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Secretary of Labor Thomas E. Perez
EBSA (Formerly PWBA) Federal Register Notice Prohibited Transaction Exemption 2001-21; Grant of Individual Exemptions; Bank of America (BofA) et al. [06/28/2001]

EBSA (Formerly PWBA) Federal Register Notice

EBSA (Formerly PWBA) Federal Register Notice Prohibited Transaction Exemption 2001-21; Grant of Individual Exemptions; Bank of America (BofA) et al. [06/28/2001]

[PDF Version]

Volume 66, Number 125, Page 34466-34471


DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Exemption Application No. D-10942, et al.]

 
Prohibited Transaction Exemption 2001-21; Grant of Individual 
Exemptions; Bank of America (BofA) 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, 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, 5 U.S.C. 
App. 1 (1996), 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.

[[Page 34467]]

Bank of America (BofA) Located in Bethesda, Maryland

[Prohibited Transaction Exemption 2001-21; Exemption Application No. D-
10942]

Exemption

    The restrictions of section 406(a) 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 (D) of the Code, shall not apply to 
(1) the granting to BofA by the Westbrook Real Estate Fund IV, L.P. 
(LP), a Delaware Limited Partnership, of a first, exclusive, and prior 
security interest in the capital commitments, reserve amounts and 
capital contributions (Capital Contributions), whether now owned or 
after-acquired, of certain employee benefit plans (Plans) investing in 
the LP; (2) the collateral assignment and pledge by the LP to BofA of 
its security interest in each Plan's limited partnership interest, 
whether now owned or after-acquired; (3) the granting by the LP of a 
first, exclusive, and prior security interest in a borrower collateral 
account to which all Capital Contributions will be deposited when paid; 
(4) the granting to BofA by Westbrook Real Estate Partners Management 
IV, L.L.C., a Delaware limited liability company and the general 
partner of the LP (the General Partner), of its right to make calls for 
cash contributions (Drawdowns) under the Amended and Restated Agreement 
of Limited Partnership of Westbrook Real Estate Fund IV, L.P., dated as 
of September 15, 2000, where BofA is the representative of certain 
lenders (the Lenders) that will fund a so-called ``credit facility'' 
(Credit Facility) providing credit to the LP, and the Lenders are 
parties in interest with respect to the Plans; and (5) the execution of 
a partner agreement and estoppel (Estoppel) under which the Plans agree 
to honor the Drawdowns; provided that (i) the proposed grants, 
assignments, and Estoppels are on terms no less favorable to the Plans 
than those which the Plans could obtain in arm's-length transactions 
with unrelated parties; (ii) the decisions on behalf of each Plan to 
invest in the LP and to execute such Estoppels in favor of BofA, for 
the benefit of each Lender, are made by a fiduciary which is not 
included among, and is independent of and unaffiliated with, the 
Lenders and BofA; (iii) with respect to Plans that may invest in the LP 
in the future, such Plans will have assets of not less than $100 
million\1\ and not more than 5% of the assets of such Plan will be 
invested in the LP; (iv) the General Partner is unrelated to any Plan 
and any Lender; and (v) on or after December 31, 2000, this exemption 
is not applicable for any direct or indirect transaction between the 
AT&T Management Pension Plan and the AT&T Pension Plan and J.P. Morgan 
Chase & Co. (or any affiliate of J.P. Morgan Chase & Co. that is a 
party in interest with respect to the AT&T Plans).
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    \1\ In the case of multiple plans maintained by a single 
employer or a single group of employers treated as a single employer 
under Sections 414(b), 414(c), 414(m), and 414(o) of the Code, the 
assets of which are invested on a commingled basis (e.g., through a 
master trust), this $100 million threshold will be applied to the 
aggregate assets of all such plans.
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    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 (the Notice) published on March 21, 
2001 at 66 FR 15897.
    Effective Date: This exemption is effective September 15, 2000.

