28626 Federal Register / Vol. 60, No. 105 / Thursday, June 1, 1995 / Notices

1See Exempt. of Rail Abandonment—Offers of

Finan. Assist., 4 I.C.C.2d 164 (1987).

INTERSTATE COMMERCE

COMMISSION

[Docket No. AB–43 (Sub-No. 168X)]

Illinois Central Railroad Co.—

Abandonment Exemption—in Hinds

County, MS

AGENCY: Interstate Commerce

Commission.

ACTION: Notice of exemption.

SUMMARY: Under 49 U.S.C. 10505, the

Commission exempts from the

regulatory requirements of 49 U.S.C.

10903–04 the abandonment by Illinois

Central Railroad Company of 2.7 miles

of rail line, between milepost NN–

178.50 at Elton and milepost NN–181.21

at Jackson, in Hinds County, MS, subject

to a public use condition, a historic

preservation condition, and the

standard employee protective

conditions. The Commission also issues

a notice of interim trail use.

DATES: Provided no formal expression of

intent to file an offer of financial

assistance has been received, this

exemption will be effective on July 1,

1995. Formal expressions of intent to

file an offer 1 of financial assistance

under 49 CFR 1152.27(c)(2) must be

filed by June 12, 1995. Petitions to stay

must be filed by June 16, 1995. Requests

for a public use condition must be filed

by June 21, 1995. Petitions to reopen

must be filed by June 26, 1995.

ADDRESSES: Send pleadings referring to

Docket No. AB–43 (Sub-No. 168X) to:

(1) Office of the Secretary, Case Control

Branch, Interstate Commerce

Commission, 1201 Constitution Avenue,

NW, Washington, DC 20423; and (2)

Miles L. Tobin, Esq., 455 North

Cityfront Plaza Drive, Chicago, IL

60611–5504.

FOR FURTHER INFORMATION CONTACT:

Joseph H. Dettmar, (202) 927–5660.

[TDD for the hearing impaired: (202)

927–5721.]

SUPPLEMENTARY INFORMATION:

Additional information is contained in

the Commission’s decision. To purchase

a copy of the full decision, write to, call,

or pick up in person from: Dynamic

Concepts, Inc., Interstate Commerce

Commission Building, Room 2229, 1201

Constitution Avenue, NW, Washington,

DC 20423. Telephone: (202) 289–4357/

4359. [Assistance for the hearing

impaired is available through TDD

services (202) 927–5721].

Decided: May 17, 1995.

By the Commission, Chairman Morgan,

Vice Chairman Owen, and Commissioners

Simmons and McDonald.

Vernon A. Williams,

Secretary.

[FR Doc. 95–13279 Filed 5–31–95; 8:45 am]

BILLING CODE 7035–01–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Prohibited Transaction Exemption 95–39;

Exemption Application No. D–09358, et al.]

Grant of Individual Exemptions; NCNB

Real Estate Fund, 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, D.C. The

notices also invited interested persons

to submit comments on the requested

exemptions to the Department. In

addition the notices stated that any

interested person might submit a

written request that a public hearing be

held (where appropriate). The

applicants have represented that they

have complied with the requirements of

the notification to interested persons.

No public comments and no requests for

a hearing, unless otherwise stated, were

received by the Department.

The notices of proposed exemption

were issued and the exemptions are

being granted solely by the Department

because, effective December 31, 1978,

section 102 of Reorganization Plan No.

4 of 1978 (43 FR 47713, October 17,

1978) transferred the authority of the

Secretary of the Treasury to issue

exemptions of the type proposed to the

Secretary of Labor.

Statutory Findings

In accordance with section 408(a) of

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

Code and the procedures set forth in 29

CFR part 2570, subpart B (55 FR 32836,

32847, August 10, 1990) and based upon

the entire record, the Department makes

the following findings:

(a) The exemptions are administratively

feasible;

(b) They are in the interests of the plans

and their participants and

beneficiaries; and

(c) They are protective of the rights of

the participants and beneficiaries of

the plans.

NCNB Real Estate Fund (the Fund),

NationsBank Pension Plan,

NationsBank Retirement Savings Plan

Located in Charlotte, North Carolina;

Exemption

[Prohibited Transaction Exemption 95–39;

Exemption Application Nos. D–09358, D–

09359 and D–09360, respectively]

Based on the facts and representations

set forth in the application, the

Department and the Service have

determined to grant the following

exemption under the authority of

section 408(a) of the Act and section

4975(c)(2) of the Code and in

accordance with the procedures set

forth in 29 CFR Part 2570, Subpart B (55

FR 32836, August 10, 1990) and

Revenue Procedure 75–26, 1975–1 C.B.

