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Secretary of Labor Thomas E. Perez
Grant of Individual Exemptions; Sprague Electric Company [Notices] [06/04/1996]

EBSA (Formerly PWBA) Federal Register Notice

Grant of Individual Exemptions; Sprague Electric Company [06/04/1996]

[PDF Version]

Volume 61, Number 108, Page 28244-28248

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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 96-44; Exemption Application No. D-
10049, et al.]

 
Grant of Individual Exemptions; Sprague Electric Company

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, D.C. 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.

Sprague Electric Company Retirement and Savings Plan (the Plan) Located 
in Cincinnati, Ohio

[Prohibited Transaction Exemption 96-44; Exemption Application No. D-
10049]

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 cash sale (the Sale) by the Plan of its 34.2 
interest in both the Group Annuity Contract No. CG 0128203A (ELIC 
Contract) issued by Executive Life Insurance Company and the Group 
Annuity Contract No. GA-4724 (MBL Contract) issued by Mutual Benefit 
Life Insurance Company to American Annuity Group, Inc., a party in 
interest with respect to the Plan; provided that the following 
conditions are met: (1) the Sale is a one-time transaction for cash; 
(2) the Plan experiences no loss and incurs no expense from the Sale; 
(3) the Plan receives as consideration for the Sale the greater of 
either (a) 34.2 percent of the fair market value of the ELIC Contract 
and the MBL Contract, respectively, as determined on the date of the 
Sale, or (b) 34.2 percent of the accumulated book value of the ELIC 
Contract and the MBL Contract, respectively, as set forth in paragraph 
4 of the notice of the proposed exemption, with such determinations as 
to the consideration for the Sale made by the State Street Bank and 
Trust Company, the Plan fiduciary.
    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 April 4, 1996, at 61 FR 
15140.

Comments

    The Department received three written comments from retired 
participants of the Plan with respect to the notice of the proposed 
exemption. These comments did not relate to the subject Sale 
transaction. Accordingly, after giving full consideration to the entire 
record, the Department has determined to grant the exemption.

FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

Dauphin Deposit Bank and Trust Company Located in Harrisburg, 
Pennsylvania

[Prohibited Transaction Exemption 96-45; Application No. D-10187]

Section I--Exemption for In-Kind Transfer of CIF Assets

    The restrictions of sections 406(a) and 406(b) 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 (F) of the Code, shall not 
apply, as of May 31, 1996 to the proposed in-kind transfer of assets of 
plans for which Dauphin Deposit Bank and Trust Company (Dauphin) acts 
as a fiduciary (the Client Plans), other than plans established and 
maintained by Dauphin (the Bank Plans), that are held in certain 
collective investment funds maintained by Dauphin (CIFs) in exchange 
for shares of the Marketvest Funds (the Funds), open-end investment 
companies registered under the Investment Company Act of 1940 (the 1940 
Act), in situations where Dauphin acts as investment advisor for the 
Fund and may provide some other ``Secondary Service'' to the Fund as 
defined in Section V(h), in connection with the termination of such 
CIFs, provided that the following conditions and the general conditions 
of Section III are met:
    (a) No sales commissions or other fees are paid by the Client Plans 
in connection with the purchase of Fund shares through the in-kind 
transfer of CIF assets, and no redemption fees are payable in 
connection with the sale of such shares by the Client Plans to the 
Funds.
    (b) Each Client Plan receives shares of a Fund which have a total 
net asset value that is equal to the value of the Plan's pro rata share 
of the assets of the

[[Page 28245]]

