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Secretary of Labor Thomas E. Perez
[Prohibited Transaction Exemption 2002-13 Application Number: D-10616] [Notices] [03/01/2002]

EBSA (Formerly PWBA) Federal Register Notice

[Prohibited Transaction Exemption 2002-13 Application Number: D-10616] [03/01/2002]

[PDF Version]

Volume 67, Number 41, Page 9483-9485

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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 2002-13 Application Number: D-10616]

 
Amendment to Prohibited Transaction Exemption (PTE) 79-15 (44 FR 
26979, May 8, 1979); PTE 80-26 (45 FR 28545, April 29, 1980); PTE 80-83 
(45 FR 73189, November 4, 1980); PTE 81-6 (45 FR 7527, January 23, 1981 
(as Amended at 52 FR 18754, May 19, 1987)); PTE 81-8 (46 FR 7511, 
January 23, 1981 (as Amended by 50 FR 14043, April 9, 1985)); PTE 82-63 
(47 FR 14804, April 6, 1982); PTE 83-1 (48 FR 895, January 7, 1983); 
PTE 84-14 (49 FR 9494, March 13, 1984) PTE 88-59 (53 FR 24811, June 30, 
1988); PTE 91-38 (56 FR 31966, July 12, 1991); PTE 95-60 (60 FR 35925, 
July 12, 1995); PTE 96-62 (61 FR 39988, July 31, 1996)

AGENCY: Pension and Welfare Benefits Administration, Department of 
Labor.

ACTION: Adoption of amendment to certain class exemptions.

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SUMMARY: This document amends certain class exemptions to define the 
term ``employee benefit plan,'' as such term is used therein, to 
include plans described in section 4975(e)(1) of the Internal Revenue 
Code of 1986 (the Code). The amendment affects individuals with 
beneficial interests in such plans, as well as the financial 
institutions that provide services and products to the plans.

EFFECTIVE DATES: The amendment is effective as of: May 1, 1979 with 
respect to PTE 79-15; January 1, 1975 with respect to PTE 80-26; 
December 1, 1980 with respect to Section I(B) of PTE 80-83 (the 
amendment is effective January 1, 1975 with respect to the remainder of 
PTE 80-83); January 23, 1981 with respect to PTE 81-6; January 1, 1975 
with respect to PTE 81-8; April 6, 1982 with respect to PTE 82-63; 
January 1, 1975 with respect to PTE 83-1; December 21, 1982 with 
respect to PTE 84-14; January 1, 1975 with respect to PTE 88-59; July 
1, 1990 with respect to PTE 91-38; January 1, 1975 with respect to PTE 
95-60; and July 31, 1996 with respect to PTE 96-62.

FOR FURTHER INFORMATION CONTACT: Christopher J. Motta, Office of 
Exemption Determinations, Pension and Welfare Benefits Administration, 
U.S. Department of Labor, (202) 693-8544, (this is not a toll-free 
number); or Paul Mannina, Plan Benefits Security Division, Office of 
the Solicitor, U.S. Department of Labor (202) 693-5600. (This is not a 
toll-free number).

[[Page 9484]]


SUPPLEMENTARY INFORMATION: On October 29, 2001, notice was published in 
the Federal Register (66 FR 54541) of the pendency before the 
Department of Labor (the Department) of a proposed amendment to PTE 79-
15; PTE 80-26; PTE 80-83; PTE 81-6; PTE 81-8; PTE 82-63; PTE 83-1; PTE 
84-14; PTE 88-59; PTE 91-38; PTE 95-60; and PTE 96-62. These class 
exemptions provide relief from certain of the restrictions described in 
section 406 of the Employee Retirement Income Security Act of 1974 
(ERISA), and the taxes imposed by sections 4975(a) and (b) of the Code, 
by reason of a parallel provision described in section 4975(c)(1)(A) 
through (F) of the Code, provided that the conditions of the relevant 
exemption have been met. The amendment to the above-described 
exemptions adopted by this notice was proposed by the Department on its 
own motion, pursuant to section 408(a) of ERISA 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).
    The notice gave interested persons an opportunity to submit written 
comments or requests for a public hearing on the proposed amendment to 
the Department. No public comments or requests for a hearing were 
received.
    As noted in the proposed amendment, after consultation with the 
Internal Revenue Service (the Service), the Department determined that 
plans described in 4975(e)(1) of the Code are included within the scope 
of relief provided by certain class exemptions issued jointly by the 
Department and the Service. These exemptions are as follows:

PTE 75-1, 40 FR 50845 (1975);
PTE 77-4, 42 FR 18732 (1977);
PTE 77-7, 42 FR 31575 (1977), amended and redesignated as PTE 92-5 by 
57 FR 5019 (1992);
PTE 77-8, 42 FR 31574 (1977), amended and redesignated as PTE 92-6, 57 
FR 5189 (1992);
PTE 77-9, 42 FR 32395 (1977), amended and redesignated as PTE 84-24, 49 
FR 13208 (1984); and
PTE 78-19, 43 FR 59915 (1978), amended and redesignated as PTE 90-1, 55 
FR 2891 (1990).

    The class exemptions amended by this notice were issued pursuant to 
the sole authority of the Department. These exemptions did not always 
expressly define the terms ``employee benefit plan'' and ``plan'' as 
used therein.\1\ The amendment adopted by this notice expressly defines 
the terms ``employee benefit plan'' and ``plan'', as such terms are 
found in such exemptions, to include an employee benefit plan described 
in ERISA section 3(3) \2\ and/or a plan described in section 4975(e)(1) 
of the Code.\3\
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    \1\ Section 102 of the Reorganization Plan No. 4 of 1978 (5 
U.S.C. App. 1 [1996]) generally transferred the authority of the 
Secretary of the Treasury to issue administrative exemptions under 
section 4975 of the Code to the Secretary of Labor.
    \2\ Section 3(3) of ERISA provides that the term ``employee 
benefit plan'' or ``plan'' means an employee welfare benefit plan or 
an employee pension benefit plan or a plan which is both an employee 
welfare benefit plan and an employee pension benefit plan.
    \3\ Section 4975(e)(1) of the Code provides that, for purposes 
of that Code section, the term ``plan'' means: (A) A trust described 
in Code section 401(a) which forms a part of a plan, or a plan 
described in Code section 403(a), which trust or plan is exempt from 
tax under section 501(a); (B) an individual retirement account 
described in Code section 408(a); (C) an individual retirement 
annuity described in section Code 408(b); (D) an Archer MSA 
described in Code section 220(d); (E) an education individual 
retirement account described in Code section 530, or (f) a trust, 
plan, account, or annuity which, at any time, has been determined by 
the Secretary to be described in any preceding subparagraph of this 
paragraph.
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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 ERISA and section 4975(c)(2) of the Code does 
not relieve a fiduciary or other party in interest or disqualified 
person from certain other provisions of ERISA and 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 require, among other things, that a fiduciary 
discharge his duties with respect to the plan solely in the interests 
of the participants and beneficiaries of the plan and in a prudent 
fashion in accordance with section 404(a)(1)(B) of ERISA; 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) In accordance with section 408(a) of ERISA and 4975(c)(2) of 
the Code, the Department makes the following determinations:
    (i) The amendment set forth herein is administratively feasible;
    (ii) The amendment set forth herein is in the interests of plans 
and of their participants and beneficiaries; and
    (iii) The amendment set forth herein is protective of the rights of 
participants and beneficiaries of plans,
    (3) Each exemption amended herein is applicable to a particular 
transaction only if the transaction satisfies the conditions specified 
in such exemption, and
    (4) The amendment is supplemental to, and not in derogation of, any 
other provisions of ERISA and 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.

Paperwork Reduction Act

    This proposed amendment to the class exemptions specifically 
enumerated does not contain a collection of information as that term is 
defined in 44 U.S.C. 3502(3), nor does it substantially or materially 
modify the terms of any collection of information included in the class 
exemptions that would be amended as to the definition of ``employee 
benefit plan'' and ``plan'' (specifically, PTE 80-83, PTE 81-6, PTE 81-
8, PTE 82-63, PTE 88-59, PTE 91-38, and PTE 96-62). The amendment would 
clarify definitions already relied upon in the analyses of these 
information collections conducted in pursuant to the Paperwork 
Reduction Act of 1995.