Written Comments

    The Department received one comment letter with respect to the 
Notice. The comment letter was submitted by BofA (the Applicant) to 
report certain facts that had changed since the exemption application 
was filed.
    The Applicant stated that the following six employee benefit plan 
trusts acquired limited partnership interests in the LP in addition to 
the trusts listed in the original application: (i) The White Plaza 
Group Trust; (ii) the UPS Retirement Plan Master Trust; (iii) Leeway & 
Co., as nominee for the Long-Term Investment Trust; (iv) the U.S. Steel 
and Carnegie Pension Fund, as Trustee for the Marathon Oil Group Trust; 
(v) the U.S. Steel and Carnegie Pension Fund, as Trustee for the U.S. 
Steel Union Trust; and (vi) the U.S. Steel and Carnegie Pension Fund, 
as Trustee for the U.S. Steel Non-Union Trust.
    The following employee benefit plans which are invested in the LP 
hold assets in these Trusts:
White Plaza Group Trust
1. General Motors Retirement Program for Salaried Employees
2. Delphi Automotive Systems Retirement Program for Salaried Employees
3. General Motors Hourly-Rate Pension Plan
4. Delphi Automotive Systems Hourly-Rate Employees Pension Plan
5. Employees Retirement Plan for GMAC Mortgage Corporation
6. Saturn Individual Savings Plan for Represented Members
7. Saturn Personal Choices Retirement Plan for Non-Represented Team 
Members
UPS Retirement Plan Master Trust
1. UPS Retirement Plan
Leeway & Co., as Nominee for the Long-Term Investment Trust
1. AT&T Management Pension Plan
2. AT&T Pension Plan
U.S. Steel and Carnegie Pension Fund, as Trustee for the Marathon Oil 
Group Trust
1. Retirement Plan of Marathon Oil Company
2. Marathon Ashland Petroleum LLC Retirement Plan
U.S. Steel and Carnegie Pension Fund, as Trustee for U.S. Steel Union 
Trust
1. United States Steel Corporation Plan for Employee Pension Benefits 
(Revision of 1950)
U.S. Steel and Carnegie Pension Fund, as Trustee for U.S. Steel Non-
Union Trust
1. United States Steel Corporation Plan for Non-Union Employee Pension 
Benefits (Revision of 1998)

    The Applicant represented that by April 20, 2001, representatives 
of the fiduciaries of each of the above Plans were given notice of the 
proposed exemption, provided with a copy of the Notice, and informed 
that they had the opportunity to submit comments for a period of 35 
days. Accordingly, the Applicant represented that the comment period 
was extended until May 25, 2001.
    The Applicant also wished to clarify that Morgan Guaranty Trust 
Company (MGT) was the fiduciary who exercised the discretionary 
authority to cause the AT&T Management Pension Plan and the AT&T 
Pension Plan (together, the AT&T Plans) to invest in the LP and to 
execute the Estoppel through Leeway & Company (Leeway), as Nominee for 
the Long Term Investment Trust (the Long Term Trust). At the time of 
the investment, MGT was a wholly-owned subsidiary of J.P. Morgan & Co. 
(J.P. Morgan). J.P. Morgan was independent of all the Lenders. However, 
J.P. Morgan subsequently merged (the Merger) with The Chase Manhattan 
Corporation on December 31, 2000. As a result of the Merger, MGT is now 
a wholly-owned subsidiary of the surviving entity: J.P. Morgan Chase & 
Co. (Morgan Chase).
    The Chase Manhattan Bank (Chase) is the co-syndication agent and a 
Lender participating in the Credit Facility. At

