[Federal Register Volume 60, Number 81 (Thursday, April 27, 1995)]
[Unknown Section]
[Pages 20773-20777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10405]



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

DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 95-33; Exemption Application No. D-
09626, et al.]


Grant of Individual Exemptions; Bank South, N.A. et al.

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Grant of individual exemptions.

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

SUMMARY: This document contains exemptions issued by the Department of 
Labor (the Department) from certain of the prohibited transaction 
restrictions of the Employee Retirement Income Security Act of 1974 
(the Act) and/or the Internal Revenue Code of 1986 (the Code).
    Notices were published in the Federal Register of the pendency 
before the Department of proposals to grant such exemptions. The 
notices set forth a summary of facts and representations contained in 
each application for exemption and referred interested persons to the 
respective applications for a complete statement of the facts and 
representations. The applications have been available for public 
inspection at the Department in Washington, DC. The notices also 
invited interested persons to submit comments on the requested 
exemptions to the Department. In addition the notices stated that any 
interested person might submit a written request that a public hearing 
be held (where appropriate). The applicants have represented that they 
have complied with the requirements of the notification to interested 
persons. No public comments and no requests for a hearing, unless 
otherwise stated, were received by the Department.
    The notices of proposed exemption were issued and the exemptions 
are being granted solely by the Department because, effective December 
31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR 
47713, October 17, 1978) transferred the authority of the Secretary of 
the Treasury to issue exemptions of the type proposed to the Secretary 
of Labor.

Statutory Findings

    In accordance with section 408(a) of the Act and/or section 
4975(c)(2) of the Code and the procedures set forth in 29 CFR part 
2570, subpart B (55 FR 32836, 32847, August 10, 1990) and based upon 
the entire record, the Department makes the following findings:
    (a) The exemptions are administratively feasible;
    (b) They are in the interests of the plans and their participants 
and beneficiaries; and
    (c) They are protective of the rights of the participants and 
beneficiaries of the plans.

Bank South, N.A. (the Bank) Located in Atlanta, GA

[Prohibited Transaction Exemption 95-33; Application No. D-09626]

Section I--Exemption for In-kind Transfer of Assets

    The restrictions of sections 406(a) and 406(b) 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 (F) of the Code, shall not 
apply as of February 11, 1994, to the in-kind transfer of assets of 
plans for which the Bank serves as a fiduciary (the Client Plans), 
other than plans established and maintained by the Bank, that are held 
in certain collective investment funds maintained by the Bank (the 
CIFs), in exchange for shares of the Peachtree Funds (the Funds), an 
open-end investment company registered under the Investment Company Act 
of 1940 (the 1940 Act) for which the Bank acts as investment adviser, 
in connection with the termination of such CIFs, provided that the 
following conditions and the general conditions of Section III below 
are met:
    (a) No sales commissions or other fees are paid by the Client Plans 
in connection with the purchase of Fund shares through the in-kind 
transfer of CIF assets and no redemption fees are paid in connection 
with the sale of such shares by the Client Plans to the Funds.
    (b) Each Client Plan receives shares of a Fund which have a total 
net asset value that is equal to the value of the Client Plan's pro 
rata share of the assets of the CIF on the date of the transfer, based 
on the current market value of the CIF's assets, as determined in a 
single valuation performed in the same manner at the close of the same 
business day using independent sources in accordance with Rule 17a-7(b) 
of the Securities and Exchange Commission under the 1940 Act and the 
procedures established by the Funds pursuant to Rule 17a-7 for the 
valuation of such assets. Such procedures must require that all 
securities for which a current market price cannot be obtained by 
reference to the last sale price for transactions reported on a 
recognized securities exchange or NASDAQ be valued based on an average 
of the highest current independent bid and lowest current independent 
offer, as of the close of business on the Friday preceding the weekend 
of the CIF transfers, determined on the basis of reasonable inquiry 
from at least three sources that are broker-dealers or pricing services 
independent of the Bank.
    (c) A second fiduciary who is independent of and unrelated to the 
Bank (the Independent Fiduciary) receives advance written notice of the 
in-kind transfer of assets of the CIFs and full written disclosure of 
information concerning the Funds (including a current prospectus for 
each of the Funds and a statement describing the fee structure) and, on 
the basis of such information, authorizes in writing the in-kind 
transfer of the Client Plan's CIF assets to a corresponding Fund in 
exchange for shares of the Fund.
    (d) For all transfers of CIF assets to a Fund following the 
publication of the proposed exemption in the Federal Register (i.e. 
January 30, 1995), the Bank sends by regular mail to each affected 
Client Plan the following information: [[Page 20774]] 
    (1) Within 30 days after completion of the transaction, a written 
confirmation containing:
    (i) The identity of each security that was valued for purposes of 
the transaction in accordance with Rule 17a-7(b)(4);
    (ii) The price of each such security involved in the transaction;
    (iii) The identity of each pricing service or market maker 
consulted in determining the value of such securities; and
    (2) Within 90 days after completion of each transfer, a written 
confirmation that contains:
    (i) The number of CIF units held by the Client Plan immediately 
before the transfer, the related per unit value, and the total dollar 
amount of such CIF units; and
    (ii) The number of shares in the Funds that are held by the Client 
Plan following the transfer, the related per share net asset value, and 
the total dollar amount of such shares.
    (e) The conditions set forth in paragraphs (e), (f), and (m) of 
Section II below are satisfied.