CIF on the date of the in-kind transfer, based on the current market 
value of the CIF's assets as determined in a single valuation performed 
in the same manner at the close of that business day using independent 
sources in accordance with Rule 17a-7 of the Securities and Exchange 
Commission (SEC) under the 1940 Act (see 17 CFR 270.17a-7) and the 
procedures established by the Funds pursuant to Rule 17a-7 for the 
independent valuation of such assets. Such procedures must require that 
all securities for which a current market price cannot be obtained by 
reference to the last sale price for transactions reported on a 
recognized securities exchange or NASDAQ be valued based on an average 
of the highest current independent bid and lowest current independent 
offer, as of the close of business on the Friday preceding the weekend 
of the CIF transfers, determined on the basis of reasonable inquiry 
from at least three sources that are broker-dealers or pricing services 
independent of Dauphin.
    (c) All or a pro rata portion of the assets of a Client Plan held 
in a CIF are transferred in-kind to the Funds in exchange for shares of 
such Funds.
    (d) A second fiduciary who is independent of and unrelated to 
Dauphin (the Second Fiduciary) receives advance written notice of the 
in-kind transfer of assets of the CIFs and full written disclosure of 
information concerning the Funds, including:
    (1) A current prospectus for each Fund in which a Client Plan is 
considering investing;
    (2) A statement describing the fees for investment advisory or 
similar services, any secondary services as defined in Section IV(h), 
and all other fees to be charged to or paid by the Client Plan and by 
the Funds, including the nature and extent of any differential between 
the rates of such fees;
    (3) The reasons why Dauphin considers investing in the Fund is an 
appropriate investment decision for the Client Plan;
    (4) A statement describing whether there are any limitations 
applicable to Dauphin with respect to which assets of a Client Plan may 
be invested in a Fund, and, if so, the nature of such limitations; and
    (5) Upon request of the Second Fiduciary, a copy of the proposed 
exemption and/or a copy of the final exemption, if granted, once such 
documents are published in the Federal Register.
    (e) After consideration of the foregoing information, the Second 
Fiduciary authorizes in writing the in-kind transfer of the Client 
Plan's CIF assets to a corresponding Fund in exchange for shares of the 
Fund.
    (f) For all in-kind transfers of CIF assets to a Fund, Dauphin 
sends by regular mail to each affected Client Plan the following 
information:
    (1) Within 30 days after completion of the transaction, a written 
confirmation containing:
    (i) The identity of each security that was valued for purposes of 
the transaction in accordance with Rule 17a-7(b)(4);
    (ii) The price of each such security involved in the transaction;
    (iii) The identity of each pricing service or market-maker 
consulted in determining the value of such securities; and
    (2) Within 90 days after completion of each in-kind transfer, a 
written confirmation containing:
    (i) The number of CIF units held by the Client Plan immediately 
before the transfer, the related per unit value, and the total dollar 
amount of such CIF units; and
    (ii) The number of shares in the Funds that are held by the Client 
Plan following the transfer, the related per share net asset value, and 
the total dollar amount of such shares.
    (g) The conditions set forth in paragraphs (e), (f) and (o) of 
Section II below are satisfied.

Section II--Exemption for Receipt of Fees

    The restrictions of section 406(a) and 406(b) 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 (F) of the Code, shall not 
apply, as of April 1, 1996, to the receipt of fees by Dauphin from the 
Funds for acting as an investment adviser for the Funds as well as for 
providing other services to the Funds which are ``Secondary Services'' 
as defined in Section V(h), in connection with the investment by the 
Client Plans in shares of the Funds, provided that the following 
conditions and the general conditions of Section III are met:
    (a) Each Client Plan satisfies either (but not both) of the 
following:
    (1) The Client Plan receives a cash credit of such Plan's 
proportionate share of all fees charged to the Funds by Dauphin for 
investment advisory services, including any investment advisory fees 
paid by Dauphin to third party sub-advisers, no later than the same day 
as the receipt of such fees by Dauphin. The crediting of all such fees 
to the Client Plans by Dauphin is audited by an independent accounting 
firm on at least an annual basis to verify the proper crediting of the 
fees to each Plan.
    (2) The Client Plan does not pay any Plan-level investment 
management fees, investment advisory fees, or similar fees to Dauphin 
with respect to any of the assets of such Plan which are invested in 
shares of any of the Funds. This condition does not preclude the 
payment of investment advisory or similar fees by the Funds to Dauphin 
under the terms of an investment management agreement adopted in 
accordance with section 15 of the 1940 Act, nor does it preclude the 
payment of fees for Secondary Services to Dauphin pursuant to a duly 
adopted agreement between Dauphin and the Funds.
    (b) The price paid or received by a Client Plan for shares in a 
Fund is the net asset value per share at the time of the transaction, 
as defined in Section V(e), and is the same price which would have been 
paid or received for the shares by any other investor at that time.
    (c) Dauphin, including any officer or director of Dauphin, does not 
purchase or sell shares of the Funds from or to any Client Plan.
    (d) No sales commissions are paid by the Client Plans in connection 
with the purchase or sale of shares of the Funds and no redemption fees 
are paid in connection with the sale of shares by the Client Plans to 
the Funds.
    (e) For each Client Plan, the combined total of all fees received 
by Dauphin for the provision of services to a Client Plan, and in 
connection with the provision of services to the Funds in which the 
Client Plan may invest, are not in excess of ``reasonable 
compensation'' within the meaning of section 408(b)(2) of the Act.
    (f) Dauphin does not receive any fees payable pursuant to Rule 12b-
1 under the 1940 Act in connection with the transactions.
    (g) The Client Plans are not employee benefit plans sponsored or 
maintained by Dauphin.
    (h) The Second Fiduciary receives, in advance of any initial 
investment by the Client Plan in a Fund, full and detailed written 
disclosure of information concerning the Funds, including but not 
limited to:
    (1) A current prospectus for each Fund in which a Client Plan is 
considering investing;
    (2) A statement describing the fees for investment advisory or 
similar services, any secondary services as defined in Section IV(h), 
and all other fees to be charged to or paid by the Client Plan and by 
the Funds, including the nature and extent of any differential between 
the rates of such fees;