[[Page 34468]]

the time of the investment by the Long Term Trust in the LP, Chase was 
a wholly-owned subsidiary of the Chase Manhattan Corporation. As a 
result of the Merger, MGT is now a wholly-owned subsidiary of Morgan 
Chase. Accordingly, MGT and Chase are included in a brother-sister 
group of trades or businesses as described in section 1.414(c) of the 
federal income tax regulations.
    The Notice requires as a condition of the proposed exemption that 
the decisions on behalf of each Plan (as defined in the Notice and 
including the AT&T Plans) to invest in the Partnership and to execute 
the Estoppel in favor of BofA, for the benefit of each Lender 
participating in the Credit Facility, be made by a fiduciary which is 
not included among, and which is independent of and unaffiliated with, 
the Lenders and BofA. To avoid the need to consider whether the Merger 
raises any issues in respect of this condition, the affected parties to 
the Credit Facility have determined that BofA, as administrative agent, 
will continue the allocation of collateral set forth in Section 5.1(c) 
of the Credit Facility in a manner that the AT&T collateral will not be 
used as collateral for, or the payment of, Chase's interest, fees, or 
the portion of the Credit Facility attributable to Chase's lending 
commitment under the Credit Facility.
    The effect of such allocation of collateral will be that the 
interests and rights granted by the AT&T Plans pursuant to Section 
5.1(b) of the Credit Facility (the Partner Collateral) will be 
allocated by BofA in such a manner that Chase will not hold any 
security interest or lien in the Partner Collateral attributable to the 
AT&T Plans, and will not receive any payment of its portion of the 
Credit Facility or any interest or fees from capital contributions 
attributable to the AT&T Plans. Moreover, any claim for the payment of 
the Credit Facility, interest or fees brought against the AT&T Plans 
will be brought by BofA, as administrative agent for the benefit of the 
Lenders. Thus, Chase will not receive any benefit from the Estoppel 
executed at the direction of MGT by Leeway & Co., as nominee for the 
Long Term Trust, on behalf of the AT&T Plans.
    In connection with the Credit Facility, Chase could earn interest, 
an unused commitment fee, and administrative fees. Interest and the 
unused commitment fee are paid to all Lenders in the Credit Facility on 
a pro rata basis. The unused commitment fee is similar to interest. It 
reflects in part the opportunity costs incurred by the Lenders in 
committing funds to the Credit Facility, just as interest reflects in 
part the Lenders' opportunity costs in actually funding the Credit 
Facility. The amount of the unused commitment fee is based on the 
difference between the money actually borrowed and the amount which the 
Lenders have committed under the Credit Facility. Chase had already 
been paid its co-syndication fees prior to the date of the Merger. In 
the event there was to be a material amendment to the Credit Facility, 
Chase, as well as other Lenders, could be paid additional interest and/
or administrative fees, including a co-syndication fee. However, as a 
result of the allocation of collateral as described above and the 
factors described below, the Applicant represents that no prohibited 
transactions would be created by the payment of such interest or fees.
    As suggested in Representation 11 of the Summary of Facts and 
Representations contained in the Notice (the Summary), the exemption 
application assumes that the LP is an ``operating company'' under the 
Department's Plan Asset Regulations.\2\ Based on such assumption and 
the allocation of collateral described above, no amounts which will be 
received or accrued by Chase in its role as co-syndication agent and 
Lender were or will be paid from Plan assets; all interest and fees 
paid to Chase in any capacity in connection with the Credit Facility 
are usually paid by the LP. In the unlikely event any amount is paid by 
the limited partners, including the AT&T Plans, then BofA, as 
administrative agent for the benefit of the Lenders, will allocate the 
AT&T Plans' capital commitments in a manner to ensure that none of 
Chase's interest or fees will be paid by assets of the AT&T Plans.
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    \2\ See 29 CFR 2510.3-101(c); Definition of ``plan assets''--
plan investments.
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    In addition, from and after the date of the Merger, the AT&T Plans' 
investment (or any decision by MGT to retain the AT&T Plans' 
investment) in the LP will have no effect on Chase's receipt of any 
interest or fees. The collateral that secures the Credit Facility 
sufficiently exceeds the amount customarily required by lenders in 
similar transactions with similar lending terms. As a result of such 
over-collateralization and the allocation of collateral, neither the 
investment by the AT&T Plans in the LP nor their withdrawal from the LP 
increase or decrease the interest or fees received by Chase in 
connection with the Credit Facility. Accordingly, Chase will earn any 
interest or fees arising in connection with the Credit Facility without 
regard to whether the AT&T Plans remain as a limited partner of the LP.
    The Applicant also made an additional clarification regarding the 
information contained in the Summary. The fourth sentence of 
Representation 10 of the Summary should be deleted and replaced with 
the following:

    In this regard, such Plan must be represented by an independent 
fiduciary, and the General Partner or BofA must receive from the 
Plan one of the following:
    (1) a representation letter from the applicable fiduciary with 
respect to such Plan substantially identical to the representation 
letter submitted by the fiduciaries of the other Plans, in which 
case this proposed exemption, if granted, will apply to the 
investments made by such Plan if the conditions required herein are 
met; or
    (2) evidence that such Plan is eligible for a class exemption or 
has obtained an individual exemption from the Department covering 
the potential prohibited transactions which are the subject of this 
proposed exemption.

    The Applicant requested that the sentence be deleted and replaced 
with the above in order to provide that the documentation described in 
items (1) and (2) may be received by either the General Partner or the 
Applicant. Thus, as a result of this clarification, BofA may also 
receive the representation letter from the independent fiduciaries of 
the Plans.
    The Applicant requested that the exemption be made retroactive to 
September 15, 2000, to cover any executions of Estoppels that may have 
occurred prior to the granting of the exemption.
    Finally, the Applicant represented that it is not requesting relief 
for any direct or indirect transaction between the AT&T Plans and 
Morgan Chase (or any affiliate of Morgan Chase that is a party in 
interest with respect to the AT&T Plans). However, the exemption will 
cover any transaction between the AT&T Plans and the other Lenders.
    Accordingly, based on the entire record, the Department has 
determined to grant the exemption as clarified herein.
    For Further Information Contact: Gary H. Lefkowitz of the 
Department, telephone (202) 219-8881. (This is not a toll-free number.)

[[Page 34469]]

Phoenix Home Life Mutual Insurance Company (Phoenix) Located in 
Hartford, CT.

[Prohibited Transaction Exemption 2001-22; Exemption Application No. D-
10943]