Section II--Exemption for Receipt of Fees

    The restrictions of sections 406(a) and 406(b) 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 (F) of the Code, shall not 
apply as of February 11, 1994, to the receipt of fees by the Bank from 
the Funds for acting as investment adviser to the Funds in connection 
with the investment in the Funds by Client Plans for which the Bank 
acts as a fiduciary, including any Client Plan invested in a CIF which 
transfers its assets to a Fund, provided that the following conditions 
and the general conditions of Section III are met:
    (a) No sales commissions, loads, charges or similar fees are paid 
by the Client Plans for the purchase or sale of shares of the Funds and 
no redemption fees are paid for the sale of shares by the Client Plans 
to the Funds.
    (b) The price paid or received by a Client Plan for shares in a 
Fund is the net asset value per share at the time of the transaction, 
as defined in Section IV(e), and is the same price which would have 
been paid or received for the shares by any other investor at that 
time.
    (c) Neither the Bank nor an affiliate, including any officer or 
director of the Bank, purchases or sells shares of the Funds from or to 
any Client Plan.
    (d) The Client Plans do not pay any plan-level investment 
management fees, investment advisory fees, or similar fees to the Bank 
with respect to any of the assets of such Client Plans which are 
invested in shares of any of the Funds. This condition does not 
preclude the payment of investment advisory fees or similar fees by the 
Funds to the Bank under the terms of an investment advisory agreement 
adopted in accordance with section 15 of the 1940 Act or any other 
agreement between the Bank and the Funds which is in compliance with 
the 1940 Act.
    (e) The combined total of all fees received by the Bank for the 
provision of services to a Client Plan, and in connection with the 
provision of services to the Funds in which the Client Plan may invest, 
are not in excess of ``reasonable compensation'' within the meaning of 
section 408(b)(2) of the Act.
    (f) The Bank does not receive any fees payable pursuant to Rule 
12b-1 under the 1940 Act in connection with the transactions.
    (g) The Client Plans are not employee benefit plans sponsored or 
maintained by the Bank.
    (h) The Independent Fiduciary receives, in advance of any 
investment by the Client Plan in a Fund, full and detailed written 
disclosure of information concerning the Funds, including, but not 
limited to:
    (1) A current prospectus for each Fund in which a Client Plan is 
considering investing;
    (2) A statement describing the fees for investment advisory or 
similar services, as well as all other fees to be charged to or paid by 
the Client Plan and by the Funds, including the nature and extent of 
any differential between the rates of such fees;
    (3) The reasons why the Bank may consider such investment to be 
appropriate for the Client Plan;
    (4) A statement describing whether there are any limitations 
applicable to the Bank with respect to which assets of a Client Plan 
may be invested in the Funds, and if so, the nature of such 
limitations; and
    (5) Upon request of the Independent Fiduciary, a copy of the 
proposed exemption and/or a copy of the final exemption, once such 
documents become available.
    (i) On the basis of the information described above in paragraph 
(h) of this Section II, the Independent Fiduciary authorizes in writing 
the investment of assets of the Client Plan in each Fund, and the fees 
to be paid by such Funds to the Bank.
    (j) All authorizations made by an Independent Fiduciary regarding 
investments in a Fund and the fees paid to the Bank are subject to an 
annual reauthorization wherein any such prior authorization referred to 
in paragraph (i) of Section II shall be terminable at will by the 
Client Plan, without penalty to the Client Plan, upon receipt by the 
Bank of written notice of termination. A form expressly providing an 
election to terminate the authorization described in paragraph (i) of 
Section II above (the Termination Form) with instructions on the use of 
the form must be supplied to the Independent Fiduciary no less than 
