracting from the 
subsequent sale price the amount of Sale Proceeds attributable to the 
portion of the Property that was sold in such subsequent sale as 
determined by an independent appraiser. The records applicable to any 
subsequent sale by UBC covered by this provision, including any 
appraisals, must be provided to the Office of Exemption Determinations 
at [email protected] within 90 days after the date of such sale.''
    32. UBC states its agreement with this condition in its comment 
letter, because it has no intention of selling the Property within the 
next 10 years. Therefore, the Department has finalized this provision 
as proposed, and renumbered section III(h)(1) as section III(h), in 
order to reflect the Department's removal of section III(h)(2).

Comment 5--Correction of Ministerial Errors

    33. Representation 15 of the Proposed Exemption states, in 
pertinent part, that ``Shumaker represents that the revenue received 
from its engagement as Independent Fiduciary for the Plan is less than 
two percent of its gross revenue for the 2021 federal income tax year, 
and less than 3.3 percent of its gross revenue for the 2022 federal 
income tax year.''
    34. UBC states that the foregoing figures are erroneous, and UBC 
represents that Shumaker received less than 0.02 percent of its gross 
revenue for federal income tax year 2021 from its engagement as the 
Plan's independent fiduciary with respect to the proposed Sale (and the 
Independent Fiduciary has not received any additional compensation 
since). The Applicant asserts that this percentage represents the sole 
amount of revenue received by the Independent Fiduciary from any party 
in interest with respect to its Application.
    Department's Response: The Department acknowledges this update to 
the Proposed Exemption. Consistent with the Applicant's comment, the 
Independent Fiduciary's statement, dated December 27, 2022, provides 
that ``revenue received from our engagement as independent fiduciary 
for United Brotherhood of Carpenters Pension Fund is less than 0.02 
percent of the gross revenue of Shumaker, Loop and Kendrick, LLP for 
the prior federal income tax year.'' The Department notes that the 
Independent Fiduciary would have met the compensation threshold set 
forth in the Department's exemption procedure regulation 
notwithstanding the Department's erroneous reference to 3.3 
percent.\21\
---------------------------------------------------------------------------

    \21\ 29 CFR 2570.31(h)(1). The procedures that govern the 
Applicant's request for an exemption (the Exemption Procedures) are 
set forth in 29 CFR part 2570, subpart B at 76 FR 66637, 66644 
(October 27, 2011).
---------------------------------------------------------------------------

Comment From the General Public

    35. The Department received a written comment from a Plan 
participant who requested a hearing on the issue of selling Plan assets 
to a party in interest. The commenter stated that they would only 
approve the sale if the Property were put out for a public ``RFP'' 
(request for proposal) and the UBC were provided a ``right of first 
refusal'' at above the appraised price and above any other RFPs. The 
commenter stated that this would be the only sure way for the Plan to 
maximize its revenue and return

[[Page 2753]]

