Grant of Individual Exemptions; General Motors Hourly-Rate Employees Pension Plan; General Motors Retirement Program for Salaried Employees; Saturn Individual Retirement Plan for Represented Team Members; Saturn Personal Choices Retirement Plan for Non-Represented Team Members; Employees' Retirement Plan for GMAC Mortgage Corporation; National Car Rental System, Inc. Salaried Employees Pension Plan; and National Car Rental System, Inc. Hourly Paid Employees Pension Plan (Collectively, the Plans), et al.

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[[Prohibited Transaction Exemption 96-17; Exemption Application No. D-

09930, et al.]

Grant of Individual Exemptions; General Motors Hourly-Rate

Employees Pension Plan; General Motors Retirement Program for Salaried

Employees; Saturn Individual Retirement Plan for Represented Team

Members; Saturn Personal Choices Retirement Plan for Non-Represented

Team Members; Employees' Retirement Plan for GMAC Mortgage Corporation;

National Car Rental System, Inc. Salaried Employees Pension Plan; and

National Car Rental System, Inc. Hourly Paid Employees Pension Plan

(Collectively, the Plans), 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.

[[Page 11876]]

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.

General Motors Hourly-Rate Employes Pension Plan; General Motors

Retirement Program for Salaried Employes; Saturn Individual Retirement

Plan for Represented Team Members; Saturn Personal Choices Retirement

Plan for Non-Represented Team Members; Employees' Retirement Plan for

GMAC Mortgage Corporation; National Car Rental System, Inc. Salaried

Employees Pension Plan; and National Car Rental System, Inc. Hourly

Paid Employees Pension Plan (collectively, the Plans) Located in New

York, New York

[Prohibited Transaction Exemption 96-17; Exemption Application Nos. D-

09930, D-09931]

Exemption

(a) General Exemption. The restrictions of section 406(a)(1)(A)

through (D) 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

(D) of the Code, shall not apply to any transaction arising in

connection with the acquisition, ownership, management, development,

leasing, financing, or sale of real property (including the

acquisition, ownership or sale of any joint venture or partnership

interest in such property) or the borrowing or lending of money in

connection therewith, between a party in interest and the Plans,

provided that the following conditions are satisfied:

(1) The terms of the transaction are negotiated on behalf of the

Plans by, or under the authority and general direction of, General

Motors Investment Management Corporation (GMIMCo), as described in the

summary of facts in the notice of proposed exemption, and GMIMCo makes

the decision to invest the assets of the Plans in such transaction.

Notwithstanding the foregoing, a transaction involving an amount of $20

million or more, which has been negotiated on behalf of a Plan by

GMIMCo will not fail to meet the requirements of this section (a)(1)

solely because General Motors Corporation or its designee retains the

right to veto or approve such transaction;

(2) Any such party in interest is not--

(i) GMIMCo or any person directly or indirectly controlling,

controlled by, or under common control with GMIMCo, any officer,

director or employee of GMIMCo or any of its subsidiaries, or any

partnership in which GMIMCo is a 10 percent or more (directly or

indirectly in capital or profits) partner;

(ii) General Motors Corporation (GM) or any of its subsidiaries,

any officer or director of GM or any of its subsidiaries;

(iii) any named fiduciary of any Plan, or any person who has

discretionary authority in the selection, supervision or operation of

GMIMCo or any of its officers, directors or employees;

(iv) a sponsor of any of the Plans (Plan Sponsor) or any subsidiary

of a Plan Sponsor, or a ten percent or more shareholder, partner, or

joint venturer of a Plan Sponsor, or any officer or director of any of

them;

(v) any person who exercises discretionary authority,

responsibility or control, or who provides investment advice [within

the meaning of 29 CFR 2510.3-21(c)], with respect to the investment of

Plan assets involved in the transaction;

(3) The transaction is not part of an agreement, arrangement or

understanding designed to benefit a party in interest;