[[Page 28246]]

    (3) The reasons why Dauphin may consider such investment to be 
appropriate for the Client Plan;
    (4) A statement describing whether there are any limitations 
applicable to Dauphin with respect to which assets of a Client Plan may 
be invested in the Funds, and if so, the nature of such limitations; 
and
    (5) Upon request of the Second Fiduciary, a copy of the proposed 
exemption and/or a copy of the final exemption, if granted, once such 
documents are published in the Federal Register.
    (i) After consideration of the information described above in 
paragraph (h), the Second Fiduciary authorizes in writing the 
investment of assets of the Client Plan in each particular Fund and the 
fees to be paid by such Funds to Dauphin.
    (j) All authorizations made by a Second Fiduciary regarding 
investments in a Fund and the fees paid to Dauphin are subject to an 
annual reauthorization wherein any such prior authorization referred to 
in paragraph (i) shall be terminable at will by the Client Plan, 
without penalty to the Client Plan, upon receipt by Dauphin of written 
notice of termination. A form expressly providing an election to 
terminate the authorization described in paragraph (i) above (the 
Termination Form) with instructions on the use of the form must be 
supplied to the Second Fiduciary no less than annually; provided that 
the Termination Form need not be supplied to the Second Fiduciary 
pursuant to this paragraph sooner than six months after such 
Termination Form is supplied pursuant to paragraph (l) below, except to 
the extent required by such paragraph in order to disclose an 
additional service or fee increase. The instructions for the 
Termination Form must include the following information:
    (1) The authorization is terminable at will by the Client Plan, 
without penalty to the Client Plan, upon receipt by Dauphin of written 
notice from the Second Fiduciary; and
    (2) Failure to return the Termination Form will result in continued 
authorization of Dauphin to engage in the transactions described in 
paragraph (i) on behalf of the Client Plan.
    (k) For each Client Plan using the fee structure described in 
paragraph (a)(1) above with respect to investments in a particular 
Fund, the Second Fiduciary of the Client Plan receives full written 
disclosure in a Fund prospectus or otherwise of any increases in the 
rates of fees charged by Dauphin to the Funds for investment advisory 
services.
    (l) (1) For each Client Plan using the fee structure described in 
paragraph (a)(2) above with respect to investments in a particular 
Fund, an increase in the rate of fees paid by the Fund to Dauphin 
regarding any investment management services, investment advisory 
services, or similar services that Dauphin provides to the Fund over an 
existing rate for such services that had been authorized by a Second 
Fiduciary in accordance with paragraph (i) above; or
    (2) For any Client Plan under this exemption, an addition of a 
Secondary Service (as defined in Section IV(h) below) provided by 
Dauphin to the Fund for which a fee is charged, or an increase in the 
rate of any fee paid by the Funds to Dauphin for any Secondary Service 
that results either from an increase in the rate of such fee or from 
the decrease in the number of kind of services performed by Dauphin for 
such fee over an existing rate for such Secondary Service which had 
been authorized by the Second Fiduciary of a Client Plan in accordance 
with paragraph (i) above;
    Dauphin will, at least 30 days in advance of the implementation of 
such additional service for which a fee is charged or fee increase, 
provide a written notice (which may take the form of a proxy statement, 
letter, or similar communication that is separate from the prospectus 
of the Fund and which explains the nature and amount of the additional 
service for which a fee is charged or of the increase in fees) to the 
Second Fiduciary of the Client Plan. Such notice shall be accompanied 
by a Termination Form with instructions as described in paragraph (i) 
above.
    (m) On an annual basis, Dauphin provides the Second Fiduciary of a 
Client Plan investing in the Funds with:
    (1) A copy of the current prospectus for the Funds in which the 
Client Plan invests and, upon such fiduciary's request, a copy of the 
Statement of Additional Information for such Funds which contains a 
description of all fees paid by the Funds to Dauphin;
    (2) A copy of the annual financial disclosure report prepared by 
Dauphin which includes information about the Fund portfolios as well as 
audit findings of an independent auditor within 60 days of the 
preparation of the report; and
    (3) Oral or written responses to inquiries of the Second Fiduciary 
as they arise.
    (n) With respect to each of the Funds in which a Client Plan 
invests, in the event such Fund places brokerage transactions with 
Dauphin, Dauphin will provide the Second Fiduciary of such Plan at 
least annually with a statement specifying:
    (1) The total, expressed in dollars, of brokerage commissions of 
each Fund that are paid to Dauphin by such Fund;
    (2) The total, expressed in dollars, of brokerage commissions of 
each Fund that are paid by such Fund to brokerage firms unrelated to 
Dauphin;
    (3) The average brokerage commissions per share, expressed as cents 
per share, paid to Dauphin by each Fund; and
    (4) The average brokerage commissions per share, expressed as cents 
per share, paid by each Fund to brokerage firms unrelated to Dauphin.
    (o) All dealings between the Client Plans and the Funds are on a 
basis no less favorable to the Plans than dealings with other 
shareholders of the Funds.