annually. The instructions for the Termination Form must include the 
following information:
    (1) The authorization is terminable at will by the Client Plan, 
without penalty to the Plan, upon receipt by the Bank of written notice 
from the Independent Fiduciary; and
    (2) Failure to return the Termination Form will constitute 
continued authorization of the Bank to engage in the transactions 
described in paragraph (i) of Section II on behalf of the Client Plan.
    (k) In the event of an increase in the rate of any fees paid by the 
Funds to the Bank regarding any investment management services, 
investment advisory services, or fees for similar services that the 
Bank provides to the Funds over an existing rate for such services that 
had been authorized by an Independent Fiduciary, in accordance with 
paragraph (i) of this Section II, the Bank will, at least thirty (30) 
days in advance of the implementation of such increase, provide a 
written notice (which may take the form of a proxy statement, letter, 
or similar communication that is separate from the prospectus of the 
Fund and which explains the nature and amount of the increase in fees) 
to the Independent Fiduciary of each of the Client Plans invested in a 
Fund which is increasing such fees. Such notice shall be accompanied by 
a Termination Form. However, if the Termination Form has been provided 
to the Independent Fiduciary pursuant to this paragraph, then the 
Termination Form need not be provided again for an annual 
reauthorization pursuant to paragraph (j) above unless at least six 
months has elapsed since the form was provided in connection with the 
fee increase.
    (l) On an annual basis, the Bank provides the Independent Fiduciary 
of a Client Plan investing in the Funds with:
    (1) A copy of the current prospectus for the Funds and, upon such 
fiduciary's request, a copy of the Statement of Additional Information 
for such Funds which contains a description of all fees paid by the 
Funds to the Bank; and [[Page 20775]] 
    (2) upon the request of such Independent Fiduciary, a report or 
statement (which may take the form of the most recent financial report, 
the current Statement of Additional Information for the Fund, or some 
other written statement) that contains a description of all fees paid 
by the Fund to the Bank.
    (m) All dealings between the Client Plans and the Funds are on a 
basis no less favorable to the Client Plans than dealings with other 
shareholders of the Funds.

Section III--General Conditions

    (a) The Bank maintains for a period of six years the records 
necessary to enable the persons described below in paragraph (b) of 
Section III to determine whether the conditions of this exemption have 
been met, except that (1) a prohibited transaction will not be 
considered to have occurred if, due to circumstances beyond the control 
the Bank, the records are lost or destroyed prior to the end of the 
six-year period, and (2) no party in interest other than the Bank shall 
be subject to the civil penalty that may be assessed under section 
502(i) of the Act or to the taxes imposed by section 4975(a) and (b) of 
the Code if the records are not maintained or are not available for 
examination as required by paragraph (b) below.
    (b) (1) Except as provided in paragraph (b)(2) and notwithstanding 
any provisions of section 504(a)(2) and (b) of the Act, the records 
referred to in paragraph (a) of Section III are unconditionally 
available at their customary location for examination during normal 
business hours by--
    (i) Any duly authorized employee or representative of the 
Department or the Internal Revenue Service,
    (ii) Any fiduciary of the Client Plans who has authority to acquire 
or dispose of shares of the Funds owned by the Client Plans, or any 
duly authorized employee or representative of such fiduciary, and
    (iii) Any participant or beneficiary of the Client Plans or duly 
authorized employee or representative of such participant or 
beneficiary;
    (2) None of the persons described in paragraph (b)(1)(ii) and (iii) 
shall be authorized to examine trade secrets of the Bank, or commercial 
or financial information which is privileged or confidential.

