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Secretary of Labor Thomas E. Perez
Grant of Individual Exemptions; Pentair Retirement Savings and Stock Incentive Plan (the Plan), et al. [Notices] [01/26/1998]

EBSA (Formerly PWBA) Federal Register Notice

Grant of Individual Exemptions; Pentair Retirement Savings and Stock Incentive Plan (the Plan), et al. [01/26/1998]

[PDF Version]

Volume 63, Number 16, Page 3772-3773

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DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration
[Prohibited Transaction Exemption 98-04; Exemption Application No. D-
10472, et al.]

 
Grant of Individual Exemptions; Pentair Retirement Savings and 
Stock Incentive Plan (the Plan), 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, 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.

Pentair Retirement Savings and Stock Incentive Plan (the Plan) Located 
in St. Paul, MN

[Prohibited Transaction Exemption No. 98-04; Application No. D-10472]

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 past sale by the Plan (the Sale) of 
the Plan's remaining interest (the Interest) in two guaranteed 
investment contracts (the GICs) of Confederation Life Insurance Company 
(CL) to Pentair, Inc. (Pentair), the sponsoring employer and a party in 
interest with respect to the Plan; provided the following conditions 
were met:
    (1) the Sale was a one-time transaction for cash;
    (2) the Plan received no less than the fair market value of the 
Interests at the time of the Sale;
    (3) the Plan and its participants and beneficiaries have not 
incurred any expenses or any losses from the Sale; and
    (4) any future distributions from the GICs that exceed the 
consideration paid by Pentair to the Plan for the Interests shall be 
paid to the Plan and allocated to the respective accounts of the 
affected Plan participants.

EFFECTIVE DATE: This proposed exemption will be effective on June 13, 
1997.
    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 November 24, 1997, at 62 
FR 62639.

FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver of the Department,

[[Page 3773]]

telephone (202) 219-8881. (This is not a toll-free number.)

Robert H. Herzog Profit Sharing Plan (the Plan) Located in Santa 
Barbara, California

[Prohibited Transaction Exemption 98-05; Exemption Application No. D-
10494]

Exemption

    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) of a certain residential 
condominium (the Property) by the Plan \1\ to Robert H. Herzog (Mr. 
Herzog), a disqualified person with respect to the Plan, provided that 
the following conditions are met:
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    \1\ Because Mr. Herzog is the only participant in the Plan, 
there is no jurisdiction under 29 CFR Sec. 2510.3-3(b). However, 
there is jurisdiction under Title II of the Act pursuant to section 
4975 of the Code.
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    (a) The Sale is a one-time transaction for cash;
    (b) The terms and conditions of the Sale are at least as favorable 
to the Plan as those obtainable in an arm's length transaction with an 
unrelated party;
    (c) The Plan receives the fair market value of the Property at time 
of the Sale; and
    (d) The Plan is not required to pay any commissions, costs or other 
expenses in connection with the Sale. 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 November 24, 1997 at 62 FR 62641.

FOR FURTHER INFORMATION CONTACT: Mr. James Scott Frazier of the 
Department, telephone (202) 219-7222. (This is not a toll-free number.)

CoreStates GIC and BIC Fund (the Fund) Located in Philadelphia, 
Pennsylvania

[Prohibited Transaction Exemption No. 98-06; Application No. D-10522]

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 sale (the Sale) by the Fund of the Fund's 
remaining interest in two Guaranteed Investment Contracts (the GICs) of 
Confederation Life Insurance Company (CL) to CoreStates Bank, N.A. (the 
Bank), a party in interest with respect to the Fund; provided (1) the 
Sale was a one-time transaction for cash, (2) the Fund received no less 
than the fair market value of the GICs at the time of the Sale, (3) the 
Fund and its participants and beneficiaries did not incur any costs or 
expenses with respect to the Sale, and (4) any future distributions 
from the GICs that exceed the consideration paid to the Fund by the 
Bank in the Sale shall be paid to the Fund and allocated to the 
respective accounts of the affected employee benefit plans.

EFFECTIVE DATE: This exemption will be effective as of December 31, 
1997.
    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 November 24, 1997, at 62 
FR 62641.

FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver of the Department, 
telephone (202) 219-8881. (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 are true and complete and accurately describe all material 
terms of the transaction which is the subject of the exemption. In the 
case of continuing exemption transactions, if any of the material facts 
or representations described in the application change after the 
exemption is granted, the exemption will cease to apply as of the date 
of such change. In the event of any such change, application for a new 
exemption may be made to the Department.

    Signed at Washington, D.C., this 21st day of January, 1998.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 98-1791 Filed 1-23-98; 8:45 am]
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