Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices 8087

WY94–16 (Feb. 11, 1994) (WY95–16)

WY94–17 (Feb. 11, 1994) (WY95–17)

WY94–18 (Feb. 11, 1994) (WY95–18)

WY94–19 (Feb. 11, 1994) (WY95–19)

WY94–20 (Feb. 11, 1994) (WY95–20)

WY94–21 (Feb. 11, 1994) (WY95–21)

WY94–22 (Feb. 11, 1994) (WY95–22)

WY94–23 (Feb. 11, 1994) (WY95–23)

WY94–24 (Feb. 11, 1994) (WY95–24)

New General Wage Determination

Decisions

The number of the decisions added to

the Government Printing Office

document entitled ‘‘General Wage

Determination Issued Under the DavisBacon and related Acts’’ are listed by

Volume and State:

Volume I

New York

NY950072 (Feb. 10, 1995)

NY950073 (Feb. 10, 1995)

Volume III

Alabama

AL950037 (Feb. 10, 1995)

Mississippi

MS950055 (Feb. 10, 1995)

MS950056 (Feb. 10, 1995)

Volume IV

Indiana

IN950040 (Feb. 10, 1995)

IN950041 (Feb. 10, 1995)

Volume VI

Utah

UT950034 (Feb. 10, 1995)

Modification to General Wage

Determination Decisions

The number of decisions listed in the

Government Printing Office document

entitled ‘‘General Wage Determinations

Issued Under the Davis-Bacon and

Related Acts’’ being modified are listed

by Volume and State. Dates of

publication in the Federal Register are

in parentheses following the decisions

being modified.

Volume I

New York

NY950005 (Feb. 10, 1995)

Rhode Island

RI950001 (Feb. 10, 1995)

Volume II

Pennsylvania

PA950001 (Feb. 10, 1995)

Virginia

VA950016 (Feb. 10, 1995)

Volume III

North Carolina

NC950010 (Feb. 10, 1995)

NC950011 (Feb. 10, 1995)

NC950016 (Feb. 10, 1995)

NC950025 (Feb. 10, 1995)

NC950026 (Feb. 10, 1995)

NC950031 (Feb. 10, 1995)

Volume IV

None

Volume V

Iowa

IA950007 (Feb. 10, 1995)

IA950029 (Feb. 10, 1995)

IA950037 (Feb. 10, 1995)

Kansas

KS950014 (Feb. 10, 1995)

Volume VI

North Dakota

ND950002 (Feb. 10, 1995)

ND950004 (Feb. 10, 1995)

ND950047 (Feb. 10, 1995)

General Wage Determination

Publication

General wage determinations issued

under the Davis-Bacon and related Acts,

including those noted above, may be

found in the Government Printing Office

(GPO) document entitled ‘‘General Wage

Determinations Issued Under The DavisBacon And Related Acts’’. This

publication is available at each of the 50

Regional Government Depository

Libraries and many of the 1,400

Government Depository Libraries across

the country. Subscriptions may be

purchased from: Superintendent of

Documents, U.S. Government Printing

Office, Washington, D.C. 20402, (202)

783–3238.

When ordering subscription(s), be

sure to specify the State(s) of interest,

since subscriptions may be ordered for

any or all of the three separate volumes,

arranged by State. Subscriptions include

an annual edition (issued on or about

January 1) which includes all current

general wage determinations for the

States covered by each volume.

Throughout the remainder of the year,

regular weekly updates will be

distributed to subscribers.

Signed at Washington, D.C. this 6th day of

February 1995.

Alan L. Moss,

Director, Division of Wage Determinations.

[FR Doc. 95–3328 Filed 2–9–95; 8:45 am]

BILLING CODE 4510–27–M

Pension and Welfare Benefits

Administration

[Application No. D–09855, et al.]

Proposed Exemptions; PACCAR Inc.

Savings Investment Plan, et al.

AGENCY: Pension and Welfare Benefits

Administration, Labor.

ACTION: Notice of Proposed Exemptions.

SUMMARY: This document contains

notices of pendency before the

Department of Labor (the Department) of

proposed exemptions from certain of the

prohibited transaction restriction of the

Employee Retirement Income Security

Act of 1974 (the Act) and/or the Internal

Revenue Code of 1986 (the Code).

Written Comments and Hearing

Requests

All interested persons are invited to

submit written comments or request for

a hearing on the pending exemptions,

unless otherwise stated in the Notice of

Proposed Exemption, within 45 days

from the date of publication of this

Federal Register Notice. Comments and

request for a hearing should state: (1)

The name, address, and telephone

number of the person making the

comment or request, and (2) the nature

of the person’s interest in the exemption

and the manner in which the person

would be adversely affected by the

exemption. A request for a hearing must

also state the issues to be addressed and

include a general description of the

evidence to be presented at the hearing.

A request for a hearing must also state

the issues to be addressed and include

a general description of the evidence to

be presented at the hearing.

ADDRESSES: All written comments and

request for a hearing (at least three

copies) should be sent to the Pension

and Welfare Benefits Administration,

Office of Exemption Determinations,

Room N–5649, U.S. Department of

Labor, 200 Constitution Avenue, N.W.,

Washington, D.C. 20210. Attention:

Application No. stated in each Notice of

Proposed Exemption. The applications

for exemption and the comments

received will be available for public

inspection in the Public Documents

Room of Pension and Welfare Benefits

Administration, U.S. Department of

Labor, Room N–5507, 200 Constitution

Avenue, N.W., Washington, D.C. 20210.