on investment and to continue on a sound basis. The commenter further 
noted that the fiduciary responsibility of the trustees is to the Plan 
and not to their employer.
    Department's Response: The Department agrees with the commenter 
that any sale of the Property by the Plan should maximize the Plan's 
revenue and return on investment. To achieve this result, the 
Department reviewed multiple appraisals submitted by a QIA, a report 
and additional information submitted by a QIF, and performed a robust 
analysis of the Plan's rationale for the Sale and the reasons that the 
UBC wanted to purchase the Property. Based on this review, the 
Department expects that the Plan will receive approximately $4,317,500 
to $4,620,000 more in net proceeds by selling the property to UBC than 
it would receive in a sale to an unrelated third party. Further 
strengthening the Department's expectation, the Department developed a 
novel condition, the Sale Proceeds Clawback Condition, which protects 
the Plan in the event UBC sells the Property during the 10-year period 
that commences immediately following the date it purchased the Property 
from the Plan. After careful review of the record attributable to this 
exemption, including the commenter's comment, and the exemption's 
protective conditions, the Department believes that the exemption for 
the Sale provides the Plan with a meaningful benefit that the Plan may 
not otherwise receive from a third-party sale, and is protective of the 
rights of participants and beneficiaries of the Plan. For clarity, the 
Department notes that the fair market value and Sale price, as 
determined by the Independent Fiduciary and QIA, must reflect the fair 
market value of the Property free and clear of any encumbrances, and 
without any reduction based on the existence of the Clawback Condition.
    Regarding the commenter's request for a hearing, the Department 
notes that its regulations provide that the Department may decline to 
hold a hearing where, among other things, the only issues identified 
for exploration at the hearing are matters of law; or the factual 
issues identified can be fully explored through the submission of 
evidence in written (including electronic) form.'' \22\ The commenter 
has not provided a general description of the evidence to be presented 
at a hearing as required by the Department's Exemption Procedure 
Regulation. Furthermore, the commenter has not identified any factual 
issues that have not been fully explored through the submission of 
written evidence provided to the Department by UBC. Accordingly, the 
Department declines the commenter's request for a hearing.\23\
---------------------------------------------------------------------------

    \22\ See 29 CFR 2570.46(a), found at 76 FR 66653 of the 
Department's Exemption Procedures Regulation.
    \23\ 29 CFR 2570.46(b), found at 76 FR 66653 of the Exemption 
Procedures.
---------------------------------------------------------------------------

Other Revisions

    36. On its own motion, the Department made the following revisions 
to the operative language of the Proposed Exemption.
    (i) In order to clarify the elements that comprise the Sale price 
of the Property, i.e., at the time of the Sale, the UBC must pay the 
greater of: $34,090,000; or the fair market value of the Property, plus 
the Assemblage Increase and Contributory Costs, as established on the 
date of the Sale, the Department is modifying section III(b) to read, 
``At the time of the Sale, the Plan receives the greater of (1) 
$34,090,000; or (2) the fair market value of the Property plus the 
Property's Assemblage Increase, as established by the QIA in an updated 
appraisal of such Property on the date of the Sale, plus the Plan's 
Contributory Costs (together, the Sale Proceeds). The Sale Proceeds, as 
determined by the Independent Fiduciary and QIA, must reflect the fair 
market value of the Property free and clear of any encumbrances, and 
without any reduction based on the existence of the Subsequent Sale 
Proceeds Subject to Clawback Condition.''
    (ii) The term ``Assemblage Increase'' is now defined in section 
I(b) to mean an increase to the Property's ``as is'' fair market value 
to account for the special value that the Property has to the UBC 
because it is adjacent to a 10.89-acre parcel of property owned by the 
UBC that is adjacent to the Property, as determined by a QIA.
    (iii) The term ``Contributory Costs'' is now defined in section 
I(f) to mean certain costs attributed to architect, engineer, and 
development studies and other activities paid for by the Plan to date 
for the benefit of the UBC and are not reflective of the value to the 
general market. These costs are valued in the 2022 Appraisal at 
approximately $270,000.
    (iv) In order to provide more flexibility in the event the Plan 
needs to substitute the Independent Fiduciary, the Department is 
modifying section III(c) defining the term ``Independent Fiduciary'' to 
read, ``The term `Independent Fiduciary' means Shumaker, Loop & 
Kendrick LLP, or any successor thereto, engaged by the Plan and that 
conforms to the qualified independent fiduciary requirements described 
in the Department's procedures for requesting an exemption at 29 CFR 
2570.34(e) and (f), found at 89 FR 4695 (January 24, 2024). The Plan 
fiduciaries must provide the information required by the procedures to 
the Department within 30 days after such successor is hired.''
    (v) In order to provide more flexibility in the event the Plan 
needs to substitute the QIA, the Department is modifying section I(f) 
defining the term ``QIA'' to read, ``The term `QIA' means Cushman & 
Wakefield of Nevada, Inc., or any successor thereto, engaged by the 
Independent Fiduciary and that conforms to the qualified independent 
appraiser requirements described in the Department's procedures for 
requesting an exemption at 29 CFR 2570.34(c), and (d) found at 89 FR 
4694 (January 24, 2024). The Plan fiduciaries must provide the 
information required by the procedures to the Department within 30 days 
after such successor is hired.''
    (vi) The Department is modifying section II to refer as well to 
certain corresponding provisions of Code section 4975. Specifically, 
section II of the grant notice reads as follows: ``The restrictions of 
ERISA sections 406(a)(1)(A) and 406(a)(1)(D), and 406(b)(1) and (b)(2), 
and the sanctions resulting from the application of Code section 4975, 
by reason of Code sections 4975(c)(1)(A), (D), and (E), shall not apply 
to the Sale, effective as of the date a final exemption is published in 
the Federal Register, provided that the parties adhere to the 
conditions in Section III, below.''
    (vii) The Department is modifying section III(d) to read, ``The 
Plan fiduciaries prudently determined that the Sale is in the Plan's 
best interest and for no less than the fair market value of the 
Property, free and clear of any encumbrances.''
    (viii) The Department is modifying section III(g)(2) to read, ``The 
Independent Fiduciary has not and will not enter into any agreement, 
arrangement or understanding that violates either ERISA section 410 or 
the Department's Regulations codified at 29 CFR 2509.75-4.''
    The Department also made several minor, non-substantive revisions 
that are intended to clarify the exemption and/or correct scrivener's 
errors.