Amendment

    Under section 408(a) of ERISA 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), the Department amends the 
following class exemptions as set forth below:
    1. PTE 79-15 is amended by adding the following paragraph at the 
end of the exemption to read as follows: For purposes of this 
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an 
employee benefit plan described in ERISA section 3(3) and/or a plan 
described in section 4975(e)(1) of the Code.
    2. PTE 80-26 is amended by adding the following paragraph at the 
end of the exemption to read as follows: For purposes of this 
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an 
employee benefit plan described in ERISA section 3(3) and/or a plan 
described in section 4975(e)(1) of the Code.
    3. PTE 80-83 is amended by adding the following paragraph 4. to 
Section II. b. to read as follows: 4. For purposes of this exemption, 
the terms ``employee benefit plan'' and ``plan'' refer to an employee 
benefit plan described in section 3(3) of ERISA and/or a plan described 
in section 4975(e)(1) of the Code.

[[Page 9485]]

    4. PTE 81-6 is amended by adding the following paragraph at the end 
of the exemption to read as follows: For purposes of this exemption, 
the terms ``employee benefit plan'' and ``plan'' refer to an employee 
benefit plan described in ERISA section 3(3) and/or a plan described in 
section 4975(e)(1) of the Code.
    5. PTE 81-8 is amended by adding the following paragraph at the end 
of the exemption to read as follows: For purposes of this exemption, 
the terms ``employee benefit plan'' and ``plan'' refer to an employee 
benefit plan described in ERISA section 3(3) and/or a plan described in 
section 4975(e)(1) of the Code.
    6. PTE 82-63 is amended by adding the following paragraph (4) to 
section II. Definitions to read as follows: (4) For purposes of this 
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an 
employee benefit plan described in ERISA section 3(3) and/or a plan 
described in section 4975(e)(1) of the Code.
    7. PTE 83-1 is amended by adding the following paragraph I. to 
Section III. Definitions to read as follows: I. For purposes of this 
exemption, the terms ``employee benefit plan'' and ``plan'' refer to an 
employee benefit plan described in ERISA section 3(3) and/or a plan 
described in section 4975(e)(1) of the Code.
    8. PTE 84-14 is amended by adding the following paragraph (n) to 
Part V. Definitions and General Rules to read as follows: (n) The terms 
``employee benefit plan'' and ``plan'' refer to an employee benefit 
plan described in section 3(3) of ERISA and/or a plan described in 
section 4975(e)(1) of the Code.
    9. PTE 88-59 is amended by adding the following paragraph (F) to 
Section III. Definitions to read as follows: (F) The terms ``employee 
benefit plan'' and ``plan'' refer to an employee benefit plan described 
in section 3(3) of ERISA and/or a plan described in section 4975(e)(1) 
of the Code.
    10. PTE 91-38 is amended by adding the following paragraph (k) to 
Section IV. Definitions and General Rules to read as follows: The terms 
``employee benefit plan'' and ``plan'' refer to an employee benefit 
plan described in section 3(3) of ERISA and/or a plan described in 
section 4975(e)(1) of the Code.
    11. PTE 95-60 is amended by adding the following paragraph (j) to 
Section V. Definitions to read as follows: (j) The terms ``employee 
benefit plan'' and ``plan'' refer to an employee benefit plan described 
in section 3(3) of ERISA and/or a plan described in section 4975(e)(1) 
of the Code.
    12. PTE 96-62 is amended by adding paragraph (g) to Section IV. 
Definitions to read as follows: (g) For purposes of this exemption, the 
terms ``employee benefit plan'' and ``plan'' refer to an employee 
benefit plan described in section 3(3) of ERISA and/or a plan described 
in section 4975(e)(1) of the Code.

    Signed at Washington, DC, this 25th day of February, 2002.
Ivan L. Strasfeld,
Director, Office of Exemption Determinations, Pension and Welfare 
Benefits Administration, Department of Labor.
[FR Doc. 02-4872 Filed 2-28-02; 8:45 am]
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