Notice to Interested Persons

Notice of the proposed exemptions

will be provided to all interested

persons in the manner agreed upon by

the applicant and the Department

within 15 days of the date of publication

in the Federal Register. Such notice

shall include a copy of the notice of

proposed exemption as published in the

Federal Register and shall inform

interested persons of their right to

comment and to request a hearing

(where appropriate).

SUPPLEMENTARY INFORMATION: The

proposed exemptions were requested in

applications filed pursuant to section

408(a) of the Act and/or section

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

accordance with procedures set forth in

29 CFR Part 2570, Subpart B (55 FR
8088 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices

1The Department notes that the decisions to

acquire and hold the GIC are governed by the

fiduciary responsibility requirements of Part 4,

Subtitle B, Title I of the Act. In this proposed

exemption, the Department is not proposing relief

for any violations of Part 4 which may have arisen

as a result of the acquisition and holding of the GIC.

2The Department notes that this exemption, if

granted, will not affect the rights of any participant

or beneficiary with respect to claims under section

404 of the Act in connection with any aspect of the

GIC transactions.

32836, 32847, August 10, 1990).

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 requested to the Secretary of

Labor. Therefore, these notices of

proposed exemption are issued solely

by the Department.

The applications contain

representations with regard to the

proposed exemptions which are

summarized below. Interested persons

are referred to the applications on file

with the Department for a complete

statement of the facts and

representations.

PACCAR Inc Savings Investment Plan

(the Plan) Located in Bellevue,

Washington

[Application No. D–09855]

Proposed Exemption

The Department is considering

granting an 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 C.F.R. Part 2570, Subpart B

(55 F.R. 32836, 32847, August 10, 1990).

If the exemption is granted 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 (1) the proposed

guarantee (the Guarantee) by PACCAR

Inc (the Employer), the sponsor of the

Plan, of the Plan’s investment in a

guaranteed investment contract (the

GIC) issued by Confederation Life

Insurance Company (Confederation

Life), including the potential extensions

of credit to the Plan by the Employer

(the Advances) pursuant to the

Guarantee; and (2) the potential

repayment of the Advances (the

Repayments); 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 could

obtain in an arm’s length transaction

with an unrelated party;

(B) The Repayments are made only

from GIC Proceeds, defined as the

amounts actually received by the Plan

(1) from Confederation Life or any other

entity making payment with respect to

Confederation Life’s obligations under

the terms of the GIC, or (2) from the sale

or transfer of the GIC to unrelated third

parties;

(C) The Repayments will be made

only after the Plan has recovered,

through the Advances plus GIC

Proceeds, the amount guaranteed by the

Employer with respect to the GIC; and

(D) To the extent the Advances exceed

GIC Proceeds, Repayment of the

difference will be waived.

Summary of Facts and Representations

Introduction

Confederation Life was recently

placed in a receivership. As a result, the

Confederation Life GIC owned by the

Plan is frozen, and the future of

Confederation Life is uncertain. The

Employer, PACCAR Inc, proposes to

protect the Plan from loss on its

investment in the GIC, by guaranteeing

the value of the GIC as of the

commencement of the receivership, as

described below.

1. The Employer is a publicly-owned

Delaware corporation engaged in the

production of class 8 trucks, winches,

oil drilling equipment and retail auto

parts. Its principal place of business is

Bellevue, Washington. The Employer

sponsors the Plan, which is a defined

contribution 401(k) plan, providing for

individually-directed participant

accounts (the Accounts). As of

September 21, 1994, the Plan had 4,816

participants and, as of July 31, 1994,

total assets of approximately

$211,979,510. The trustee of the Plan is

Fidelity Management Trust Company of

Boston, Massachusetts (the Trustee).

Plan participants may invest their

accounts in and among six investment

funds, including an income fund (the I

Fund) which consists of guaranteed

investment contracts issued by

insurance companies, a cash short-term

investment fund, and units in a group

trust maintained by the Trustee and

designated as the Fidelity Managed

Income Portfolio II of the Fidelity Group

Trust for Employee Benefit Plans (the

MI Portfolio).

2. Among the assets of the I Fund is

the GIC, which is identified as

Confederation Life Guaranteed

Investment Contract No. 62185, issued

to the Plan by Confederation Life on

July 10, 1990 for a principal deposit of

$6 million. The GIC is a single-deposit,

non-benefit-responsive contract, with

interest on principal at the annual rate

of 9.67 percent, requiring payment to

the Plan of $9.49 million on the

maturity date of June 30, 1995 (the

Maturity Date). On August 12, 1994 (the

Receivership Date), Confederation life

was placed in receivership (the

Receivership) pursuant to rehabilitation

proceedings by the State of Michigan.1

Consequently, Confederation Life’s

assets and operations were frozen, and

payments on all its guaranteed

investment contracts, including the GIC

held by the Plan, were suspended

effective as of the Receivership Date. As

of the Receivership Date, the total GIC

principal and accumulated interest was

$8.752 million (the Receivership Value),

representing 17.92 percent of the assets

of the I Fund.