722.

Section I: Covered Transactions

1. 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 (the

Sale) of units in the Fund (Units) by

plans participating in the Fund (the

Plans) pursuant to an Option election

made available by NationsBank, N.A.

(Carolinas) (the Bank), to a standby trust

(the Standby Trust) established and

maintained by NationsBank,

Corporation (the Holding Company), a

party in interest with respect to the

Plans. This exemption is subject to the

conditions set forth in Section II.

2. The restrictions of sections

406(a)(1)(D), 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) (D) and

(E) of the Code shall not apply to any

decision by the Bank to sell a property

held by the Fund to a third party, and

jointly owned by the Plans and the

Holding Company, provided that: each

Plan receives no less than fair market

value for its interest in the property; and
Federal Register / Vol. 60, No. 105 / Thursday, June 1, 1995 / Notices 28627

the Independent Fiduciary approves the

reasonableness and propriety of the sale

of the property.

Section II: Conditions

(a) The properties held by the Fund

(the Properties) shall be appraised by an

independent and qualified appraiser

within twelve months and updated

within fifteen days before the

Settlement Valuation Date.

(b) The Plans selling Units pursuant

to the Options will receive a price equal

to the value of each Unit sold based on

the value of the Fund as of the

Settlement Valuation Date (the Unit

Purchase Price) plus the Interest

Amount which will be calculated by the

Bank and reviewed and approved by the

Independent Fiduciary who has been

retained to represent the interests of the

Plans with respect to the Sale and the

subsequent activities of the Fund related

to the Fund’s liquidation.

(c) Plans selling Units pursuant to

Options 1 or 2 will receive the Unit

Purchase Price plus the Interest Amount

for each Unit sold on the settlement date

(Settlement Date) which will be no more

than 120 days after the Settlement

Valuation Date.

(d) If Options 2 or 4 are elected, the

Plans involved will receive the final

payment, if any, within sixty days after

the two year anniversary of the

Settlement Valuation date for Option 2,

or the date of complete liquidation of

the Fund for Option 4.

(e) Prior to the Settlement Valuation

Date, the Bank will provide each Plan

with written information regarding the

terms of the Sale. Such information

includes, but is not limited to:

(i) notice that each Plan will be

entitled to elect one or more Options

which will permit the Plan to sell all or

part of its Units to the Stand-by Trust,

or to continue to hold all or part of its

Units in the Fund until the Fund’s

liquidation is complete, provided that if

multiple Options are elected they must

be uniform with respect to the grant, or

failure to grant, a Release to the Bank,

(ii) a description of each Option,

(iii) the date by which a Plan must

elect an Option (Option Election Date),

and

(iv) forms for electing the Options.

(f) Except for Plans with respect to

which the Bank or any of its Affiliates

is an employer, the decision whether to

authorize the Independent Fiduciary to

make an Option election on behalf of

the Plan will be made by a fiduciary

independent of the Bank and its

Affiliates and the Independent

Fiduciary.

(g) The Bank and any Affiliate which

is an employer with respect to a Plan

will authorize the Independent

Fiduciary to choose among all of the

Options.

(h) A Plan’s Option election will be

made by a Plan fiduciary who is

independent of the Bank and its

Affiliates or by the Independent

Fiduciary.

(i) The Independent Fiduciary’s

duties and responsibilities are set forth

in the Independent Fiduciary

Agreement between the Independent

Fiduciary and the Bank dated April 1,

1994 and amended by the First

Amendment thereto dated September 1,

1994. These duties and responsibilities

include such activities as:

(1) Reviewing and determining

whether to rely on the appraisals of the

Properties;

(2) Ordering a new appraisal to the

extent it deems necessary in cases in

which it has determined that an existing

appraisal cannot be relied upon;

(3) Reviewing and approving all of the

relevant disclosures, written

explanations, and forms furnished to the

Plans by the Bank;

(4) Furnishing certain information to

an independent Plan fiduciary, in

advance of any date by which the

independent Plan fiduciary is required

to respond in order to authorize the

Independent Fiduciary to make a

decision on behalf of the Plan. Such

information includes, but is not limited

to:

(i) the Unit Purchase Price;

(ii) a description and explanation of

the Options;

(iii) dates by which the Plans must act

in order to make Option elections and

authorize the Independent Fiduciary to

make Option elections on behalf of the

Plan;

(iv) information summarizing: the

effect of failing to authorize the

Independent Fiduciary to make Option

elections on behalf of the Plan, the effect

of failing to make an Option election

after informing the Independent

Fiduciary that the independent Plan

fiduciary would make the decision to

select an Option election, and the

availability and effect of the different

Option election authorizations which

the Plan may provide to the

Independent Fiduciary, in language

calculated to be reasonably understood

by the average independent Plan

fiduciary responsible for making

decisions on behalf of a Plan with

regard to Units of the Fund held by the

Plan;