Conclusion

    37. The Department has carefully considered the issues expressed by 
the commenters. After giving full consideration to the entire record, 
including the comments and the hearing request, the Department has 
determined

[[Page 2754]]

to grant the exemption subject to the modifications and clarifications 
described herein. In granting this exemption, the Department has relied 
on the representations of the Applicant. If any material statement in 
the Application, final exemption or the Applicant's Comment is not, or 
may no longer be, completely and factually accurate, the Applicant and 
recipient of the exemptive relief provided herein must immediately 
alert the Department.\24\
---------------------------------------------------------------------------

    \24\ The Representations stated herein are based on UBC's 
representations provided in its exemption application, comments, and 
supporting submissions, including those of the Independent 
Fiduciary, and do not reflect factual findings or opinions of the 
Department unless indicated otherwise. The Department notes that the 
availability of this exemption is subject to the express condition 
that the material facts and representations contained in application 
D-12084 are true and complete at all times, and accurately describe 
all material terms of the transactions covered by the exemption. If 
there is any material change in a transaction covered by the 
exemption, or in a material fact or representation described in the 
application, the exemption will cease to apply as of the date of the 
change.
---------------------------------------------------------------------------

    38. For further information regarding the comments and other 
matters discussed herein, interested persons are encouraged to obtain 
copies of the Application (Exemption Application No. D-12084) the 
Department is maintaining in this case from EBSA's Public Disclosure 
Room (U.S. Department of Labor, Room N-1515, 200 Constitution Avenue 
NW, Washington DC 20210 (202.693.8673)).