3. In order to avoid liquidity problems

in the I Fund, after the Receivership was

announced, the Employer and the

Trustee froze the I Fund assets invested

in the GIC. The Employer represents

that it appears unlikely that

Confederation Life will make timely

payment to the Plan upon the Maturity

Date of the GIC. The Employer has

notified Plan participants that it will

undertake measures to protect the

Accounts from adverse effects of any

nonpayment of the GIC or from the

effects of a lengthy rehabilitation of

Confederation Life. Accordingly, the

Employer proposes to guarantee the

Plan’s investment in the GIC plus

interest, by means of potential

extensions of credit to the Plan, and is

requesting an exemption for these

transactions under the terms and

conditions described herein.

4. The terms of the Employer’s

guarantee (the Guarantee) of the Plan’s

investment in the GIC and the

Employer’s potential cash advances (the

Advances) pursuant to the Guarantee

will be evidenced in a written

agreement between the Plan and the

Employer.2

The Guarantee

In making the Guarantee, the

Employer is undertaking to ensure that

in the eventual resolution of the

Receivership the Plan receives a total

amount with respect to the GIC which

is no less than its investment in the GIC

as of the Receivership Date plus interest

thereafter at a market rate. In accordance

with this undertaking, the amount

which the Employer proposes to

guarantee (the Guarantee Amount) is the

Receivership Value of the GIC, which is

$8.752 million, less GIC Proceeds

(defined as the amounts actually

received by the Plan from Confederation

Life or any other entity making payment

with respect to Confederation Life’s

obligations under the terms of the GIC,
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices 8089

3The Department notes that the decisions to

acquire and hold the GAC are governed by the

fiduciary responsibility requirements of Part 4,

Subtitle B, Title I of the Act. In this regard, the

Department is not herein proposing relief for any

violations of Part 4 which may have arisen as a

result of the acquisition and holding of the GAC

issued by Mutual Benefit.

4Following the cessation of payments by Mutual

Benefit with respect to the GAC, Shippers Paper

Products Company made the decision to make

periodic advances to the Plan to enable the payment

of distributions to terminating and retiring

participants and the payment of certain in-service

withdrawals to current participants. The Applicant

represents that, as of November 30, 1994, the

periodic advances to the Plan totaled approximately

$178,595. The Applicant also represents that the

terms of those periodic advances satisfy the

conditions of PTE 80–26 (45 FR 28545, April 29,

1980). This conditional class exemption permits a

party in interest to make an interest-free loan to an

employee benefit plan, and the repayment of such

loan. Specifically, the exemption states, in relevant

part, that effective January 1, 1975, the restrictions

of section 406(a)(1)(B) and (D) and section 406(b)(2)

of the Act and the taxes imposed by section 4975(a)

and (b) of the Code by reason of section

4975(c)(1)(B) and (D) of the Code, shall not apply

to the lending of money from a party in interest to

an employee benefit plan, nor to the repayment of

such loan in accordance with its terms, if no

interest or other fee is charged to the plan, the loan

is unsecured, and the loan proceeds are used only

for the payment of ordinary operating expenses of

the plan, including the payment of benefits in

accordance with the terms of the plan. In this

proposed exemption the Department expresses no

opinion as to whether the periodic advances satisfy

the provisions of PTE 80–26.

or from the sale or transfer of the GIC

to unrelated third parties) and advances

made by the Employer (Advances, as

described below), plus interest on the

net of the foregoing amount after the

Receivership Date at the rate earned by

the MI Portfolio (the Guarantee Rate),

accrued on a daily basis. The Trustee’s

MI Portfolio is a diversified portfolio of

short-term and long-term conventional

and synthetic guaranteed investment

contracts issued by insurance

companies and other institutions. The

average yield on the MI Portfolio Assets

for the month of November, 1994, was

5.81 percent.

The Advances

Although the GIC is non-benefitresponsive, the Employer is concerned

that the Receivership may result in an

increase in transfers of Accounts out of

the I Fund to other investment funds

maintained by the Plan, posing potential

liquidity problems for the I Fund.

Accordingly, if as a result of Account

transfers or withdrawals from the I Fund

the Guarantee Amount commences to

represent more than 30 percent of the I

Fund, the Employer will make

Advances to the I Fund in an amount

sufficient to reduce the ratio to 30

percent.

Final Resolution

If the Receivership and any

rehabilitation of Confederation Life are

resolved and completed prior to the end

of the year 2000, within 60 days of the

Plan’s receipt of final payment from or

on behalf of Confederation Life with

respect to the GIC, the Employer will

honor the Guarantee by making a final

Advance to the I Fund in an amount

sufficient to cause the Guarantee

Amount to equal zero. If the

Receivership and any rehabilitation

extend beyond the year 2000, the

Employer will make a final Advance to

the I Fund on the first business day in

the year 2001 in the amount of the

Guarantee Amount.

Repayments

Repayment of the final Advance and

all previous Advances will be restricted

to the GIC Proceeds. The Repayments

will only be made after such time as the

Plan has recovered, through the

Advances plus the GIC Proceeds, the

amount guaranteed by the Employer

with respect to the GIC, as described

above. To the extent the total Advances

exceed GIC Proceeds, repayment will be

waived.