(5) making Option elections on behalf

of any Plan if: (a) the Bank or any of its

Affiliates is an employer with respect to

the Plan; (b) the independent Plan

fiduciary authorizes the Independent

Fiduciary to make Option elections on

behalf of that Plan; or (c) the

independent Plan fiduciary fails to

make an option election prior to the

Option Election Date;

(6) providing certain assistance

regarding the four Options, to those

independent Plan fiduciaries who wish

to make their own Option elections;

(7) reviewing and determining

whether to approve the Unit Purchase

Price as of the Settlement Valuation

Date, and the value of a Unit in the

Fund as of two years from the Sale of

the Units by the Plans to the Standby

Trust (for purposes of determining the

amount which is due to those Plans

electing Option 2);

(8) reviewing and determining

whether to approve the Interest Amount

payable to any Plan which elected either

Option 1 or 2;

(9) exercising its veto authority with

regard to the proposed Unit Purchase

Price, Interest Amount, or value of Fund

Units pursuant to Option 2, which it has

determined not to approve;

(10) monitoring, by attending the

Bank’s Trust Real Estate Investment

Committee’s quarterly meetings, the

Bank’s efforts to dispose of the

Properties during the liquidation of the

Fund;

(11) approving the reasonableness and

propriety of sales of the Properties

during the period in which the Standby

Trust owns units in the Fund.

(j) The Independent Fiduciary may be

removed by a majority vote of the Plans

‘‘for cause.’’

(i) The term ‘‘for cause’’ shall mean

that there must be sufficient and

reasonable grounds for removal and the

grounds must be related to the ability

and fitness of the Independent

Fiduciary to perform his required

duties.

(ii) Each Plan’s vote for or against

removal will be proportionate to its

ownership interest in the Fund

exclusive of Units owned by the

Standby Trust.

(k) The Bank and the Holding

Company will be bound by the

decisions and determinations made by

the Independent Fiduciary.

(l) The Bank will continue its efforts,

with due diligence to liquidate the

Fund.

(m) Any distributions made by the

Fund will be made pro rata, in cash.

(n) Any payment made pursuant to

any of the Options will be made in cash.

(o) The Independent Fiduciary is

responsible for taking reasonable steps

consistent with its duties and

responsibilities hereunder to monitor

compliance with the terms and

conditions of the exemption at all times.
28628 Federal Register / Vol. 60, No. 105 / Thursday, June 1, 1995 / Notices

Section III: Definitions

For purposes of this exemption:

(a) Affiliate of the Bank includes:

(1) Any person directly or indirectly

through one or more intermediaries

controlling, controlled by, or under

common control with the Bank;

(2) Any officer, director or employee

of the Bank, or of a person described in

paragraph (a)(1) of Section II; and

(3) Any partnership in which the

Bank is a partner;

(b) Control means the power to

exercise a controlling influence over the

management or policies of a person

other than an individual.

(c) Affiliate of the Independent

Fiduciary includes:

(1) Any person directly or indirectly

through one or more intermediaries

controlling, controlled by, or under

common control with the Independent

Fiduciary;

(2) Any officer or director of the

Independent Fiduciary (where the

Independent Fiduciary is other than a

partnership);

(3) Any partner in the Independent

Fiduciary with the authority to make, or

who actually makes, fiduciary decisions

which are within the scope of the

Independent Fiduciary’s duties and

responsibilities under this exemption,

or who holds a five percent (5%) or

greater interest in the Independent

Fiduciary;

(d) Independent Fiduciary means a

person who:

(1) Is not an Affiliate of the Bank as

defined in Section III(a);

(2) does not have an ownership

interest in the Bank or its Affiliates;

(3) is not a corporation or partnership

in which the Bank or any of its Affiliates

has an ownership interest;

(4) is not a fiduciary with respect to

any of the Plans other than in

connection with the transactions

described in this exemption;

(5) has acknowledged in writing

acceptance of fiduciary responsibility;

(6) is either:

(i) A business organization which has

at least (5) years of experience with

respect to commercial real estate

investments or other relevant

experience;

(ii) a committee comprised of three to

five individuals who each have at least

five (5) years of experience with respect

to commercial real estate investments or

other relevant experience; or

(iii) a committee comprised both of a

business organization or organizations

and individuals having the

qualifications described in paragraphs

(d)(1) through (6)(ii) above.

