Grant of Individual Exemptions; Bankers Trust Company

DEPARTMENT OF LABOR

[Prohibited Transaction Exemption 95-67; Exemption Application No. D-

09869, et al.]

Grant of Individual Exemptions; Bankers Trust 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, 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 (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.

Bankers Trust Company (Bankers Trust) Located in New York, NY;

Exemption

[Prohibited Transaction Exemption 95-67; Exemption Application No.

D-09869]

The restrictions of sections 406(a), 406(b)(1) and 406(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 as of October 28, 1994, to the cash sale of certain

structured notes (the Notes) for $432,131,250 by three collective

investment funds for which Bankers Trust acts as trustee (the Funds) to

[[Page 40623]]

Bankers Trust New York Corporation (BTNY), a party in interest with

respect to employee benefit plans invested in the Funds, provided that

the following conditions were met:

(a) Each sale was a one-time transaction for cash;

(b) Each Fund received an amount which was equal to the greater of

either: (i) the par value of the Notes owned by the Fund at the time of

sale, (ii) the purchase price paid by the Fund for its interest in each

of the Notes, or (iii) the fair market value of the Notes owned by the

Fund, as determined by bid quotations for the Notes obtained from

independent broker-dealers at the time of sale;

(c) The Funds did not pay any commissions or other expenses with

respect to the sale;

(d) Bankers Trust, as trustee of the Funds, determined that the

sale of the Notes was in the best interests of each Fund, and the

employee benefit plans invested in the Fund, at the time of the

transactions;

(e) Bankers Trust took all appropriate actions necessary to

safeguard the interests of the Funds, and the employee benefit plans

invested in the Funds, in connection with the transactions; and

(f) The Funds received a reasonable rate of return during the

period of time that the Funds held the Notes.

EFFECTIVE DATE: This exemption is effective as of October 28, 1994.

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 15, 1995, at 60 FR

31508.

FOR FURTHER INFORMATION CONTACT: Mr. E.F. Williams of the Department,

telephone (202) 219-8194. (This is not a toll-free number.)

Masik Tool and Die Corporation Profit Sharing Plan (the Plan) Located

in Cudahy, Wisconsin; Exemption

[Prohibited Transaction Exemption 95-68; Application No. D-09899]

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: (1) The past leasing (the Lease) of a lathe (the

Lathe) owned by the Plan and certain individually-directed accounts in

the Plan (the Accounts) to Masik Tool and Die Corporation (Masik), a

party in interest with respect to the Plan; and (2) the proposed cash

sale (the Sale) of the Lathe by the Accounts to Masik.

This exemption is conditioned on the following requirements: (1)

With respect to the past Lease--

(a) the terms and conditions of the Lease have been at least as

favorable to the Plan and the Accounts as those obtainable in an arm's

length transaction with an unrelated party; (b) the value of the Lathe

did not exceed twenty-five percent of the assets of the Plan or of any

of the Accounts at any time during the duration of the Lease; (c) an

independent, qualified fiduciary approved of the Lease on behalf of the

Plan and the Accounts and has monitored the Lease throughout its

entirety; (d) the rental amount received by the Plan and the Accounts

was based upon the fair market rental value of the Lathe; and (e)

within ninety days of the publication in the Federal Register of the

grant of this exemption, Masik files Forms 5330 with the Internal

Revenue Service and pay all applicable excise taxes that are due by

reason of the past prohibited transactions, which are not subject to

this exemption.

(2) With respect to the prospective Sale--

(a) the terms and conditions of the Sale are at least as favorable

to the Accounts as those obtainable in an arm's length transaction with

an unrelated party; (b) the Sale is a one-time cash transaction; (c)

the Accounts are not required to pay any commissions, costs or other

expenses in connection with the Sale; (d) the Sale price for the Lathe

is based upon its fair market value on the date of the Sale as

determined by an independent, qualified appraiser; and (e) within

ninety days of the publication in the Federal Register of the grant of

this exemption, Masik files Forms 5330 with the Internal Revenue

Service and pay all applicable excise taxes that are due by reason of

the past prohibited transactions, which are not subject to this

exemption.

