[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Notices]
[Pages 63062-63064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29985]



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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Prohibited Transaction Exemption 95-108, Exemption Application No. D-
09973, et al.]


Grant of Individual Exemptions; Kay Alden, Inc. Money Purchase 
Plan (the Plan), et al.

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Grant of individual exemptions.

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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 

[[Page 63063]]
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.

Kay Alden, Inc. Money Purchase Plan (the Plan), Located in Chicago, 
Illinois; Exemption

[Prohibited Transaction Exemption 95-108; Exemption Application No. 
D-09973]

    The restrictions of sections 406(a), 406(b)(1) and 406(b)(2) of the 
Act and the sanctions resulting from the application of section 4975 of 
the Code, by reason of section 4975(c)(1) (A) through (E) of the Code 
shall not apply to the purchase of real property (the Purchase) by the 
Plan from Mr. Vernon Nelson (Nelson), a party in interest with respect 
to the Plan provided that: (a) The Purchase is a one time transaction 
for cash; (b) the Plan will pay no more than fair market value for the 
Property, as determined by an independent qualified real estate 
appraiser at the time of the transaction; (c) the fair market value of 
the Property represents no more than 25% of the value of the Plan's 
assets; (d) the Plan's interests with respect to the Purchase are 
represented by two independent fiduciaries; (e) the Plan will pay no 
fees or commissions associated with the Purchase; and (f) all terms and 
conditions of the Purchase are at least as favorable to the Plan as 
those obtainable in an arm's length transaction with an unrelated 
party.
    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 October 17, 1995 at 60 FR 
53805.

FOR FURTHER INFORMATION CONTACT: Allison Padams of the Department, 
telephone (202) 219-8971. (This is not a toll-free number.)

Rea Magnet Wire Company, Inc. Employees' Retirement Savings Plan and 
Rea Magnet Wire Company, Inc. Union Employees' Retirement Savings Plan 
(together, the Plans) Located in Fort Wayne, Indiana; Exemption

[Prohibited Transaction Exemption 95-109; Exemption Application Nos. 
D-10075 and D-10076]

    The restrictions of sections 406(a), 406 (b)(1) and (b)(2) of the 
Act and the sanctions resulting from the application of section 4975 of 
the Code, by reason of section 4975(c)(1) (A) through (E) of the Code, 
shall not apply to the proposed sale by the Plans of two guaranteed 
investment contracts (the GICs) of Confederation Life Insurance Company 
(CL) to Rea Magnet Wire Company, Inc. (Rea), a party in interest with 
respect to the Plans, provided the following conditions are satisfied: 
a) the sale is a one-time transaction for cash; b) the Plans will 
receive no less than the fair market value of the GICs as of the date 
of the sale; and c) the purchase price will be not less than the GICs' 
accumulated book values at their maturity date (defined as total 
deposits plus interest accrued but unpaid at the GICs' stated rates of 
interest through the date of maturity, less withdrawals) plus interest 
from the date of maturity through the date of the sale at the rate then 
being earned under the Plans' ``GIC/Stable Value Fund''.
    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 September 25, 1995 at 60 
FR 49426.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

Profit Sharing Plan of NEBCO, Inc. Located in Lincoln, Nebraska; 
Exemption

[Prohibited Transaction Exemption 95-110; Exemption Application No. 
D-10096]

    The restrictions of sections 406(a) and 406 (b)(1) and (b)(2) of 
the Act and the sanctions resulting from the application of section 
4975 of the Code, by reason of section 4975(c)(1) (A) through (E) of 
the Code, shall not apply to (1) the extensions of credit in the form 
of guarantees and advances of funds (the Advances) to the Plan by 
NEBCO, Inc. (the Employer), the sponsor of the Plan, with respect to 
the Guaranteed Investment Contract No. 64238 (the GIC) issued by 
Confederation Life Insurance Company of Canada (Confederation); and (2) 
the repayment of the Advances by the Plan to the Employer; provided 
that the following conditions are satisfied: (a) All terms and 
conditions of the transactions are no less favorable to the Plan than 
those which the Plan would receive in arm's length transactions; (b) No 
interest payments or expenses will be incurred by the Plan with respect 
to the transactions; (c) Repayment of the Advances will be restricted 
to proceeds from the GIC (GIC Proceeds); (d) Repayment of Advances will 
be waived by the Employer to the Extent that Advances exceed the GIC 
Proceeds; and (e) All unpaid principal and earned interest of the GIC 
will be completely paid by the Advances to the Plan by March 15, 2000.
    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 October 6, 1995, at 60 FR 
52419.

FOR FURTHER INFORMATION CONTACT: Mr. C.E. Beaver of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

Profit Sharing Plan of Constructors, Inc. (the Plan) Located in 
Lincoln, Nebraska; Exemption

[Prohibited Transaction Exemption 95-111; Exemption Application No. 
D-10097]

    The restrictions of sections 406(a) and 406 (b)(1) and (b)(2) of 
the Act and the sanctions resulting from the application of section 
4975 of the Code, by reason of section 4975(c)(1) (A) through (E) of 
the Code, shall not apply to (1) the extensions of credit in the form 
of guarantees and advances of funds (the Advances) to the Plan by 
Constructors, Inc. (the Employer), the sponsor of the Plan, with 
respect to the Guaranteed Investment Contract No. 64238 (the GIC) 
issued by Confederation Life Insurance Company of Canada 
(Confederation); and (2) the repayment of the Advances by the Plan to 
the Employer; provided that the following conditions are satisfied: (a) 
All terms and conditions of the transactions are no less favorable to 

[[Page 63064]]
the Plan than those which the Plan would receive in arm's length 
transactions; (b) No interest payments or expenses will be incurred by 
the Plan with respect to the transactions; (c) Repayment of the 
Advances will be restricted to proceeds from the GIC (GIC Proceeds); 
(d) Repayment of Advances will be waived by the Employer to the Extent 
that Advances exceed the GIC Proceeds; and (e) All unpaid principal and 
earned interest of the GIC will be completely paid by the Advances to 
the Plan by March 15, 2000.
    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 October 6, 1995, at 60 FR 
52421.

FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

Universal Surety Company Profit Sharing Plan (the Plan) Located in 
Lincoln, Nebraska; Exemption

[Prohibited Transaction Exemption 95-112; Exemption Application No. 
D-10098]

    The restrictions of sections 406(a) and 406 (b)(1) and (b)(2) of 
the Act and the sanctions resulting from the application of section 
4975 of the Code, by reason of section 4975(c)(1) (A) through (E) of 
the Code, shall not apply to (1) the extensions of credit in the form 
of guarantees and advances of funds (the Advances) to the Plan by 
Universal Surety Company (the Employer), the sponsor of the Plan, with 
respect to the Guaranteed Investment Contract No. 64238 (the GIC) 
issued by Confederation Life Insurance Company of Canada 
(Confederation); and (2) the repayment of the Advances by the Plan to 
the Employer; provided that the following conditions are satisfied: (a) 
All terms and conditions of the transactions are no less favorable to 
the Plan than those which the Plan would receive in arm's length 
transactions; (b) No interest payments or expenses will be incurred by 
the Plan with respect to the transactions; (c) Repayment of the 
Advances will be restricted to proceeds from the GIC (GIC Proceeds); 
(d) Repayment of Advances will be waived by the Employer to the Extent 
that Advances exceed the GIC Proceeds; and (e) All unpaid principal and 
earned interest of the GIC will be completely paid by the Advances to 
the Plan by March 15, 2000.
    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 October 6, 1995, at 60 FR 
52422.

FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

Constructors, Inc. 401(k) Plan (the Plan) Located in Lincoln, Nebraska; 
Exemption

[Prohibited Transaction Exemption 95-113; Exemption Application No. 
D-10099]

    The restrictions of sections 406(a) and 406(b)(1) and (b)(2) of the 
Act and the sanctions resulting from the application of section 4975 of 
the Code, by reason of section 4975(c)(1) (A) through (E) of the Code, 
shall not apply to (1) the extensions of credit in the form of 
guarantees and advances of funds (the Advances) to the Plan by 
Constructors, Inc. (the Employer), the sponsor of the Plan, with 
respect to the Guaranteed Investment Contract No. 64238 (the GIC) 
issued by Confederation Life Insurance Company of Canada 
(Confederation); and (2) the repayment of the Advances by the Plan to 
the Employer; provided that the following conditions are satisfied: (a) 
All terms and conditions of the transactions are no less favorable to 
the Plan than those which the Plan would receive in arm's length 
transactions; (b) No interest payments or expenses will be incurred by 
the Plan with respect to the transactions; (c) Repayment of the 
Advances will be restricted to proceeds from the GIC (GIC Proceeds); 
(d) Repayment of Advances will be waived by the Employer to the Extent 
that Advances exceed the GIC Proceeds; and (e) All unpaid principal and 
earned interest of the GIC will be completely paid by the Advances to 
the Plan by March 15, 2000.
    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 October 6, 1995, at 60 FR 
52424.

FOR FURTHER INFORMATION CONTACT: Mr. C.E. Beaver of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

General Information

    The attention of interested persons is directed to the following:
    (1) The fact that a transaction is the subject of an exemption 
under section 408(a) of the Act and/or section 4975(c)(2) of the Code 
does not relieve a fiduciary or other party in interest or disqualified 
person from certain other provisions to which the exemptions does not 
apply and the general fiduciary responsibility provisions of section 
404 of the Act, which among other things require a fiduciary to 
discharge his duties respecting the plan solely in the interest of the 
participants and beneficiaries of the plan and in a prudent fashion in 
accordance with section 404(a)(1)(B) of the Act; nor does it affect the 
requirement of section 401(a) of the Code that the plan must operate 
for the exclusive benefit of the employees of the employer maintaining 
the plan and their beneficiaries;
    (2) These exemptions are supplemental to and not in derogation of, 
any other provisions of the Act and/or the Code, including statutory or 
administrative exemptions and transactional rules. Furthermore, the 
fact that a transaction is subject to an administrative or statutory 
exemption is not dispositive of whether the transaction is in fact a 
prohibited transaction; and
    (3) The availability of these exemptions is subject to the express 
condition that the material facts and representations contained in each 
application are true and complete and accurately describe all material 
terms of the transaction which is the subject of the exemption. In the 
case of continuing exemption transactions, if any of the material facts 
or representations described in the application change after the 
exemption is granted, the exemption will cease to apply as of the date 
of such change. In the event of any such change, application for a new 
exemption may be made to the Department.

    Signed at Washington, D.C., this 5th day of December, 1995.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, U.S. Department of Labor.
[FR Doc. 95-29985 Filed 12-7-95; 8:45 am]
BILLING CODE 4510-29-P