5. In summary, the applicant

represents that the proposed

transactions satisfy the criteria of

section 408(a) of the Act for the

following reasons: (1) The Guarantee

will enable the Employer to complete its

commitment to Plan participants to

protect the Plan from any loss of its

investment in the GIC as of the

Receivership Date; (2) The Advances

will protect the I Fund from threats to

its liquidity resulting from possible

transfers and withdrawals of Accounts;

(3) The Repayments will be made only

from GIC Proceeds, and only after the

Plan has recovered the amount

guaranteed by the Employer; (4) After

resolution of the Receivership, the Plan

will be made whole with respect to the

Guarantee by means of a final cash

Advance; and (5) To the extent the

Advances exceed the GIC Proceeds,

Repayment of the difference will be

waived.

FOR FURTHER INFORMATION CONTACT:

Ronald Willett of the Department,

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

toll-free number.)

Shippers Paper Products Company

401(k) Plan (the Plan) Located in

Glenview, IL

[Application No. D–09866]

Proposed Exemption

The Department is considering

granting an 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, 32847, August 10, 1990). If

the exemption is granted, 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 Plan of Group Annuity Contract, No.

GA–4725 (the GAC) issued by Mutual

Benefit Life Insurance Company

(Mutual Benefit) to Illinois Tool Works

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.

Summary of Facts and Representations

1. The Plan is sponsored by the

Shippers Paper Products Company,

which is an wholly-owned subsidiary of

Illinois Tool Works Inc. (the Applicant).

The Plan is a defined contribution plan

with a salary reduction feature. There

were 91 participants as of October 20,

1994. As of September 30, 1994, the

Plan’s total assets were $635,695.00.

The Plan is administered by the

Employee Benefits Committee of the

Board of Directors of the Applicant (the

Committee). The Plan’s trustee,

Northern Trust Company (the Trustee),

manages the investment of Plan funds at

the direction of the Committee. The

GAC, which is the sole asset of the Plan,

was effective as of July 1, 1985.3 The

Applicant represents that the GAC was

scheduled to terminate only after

disbursement of the final annuity

payment thereunder and, therefore, had

no stated maturity date. The terms of the

GAC provided for a minimum annual

interest rate of 4.0%.

2. On July 16, 1991, Mutual Benefit

was placed into rehabilitation

proceedings by the New Jersey

Commissioner of Insurance. As a result

of these proceedings, the Plan’s assets

have been frozen.4 The Applicant

represents that it wishes to enter into

the proposed transaction in order to

protect the accounts of Plan participants

and beneficiaries from the risk of

investment loss associated with the

GAC. The Applicant further represents

that the Plan needs to sell its interest in
8090 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices

5The Applicant represents that, following the

sale of the GAC to the Applicant, the Plan will

repay any amounts due Shippers Paper Products

Company in connection with the periodic advances

discussed above.

the GAC in order to give the Plan more

investment flexibility to direct the

investment of participant account

balances to safer and more prudent

investments. The Applicant also

represents that the Plan will not incur

any expenses with respect to the sale of

the GAC.

3. The Applicant proposes to protect

the interests of the affected participants

by purchasing the GAC from the Plan.

The purchase price for the GAC will be

the contract balance of the GAC as of

September 30, 1994, as determined by

Mutual Benefit using the following

interest rates: (1) Interest is credited at

the rate of 10.35% for the period from

July 1, 1986 through June 30, 1990; (2)

interest is credited at the rate of 8.7%

for the period from July 1, 1990 through

June 30, 1991; (3) interest is credited at

the rate of 8.35% for the period from

July 1, 1991 through December 31, 1991.

These are the rates of interest actually

earned under the GAC until December

31, 1991. After December 31, 1991,

pursuant to the terms of the proposed

plan of rehabilitation set forth by the

Superior Court of New Jersey, interest is

credited at a rate equal to 5.75% for

1992, 5.25% for 1993, and at a rate

equal to 5.10% for 1994. The purchase

price will be adjusted to reflect any

contract distributions and additional

interest earned from September 30, 1994

to the date the actual purchase takes

place.5 From January 1, 1995 through

December 31, 1999, the GAC will earn

interest based on Mutual Benefit’s

actual investment performance, with a

minimum annual rate of 3.5%.

4. The Trustee has reviewed the

proposed transaction on behalf of the

Plan. The Trustee represents that it has

determined that the proposed purchase

price for the GAC is at least equal to the

fair market value of the GAC. In

addition, the Trustee represents that it

has determined that the proposed

transaction is appropriate for the Plan

and in the best interests of its

participants and beneficiaries.

5. In summary, the Applicant

represents that the proposed transaction

satisfies the criteria of section 408(a) of

the Act because: (1) The Plan will

receive cash for the GAC in the amount

of the contract balance of the GAC, as

determined by Mutual Benefit as of the

date of the sale; (2) the transaction will

enable the Plan and its participants and

beneficiaries to avoid any risk

associated with the continued holding

of the GAC, and to exercise all of their

rights under the Plan to request

distributions and withdrawals from the

Plan; and (3) the Plan’s trustee, acting as

the Plan’s independent fiduciary, has

determined that the sale at the proposed

price is in the best interests of the

participants and beneficiaries of the

Plan, and that the proposed price is not

less than the fair market value of the

GAC.