Exemption

Section I. Covered Transactions
    The restrictions of section 406(a) 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 (D) of the Code, shall not apply 
effective as of June 8, 2001, to (1) the receipt of common stock 
(Stock) of The Phoenix Companies, Inc. (the Holding Company), the 
parent of Phoenix, or (2) the receipt of cash (Cash) or Policy Credits, 
by or on behalf of any Eligible Policyholder of Phoenix which is an 
employee benefit plan (a Plan), including any Eligible Policyholder 
that is a Plan maintained by Phoenix or its affiliates (Phoenix Plan), 
in exchange for such Eligible Policyholder's membership interest in 
Phoenix, in accordance with the terms of a plan of reorganization (the 
Plan of Reorganization) adopted by Phoenix and implemented pursuant to 
Section 7312 of the New York Insurance Law.
    In addition, effective as of June 8, 2001, the restrictions of 
section 406(a)(1)(E) and (a)(2) and section 407(a)(2) of the Act shall 
not apply to the receipt and holding of the Stock, by a Phoenix Plan, 
whose fair market value exceeds 10 percent of the value of the total 
assets held by such Plan.
    The exemption is subject to the following conditions set forth 
below in Section II.
Section II. General Conditions
    (a) The Plan of Reorganization is subject to approval, review and 
supervision by the Superintendent of Insurance of the State of New York 
(the Superintendent) and is implemented in accordance with procedural 
and substantive safeguards that are imposed under New York law.
    (b) The Superintendent reviews the terms and options that are 
provided to Eligible Policyholders of Phoenix as part of such 
Superintendent's review of the Plan of Reorganization and the 
Superintendent only approves the Plan of Reorganization following a 
determination that the Plan of Reorganization is fair and equitable to 
Eligible Policyholders and is not detrimental to the general public.
    (c) Each Eligible Policyholder has an opportunity to vote to 
approve the Plan of Reorganization after full written disclosure is 
given to the Eligible Policyholder by Phoenix.
    (d) Any determination to receive Stock, Cash or Policy Credits by 
an Eligible Policyholder which is a Plan, pursuant to the Plan of 
Reorganization, is made by one or more Plan fiduciaries which are 
independent of Phoenix and its affiliates and neither Phoenix nor any 
of its affiliates exercises any discretion or provides investment 
advice, within the meaning of 29 CFR 2510.3-21(c), with respect to such 
decisions.
    (e) In the case of the Phoenix Plans, an independent fiduciary with 
respect to the Phoenix Plans:
    (1) Exercises its authority and responsibility to vote on behalf of 
the Phoenix Plans at the special meeting of Eligible Policyholders on 
the proposal to approve the Plan of Reorganization;
    (2) Monitors, on behalf of the Phoenix Plans, the acquisition and 
holding of any Stock, Cash or Policy Credits received;
    (3) Makes determinations on behalf of the Phoenix Plans with 
respect to the voting and continued holding of any Stock held by such 
Plans until such holding is reduced so that it does not exceed the 
limits of section 407(a) of the Act;
    (4) Disposes of Stock exceeding the limits of section 407(a) of the 
Act within six months of the effective date of the Plan of 
Reorganization.
    (5) Provides the Department with a complete and detailed final 
report as it relates to the Phoenix Plans prior to the effective date 
of the demutualization.
    (f) After each Eligible Policyholder entitled to receive Stock is 
allocated 37 shares of Stock (subject to possible adjustment as 
provided in the Plan of Reorganization), additional consideration is 
allocated to each Eligible Policyholder who owned participating 
policies based on actuarial formulas that take into account each 
participating policy's contribution to the surplus of Phoenix, which 
formula has been approved by the Superintendent.
    (g) All Eligible Policyholders that are Plans participate in the 
transactions on the same basis as all Eligible Policyholders that are 
not Plans.
    (h) No Eligible Policyholder pays any brokerage commissions or fees 
in connection with the receipt of Stock or in connection with the 
implementation of the commission-free purchase and sale program.
    (i) All of Phoenix's policyowner obligations remain in force and 
are not affected by the Plan of Reorganization.
    (j) The terms of the transaction are at least as favorable to the 
Plans as an arm's-length transaction with an unrelated party.
Section III. Definitions
    For purposes of this exemption:
    (a) An ``affiliate'' of Phoenix includes--
    (1) Any person directly or indirectly through one or more 
intermediaries, controlling, controlled by, or under common control 
with Phoenix. (For purposes of this paragraph, the term ``control'' 
means the power to exercise a controlling influence over the management 
or policies of a person other than an individual), and
    (2) Any officer, director or partner in such person.
    (b) The term ``Eligible Policyholder'' means a person who is (or 
collectively, persons who are) the owner(s) of one or more policies 
that are in force on the date of the adoption of the Plan of 
Reorganization.
    (c) The term ``Phoenix'' means Phoenix Home Life Mutual Insurance 
Company and any of its affiliates, as defined in paragraph (a) of this 
Section III.
    (d) The term ``Policy Credit'' means (a) for an individual or joint 
participating whole life insurance policy, the crediting of paid-up 
additions which will increase the cash value and death benefit of the 
policy; (b) for supplementary contracts issued under optional modes of 
settlement or annuities in the course of installment payment without a 
defined account value and that provide for the payment of additional 
interest, the crediting of an additional amount in the form of 
additional interest; (c) for supplementary contracts issued under 
optional modes of settlement or annuities in the course of installment 
payment without a defined account value not providing for the payment 
of additional interest, an increase in the installment payment amount; 
and (d) for all other individual or joint life policies and annuities, 
(i) if the policy or contract has a defined account value, an increase 
in the account value, to which the Company will apply no sales, 
surrender or similar charges, or that will be further increased in 
value to offset any of these charges, or (ii) if the policy or contract 
does not have a defined account value, the crediting of dividends under 
the policy or contract.
    Effective Date: This exemption is effective June 8, 2001.
Written Comments
    The Department received seven written comments with respect to the 
proposed exemption. Six comments were submitted by Plan policyholders 
of Phoenix. The seventh comment was submitted by Phoenix, and contained