(4) At the time the transaction is entered into, and at the time of

any subsequent renewal or modification thereof that requires the

consent of GMIMCo, the terms of the transaction are at least as

favorable to the Plans as the terms generally available in arm's-length

transactions between unrelated parties;

(4) GM or GMIMCo shall maintain for a period of six years from the

date of each transaction mentioned above the records necessary to

enable the persons described in subparagraph (5) of this section (a) to

determine whether the conditions of this exemption have been met,

except that (i) a prohibited transaction will not be deemed to have

occurred if, due to circumstances beyond the control of GM and GMIMCo,

the records are lost or destroyed prior to the end of the six-year

period, and (ii) no party in interest except GM and GMIMCo shall be

subject to the civil penalty which 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 subparagraph (5) below;

(5)(i) Except as provided in subsection (ii) of this subparagraph

(5) and notwithstanding any provisions of subsections (a)(2) and (b) of

section 504 of the Act, the records referred to in subparagraph (4) of

this section (a) are unconditionally available at GM's headquarter

offices, or, upon prior arrangement with GM, at any other customary

location for the maintenance and/or retention of such records, for

examination during normal business hours by:

(A) Any duly authorized employee or representative of the

Department of Labor or the Internal Revenue Service,

(B) Any fiduciary of a Plan or any duly authorized employee or

representative of such fiduciary, and

(C) Any participant or beneficiary of any Plan or any duly

authorized representative of such participant or beneficiary.

(ii) None of the persons described in subdivisions (i)(B) and

(i)(C) of this subparagraph (5) shall be authorized to examine GM's

trade secrets or commercial or financial information which is

privileged, confidential or of a proprietary nature.

(b) Specific exemption. The restrictions of sections 406(a)(1) (A)

through (D) and sections 406(b)(1) and (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 furnishing of services, facilities, and any goods incidental

thereto by a place of public accommodation which is or may be

considered an asset of a Plan if the services, facilities or incidental

goods are furnished on a comparable basis to the general public, and if

the requirements of subparagraphs (a)(4) and (5) of this exemption are

met.

For a more complete statement of the facts and representations

supporting this exemption, refer to the notice of proposed exemption

published on November 28, 1995 at 60 FR 58662.

EFFECTIVE DATE: This exemption is effective as of July 1, 1994.

TEMPORARY NATURE OF THE EXEMPTION: This exemption is temporary in

nature and will expire on the date of

[[Page 11877]]

publication by the Department of the final class exemption for plan

asset transactions determined by in-house asset managers, which was

proposed by the Department on March 24, 1995 at 60 FR 15597

(application no. D-09602).

WRITTEN COMMENTS: The Department received one written comment and no

requests for a hearing. The comment, which was submitted by the

applicant, General Motors Corporation, informed the Department that two

additional pension plans (the New Plans) became participants in the

General Motors Hourly-Rate Employees Pension Trust effective August 1,

1995: (1) the National Car Rental System, Inc. Salaried Employees

Pension Plan, plan no. 001, with 1,439 participants as of December 31,

1994, and (2) the National Car Rental System, Inc. Hourly Paid

Employees Pension Plan, plan no. 002, with 2,363 participants as of

December 31, 1994. The applicant requested that the New Plans be

included among the Plans to which the exemption is applicable.

In response to the comment, the Department has added the New Plans

to the Plans identified in the heading of the exemption.

After consideration of the entire record, the Department has

determined to grant the exemption.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,

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

H.E.B. Investment and Retirement Plan (the Plan) Located in San

Antonio, Texas

[Prohibited Transaction Exemption 96-18; Application No. D-10035]

Exemption

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 to the proposed cash sale by the Plan to H.E. Butt

Grocery Company (the Company), a party in interest with respect to the

Plan, of an interest in a certain parcel of improved real property (the

Property) known as the South Congress Shopping Center in Austin, Texas,

provided that the following conditions are met:

(a) The sale is a one-time transaction for cash;

(b) The Plan will receive an amount equal to the greater of either:

(1) $2,975,666, or (2) the fair market value of the Property at the

time of the transaction, as determined by a qualified, independent

appraiser;

(c) The Plan will not pay any commissions or other expenses with

respect to the sale; and

(d) The Plan's trustees determine that the sale of the Property to

the Company is appropriate for the Plan and in the best interests of

the Plan and its participants and beneficiaries at the time of

transaction.