FOR FURTHER INFORMATION CONTACT:

Virginia J. Miller of the Department,

telephone (202) 219–8971. (This is not

a toll-free number.)

Manke Lumber Company, Inc. Profit

Sharing Plan (the Plan) Located in

Tacoma, Washington

[Exemption Application No. D–09897]

Proposed Exemption

The Department is considering

granting an 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). If the

exemption is granted, 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 cash sale (the Sale) by

the Plan of certain real property (the

Property) to Manke Family Resources,

Limited Partnership (MFR).

This proposed exemption is

conditioned upon the following

requirements: (1) All terms and

conditions of the Sale are at least as

favorable to the Plan as those obtainable

in an arm’s length transaction with an

unrelated party; (2) the Sale is a onetime cash transaction; and (3) the Plan

is not required to pay any commissions,

costs or other expenses in connection

with the Sale; and (4) the Plan receives

a sales price equal to the greater of: (a)

The fair market value of the Property on

the date of the Sale; or (b) the Plan’s

aggregate costs of acquiring and holding

the Property.

Summary of Facts and Representations

1. Manke Lumber Company, Inc.

(Manke) sponsors the Plan, a profit

sharing plan which was established on

May 1, 1971. The Plan was amended,

effective May 1, 1988, to include 401(k)

features which allow participants to

direct the investments of their accounts.

As of April 30, 1993, approximately

eighty-eight percent of Plan assets were

held as general assets while the

remaining twelve percent were subject

to participant direction. As of the same

date, the Plan had assets totalling

$9,360,468 and approximately 520

participants.

West One Trust Company (the

Trustee) serves as the trustee of the Plan

and has the sole investment discretion

with respect to the Property and certain

other non-liquid assets. Piper Capital

Management, a registered investment

adviser, has investment management

discretion over the marketable securities

and other liquid assets of the Plan.

Under the terms of the Plan, Manke

appoints an Advisory Committee (the

Advisory Committee) which is

responsible for setting the funding

policy for the Plan. The Advisory

Committee does not have any

investment discretion. As of January 9,

1995, the Advisory Committee consisted

of two Manke employees—J. Randal

Jordan and Milton Farvour.

2. Manke is a Washington corporation

engaged in the manufacturing and sale

of lumber and other wood products. In

addition, Manke also owns and manages

timberland. The principal shareholders

of Manke include Charles Manke, Virgil

Manke and James Manke, who also

comprise the Board of Directors (the

Directors) and are the officers of Manke.

MFR is a Washington limited

partnership engaged in the business of

owning, utilizing and developing

timberland and personal property

related to the timber business. Tacoma

Timber Co. (Tacoma Timber), a

Washington corporation, serves as the

general partner of MFR. Both MFR and

Tacoma Timber are wholly owned by

sons and daughters of the Directors,

who are parties in interest with respect

to the Plan. In addition, the owners of

MFR and Tacoma Timber also own

small amounts of Manke stock.

3. Among the general assets of the

Plan is the Property, which consists of

approximately 275 acres of land and

timber located in Clallam County,

Washington. The Property lies

contiguous to a forty acre parcel of

property owned by Manke. The Plan

acquired the Property on September 25,

1975 for $200,709 from Raymond B.

Fife, an unrelated party. Since its

acquisition, the Plan has held the

Property as timberland, and it has not

been utilized by, or leased to, any

related or unrelated party. As of

December 9, 1994, the Plan had

expended a total of $14,384 in

connection with the Property for taxes

and other expenses such as surveying

and insurance.

4. Steven D. Lodge of Shorett & Riely,

a real estate appraising and consulting

firm located in Seattle, Washington,

appraised the Property. Mr. Lodge is a

Washington State-certified General Real

Estate Appraiser and has fifteen years of
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices 8091

experience in appraising real estate. Mr.

Lodge represents that both he and

Shorett & Riely are independent of, and

unrelated to, Manke, MFR, Tacoma

Timber and the Directors.

Because the timber located on the

Property has a substantial value apart

from the underlying land, Mr. Lodge

valued the two components of the

Property, the timber and the land,

separately and then as one. Based upon

a report prepared by Washington

Timberland Management, Inc., which

estimates harvestable area, timber

volume and timber value, Mr. Lodge

placed the fair market value of the

timber at $1,519,283 as of April 30,

1994. In addition, based upon

comparable sales of properties located

in the Tacoma area, Mr. Lodge placed

the fair market value of the land within

a range of $220,456 and $385,798 as of

April 30, 1994. Finally, as of result of

these two valuations, Mr. Lodge placed

the fair market value of the Property at

$1,700,000 as of April 30, 1994.

5. The Trustee attempted to sell the

Property on October 7, 1994 in a

written/oral bid auction sale. Beginning

on September 2, 1994, the Trustee

circulated a written bid proposal, to

approximately 100 prospective bidders.

The written bid proposal set the

minimum bid at $2,000,000 in cash.

None of the prospective bidders

submitted an oral or written bid in

response to the written bid proposal,

and, as a result, the Property was not

sold. Despite this, the Trustee believes

that a new proposal will result in a sale

of the Property and, therefore, proposes

to attempt to sell the Property again

through a written/oral bid auction sale.