[[Page 34470]]

only technical corrections to update factual information provided in 
the Summary of Facts and Representations included as part of the 
proposed exemption. The policyholders' comments, as well as the 
comments submitted by Phoenix, are discussed below.
Policyholder's Comments
    As noted above, six policyholders submitted comments with respect 
to the proposed exemption. Three of the policyholders indicated concern 
that the demutualization would affect retirement benefits owed to them 
under Phoenix policies. In response, Phoenix emphasizes that the 
demutualization will not in any way cause a loss or a reduction in the 
benefits paid pursuant to Phoenix policies.
    One policyholder expressed doubts as to the benefit to Phoenix of 
the plan of demutualization. In response, Phoenix states that 
converting to a stock life company will increase Phoenix's potential 
for long-term growth and financial strength in ways not available to it 
as a mutual company. Phoenix acknowledges that, as in all business 
ventures, there are risks. However, Phoenix asserts that as a stock 
company, it will be better able to attract needed capital and offer 
additional financial products and services to its policyholders. In 
sum, Phoenix states that the demutualization will make it a stronger, 
more flexible company.
    One policyholder commented that the disclosure information provided 
by Phoenix did not describe with sufficient clarity the transaction 
with respect to which Phoenix desires an exemption. In response, 
Phoenix references the Policyholder Information Booklet, Part I, which 
contains the following description of the transaction:
    Section 406 of ERISA and Section 4975 of the Code prohibit employee 
benefit plans from engaging in certain transactions with ``parties in 
interest'' and ``disqualified persons.'' If Phoenix is a ``party in 
interest'' with respect to an employee benefit plan under ERISA or a 
``disqualified person'' under the Code, the receipt of Compensation in 
exchange for the Policyholders' Membership Interests owned by an 
Eligible Policyholder with respect to such employee benefit plan could 
be viewed as prohibited. Phoenix has applied to the U.S. Department of 
Labor for an administrative exemption to cover such transactions.
    Finally, one policyholder submitted a comment that was determined 
not to be germane to the requested exemption.
Phoenix's Comment
    The Department notes the following clarifications made to the 
Summary of Facts and Representations by Phoenix:
    1. Representation 1. In the fourth paragraph of Representation 1, 
it is stated that Holdings has an approximate 60% ownership interest in 
publicly traded Phoenix Investment Partners, Ltd. (PXP). Phoenix wishes 
to clarify this to state that Holdings is now the sole owner of PXP.
    2. Representation 2. Phoenix wishes to revise the fourth paragraph 
of Representation 2 in a number of respects. Phoenix clarifies that the 
Phoenix Plans are employee benefit plans sponsored by Phoenix, PXP and 
a PXP subsidiary, Pasadena Capital Corporation. Phoenix states that, 
with respect to subparagraphs (e) and (f), the actuaries have 
determined that the Phoenix Home Life Mutual Insurance Company Employee 
Group Life Insurance Plan and the Phoenix Home Life Mutual Insurance 
Company Agent Group Life Insurance Plan were not be entitled to any 
demutualization compensation. Therefore they should not be included in 
the list of Phoenix Plans which are expected to be Eligible 
Policyholders. With respect to subsection (g) (redesignated as (e) 
below), Phoenix notes that the Phoenix Investment Partners Ltd. Group 
Profit Sharing Plan and Trust was terminated effective March 19, 2001, 
and that the demutualization proceeds will be used to pay a small 
portion of the legal expenses for obtaining an IRS determination 
letter. With respect to subsections (h) and (i) (redesignated as (f) 
and (g) below), Phoenix states that the Phoenix Investment Partners, 