Section IV--Definitions

    For purposes of this exemption:
    (a) The term ``Bank'' means the Bank South, N.A. and any affiliate 
thereof as defined below in paragraph (b) of this Section IV.
    (b) An ``affiliate'' of a person includes:
    (1) Any person directly or indirectly through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person;
    (2) Any officer, director, employee, relative, or partner in any 
such person; and
    (3) Any corporation or partnership of which such person is an 
officer, director, partner, or employee.
    (c) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    (d) The term ``Fund'' or ``Funds'' shall include the Peachtree 
Funds, Inc., or any other diversified open-end investment company 
registered under the 1940 Act for which the Bank serves as an 
investment adviser.
    (e) The term ``net asset value'' means the amount for purposes of 
pricing all purchases and sales calculated by dividing the value of all 
securities, determined by a method as set forth in the Fund's 
prospectus and statement of additional information, and other assets 
belonging to the Fund or portfolio of the Fund, less the liabilities 
charged to each such portfolio or Fund, by the number of outstanding 
shares.
    (f) The term ``relative'' means a ``relative'' as that term is 
defined in section 3(15) of the Act (or a ``member of the family'' as 
that term is defined in section 4975(e)(6) of the Code), or a brother, 
a sister, or a spouse of a brother or a sister.
    (g) The term ``Independent Fiduciary'' means a fiduciary of a 
Client Plan who is independent of and unrelated to the Bank. For 
purposes of this exemption, the Independent Fiduciary will not be 
deemed to be independent of and unrelated to the Bank if:
    (1) Such fiduciary directly or indirectly controls, is controlled 
by, or is under common control with the Bank;
    (2) Such fiduciary, or any officer, director, partner, employee, or 
relative of the fiduciary is an officer, director, partner, employee or 
affiliate of the Bank (or is a relative of such persons);
    (3) Such fiduciary directly or indirectly receives any compensation 
or other consideration for his or her own personal account in 
connection with any transaction described in this exemption.
    If an officer, director, partner, affiliate or employee of the Bank 
(or relative of such persons), is a director of such Independent 
Fiduciary, and if he or she abstains from participation in (i) the 
choice of the Client Plan's investment adviser, (ii) the approval of 
any such purchase or sale between the Client Plan and the Funds, and 
(iii) the approval of any change in fees charged to or paid by the 
Client Plan in connection with any of the transactions described in 
Sections I and II above, then paragraph (g)(2) of this Section IV shall 
not apply.
    (h) The term ``Termination Form'' means the form supplied to the 
Independent Fiduciary which expressly provides an election to the 
Independent Fiduciary to terminate on behalf of a Client Plan the 
authorization described in paragraph (j) of Section II. The Termination 
Form shall be used at will by the Independent Fiduciary to terminate an 
authorization without penalty to the Client Plan and to notify the Bank 
in writing to effect a termination by selling the shares of the Funds 
held by the Client Plan requesting such termination within one business 
day following receipt by the Bank of the form; provided that if, due to 
circumstances beyond the control of the Bank, the sale cannot be 
executed within one business day, the Bank shall have one additional 
business day to complete such sale.

Effective Date: The exemption is effective as of February 11, 1994.
    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 January 30, 1995, at 60 
FR 5713.