Because of its need for timberland,

MFR desires to purchase the Property

from the Plan provided that it is the

highest bidder. MFR represents that the

Sale price will be at least the greater of:

(a) The fair market value of the Property

on the date of the Sale; or (b) the Plan’s

aggregate costs of acquiring and holding

the Property. Accordingly, the Advisory

Committee of the Plan requests an

administrative exemption from the

Department to permit the Sale of the

Property under the terms and conditions

described herein. The Sale will be a

one-time cash transaction, and the Plan

will not be required to pay any fees,

commissions or expenses in connection

with the Sale.

6. The Trustee has indicated that the

bid auction sale for the Property will be

conducted sometime in 1995. In

preparation of such auction, the

Advisory Committee represents that the

Trustee will circulate a written bid

proposal to approximately 100

prospective bidders which will allow

them to bid either in writing prior to the

auction or orally at the action. The

minimum bid set forth in the bid

proposal will be at least the Property’s

fair market value as of the date of such

proposal. The Property will be sold to

the highest bidder, which may or may

not be MFR, only if the highest bid

exceeds the minimum bid set by the

Trustee. Acceptance of the highest

bidder’s offer is subject to final

acceptance and approval by the

Trustee’s Trust Committee. For

purposes of condition #4 of this

proposed exemption, the fair market

value of the Property on the date of the

Sale will be determined in the following

manner. If the Trustee receives two or

more bids from unrelated individuals or

entities, the highest bid will be deemed

to be the Property’s fair market value on

the date of the Sale. If the Trustee

receives less than two bids from

unrelated individuals or entities, the fair

market value on the date of the Sale will

be determined by an independent,

qualified appraiser. In this event, MFR’s

bid cannot be less than the fair market

value of the Property as determined by

the independent, qualified appraiser on

the date of the Sale.

7. In summary, it is represented that

the transaction will satisfy the statutory

criteria of section 408(a) of the Act

because: (a) All terms and conditions of

the Sale will be at least as favorable to

the Plan as those obtainable in an arm’s

length transaction; (b) the Sale will be

a one-time cash transaction; (c) the Plan

will not be required to pay any

commissions, costs or other expenses in

connection with the Sale; and (d) the

Plan will receive a sales price equal to

the greater of: (1) The fair market value

of the Property on the date of the Sale;

or (2) the Plan’s aggregate costs of

acquiring and holding the Property.

FOR FURTHER INFORMATION CONTACT:

Kathryn Parr of the Department,

telephone (202) 219–8971. (This is not

a toll-free number.)

Virginia Fibre Corporation Employees

Retirement Savings Plan (the Plan)

Located in Amherst, Virginia

[Application No. D–09901]

Proposed Exemption

The Department is considering

granting an 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, 32847, August 10, 1990). If

the exemption is granted 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, effective February 1, 1995, to (1)

The proposed purchase from the Plan

(the Purchase) by the Virginia Fibre

Corporation (the Employer), the sponsor

of the Plan, of a guaranteed investment

contract (the GIC) issued by the

Confederation Life Insurance Company

(Confederation Life); or, in the

alternative, (2) the proposed interestfree loan to the Plan by the Employer

(the Loan) with respect to the GIC,

including repayment of the Loan;

provided that the following conditions

are satisfied:

(A) All terms and conditions of the

transactions are at least as favorable to the

Plan as those which the Plan could obtain in

an arm’s-length transaction with an unrelated

party;

(B) In the event of the Purchase, the Plan

receives a cash purchase price which is no

less than the greater of (1) The fair market

value of the GIC as of the sale date, or (2) the

GIC’s Maturity Payment, as described below;

(C) In the event of the Loan: (1) The Loan

is in the amount of the GIC’s Maturity

Payment, as described below; (2) the Loan is

repaid only from GIC Proceeds, defined as

the amounts paid by or on behalf of

Confederation Life or any other entity making

payment with respect to Confederation Life’s

obligations under the GIC; (3) the Plan incurs

no expenses or interest with respect to the

Loan; and (4) repayment of the Loan is

waived to the extent the Loan exceeds the

GIC Proceeds.

EFFECTIVE DATE: This exemption, if

granted, will be effective as of Febraury

1, 1995.

Summary of Facts and Representations

1. The Employer is a Virginia

corporation engaged in the manufacture

of corrugating medium and liner board,

with its principal place of business in

Amherst, Virginia, and is wholly owned

by the Grief Bros. Corporation, located

in Delaware, Ohio. The Plan is a defined

contribution 401(k) plan with 240

participants and total assets of

approximately $5,510,972 as of

September 30, 1994. The Plan’s assets

are held, managed and invested by its

trustee, Society National Bank in

Cleveland, Ohio.