Section III--General Conditions

    (a) Dauphin maintains for a period of six years the records 
necessary to enable the persons described below in paragraph (b) to 
determine whether the conditions of this exemption have been met, 
except that (1) a prohibited transaction will not be considered to have 
occurred if, due to circumstances beyond the control of Dauphin, the 
records are lost or destroyed prior to the end of the six-year period, 
and (2) no party in interest other than Dauphin or an affiliate shall 
be subject to the civil penalty that may be assessed under section 
502(i) of the Act or to the taxes imposed by section 4975(a) and (b) of 
the Code if the records are not maintained or are not available for 
examination as required by paragraph (b) below.
    (b) (1) Except as provided below in paragraph (b)(2) and 
notwithstanding any provisions of section 504(a)(2) of the Act, the 
records referred to in paragraph (a) are unconditionally available at 
their customary location for examination during normal business hours 
by--
    (i) Any duly authorized employee or representative of the 
Department or the Internal Revenue Service,
    (ii) Any fiduciary of the Client Plans who has authority to acquire 
or dispose of shares of the Funds owned by the Client Plans, or any 
duly authorized employee or representative of such fiduciary, and
    (iii) Any participant or beneficiary of the Client Plans or duly 
authorized employee or representative of such participant or 
beneficiary;
    (2) None of the persons described in paragraph (b)(1)(ii) and (iii) 
shall be authorized to examine trade secrets of Dauphin, or commercial 
or financial information which is privileged or confidential.

[[Page 28247]]

Section IV--Definitions

    For purposes of this exemption:
    (a) The term ``Dauphin'' means Dauphin Deposit Bank and Trust 
Company and any affiliate thereof as defined below in paragraph (b) of 
this section.
    (b) An ``affiliate'' of a person includes:
    (1) Any person directly or indirectly through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person;
    (2) Any officer, director, employee, relative, or partner in any 
such person; and
    (3) Any corporation or partnership of which such person is an 
officer, director, partner, or employee.
    (c) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    (d) The term ``Fund'' or ``Funds'' shall include the Marketvest 
Funds, Inc. or any other diversified open-end investment company or 
companies registered under the 1940 Act for which Dauphin serves as an 
investment adviser and may also serve as a custodian, dividend 
disbursing agent, shareholder servicing agent, transfer agent, Fund 
accountant, or provide some other ``Secondary Service'' (as defined 
below in paragraph (h) of this Section) which has been approved by such 
Funds.
    (e) The term ``net asset value'' means the amount for purposes of 
pricing all purchases and sales calculated by dividing the value of all 
securities, determined by a method as set forth in the Fund's 
prospectus and statement of additional information, and other assets 
belonging to the Fund or portfolio of the Fund, less the liabilities 
charged to each such portfolio or Fund, by the number of outstanding 
shares.
    (f) The term ``relative'' means a ``relative'' as that term is 
defined in section 3(15) of the Act (or a ``member of the family'' as 
that term is defined in section 4975(e)(6) of the Code), or a brother, 
a sister, or a spouse of a brother or a sister.
    (g) The term ``Second Fiduciary'' means a fiduciary of a Client 
Plan who is independent of and unrelated to Dauphin. For purposes of 
this exemption, the Second Fiduciary will not be deemed to be 
independent of and unrelated to Dauphin if:
    (1) Such fiduciary directly or indirectly controls, is controlled 
by, or is under common control with Dauphin;
    (2) Such fiduciary, or any officer, director, partner, employee, or 
relative of the fiduciary is an officer, director, partner or employee 
of Dauphin (or is a relative of such persons);
    (3) Such fiduciary directly or indirectly receives any compensation 
or other consideration for his or her own personal account in 
connection with any transaction described in this exemption.
    If an officer, director, partner or employee of Dauphin (or 
relative of such persons), is a director of such Second Fiduciary, and 
if he or she abstains from participation in (i) the choice of the 
Client Plan's investment adviser, (ii) the approval of any such 
purchase or sale between the Client Plan and the Funds, and (iii) the 
approval of any change in fees charged to or paid by the Client Plan in 
connection with any of the transactions described in Sections I and II 
above, then paragraph (g)(2) of this section shall not apply.
    (h) The term ``Secondary Service'' means a service other than an 
investment management, investment advisory, or similar service, which 
is provided by Dauphin to the Funds. However, for purposes of Section 
II(k), the term ``Secondary Service'' will not include any brokerage 
services provided to the Funds by Dauphin for the execution of 
securities transactions engaged in by the Funds.
    (i) The term ``Termination Form'' means the form supplied to the 
Second Fiduciary which expressly provides an election to the Second 
Fiduciary to terminate on behalf of a Client Plan the authorization 
described in paragraph (i) of Section II. Such Termination Form may be 
used at will by the Second Fiduciary to terminate an authorization 
without penalty to the Client Plan and to notify Dauphin in writing to 
effect a termination by selling the shares of the Funds held by the 
Client Plan requesting such termination within one business day 
following receipt by Dauphin of the form; provided that if, due to 
circumstances beyond the control of Dauphin, the sale cannot be 
executed within one business day, Dauphin shall have one additional 
business day to complete such sale.