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 ERISA section 408(a) and/or Code section 4975(c)(2) does not 
relieve a fiduciary or other party in interest or disqualified person 
from certain other provisions of ERISA and/or the Code, including any 
prohibited transaction provisions to which the exemption does not apply 
and the general fiduciary responsibility provisions of ERISA section 
404, which, among other things, require a fiduciary to discharge their 
duties respecting the plan solely in the interest of the participants 
and beneficiaries of the plan and in a prudent fashion in accordance 
with ERISA section 404(a)(1)(B); nor does it affect the requirement of 
Code section 401(a) that the plan must operate for the exclusive 
benefit of the employees of the employer maintaining the plan and their 
beneficiaries;
    (2) As required by ERISA section 408(a) and/or Code section 
4975(c)(2), the Department hereby finds that the exemption is (1) 
administratively feasible, (2) in the interests of the plan and of its 
participants and beneficiaries, and (3) protective of the rights of the 
participants and beneficiaries of the plan;
    (3) The exemption is supplemental to and not in derogation of any 
other ERISA provisions 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 availability of this exemption is subject to the express 
condition that the material facts and representations contained in the 
Application are true and complete at all times, and that the 
Application accurately describes all material terms of the transaction 
which is the subject of the exemption.
    Accordingly, the following exemption is granted under the authority 
of ERISA section 408(a) and/or Code section 4975(c)(2) and in 
accordance with the procedures set forth in 29 CFR part 2570, subpart B 
at 76 FR 66637, 66644 (October 27, 2011).

Exemption

Section I. Definitions

    (a) The term ``Applicant'' or ``UBC'' means United Brotherhood of 
Carpenters and Joiners of America.
    (b) The term ``Assemblage Increase'' means an increase to the 
Property's ``as is'' fair market value, as determined by a QIA, to 
account for the special value that the Property has to the UBC because 
it owns a 10.89-acre real estate parcel that is adjacent to the 
Property.
    (c) The term ``Bermuda LLC'' means Bermuda Hidden Well, LLC.
    (d) The term ``Board'' means a board of trustees made pursuant to 
the Plan's Declaration of Trust, consisting of six (6) trustees who are 
current and former members of the UBC Executive Board and five (5) 
trustees who are appointed from officers of UBC Local Unions or UBC 
Councils.
    (e) The term ``Consolidated Property'' means a 30.14-acre combined 
block of property composed of the Property and a 10.89-acre parcel of 
property owned by the UBC that is adjacent to the Property.
    (f) The term ``Contributory Costs'' means certain costs attributed 
to architect, engineer, and development studies and other activities 
paid for by the Plan to date for the benefit of the UBC and are not 
reflective of the value to the general market. These costs are valued 
in the 2022 Appraisal at approximately $270,000.
    (g) The term ``Independent Fiduciary'' means Shumaker, Loop & 
Kendrick LLP, or any successor thereto, engaged by the Plan and that 
conforms to the qualified independent fiduciary requirements described 
in the Department's procedures for requesting an exemption at 29 CFR 
2570.34(e) and (f), found at 89 FR 4695 (January 24, 2024). The Plan 
fiduciaries must provide the information required by the procedures to 
the Department within 30 days after such successor is hired.
    (h) The term ``Plan'' means United Brotherhood of Carpenters 
Pension Fund.
    (i) The term ``Property'' means the 19.25-acre parcel of improved 
real property owned by the Plan and located at 6855 Bermuda Road, Las 
Vegas, Clark County, Nevada.
    (j) The term ``QIA'' means Cushman & Wakefield of Nevada, Inc., or 
any successor thereto, engaged by the Independent Fiduciary and that 
conforms to the qualified independent appraiser requirements described 
in the Department's procedures for requesting an exemption at 29 CFR 
2570.34(c) and (d), found at 89 FR 4694 through 95 (January 24, 2024). 
The Plan fiduciaries must provide the information required by the 
procedures to the Department within 30 days after such successor is 
hired.
    (k) The term ``Sale'' means the one-time sale for cash of the 
Property by the Trustees on behalf of the Plan through its subsidiary 
entity, Bermuda LLC, to the UBC.
    (l) The term ``Trustees'' means the six (6) trustees on the Plan's 
Board who are current and former members of the UBC Executive Board and 
five (5) trustees who are appointed by officers of UBC Local Unions or 
UBC Councils.

Section II. Covered Transactions

    The restrictions of ERISA sections 406(a)(1)(A) and 406(a)(1)(D), 
and 406(b)(1) and (b)(2), and the sanctions resulting from the 
application of Code section 4975, by reason of Code sections 
4975(c)(1)(A), (D), and (E), shall not apply to the Sale, effective as 
of the date a final exemption is published in the Federal Register, 
provided that the parties adhere to the conditions in section III, 
below.