(7) An individual acting in a fiduciary

capacity with respect to the Fund on

behalf of, and at the direction of, an

Independent Fiduciary meeting the

conditions of paragraphs (d)(1) through

(6)(iii) above shall be considered an

Independent Fiduciary.

For purposes of this definition, no

organization or individual may serve as

an Independent Fiduciary for the Fund

for any fiscal year, if the gross income

received by such organization or

individual (or by any partnership or

corporation of which such organization

or individual is an officer, director, or

ten percent (10%) or more partner or

shareholder) from the Bank, or any

Affiliate, for that fiscal year exceeds five

percent (5%) of its or his annual gross

income from all sources for the prior

fiscal year. If such organization or

individual has no income for the prior

fiscal year, the 5% limitation shall be

applied with reference to the fiscal year

in which such organization or

individual serves as an independent

fiduciary. The income limitation will

include income received for services

rendered to the Plans and the Fund as

Independent Fiduciary, as described in

this exemption.

In addition, no organization or

individual who is an Independent

Fiduciary or an Affiliate of such

Independent Fiduciary, and no

partnership or corporation of which

such Independent Fiduciary is an

officer, director, or ten percent (10%) or

more partner or shareholder with the

authority to cause such corporation or

partnership to engage in the following

transactions, or who exercises such

authority in conjunction with others,

may:

(1) Acquire any property from, sell

any property to, or borrow any funds

from, the Bank, its Affiliates, or any

collective investment vehicle or

separate trust maintained or advised by

the Bank or its Affiliates, during the

period that such organization or

individual serves as an Independent

fiduciary and continuing for a period of

six (6) months after such organization or

individual ceases to be an Independent

Fiduciary; or

(2) Negotiate any such transaction,

described above in paragraph (1) above

during the period that such organization

or individual serves as Independent

Fiduciary.

No Plan fiduciary or sponsor of a Plan

or a designee of such Plan fiduciary,

sponsor or Plan may serve as the

Independent Fiduciary with respect to

the Fund.

(e) Option(s) means the following:

Option 1: A Plan will accelerate the

liquidation of its investment in the

Fund by selling each of its Units subject

to this Option to the Standby Trust for

an amount equal to the Unit Purchase

Price plus the Interest Amount. A Plan

electing this Option will reserve all

rights it may have with respect to the

Fund, the Bank and other appropriate

persons. However, with respect to a

participant directed account Plan, the

Plan sponsor and an authorized

independent Plan fiduciary will provide

a Release to the Fund, the Bank and

other appropriate persons without any

affect on the rights of the participants or

beneficiaries regarding the matters

covered by the Release.

Option 2: A Plan will accelerate the

liquidation of its investment in the

Fund by selling each of its Units subject

to this Option to the Standby Trust for

an amount equal to the Unit Purchase

Price plus the Interest Amount. In

addition, the Bank will pay promptly

following the second anniversary of the

Settlement Valuation Date, an amount

equal to the excess, if any, of (A) the

sum of (1) the value that the Unit would

have had at the Valuation Date two

years after the Settlement Valuation

Date if such Unit had not been sold,

plus (2) the amount of any distributions

made with respect to such Unit during

such two year period, over (B) the Unit

Purchase Price plus the Interest

Amount. The Bank will pay Litigation

Expenses to the Plan, if any. Under this

Option, a Plan will release the Fund, the

Bank and other appropriate persons

with respect to all matters relating to the

investment in the Fund occurring prior

to the Sale.

Option 3: A Plan will continue its

investment in the Fund through the end

of the liquidation process. Under this

Option, a Plan reserves all rights with

respect to the Fund, the Bank and all

other appropriate persons. However,

with respect to a participant directed

account Plan, the Plan sponsor and an

authorized independent Plan fiduciary

will provide a Release to the Fund, the

Bank and other appropriate persons

without any affect on the rights of the

participants or beneficiaries regarding

the matters covered by the Release.

Option 4: A Plan will continue its

investment in the Fund through the end

of the liquidation process. For a Plan

electing this Option, the Bank will agree

to pay promptly following the

completion of the liquidation of the

Fund, with respect to each Unit subject

to this Option, an amount equal to the

excess, if any, of the (i) the value of a

Unit on September 28, 1990 over (ii) the

value of all distributions made to the

Plan with respect to such Unit since

September 29, 1990 and during the

liquidation of the Fund. The Bank will

also pay Litigation Expenses to the Plan,

if any. Plans electing this Option will
Federal Register / Vol. 60, No. 105 / Thursday, June 1, 1995 / Notices 28629

release the Fund, the Bank and other

appropriate persons with respect to all

matters related to the investment in the

Fund occurring prior to the Sale.