Written Comments: The applicant submitted the following comments 
regarding the notice of proposed exemption (the Proposal).
    With respect to the description of the fee structure, the applicant 
states that the Bank is using the fee offset mechanism described in 
Section II(d) of the Proposal for Client Plans that first invested in 
the Funds after the conversion date (i.e. February 14, 1994). As 
described in the Summary of Facts and Representations in the Proposal 
(the Summary), Client Plans invested in the CIFs prior to the 
conversion transaction (described in Section I of the Proposal) 
currently utilize the credit mechanism under which Plan-level trustee 
fees are reduced by the investment advisory fees charged at the Fund-
level pursuant to Section II(c) of Prohibited Transaction Exemption 
(PTE) 77-4, 42 FR 18732, April 8, 1977.<SUP>1 The Bank anticipates 
[[Page 20776]] that the offset mechanism described in Section II(d) of 
the Proposal will be implemented for all Client Plans as soon as 
practicable during the current year. Thus, it is the Bank's 
understanding that the exemption provided by Section II will be 
applicable upon implementation of the fee offset mechanism. The 
Department concurs with the applicant's clarification.

    \ 1\PTE 77-4, in pertinent part, permits the purchase and sale 
by an employee benefit plan of shares of a registered, open-end 
investment company when a fiduciary with respect to the plan is also 
the investment adviser for the investment company, provided that, 
among other things, the plan does not pay an investment management, 
investment advisory or similar fee with respect to the plan assets 
invested in such shares for the entire period of such investment. 
Section II(c) of PTE 77-4 states that this condition does not 
preclude the payment of investment advisory fees by the investment 
company under the terms of an investment advisory agreement adopted 
in accordance with section 15 of the Investment Company Act of 1940. 
Section II(c) states further that this condition does not preclude 
payment of an investment advisory fee by the plan based on total 
plan assets from which a credit has been subtracted representing the 
plan's pro rata share of investment advisory fees paid by the 
investment company.
---------------------------------------------------------------------------

    In addition, Sections I(c) and II(h) of the Proposal and Paragraph 
8 of the Summary state that each Independent Fiduciary received from 
the Bank a written statement giving full disclosure of the fee 
structure prior to investment in the Funds. The Bank would like to 
clarify that the written statement received by Client Plans that 
participated in the conversion transaction described the PTE 77-4 
credit mechanism rather than the fee offset mechanism described in 
Section II(d) of the Proposal. The applicant states that prior to 
implementation of the fee offset mechanism for Client Plans that 
participated in the conversion, each Independent Fiduciary will receive 
a written statement giving full disclosure of the fee structure 
described in Section II(d) of the Proposal, and the Bank will receive 
written authorization from the Independent Fiduciary approving the new 
fee structure. The Department concurs with the applicant's 
clarification.
    With respect to fees payable under Rule 12b-1, Section II(f) of the 
Proposal provides that the Bank may not receive any fees payable 
pursuant to such Rule in connection with the investment of Plan assets 
in the Funds. The applicant notes that this condition is consistent 
with the representations made by the Bank. However, the applicant 
states that Paragraph 4 of the Summary overstates the representations 
made by the Bank with regard to 12b-1 fees and requires minor 
clarification. The third sentence of Paragraph 4 states that ``* * * In 
addition, the Bank does not and will not receive fees payable pursuant 
to Rule 12b-1 in connection with transactions involving any shares of 
the Funds.'' The Bank represents that this statement is true with 
respect to trust accounts, but should be clarified to limit it to 
transactions described under the exemption. The Bank otherwise may 
receive 12b-1 fees for sales of Fund shares to investors other than the 
Client Plans. The Department concurs with the applicant's 
clarification.
    With respect to the responsibility for distributing updated 
prospectuses, Paragraph 8 of the Summary states that ``* * * Client 
Plan fiduciaries will also receive from Federated [Investors], the 
Fund's Distributor, an updated prospectus and periodic reports for each 
Fund.'' The applicant states that while it is true that Federated will 
prepare the updated prospectuses and periodic reports, these items will 
be distributed to Client Plans by the Bank, as trustee. The Department 
concurs with the applicant's clarification.
    With respect to purchases and sales of Fund shares, Section II(c) 
of the Proposal states that neither the Bank nor any affiliate, 
including any officer or director of the Bank, may purchase or sell 
shares of the Funds to any Client Plan. In this regard, the applicant 
notes that the Fund's distributor will execute all purchases or 
redemptions of Fund shares by Client Plans. However, the applicant 
states that the Client Plans will place purchase and redemption orders 
through the Plan's account representative at the Bank. The Bank wishes 
to clarify that Section II(c) of the Proposal does not apply to a 
Client Plan's placement of a purchase or redemption order through its 
account representative at the Bank where the Fund's distributor 
executes the purchase or redemption order. The Department concurs with 
the applicant's clarification.
    With respect to carrying out termination instructions, Section 
IV(h) of the Proposal and Paragraph 8 of the Summary provide that, upon 
receipt of an executed Termination Form, the Bank will effect the sale 
of Fund shares within one business day following receipt of the form; 
provided that if, due to circumstances beyond the Bank's control, the 
Bank may have one additional business day to complete the sale. In this 
regard, the applicant states that Fund shares may not be able to be 
redeemed in the event of extraordinary circumstances that result in 
market closure and/or other restrictions on trading mutual fund 
shares--e.g. natural disaster, war, etc. The Bank would like the 
Department to clarify that, in such event, the conditions of the 
exemption are satisfied provided the Bank redeems Fund shares within 
one business day after the market re-opens and/or Funds are able to be 
traded. The Department concurs with the applicant's clarification.
    Accordingly, after consideration of the entire record, the 
Department has determined to grant the exemption.
    For Further Information Contact: Mr. E.F. Williams of the 
Department, telephone (202) 219-8194. (This is not a toll-free number.)