Effective Date

    This exemption is effective as of May 31, 1996, for the in-kind 
transfers of CIF assets described in Section I. In addition, this 
exemption is effective as of April 1, 1996, for the receipt of fees by 
Dauphin described in Section II for cash investments made by Client 
Plans in shares of the Funds which do not involve any in-kind transfer 
of CIF assets to such Funds.
    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 March 12, 1996, at 61 FR 
10017.

Notice to Interested Persons

    The applicant represents that it was unable to notify interested 
persons within the time period specified in the Federal Register notice 
published on March 12, 1996. The applicant states that interested 
persons were notified, in the manner agreed upon between the applicant 
and the Department, by April 3, 1996. Interested persons were advised 
that they had until May 3, 1996 to comment on the proposed exemption.

Written Comments and Modifications

    The applicant submitted the following comments and requests for 
modifications regarding the notice of proposed exemption (the 
Proposal).
    With respect to Section I(g) of the Proposal, the applicant states 
that the cross-reference to paragraph (n) of Section II should be 
changed to paragraph (o). The Department acknowledges the applicant's 
requested clarification and has so modified the language of the 
exemption.
    With respect to Section IV(i) of the Proposal, the applicant states 
that the cross-reference to paragraph (h) of Section II should be 
changed to paragraph (i). The Department acknowledges the applicant's 
requested clarification and has so modified the language of the 
exemption.
    With respect to the effective dates for the exemption, the 
applicant notes that, consistent with the representations made in the 
application, the Proposal provided that the effective date of the 
exemption should be March 29, 1996. However, the applicant states that 
the target date for the in-kind transfers of CIF assets to the Funds 
has been changed to May 31, 1996. Therefore, the effective date for the 
exemption under Section I for the in-kind transfers of CIF assets to 
the Funds should be changed to May 31, 1996. However, the applicant 
states that new Client Plans that have just retained Dauphin as trustee 
may seek to invest in the Funds prior to that date. Thus, the applicant 
requests that the effective date for the exemption under Section II 
concerning the receipt of fees by Dauphin from the Funds for 
investments in the Funds made by new Client Plans should be April 1, 
1996.
    The Department acknowledges the applicant's requested clarification 
and has so modified the paragraph in the exemption relating to the 
effective date for the transactions described in Section I (the in-kind 
transfers of CIF assets to the Funds) and Section II (the receipt of 
fees by Dauphin from the Funds).

[[Page 28248]]

    No other comments, and no requests for a hearing, were received by 
the Department on the Proposal.
    Accordingly, based on all of the facts and representations made by 
the applicant, the Department has determined to grant the proposed 
exemption as modified.

FOR FURTHER INFORMATION CONTACT: Mr. E. F. Williams 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, D.C., this 30th day of May, 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, U.S. Department of Labor.
[FR Doc. 96-13915 Filed 6-3-96; 8:45 am]
BILLING CODE 4510-29-P