(f) Unit Purchase Price means the

amount which is calculated by dividing

the value of all of the assets of the Fund,

as reviewed and approved by the

Independent Fiduciary, by the total

number of units in the Fund.

(g) Interest Amount means the amount

approved by the Independent Fiduciary,

equal to the net income earned on a

Fund unit during the period

commencing on the Settlement

Valuation Date and ending on the day

immediately preceding the Settlement

Date, exclusive of realized or unrealized

appreciation or depreciation.

(h) Settlement Valuation Date means

the date on which the value of the Fund

will be determined by the Bank in order

to establish the Unit Purchase Price in

connection with the Sale. The

Settlement Valuation Date will be the

last business day of the calendar month

following the calendar month in which

final prospective approval will be

granted by the Office of the Comptroller

of the Currency subsequent to the final

grant of this exemption and approval of

the transaction which is the subject of

this exemption by the Federal Reserve

Board.

(i) Litigation Expenses means the outof-pocket expenses of litigation

instituted before November 24, 1992 by

or on behalf of a Plan against the Bank

or the Fund with respect to the Plan’s

investment in the Fund exclusive of any

expense of litigation with respect to a

case which has proceeded to trial, or

with respect to which there is a

judgment against the Bank or the Fund,

prior to the Option Election Date, plus

interest. The total amount of Litigation

Expenses, the rate of interest and the

period for which interest is paid must

be agreed to in writing between the

Bank and the Plan prior to the Plan’s

election of Options 2 or 4. However, in

the event there has never been a written

settlement agreement specifying the

amount of Litigation Expenses, prior to

the date on which the Plan elects

Option 2 or 4, Litigation Expenses will

be the amounts requested by the Plan,

unless such expenses are unreasonable.

(j) Option Election Date means the

date as communicated to the Plans, at

least Ninety (90) days subsequent to the

Settlement Valuation Date and at least

sixty (60) days subsequent to the

completion of the mailing of the general

post Settlement Valuation Date

disclosure to all of the Plans by the

Independent Fiduciary, on or prior to

which a Plan must submit its Option

election forms to the Bank.

(k) Settlement Date means the date, no

more than 120 days after the Settlement

Valuation Date, on which the transfer of

the Units to the Standby Trust and

delivery of Releases to the Bank will be

effected pursuant to the Options.

(l) Release means a release covering

activities and transactions in connection

with the Fund prior to, and during, the

Fund’s liquidation, but in no case shall

be effective on or after the Settlement

Date. In this regard, the Release does not

cover activities and transactions

necessary to comply with the

exemption, the conditions of the

exemption, and the material

representations made in connection

therewith, which form the basis for the

Department’s decision to grant the

exemption for the Sale and subsequent

dispositions of properties owned by the

Fund.

Written Comments

In the Notice of Proposed Exemption

(the Notice), the Department invited all

interested persons to submit written

comments and requests for a hearing on

the proposed exemption within 30 days

of the date of publication of the Notice

in the Federal Register on March 20,

1995.

During the comment period, the

Department received no requests for a

hearing. However, the Department

received four comment letters; one from

a person who appears to represent an

employee benefit plan invested in the

Fund, one from the Bank, and two from

Arthur Anderson, the Independent

Fiduciary.

The comment on behalf of Drs.

Auman, Anderson & Munt, who appear

to represent an employee benefit plan

invested in the Fund, favored the

liquidation of the plan’s interest in the

Fund.

The comment from the Bank dated

March 30, 1995, states that the name of

the applicant has been changed from

‘‘Nations Bank of North Carolina, N.A.’’

to NationsBank, N.A. (Carolinas). The

Department concurs.

The comment letter from Arthur

Andersen dated, May 1, 1995, as well as

a second letter clarifying certain

comments in the first letter, requested

certain modifications and clarifications

of the conditions of the exemption and

certain revisions of the language of the

Summary of Facts and Representations

in the Notice (SFR). Arthur Andersen’s

comments are as follows:

First, Arthur Andersen requests

modification of the condition contained

in Section II(i) on page 14781 of the

Notice. A list of activities follows the

language, ‘‘[t]he Independent

Fiduciary’s duties and responsibilities

include, but are not limited to,’’ which

appears at the beginning of paragraph

(i). Arthur Andersen suggests replacing

the quoted language with the following

language: ‘‘[t]he Independent

Fiduciary’s duties and responsibilities

are set forth in the Independent

Fiduciary Agreement between the

Independent Fiduciary and the Bank

dated April 1, 1994, and amended by

the First Amendment thereto dated

September 1, 1994. These duties and

responsibilities include such activities

as.’’ Arthur Andersen states that this

change would clarify that Section II(i) is

meant to describe the terms of the

Agreement which the parties should

look to in order to determine the

specific scope of Arthur Andersen’s

responsibilities. The Department

concurs.