Delaware Trust Capital Management, Inc. (DTCM), Located in Wilmington, 
DE

[Prohibited Transaction Exemption 95-34; Exemption Application No. D-
09853]

Exemption

    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 certain rollover individual retirement 
accounts (the IRAs) of their interests in certain securities (the 
Securities) to DTCM, a disqualified person with respect to the IRAs, 
provided the following conditions are satisfied: 1) the sale is a one-
time transaction for cash; 2) no commissions or other expenses are paid 
by the IRAs in connection with the sale; 3) the IRAs receive the 
greater of: a) the fair market value of the Securities as of June 30, 
1994, plus accrued interest, less principal repayments received, or b) 
the fair market value of the Securities as of the time of the sale as 
determined by a qualified, independent expert.<SUP>2

    \2\Pursuant to 29 CFR 2510.3-2(d), the IRAs are not within the 
jurisdiction of Title I of the Act. However, there is jurisdiction 
under Title II of the Act pursuant to section 4975 of the Code.
---------------------------------------------------------------------------

    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 March 20, 1995 at 60 FR 
14793.
    For Further Information Contact: Gary H. Lefkowitz of the 
Department, telephone (202) 219-8881. (This is not a toll-free number.)

Shippers Paper Products Co., 401(k) Plan (the Plan), Located in 
Glenview, IL

[Prohibited Transaction Exemption 95-35; Application No. D-09866]

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 Group Annuity Contract, No. 
GA-4725 (the GAC) issued by Mutual Benefit Life Insurance Company 
(Mutual Benefit) to Illinois Tool Works [[Page 20777]] Inc., a party in 
interest with respect to the Plan; provided the following conditions 
are satisfied: (1) The sale is a one-time transaction for cash; (2) the 
Plan receives no less than the fair market value of the GAC at the time 
of the sale; (3) the Plan's trustee, acting as independent fiduciary 
for the Plan, has determined that the proposed sale price is not less 
than the current fair market value of the GAC; and (4) the Plan's 
trustee has determined that the proposed transaction is appropriate for 
and in the best interests of the Plan and its participants and 
beneficiaries.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on February 10, 1995 at 60 
FR 8089.
    For Further Information Contact: Virginia J. Miller of the 
Department, telephone (202) 219-8971. (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, DC, this 24th day of April 1995.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, U.S. Department of Labor.
[FR Doc. 95-10405 Filed 4-26-95; 8:45 am]
BILLING CODE 4510-29-P