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Grant of Individual Exemptions; Local 705 International Brotherhood of Teamsters Pension Plan (the Plan) [09/05/2003]
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Volume 68, Number 172, Page 52789-52790
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Prohibited Transaction Exemption 2003-27; Exemption Application No. D-
10992 et al.]
Grant of Individual Exemptions; Local 705 International
Brotherhood of Teamsters Pension Plan (the Plan)
AGENCY: Employee Benefits Security 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).
A notice was published in the Federal Register of the pendency
before the Department of a proposal to grant such exemption. The notice
set forth a summary of facts and representations contained in the
application for exemption and referred interested persons to the
application for a complete statement of the facts and representations.
The application has been available for public inspection at the
Department in Washington, DC. The notice also invited interested
persons to submit comments on the requested exemption to the
Department. In addition the notice stated that any interested person
might submit a written request that a public hearing be held (where
appropriate). The applicant has represented that it has complied with
the requirements of the notification to interested persons. No requests
for a hearing were received by the Department. Public comments were
received by the Department as described in the granted exemption.
The notice of proposed exemption was issued and the exemption is
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 exemption is administratively feasible;
(b) The exemption is in the interests of the plan and its
participants and beneficiaries; and
(c) The exemption is protective of the rights of the participants
and beneficiaries of the plan.
Local 705 International Brotherhood of Teamsters Pension Plan (the
Plan) Located in Chicago, Illinois
[Prohibited Transaction Exemption No. 2003-27; Application No. D-10992]
Exemption
The restrictions of sections 406(a) and 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,
shall not apply to the proposed purchase of a 10 ft. x 52.6 ft. parcel
of real property (the Property) by the West Side Realty Corporation, a
wholly owned affiliate of the Plan from Local 705 Building Corporation
(the Building Corporation), a party in interest with respect to the
Plan. This exemption is conditioned upon the adherence to the material
facts and representations described herein and upon the satisfaction of
the following requirements:
(a) The purchase of the Property by the Plan is a one-time
transaction for cash;
(b) The Plan pays no more than the lesser of: (i) $147,000; or (ii)
the fair market value of the Property as determined at the time of the
transaction;
(c) The fair market value of the Property is established by an
independent, qualified, real estate appraiser that is unrelated to the
Building Corporation or any other party in interest with respect to the
Plan;
(d) The Plan will not pay any commissions or other expenses with
respect to the transaction; and
(e) The Townsend Group, Institutional Real Estate Consultants,
acting as an independent, qualified, fiduciary for the Plan, determines
that the proposed transaction is in the best interest of the Plan and
its participants and beneficiaries.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this
[[Page 52790]]
exemption, refer to the Notice of Proposed Exemption published on May
5, 2003 at 68 FR 23766.
FOR FURTHER INFORMATION CONTACT: Mr. Khalif I. Ford of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
Raleigh Pathology Laboratory Associates, P.A. Profit Sharing Plan (the
Plan) Located in Raleigh, NC
[Prohibited Transaction Exemption 2003-28; Exemption Application No. D-
11171]
Exemption
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,\1\ shall not apply to the exchange of an unimproved waterfront
lot (the Pine Knoll Shores Lot) owned by the Plan and allocated to the
individually-directed account (the Account) in the Plan of James R.
Edwards, M.D., for one unimproved tract of land (Parcel One) owned
personally by Dr. Edwards and his spouse, Mrs. Delores Edwards.
This exemption is subject to the following conditions: (a) The
exchange of the Pine Knoll Shores Lot between the Account and Dr. and
Mrs. Edwards for Parcel One is a one-time transaction.
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\1\ For purposes of this exemption, references to specific
provisions of title I of the Act, unless otherwise specified, refer
also to the corresponding provisions of the Code.
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(b) The fair market value of the Pine Knoll Shores Lot and Parcel
One is determined by qualified, independent appraisers, who will update
their appraisal reports at the time the exchange is consummated.
(c) For purposes of the exchange, Parcel One has a fair market
value that is no less than the fair market value of the Pine Knoll
Shores Lot at the time the transaction is consummated.
(d) The terms and conditions of the exchange are at least as
favorable to the Account as those obtainable in an arm's-length
transaction with an unrelated party.
(e) The exchange does not involve more than 25 percent of the
Account's assets.
(f) The exchange allows the Account to divest itself of property
that is susceptible to hurricane damage and high maintenance costs, and
it permits the Account to acquire virtually maintenance-proof property
having increased liquidity.
(g) Dr. Edwards is the only participant in the Plan whose Account
is affected by the transaction and he desires that such transaction be
consummated.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on June 24, 2003 at 68 FR
37545.
FOR FURTHER INFORMATION CONTACT: Ms. Blessed Chuksorji, telephone (202)
693-8567. (This is not a toll-free number.)
Valley OB-GYN Clinic P.C. Employees Pension Plan (the Plan) Located in
Saginaw, Michigan
[Prohibited Transaction Exemption 2003-29; Application No. D-11172]
Exemption
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 loan of $550,000 (the Loan) by the Plan to
Valley OB-GYN Realty Company (the Company), a party in interest with
respect to the Plan; provided that the following conditions are
satisfied:
a. The Loan does not exceed 25% of the total assets of the Plan at
any time;
b. The terms of the Loan are at least as favorable to the Plan as
those terms which would exist in an arm's-length transaction with an
unrelated party;
c. The Loan is secured by a building which has a fair market value,
as determined by an independent, qualified appraiser, of at least 150%
of the outstanding principal balance of the Loan (plus accrued but
unpaid interest) throughout its duration (unless other property is
pledged as collateral, as noted below in condition f.);
d. An independent, qualified fiduciary (the Independent Fiduciary)
reviews the proposed terms and conditions of the Loan, and determines
that the Loan is in the best interest and protective of the Plan and
its participants and beneficiaries;
e. The Independent Fiduciary monitors the Loan throughout its
duration and takes whatever actions are necessary to safeguard the
interests of the Plan and its participants and beneficiaries; and
f. The Plan has the right, under the terms of the Loan and mortgage
note related thereto, to require the Company to pledge additional
property as collateral for the Loan, in the event such property is
needed to maintain full collateralization at the amount specified
herein.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on June 24, 2003 at 68 FR
37546.
FOR FURTHER INFORMATION CONTACT: Ekaterina A. Uzlyan of the Department
at (202) 693-8540. (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 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) This exemption is 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 this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describes all material terms of the transaction
which is the subject of the exemption.
Signed at Washington, DC, this 2nd day of September, 2003.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security
Administration, Department of Labor.
[FR Doc. 03-22623 Filed 9-4-03; 8:45 am]
BILLING CODE 4510-29-P