Second, the condition contained in

Section II(i)(1) on page 14781 of the

Notice states that the Independent

Fiduciary’s duties include ‘‘reviewing

and determining whether to approve

appraisals of the Properties.’’ Arthur

Andersen suggests replacing the word,

‘‘approve,’’ with the words, ‘‘rely on.’’

Arthur Andersen explains that its role is

limited to reviewing the appraisals to

determine whether they can reasonably

be relied upon as the basis for

establishing the Unit Purchase Price.

The Department concurs.

Further, the third sentence of item 9

of the SFR on page 14785 of the Notice

states that ‘‘[t]he Independent Fiduciary

will review and approve the

qualifications of the appraisers and their

technical analyses and methodologies

employed.’’ Arthur Andersen states that

it will not approve the professional

qualifications of the appraisers, but

rather will evaluate and consider their

qualifications in the course of its review

of the appraisals. The Department

concurs.

Moreover, the fourth sentence of item

9 of the SFR on page 14785 states that

‘‘[a]s part of this approval process, the

Independent Fiduciary will determine

whether such appraisals are reasonable

and adequate to establish the fair market

value of the Properties.’’ Arthur

Andersen states that it would be more

accurate to say that the Independent

Fiduciary will determine to what extent

such appraisals provide a reasonable

basis for such purpose. Arthur Andersen

explains that it’s role will be limited to

reviewing the appraisals to determine

whether they can reasonably be relied

upon as a basis for establishing the Unit

Purchase Price, rather than approval of

the underlying appraisals. The

Department concurs.

In addition, the fourth sentence of the

second paragraph of item 9 of the SFR
28630 Federal Register / Vol. 60, No. 105 / Thursday, June 1, 1995 / Notices

on page 14785 states that ‘‘[f]urther, if

the Independent Fiduciary believes that

the Unit Purchase Price proposed by the

Bank is not accurate, the Independent

Fiduciary has the authority to order the

Bank to recalculate the Unit Purchase

Price.’’ Arthur Andersen suggests that

the quoted language above should be

replaced with the following language:

‘‘[f]urther, if the Independent Fiduciary

cannot approve the Unit Purchase Price

proposed by the Bank, the Independent

Fiduciary has the authority to order the

Bank to recalculate the Unit Purchase

Price.’’ Arthur Andersen explains that

the word, ‘‘accurate,’’ is not the

appropriate term to use, because the

property values will be based on a range

of reasonableness. The Department

concurs.

Third, the condition contained in

Section II(i)(2) on page 14781 of the

Notice states that the Independent

Fiduciary is responsible for ‘‘[o]rdering

a new appraisal in cases in which it has

determined not to approve an existing

appraisal.’’ Arthur Andersen suggests

that the quoted language above be

replaced with the following language:

‘‘[o]rdering a new appraisal to the extent

it deems necessary in cases in which it

has determined that an existing

appraisal cannot be relied upon.’’

Arthur Andersen explains that this

revision would make this condition

consistent with the above described

revision it proposes for the first

sentence in Section II(i) of the

conditions. The Department concurs.

Fourth, the condition contained in

Section II(i)(3) on page 14781 of the

Notice states that the Independent

Fiduciary is responsible for ‘‘[r]eviewing

and approving all of the disclosures,

written explanations, and forms

furnished to the Plans by the Bank.’’

Arthur Andersen states that the word,

‘‘relevant,’’ should be inserted before

the word, ‘‘disclosures.’’ In this regard,

Arthur Andersen explains that it will

review and approve materials only

insofar as they are relevant to Arthur

Andersen’s duties and responsibilities

in connection with the Option election

process. Other communications by the

Bank to the Plans would be outside the

scope of Arthur Andersen’s role under

the exemption. Arthur Andersen

believes this is particularly appropriate

since the Bank may engage in a number

of communications to the Plans during

the liquidation period which are

unrelated to the exemption or the

Independent Fiduciary’s role. The

Department concurs.

Fifth, the condition contained in

Section II(i)(4) on page 14781 of the

Notice states that the Independent

Fiduciary is responsible for

‘‘[f]urnishing information to an

independent Plan fiduciary, in advance

of any date by which the independent

Plan fiduciary is required to respond in

order to authorize the Independent

Fiduciary to make a decision on behalf

of the Plan.’’ Arthur Andersen suggests

inserting the word, ‘‘certain,’’ between

the word, ‘‘furnishing,’’ and the word,

‘‘information.’’ Arthur Andersen

explains that the change would clarify

that it is responsible for providing

certain types of information relevant to

its role as Independent Fiduciary. The

Department concurs.

