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Release Date: 11/14/2003
Release Number: 03-744
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Washington,
DC - The U.S. Department of Labor’s Employee Benefits Security
Administration (EBSA) today announced a proposed exemption that, if granted,
would allow the United States Steel Corporation (U.S. Steel) to contribute the
timber rights on two parcels of land owned by the corporation in lieu of cash to
its defined benefit pension plan.
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U.S. Steel, headquartered in Pittsburgh,
Pennsylvania, currently sponsors two defined
benefit plans. The plans are expected to merge on November 30, 2003, and will have
combined assets over $7.2 billion and cover approximately 120,500 participants
and beneficiaries. The proposed contribution is expected to represent less than
one percent of the plan’s assets. |
The Employee Retirement Income Security Act
(ERISA) generally prohibits
in-kind contributions, except in certain statutory exceptions. The law gives the
department authority, however, to grant exemptions that protect the interests of
plan participants and beneficiaries. |
The department has used its exemption authority to grant relief for similar
types of transactions in the past. The department is willing to consider such
exemption applications when the value of the contributed assets can be
independently determined and the plan receives actual ownership rights to those
assets. |
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The exemption would allow in-kind contribution of the
timber rights that were independently appraised at approximately $60
million, as of September 2, 2003. The timber rights would give the plan
the right to grow, cut and harvest timber on approximately 170,000 acres
of land located near Birmingham, Alabama, for a period of 99 years. All
decisions regarding the timber rights will be made by the qualified
independent fiduciary. The independent fiduciary will select an
independent appraiser to perform ongoing valuations of the timber rights. |
The
proposed exemption also would permit transactions between the plan and
U.S. Steel arising from the corporation’s underlying ownership of the
property. |
The
proposed exemption is scheduled to be published in the November 14, 2003,
Federal Register. Comments on the proposal and any requests for a public
hearing should be submitted to Silvia M. Quezada by December 18, 2003, by
mail to the Office of Exemption Determinations, Employee Benefits Security
Administration, Room N-5649, U.S. Department of Labor, 200 Constitution
Ave., N.W., Washington, D.C. 20210. Copies of the proposal will be
available after publication on EBSA’s Web site at www.dol.gov/ebsa. |
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U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7755. |
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