Section III. Conditions

    (a) The Sale is a one-time transaction for cash that must be 
completed within 90 days of the effective date of the exemption;
    (b) At the time of the Sale, the Plan receives the greater of (1) 
$34,090,000; or (2) the fair market value of the Property plus the 
Property's Assemblage

[[Page 2755]]

Increase, as established by the QIA in an updated appraisal of such 
Property on the date of the Sale, plus the Plan's Contributory Costs 
(together, the Sale Proceeds). The Sale Proceeds, as determined by the 
Independent Fiduciary and QIA, must reflect the fair market value of 
the Property free and clear of any encumbrances, and without any 
reduction based on the existence of the Subsequent Sale Proceeds 
Subject to Clawback Condition;
    (c) The Plan pays no commissions, expenses, or fees associated with 
the Sale, and the Plan does not bear the costs of: (1) the exemption 
application; nor (2) notifying interested persons;
    (d) The Plan fiduciaries prudently determined that the Sale is in 
the Plan's best interest and for no less than the fair market value of 
the Property, free and clear of any encumbrances.
    (e) The terms and conditions of the Sale are at least as favorable 
to the Plan as those obtainable in arm's length transactions with an 
unrelated third party;
    (f) The Independent Fiduciary, in accordance with ERISA sections 
404(a)(1)(A) and (B), must prudently and loyally:
    (1) represent the Plan's interests with respect to the Sale;
    (2) determine that the Sale is in the interests of, and protective 
of, the Plan and its participants and beneficiaries;
    (3) determine that the Sale price for the Property is in the 
interests of, and protective of, the Plan;
    (4) review and approve the terms and conditions of the Sale in 
their sole discretion and further negotiate any conditions they 
consider to be in the best interest of the Plan;
    (5) independently engage the QIA for the Sale;
    (6) ensure that the appraisal is based on complete, current and 
accurate information; review and approve the methodology used by the 
QIA that such methodology is properly applied in determining the 
Property's fair market value on the date of the Sale; and that it is 
appropriate to rely upon the appraisal as accurately reflecting the 
fair market value of the Property;
    (7) monitor the Sale throughout its duration consistent with its 
duties as a prudent plan fiduciary;
    (8) ensure that the QIA renders an updated fair market valuation of 
the Property as of the date of the Sale in accordance with paragraph 
(f)(6) of this section;
    (9) determine whether it is prudent for the Plan to proceed with 
the Sale and has the ultimate decision-making authority to approve the 
Sale on behalf of the Plan;
    (10) ensure compliance with the general terms of the Sale and with 
the conditions of the exemption;
    (11) take any appropriate actions to safeguard the interests of the 
Plan and its participants and beneficiaries; and
    (12) submit a written report to the Department not later than 90 
days after the Sale has been completed demonstrating that each 
exemption condition has been met;
    (g)(1) The Independent Fiduciary must not have entered into, and 
must not enter into, any agreement, arrangement, or understanding that 
includes any provision that provides for the direct or indirect 
indemnification or reimbursement of the Independent Fiduciary by the 
Plan or other party for any failure to adhere to its contractual 
obligations or to state or Federal laws applicable to the Independent 
Fiduciary's work; the Independent Fiduciary may not seek or receive any 
waiver of any rights, claims, or remedies of the Plan under ERISA, 
state, or Federal law against the Independent Fiduciary with respect to 
the subject matter of the exemption; and
    (2) The Independent Fiduciary has not and will not enter into any 
agreement, arrangement or understanding that violates either ERISA 
section 410, or the Department's Regulations codified at 29 CFR 
2509.75-4;
    (h) Subsequent Sale Proceeds Subject to Clawback Condition. If UBC 
sells the Property within 10 years after the date of the Sale, for a 
sale price that is greater than the Sale Proceeds, then the amount of 
the subsequent sale price received by UBC that exceeds the Sale 