Sixth, the condition contained in

paragraph (i)(4) (renumbered in the final

exemption as (i)(5)) on page 14782 of

the Notice states that the Independent

Fiduciary is responsible for—

Making Option elections on behalf of any

Plan if: (a) the Bank or any of its Affiliates

is an employer with respect to the Plan; (b)

the independent Plan fiduciary authorizes

the Independent Fiduciary to make an

Option elections on behalf of that Plan; or (c)

the independent Plan fiduciary does not

reserve the right to make an Option election

and fails to make an Option election prior to

the Option Election Date.

Arthur Andersen suggests that the

language in item (c) quoted above,

should be replaced with the following

language: ‘‘the independent Plan

fiduciary fails to make Option election

prior to the Option Election Date.’’

Arthur Andersen states that

Independent Plan fiduciaries that

reserve the right to make an Option

election but fail to do so within the

prescribed time frames are not described

in the current language quoted above.

Because Arthur Andersen will make

Option elections for such Plans, the

language in item (c) should include this

omitted category, which can be

accomplished by eliminating the

distinction between Plan fiduciaries that

do or do not reserve the right to make

option elections. The Department

concurs.

Further, the second paragraph of item

12 of the SFR on page 14786 states

that—

[I]f the Plan reserves the right to make it’s

own Option election and subsequently fails

to make an Option election by the Option

Election Date, the Plan will be deemed to

have elected Option 3. If the Plan does not

reserve the right to make its own Option

election and the Plan fails to make: a

sufficiently broad authorization; any

authorization at all; or fails to complete the

profile survey, Arthur Andersen will elect

only between Options 1 and 3 for the Plan.

However, Arthur Andersen will choose

among all four Options if the independent

Plan fiduciary completes and returns timely

all required parts of the profile/survey and

the related authorization form expressly

authorizing Arthur Andersen to choose

among all four Options. The Bank represents

that it will authorize Arthur Andersen to

choose among all four Options for Plans with

respect to which the Bank or any of its

Affiliates is an employer.

Arthur Andersen states that the above

quoted language should be clarified to

indicate that ‘‘where the Plan fails to

make its own Option election by the

Option Election Date, Andersen will

make an election for the Plan between

Options 1 and 3, unless otherwise

expressly authorized in writing by an

independent Plan fiduciary to elect from

among all four options. The Option

election will not automatically default

in certain cases to Option 3.’’ Arthur

Andersen explains that in each case, an

Option election will be made either by

a Plan’s independent fiduciary, a plan

participant or beneficiary in a

participant-directed plan (where

applicable), or by Arthur Anderson as

Independent Fiduciary, as described in

the Notice, and in no case will an

Option election automatically default to

any particular Option. The Department

concurs.

Seventh, the condition contained in

Section II(i)(5) (renumbered in the final

exemption as (i)(6)) on page 14782 of

the Notice states that the Independent

Fiduciary is responsible for ‘‘providing

guidance regarding the four Options, to

those independent Plan fiduciaries who

wish to make their own Option

elections.’’ Arthur Andersen states that

the words, ‘‘certain assistance,’’ should

replace the word, ‘‘guidance.’’ Arthur

Andersen explains that where

independent Plan fiduciaries have

decided to make their own Option

elections, they will not be depending on

Arthur Andersen in making their

decisions. Consequently, the word,

‘‘guidance,’’ would overstate the

interaction between Arthur Andersen

and such fiduciaries regarding Option

elections, whereas ‘‘certain assistance’’

more accurately describes this

interaction. The Department concurs.

Further, the first sentence of the

fourth paragraph of item 12 of the SFR

on page 14786 states that ‘‘[w]ith respect

to those independent Plan fiduciaries

who notify Arthur Andersen that they

will be making their own Option

elections, Arthur Andersen is prepared

to counsel any Plan fiduciary regarding

the election process.’’ Arthur Andersen

suggests substituting the word, ‘‘assist,’’

for the word, ‘‘counsel.’’ Arthur

Andersen wishes to clarify that with

respect to those independent Plan

fiduciaries who notify Arthur Andersen

that they will be making their own

Option elections, Arthur Andersen is

prepared to assist any Plan fiduciary
Federal Register / Vol. 60, No. 105 / Thursday, June 1, 1995 / Notices 28631

regarding the election process. Arthur

Andersen explains that in this context,

the word, ‘‘assist,’’ is more accurate. The

Department concurs.