Ltd. Group Life Insurance Plan and the Phoenix Investment Partners, 
Ltd. Group Long Term Disability Plan were terminated effective December 
31, 2000, and the demutualization proceeds received by those plans 
which constitute plan assets will be used to reduce participants 
contributions under essentially similar plans maintained by Phoenix and 
in which PXP employees participate. Finally, Phoenix adds the Pasadena 
Capital Corporation Major Medical and Dental Treatment Plans (the 
Pasadena Plans), welfare plans, to the listing of plans which are 
considered Phoenix Plans. As of December 31, 1999, the Pasadena Plans 
had 87 participants.
    Accordingly, as revised, the fourth paragraph of Representation 2 
reads as follows:
    Phoenix, PXP, and a PXP subsidiary, Pasadena Capital Corporation, 
sponsor the following Plans, which are expected to be Eligible 
Policyholders (collectively referred to herein as the ``Phoenix 
Plans''):
    (a) The Phoenix Home Life Mutual Insurance Company Employee Pension 
Plan (the Pension Plan) is a defined benefit pension plan. As of 
December 31, 1999, the Pension Plan had approximately 6,160 
participants.
    (b) The Phoenix Home Life Mutual Insurance Company Savings and 
Investment Plan (the Savings Plan) is a defined contribution plan. As 
of December 31, 1999, the Savings Plan had 3,002 participants.
    (c) The Phoenix Home Life Mutual Insurance Company Agent Pension 
Plan (the Agent Pension Plan) is a defined contribution plan. As of 
December 31, 1999, the Agent Pension Plan had 1,024 participants.
    (d) The Phoenix Home Life Mutual Insurance Company Agent Savings 
and Investment Plan (the Agent Savings Plan) is a defined contribution 
plan. As of December 31, 1999, the Agent Savings Plan had 535 
participants.
    (e) The Phoenix Investment Partners, Ltd. Group Profit Sharing Plan 
and Trust (the PXP Profit Sharing Plan) is a defined contribution plan. 
As of December 31, 1999, the PXP Profit Sharing Plan had 193 
participants. The PXP Profit Sharing Plan was terminated effective 
March 19, 2001. The anticipated distribution will be used to pay a 
small portion of the legal expenses for obtaining an IRS determination 
letter.
    (f) The Phoenix Investment Partners, Ltd. Group Life Insurance Plan 
(the PXP Group Life Plan) is a welfare benefit plan. As of December 31, 
1999, the PXP Group Life Plan had 493 participants. The PXP Group Life 
Plan was terminated effective December 31, 2000. Consideration received 
by the plan which constitutes plan assets will be used to reduce 
participants' contributions under essentially similar plans maintained 
by Phoenix and in which PXP employees participate.
    (g) The Phoenix Investment Partners, Ltd. Group Long Term 
Disability Plan (the PXP Long Term Disability Plan) is a welfare 
benefit plan. As of December 31, 1999, the PXP Long Term Disability 
Plan had 359 participants. The PXP Long Term Disability Plan was 
terminated effective December 31, 2000. Consideration received by the 
plan which constitutes plan assets will be used to reduce participants' 
contributions under essentially similar plans maintained by Phoenix and 
in which PXP employees participate.
    (h) The Pasadena Capital Corporation Major Medical and Dental 
Treatment Plans (the Pasadena Plans) are welfare

[[Page 34471]]

benefit plans. As of December 31, 1999, the Pasadena Plans had 87 
participants.
    After giving full consideration to the entire record, including the 
written comments, the Department has decided to grant the exemption. In 
this regard, the comment letters 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 Disclosure Room of the Pension and Welfare Benefits 
Administration, Room N-1513, U.S. Department of Labor, 200 Constitution 
Avenue, N.W., Washington, D.C. 20210.
    For Further Information Contact: Karen Lloyd of the Department, 
telephone (202) 219-8194. (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 June, 2001.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 01-16236 Filed 6-27-01; 8:45 am]
BILLING CODE 4510-29-P