Proceeds (the Excess Amount) must be contributed by the UBC to the Plan 
in cash before the end of the Plan year following the date of such 
subsequent sale. If UBC subdivides the Property and a portion of the 
Property is subsequently sold by UBC, then the Excess Amount would be 
determined by subtracting from the subsequent sale price the amount of 
Sale Proceeds attributable to the portion of the Property that was sold 
in such subsequent sale as determined by an independent appraiser. The 
Independent Fiduciary and QIA may not reduce the sale price paid to the 
Plan or the fair market value of the Property based on the Clawback 
Condition. The records applicable to any subsequent sale by UBC covered 
by this provision, including any appraisals, must be provided to the 
Office of Exemption Determinations at [email protected] within 90 days 
after the date of such sale.
    (i) Any QIA selected by the Independent Fiduciary must not have 
entered into, and must not enter into, any agreement, arrangement, or 
understanding that includes any provision that provides for the direct 
or indirect indemnification or reimbursement of the QIA by the Plan or 
any other party for any failure to adhere to its contractual 
obligations or to state or Federal laws applicable to the QIA's work; 
the QIA may not seek or obtain any waiver of any rights, claims or 
remedies of the Plan or its participants and beneficiaries under ERISA, 
the Code, or other Federal and state laws against the QIA with respect 
to the subject matter of the exemption; and
    (j) The Board and the Independent Fiduciary maintain for a period 
of six (6) years from the date of Sale, in a manner that is convenient 
and accessible for audit and examination, the records necessary to 
enable the persons described in paragraph (k)(1) below to determine 
whether conditions of this exemption have been met, except that (i) a 
prohibited transaction will not be considered to have occurred if, due 
to circumstances beyond the control of the Board and/or the Independent 
Fiduciary, the records are lost or destroyed prior to the end of the 
six-year period, and (ii) no party in interest other than the Board or 
the Independent Fiduciary shall be subject to the civil penalty that 
may be assessed under ERISA section 502(i) if the records are not 
maintained, or are not available for examination as required by 
paragraph (k) below; and
    (k)(1) Except as provided in section (2) of this paragraph and 
notwithstanding any provisions of subsections (a)(2) and (b) of ERISA 
section 504, the records referred to in paragraph (j) above shall be 
unconditionally available at their customary location during normal 
business hours to:
    (i) any duly authorized employee or representative of the 
Department or the Internal Revenue Service;
    (ii) the Board or any duly authorized representative of the Board;
    (iii) the Independent Fiduciary or any duly authorized 
representative of the Independent Fiduciary;
    (iv) any participant or beneficiary of the Plan, or any duly 
authorized representative of such participant or beneficiary;
    (2) If any party refuses to disclose information to a person on the 
basis that such information is exempt from disclosure, such party must 
provide a written notice to that person advising them of the reasons 
for the refusal and that the Department may request such information on 
their behalf by the close

[[Page 2756]]

of the thirtieth (30th) day following the request;
    (l) The Sale is not part of an agreement, arrangement or 
understanding designed to benefit UBC or any of its affiliates;
    (m) The Board, the UBC, and/or the Independent Fiduciary must 
provide to the Department the records necessary to demonstrate that the 
conditions of this exemption, as amended, have been met, within 30 days 
from the date the Department requests such records; and
    (n) All the material facts and representations made by the 
Applicant that are set forth in the Summary of Facts and 
Representations are true and accurate at all times.
    Exemption Date: The exemption will be in effect on January 13, 
2025.

    Signed at Washington, DC.
George Christopher Cosby,
Director, Office of Exemption Determinations, Employee Benefits 
Security Administration, U.S. Department of Labor.
[FR Doc. 2025-00405 Filed 1-10-25; 8:45 am]
BILLING CODE 4510-29-P
```