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 January 31, 1996, at 61

FR 3474.

WRITTEN COMMENTS: The Department received one written comment on the

notice of proposed exemption, which was from a former employee and Plan

participant who is now retired (the Commenter). The Commenter indicated

that he was familiar with the Property and supported the granting of an

exemption for the sale of the Property to the Company.

No other written comments, and no requests for a hearing, were

received by the Department.

Accordingly, the Department has determined to grant the exemption.

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

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

Rose's Stores, Inc., Retirement Savings 401(k) Plan, (the Retirement

Savings Plan), Located in Henderson, NC

[Prohibited Transaction Exemption 96-19; Exemption Application No. D-

10062]

Exemption

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

407(a) 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 acquisition and

holding by the Rose's Stores, Inc. Variable Investment Plan (the

Variable Investment Plan) of subscription rights (the Subscription

Rights) offered by Rose's Stores, Inc. (the Employer) to purchase

shares of new common stock (the New Stock) upon the emergence of the

Employer from bankruptcy; (2) the past acquisition and continued

holding by the Variable Investment Plan and subsequently, the

Retirement Savings Plan, of warrants (the Warrants) to purchase shares

of the Employer's New Stock; and (3) the proposed acquisition of shares

of the New Stock by the Retirement Savings Plan upon the exercise of

the Warrants.

This exemption is subject to the following conditions:

(a) The acquisition and holding of the Subscription Rights and the

Warrants by the Variable Investment Plan occurred in connection with

the Employer's bankruptcy proceeding pursuant to which all holders of

the old common stock of the Employer were treated in the same manner.

(b) The Variable Investment Plan had little, if any, ability to

affect the negotiation of the Employer's plan of reorganization with

respect to the bankruptcy proceeding.

(c) The Subscription Rights and the Warrants were acquired

automatically and without any action on the part of the Variable

Investment Plan.

(d) The Variable Investment Plan did not pay any fees or

commissions in connection with the receipt and holding of the

Subscription Rights and the Warrants, nor will the Retirement Savings

Plan pay any fees or commissions in connection with the holding and

exercise of the Warrants.

(e) Any decision to exercise the Warrants now held by the

Retirement Plan will be made by participants in accordance with the

terms of such Plan.

EFFECTIVE DATE: This exemption will be effective February 7, 1995 with

respect to the acquisition and holding by the Variable Investment Plan

of the Subscription Rights and April 28, 1995 with respect to the

acquisition and holding by the Variable Investment Plan (and

subsequently the Retirement Savings Plan) of the Warrants.

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 January 31, 1996 at 61 FR

3485.

Comments

The Department received one written comment with respect to the

proposed exemption and no requests for a public hearing. In the

comment, the commentator requested assurance that her pension benefits

would not be jeopardized in the event future problems affected the

Employer's business. Following a discussion of the comment with a

Department representative, the commentator decided to withdraw the

comment.

Thus, after giving full consideration to the entire record, the

Department has decided to grant the subject exemption. The comment

letter has been included as part of the public record of the exemption

application. The complete application file, including all supplemental

submissions received by the Department, is made available for public

inspection in the Public Documents Room of the Pension and

[[Page 11878]]

Welfare Benefits Administration, Room N-5638, U.S. Department of Labor,

200 Constitution Avenue, N.W., Washington, D.C. 20210.

FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady, Department of

Labor, 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 19th day of March, 1996.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 96-6990 Filed 3-21-96; 8:45 am]

BILLING CODE 4510-29-P