Eighth, the condition contained in

Section II(i)(9) (renumbered in the final

exemption as (i)(10)) on page 14782 of

the Notice states that the Independent

Fiduciary is responsible for ‘‘monitoring

the Bank’s efforts to dispose of the

Properties during the liquidation of the

Fund.’’ Arthur Andersen suggests

modifying this phrase to read:

‘‘monitoring, by attending the Bank’s

Trust Real Estate Investment

Committee’s quarterly meetings, the

Bank’s efforts to dispose of the

Properties during the liquidation of the

Fund.’’ Arthur Andersen states that the

additional language more accurately

reflects its duties under the Agreement,

as amended. The Department concurs.

In addition, the condition contained

in Section II(o) on page 14782 of Notice

states that ‘‘[t]he Independent Fiduciary

is responsible for monitoring

compliance with the terms and

conditions of the exemption at all

times.’’ Arthur Andersen suggests

deleting the word, ‘‘monitoring,’’ and

inserting after the words, ‘‘responsible

for,’’ the following language: ‘‘taking

reasonable steps consistent with its

duties and responsibilities hereunder to

monitor.’’ In this regard, Arthur

Andersen explains that it would not

have an affirmative obligation to engage

in additional activities to determine

compliance beyond participation in the

quarterly meetings of NationsBank’s

Trust Real Estate Investment Committee.

Arthur Andersen believes that it must

act reasonably within the scope of its

defined role, and to the extent it

determines there is non-compliance, it

must take appropriate action.

Arthur Andersen represents that

notwithstanding its comments regarding

its responsibilities under the conditions

contained in Sections II(i)(9) and (o) of

the Notice, Arthur Andersen will be

responsible for obtaining the

information necessary to execute its

duties as follows: (a) To approve, in

advance of any sales of the Properties

during the period in which the Standby

Trust owns Units in the Fund, the

reasonableness and propriety of such

sales; and (b) to approve, in advance of

the payments to Plans under Option 2

following the second anniversary of the

Settlement Valuation Date, the

reasonableness and propriety of the

value of the Fund Units pursuant to

Option 2, using procedures parallel to

those used in reviewing and approving

the reasonableness of the Unit Purchase

Price. The Department concurs.

Ninth, the definition in Section

II(c)(2) (renumbered in the final

exemption as Section III(c)(2)) on page

14782 of the Notice states that ‘‘[a]ny

officer or director of the Independent

Fiduciary’’ is defined as an Affiliate of

the Independent Fiduciary. Arthur

Andersen requests that the parenthetical

‘‘(where the Independent Fiduciary is

other than a partnership)’’ be appended

to the end of the language quoted above.

Arthur Andersen explains that the

change would clarify that Section

III(c)(2) is not intended to apply to a

partnership. The Department concurs.

Tenth, the definition in Section

II(c)(3) (renumbered in the final

exemption as Section III(c)(3)) on page

14782 of the Notice defines Affiliate of

the Independent Fiduciary to include

‘‘[a]ny partner in the Independent

Fiduciary, or any other related

individual, with the authority to make,

or who actually makes, fiduciary

decisions which are within the scope of

the Independent Fiduciary’s duties and

responsibilities under this exemption,

or who holds a five percent (5%) or

greater interest in the Independent

Fiduciary.’’ Arthur Andersen suggests

that the italicized phrase above be

deleted. Arthur Andersen explains that

section (d)(7) of the definitions, already

reaches persons who are not partners in

the Independent Fiduciary but

nevertheless act in a fiduciary capacity.

The Department concurs.

After giving full consideration to the

record, including the comments by

commentators, the Department has

determined to grant the exemption as

described herein. In this regard, the

comments submitted to the Department

have been included as part of the public

record of the exemption application.

The complete application file, including

all supplemental submissions received

by the Department is made available for

public inspection in the Public

Documents Room of the Pension and

Welfare Benefits Administration, Room

N–5507, U.S. Department of Labor, 200

Constitution Avenue NW., Washington,

DC 20210.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption published refer to the notice

of proposed exemption published

Monday March 20, 1995, at 60 FR

14781.

FOR FURTHER INFORMATION CONTACT: Eric

Berger 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 25th day of

May 1995.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

U.S. Department of Labor.

[FR Doc. 95–13300 Filed 5–31–95; 8:45 am]

BILLING CODE 4510–29–P

NATIONAL ARCHIVES AND RECORDS

ADMINISTRATION

Notice of Submission of Proposed

Information Collections to OMB

AGENCY: National Archives and Records

Administration.

ACTION: Notice of proposed information

collections submitted to OMB for

approval.

SUMMARY: The National Archives and

Records Administration (NARA) is

giving notice that the proposed

collections of information described in

this notice have been submitted to the

Office of Management and Budget for

approval under the Paperwork

Reduction Act and 5 CFR part 1320.