EFFECTIVE DATE: This exemption is effective as of June 1, 1988 with

respect to the Lease. The exemption is effective as of the date of the

grant of the exemption with respect to 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 Notice published on April 27, 1995 at

60 FR 20767.

FOR FURTHER INFORMATION CONTACT: Mr. E.F. Williams of the Department,

telephone (202) 219-8194. (This is not a toll-free number.)

The Amended and Restated Profit Sharing Retirement Plan for Employees

of 84 Lumber Company (the Profit Sharing Plan) and The Amended and

Restated Savings Fund Plan for Employees of 84 Lumber Company (the

Savings Plan; together, the Plans) Located in Eighty Four,

Pennsylvania; Exemption

[Prohibited Transaction Exemption 95-69; Exemption Application Nos.

D-09945 and D-09946]

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: (1) The extension of credit by 84 Lumber Company

(Lumber) to the Plans in the form of loans (the Loans) with respect to

Guaranteed Investment Contract, Number CG0124601A issued by Executive

Life Insurance Company (ELIC) to the Profit Sharing Plan and Guaranteed

Investment Contract No. CG0124701A (both Contracts together, the GICs)

issued by ELIC to the Savings Plan; and (2) the Plans' potential

repayment of the Loans (the Repayments), provided: (a) All terms of

such transactions are no less favorable to the Plans than those which

the Plans could obtain in arm's-length transactions with an unrelated

party; (b) no interest and/or expenses are paid by the Plans; (c) the

Loans are made with respect to amounts invested by the Plans in the

GICs; (d) the Repayments are restricted to the amounts, if any, paid to

the Plans after the date of the Loans by ELIC or other responsible

third parties with respect to the GICs (the GIC Proceeds); (e) the

Repayments under each Loan will not exceed the total amount of the

Loan; and (f) the Repayments are waived with respect to the amount by

which any Loan exceeds the GIC Proceeds.

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 15, 1995 at 60 FR

31515.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,

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

Universal Underwriters Group Thrift Plan (the Plan) Located in Overland

Park, Kansas; Exemption

[Prohibited Transaction Exemption 95-70; Application No. D-09947]

The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the

Act and the sanctions resulting from the application

[[Page 40624]]

of section 4975 of the Code, by reason of section 4975(c)(1)(A) through

(E) of the Code shall not apply to: (1) The extensions of credit (the

Loans) to the Plan from Universal Underwriters Insurance Company (the

Employer), with respect to a guaranteed investment contract (the GIC)

issued by Confederation Life Insurance Company (Confederation); (2) the

Plan's potential repayment of the Loans upon the receipt by the Plan of

payments under the GIC; and (3) the assignment by the Plan to the

Employer of all claims or causes of action it may have against the

Plan's former GIC placement advisor for recommending that the Plan

purchase the GIC; provided the following conditions are satisfied:

(A) All terms and conditions of such transaction are no less

favorable to the Plan than those which the Plan could obtain in arm's-

length transactions with unrelated parties;

(B) No interest or expenses are paid by the Plan in connection with

the proposed transaction;

(C) The Loans will be repaid only out of amounts paid to the Plan

by Confederation, its successors, or any other responsible third party;

(D) Repayment of the Loans will be waived to the extent that the

Loans exceed GIC proceeds;

(E) A qualified independent fiduciary will represent the interests

of the Plan throughout the duration of the proposed transaction; and

(F) The Employer's recovery resulting from a cause of action

assigned to the Employer by the Plan will be limited to the amount

necessary to pay for litigation expenses and to pay off the Plan's

outstanding Loan balance and any excess recovery will be transferred

back to the Plan.

WRITTEN COMMENTS: The Department received a total of 6 written

comments. All 6 commentators urged the Department to grant the

exemption. No commentators requested a hearing.

After giving full consideration to the entire record, including the

written comments, the Department has determined to grant the exemption.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption refer to

the Notice published on June 7, 1995, at 60 FR 30109.

FOR FURTHER INFORMATION CONTACT: Virginia J. Miller of the Department,

telephone (202) 219-8971. (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 do 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 4th day of August, 1995.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 95-19664 Filed 8-8-95; 8:45 am]

BILLING CODE 4510-29-P