2. The Plan provides for individual

participant accounts (the Accounts) and

participant-directed investment of the

Accounts. The Plan participants may

direct the investment of their Accounts

among various investment options

offered by the Trustee, including the

Virginia Fibre MAGIC Fund (the M

Fund), which invests in, among other

things, guaranteed investment contracts

issued by insurance companies. Of the

Plan’s 280 participants, 168 Accounts

are invested in the M Fund. Among the
8092 Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices

6The Department notes that the decisions to

acquire and hold the GIC are governed by the

fiduciary responsibility requirements of Part 4,

Subtitle B, Title I of the Act. In this proposed

exemption, the Department is not proposing relief

for any violations of Part 4 which may have arisen

as a result of the acquisition and holding of the GIC.

assets in the M Fund is the GIC, a singledeposit, non-benefit-responsive

guaranteed investment contract issued

to the Plan on February 2, 1990 by

Confederation Life, a Canadian life

insurance company doing business in

the United States through subsidiaries

in Michigan and Georgia. The GIC was

purchased by the Plan for an initial

principal deposit of $250,000 (the GIC

Principal), which earns interest at the

rate of 9.18 percent per annum (the

Contract Rate). The GIC terms provide

for annual interest payments (the

Annual Payments) on February 1 each

year, commencing 1991 through 1995.

All Annual Payments through 1994

have been made by Confederation Life

and received by the Plan. The GIC

provides for no pre-maturity

withdrawals of principal, and has a

maturity date of February 1, 1995 (the

Maturity Date). Upon the Maturity Date,

the Plan is due a final Annual Payment

plus the total GIC Principal, for a total

of $272,950 (the Maturity Payment).

3. On August 12, 1994, Confederation

life was placed in receivership (the

Receivership) pursuant to rehabilitation

proceedings by the State of Michigan.6

Consequently, Confederation Life’s

assets and operations were frozen, and

payments on all its guaranteed

investment contracts were suspended

effective as of the Receivership

commencement. The Employer

represents that under the prevailing

circumstances, it is unlikely that the

Maturity Payment will be made to the

Plan when due on February 1, 1995. The

Employer is also concerned that the

Plan may never recover the full Maturity

Payment in its entirety. The Employer

desires to protect Plan participants and

beneficiaries from any loss resulting

from the Receivership, by purchasing

the GIC from the Plan, if allowable, or

by lending the Plan the amount of the

Maturity Payment, if the purchase is not

allowable. The Employer is requesting

an exemption for such transactions

under the terms and conditions

described herein.

4. The Employer prefers to purchase

the GIC from the Plan on February 1,

1995 for the amount of the Maturity

Payment due the Plan on that date.

However, the terms of the GIC include

a prohibition against assignment of the

GIC. The Employer and the Trustee

represent that they have initiated the

process of obtaining a release from this

contractual prohibition. If a release is

obtained to enable the GIC’s transfer to

the Employer, the Employer will

purchase the GIC on February 1, 1995

for cash in the amount of the Maturity

Payment due on that date. The Plan will

incur no expenses with respect to this

proposed sale transaction.

In the event the parties are unable to

obtain a release from the prohibition on

assignability of the GIC, on February 1,

1995 the Employer will make a cash

loan to the Plan (the Loan) in the

amount of the Maturity Payment due on

that date. The Loan will be interest-free,

and the Plan will incur no expenses

related to the Loan. Repayment of the

Loan will be restricted to the amounts

which the Plan receives from

Confederation Life or any other entity

making payment with respect to

Confederation Life’s obligations under

the GIC (the GIC Proceeds). To the

extent the Loan exceeds the GIC

Proceeds, repayment of the Loan will be

waived.

5. In summary, the applicant

represents that the proposed

transactions satisfy the criteria of

section 408(a) of the Act for the

following reasons: (1) The transactions

will protect the Plan from any loss on

the GIC’s full Maturity Payment which

might result from the Receivership; (2)

The Employer’s proposed purchase of

the GIC will be a one-time transaction

for cash in which the Plan receives no

less than the greater of the fair market

value of the GIC or the Maturity

Payment; (3) If a release is not obtained

to enable the purchase of the GIC, the

Plan will still receive the Maturity

Payment when due, in the form of the

Loan; (4) If the Loan is made, its

repayment will be restricted to GIC

Proceeds; (5) To the extent the Loan

exceeds GIC Proceeds, the repayment of

the Loan will be waived; and (6) The

Plan will pay no interest or incur any

expenses with respect to the proposed

transactions.

FOR FURTHER INFORMATION CONTACT:

Ronald Willett of the Department,

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

a toll-free number.)

Profit Sharing Plan for Employees of

Annis, Mitchell, Cockey, Edwards &

Roehn, P.A. (the Plan) Located in

Tampa, Florida

[Application No. D–09906]

Proposed Exemption

The Department is considering

granting an 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, 32847, August 10, 1990). If

the exemption is granted, 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 Plan to Annis, Mitchell, Cockey,

Edwards & Roehn, P.A. (the Employer),

of the Plan’s interest (the Interest) in a

limited partnership, for $40,000 in cash,

provided the following conditions are

satisfied: (a) The sale is a one-time

transaction for cash; (b) no commissions

or other expenses are paid by the Plan

in connection with the sale; and (c) the

Plan receives not less than the fair

market value of the Interest as of the

date of the sale as determined by a

qualified, independent expert.

Summary of Facts and Representations

1. The Plan is a defined contribution,

profit sharing plan which currently has

approximately 105 participants. As of

September 30, 1994, the aggregate fair

market value of the Plan’s assets was

$3,378,407. The Employer is a

professional association engaged in the

practice of law in Tampa, Florida.

2. On June 30, 1988 the Plan acquired

the Interest, which is a one-half unit of

limited partnership interest in Hunter’s

Ridge Associates, Ltd. (the Partnership).

The business of the Partnership is to

acquire, own, operate, improve and

otherwise deal with an apartment

complex located in Winter Park,

Florida. The Partnership units were not

registered with the Securities and

Exchange Commission or the Florida

Division of Securities, but rather were

privately placed. The total number of

units offered and sold was 35. No

shareholder or employee of the

Employer individually purchased an

interest in the Partnership.

3. The Plan has now been modified to

permit individual investment selections

by the Plan participants. The Plan’s

investment in the Interest is illiquid,

difficult to accurately value and hard to

allocate among participants. In order to

improve the Plan’s liquidity and to

reduce accounting costs for the Plan

attributable to this investment, the Plan

would like to sell the Interest to the

Employer.

4. If the exemption proposed herein is

granted, the Plan will assign the Interest

to the Employer as a substitute investor

in the Partnership, in exchange for a

lump sum cash payment equivalent to

the current fair market value of the

Interest from the Employer. Participants’

accounts will receive an allocation in

cash exactly equal to the most recent

valuation of the Interest. No broker fees
Federal Register / Vol. 60, No. 28 / Friday, February 10, 1995 / Notices 8093

or administrative fees will be incurred

by the Plan since the Employer will

absorb the cost of the transfer.

5. Mr. Richard D. Schofield, a

registered real estate broker who has

been in the real estate business for 17

years, is the general partner of the

Partnership. Mr. Schofield represents

that as of January 5, 1995, the Interest

would be appraised as having a fair

market value at its original cost, or

$40,000. This is the purchase price that

the Employer proposes to pay to the

Plan for the Interest.

6. In summary, the applicant

represents that the proposed transaction

satisfies the criteria contained in section

408(a) of the Act because: (a) The sale

is a one-time transaction for cash; (b) the

Plan will pay no commissions or fees in

connection with the transaction; (c) the

Plan will receive not less than the

current fair market value of the Interest

at the time of the sale; and (d) the fair

market value for the Interest has been

determined by Mr. Schofield, a

qualified, independent expert who is

the general partner of the Partnership.

FOR FURTHER INFORMATION CONTACT: Gary

H. Lefkowitz 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 of

disqualified person from certain other

provisions of the Act and/or the Code,

including any prohibited transaction

provisions to which the exemption does

not apply and the general fiduciary

responsibility provisions of section 404

of the Act, which among other things

require a fiduciary to discharge his

duties respecting the plan solely in the

interest of the participants and

beneficiaries of the plan and in a

prudent fashion in accordance with

section 404(a)(1)(b) of the act; nor does

it affect the requirement of section

401(a) of the Code that the plan must

operate for the exclusive benefit of the

employees of the employer maintaining

the plan and their beneficiaries;

(2) Before an exemption may be

granted under section 408(a) of the Act

and/or section 4975(c)(2) of the Code,

the Department must find that the

exemption is administratively feasible,

in the interests of the plan and of its

participants and beneficiaries and

protective of the rights of participants

and beneficiaries of the plan;

(3) The proposed exemptions, if

granted, will be supplemental to, and

not in derogation of, any other

provisions of the Act and/or the Code,

including statutory or administrative

exemptions and transitional rules.

Furthermore, the fact that a transaction

is subject to an administrative or

statutory exemption is not dispositive of

whether the transaction is in fact a

prohibited transaction; and

(4) The proposed exemptions, if

granted, will be subject to the express

condition that the material facts and

representations contained in each

application are true and complete, and

that each application accurately

describes all material terms of the

transaction which is the subject of the

exemption.

Signed at Washington, DC, this 7th day of

February, 1995.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 95–3407 Filed 2–9–95; 8:45 am]

BILLING CODE 4510–29–P

[Prohibited Transaction Exemption 95–09;

Exemption Application No. D–09462, et al.]

Grant of Individual Exemptions;

Peoples Security Life Insurance

Company, 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.

Peoples Security Life Insurance

Company (Peoples) Located in Durham,

North Carolina

[Exemption Application No.: D–09462]

Commonwealth Life Insurance

Company (Commonwealth) Located in

Louisville, Kentucky

[Prohibited Transaction Exemption 95–09;

Exemption Application No.: D–09463]

Exemption

The restrictions of section 406(a) of

the Act and the sanctions resulting from

the application of section 4975(c)(1) (A)

through (D) of the Code, shall not apply,

effective March 1, 1992, to: (1) The

extension of credit by Peoples or

Commonwealth (the Applicants), the

sponsors of an investment product (the

Group Annuity Contract or GAC) in

connection with a plan’s investment in

the GAC; and (2) the reimbursement of

Peoples or Commonwealth for benefit

payments made to investing plans from

the cashflow generated by the

investments in the plans’ Custodian

Accounts which are set up by a plan

pursuant to the GAC, or (3) the

reimbursement of Peoples or

Commonwealth for benefit payments

made to investing plans from the

proceeds generated by liquidation of

investments in the Custodial Accounts

upon termination of the Group Annuity

Contract provided:

1. The decision to enter into the

Group Annuity Contract will be made