Grant of Individual Exemptions; ILGWU National Retirement Fund

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 97-35; Exemption Application No.

D-10192, et al.]

Grant of Individual Exemptions; ILGWU National Retirement Fund

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

[[Page 41089]]

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.

ILGWU National Retirement Fund, et al. (collectively, the Plans),

Located in New York, New York

[Prohibited Transaction Exemption 97-35; Exemption Application Nos. D-

10192, L-10193 through L-10196]

Exemption

Section I--Transactions

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, effective July 1, 1995, to--

(A) the provision of banking services (Banking Services, as defined

in section IV(C)) by the Amalgamated Bank of New York (the Bank) to

certain employee benefit plans (the Plans, as defined in section

IV(E)), which are maintained on behalf of members of the International

Ladies Garment Workers Union;

(B) the purchase by the Plans of certificates of deposit (CDs)

issued by the Bank; and

(C) the deposit of Plans' assets in money market or other deposit

accounts established by the Bank;

provided that the applicable conditions of Section II and Section III

are met:

Section II--Conditions

(A) The terms under which the Banking Services are provided by the

Bank to the Plans, and those under which the Plans purchase CDs from

the Bank or maintain deposit accounts with the Bank, are at least as

favorable to the Plans as those which the Plans could obtain in arm's-

length transactions with unrelated parties.

(B) The interests of each of the Plans with respect to the Bank's

provision of Banking Services to the Plans, the purchase of CDs from

the Bank by any of the Plans, and the deposit of Plan assets in deposit

accounts established by the Bank, are represented by an Independent

Fiduciary (as defined in section IV(D)).

(C) On a periodic basis, not less frequently than annually, an

Authorizing Plan Fiduciary (as defined below in section IV(A)) with

respect to each Plan authorizes the representation of the Plan's

interests by the Independent Fiduciary and determines that the Banking

Services and any CDs and depository accounts utilized by the Plan are

necessary and appropriate for the establishment or operation of the

Plan;

(D) With respect to the purchase by any of the Plans of

certificates of deposit (CDs) issued by the Bank or the deposit of Plan

assets in a money market account or other deposit account established

at the Bank,: (1) Such transaction complies with the conditions of

section 408(b)(4) of the Act; (2) Any CD offered to the Plans by the

Bank is also offered by the Bank in the ordinary course of its business

with unrelated customers; and (3) Each CD purchased from the Bank by a

Plan pays the maximum rate of interest for CDs of the same size and

maturity being offered by the Bank to unrelated customers at the time

of the transaction;

(E) The compensation received by the Bank for the provision of

Banking Services to the Plan is not in excess of reasonable

compensation within the meaning of section 408(b)(2) of the Act.

(F) Following the merger of the International Ladies Garment

Workers Union with UNITE, the Independent Fiduciary made an initial

written determination that (1) the Bank's provision of Banking Services

to the Plans, (2) the deposit of Plan assets in depository accounts

maintained by the Bank, and (3) the purchase by the Plans of CDs from

the Bank, are in the best interests and protective of the participants

and beneficiaries of each of the Plans.

(G) On a periodic basis, not less frequently than quarterly, the

Bank provides the Independent Fiduciary with a written report (the

Periodic Report) which includes the following items with respect to the

period since the previous Periodic Report: (1) A listing of Banking

Services provided to, all outstanding CDs purchased by, and deposit

accounts maintained for each Plan; (2) a listing of all fees paid by

the Plans to the Bank for the Banking Services, (3) the performance of

the Bank with respect to all investment management services, (4) a

description of any changes in the Banking Services, (5) an explanation

of any problems experienced by the Bank in providing the Banking

Services, (6) a description of any material adverse events affecting

the Bank, and (7) any additional information requested by the

Independent Fiduciary in the discharge of its obligations under this

exemption.

(H) On a periodic basis, not less frequently than annually, the

Independent Fiduciary reviews the Banking Services provided to each

Plan by the Bank, the compensation received by the Bank for such

services, any purchases by the Plan of CDs from the Bank, and any

deposits of assets in deposit accounts maintained by the Bank, and

makes the following written determinations:

(1) The continuation of the Bank's provision of Banking Services

to the Plan for compensation is in the best interests and protective

of the participants and beneficiaries of the Plan;

(2) The Bank is a solvent financial institution and has the

capability to perform the services;

(3) The fees charged by the Bank are reasonable and appropriate;

(4) The services, the depository accounts, and the CDs are

offered to the Plan on the same terms under which the Bank offers

the services to unrelated Bank customers in the ordinary course of

business; and

(5) Where the Banking Services include an investment management

service, that the rate of return is not less favorable to the Plan

than the rates on comparable investments involving unrelated

parties.

(I) Copies of the Bank's periodic reports to the Independent

Fiduciary are furnished to the Authorizing Plan Fiduciaries on a

periodic basis, not less frequently than annually and not later than 90

days after the period to which they apply.

(J) The Independent Fiduciary is authorized to continue, amend, or

[[Page 41090]]

terminate, without any penalty to any Plan (other than the payment of

penalties required under federal or state banking regulations upon

premature redemption of a CD), any arrangement involving: (1) The

provision of Banking Services by the Bank to any of the Plans, (2) the

deposit of Plan assets in a deposit account maintained by the Bank, or

(3) any purchases by a Plan of CDs from the Bank;

(K) The Authorizing Plan Fiduciary may terminate, without penalty

to the Plan (other than the payment of penalties required under federal

or state banking regulations upon premature redemption of a CD), the

Plan's participation in any arrangement involving: (1) The

representation of the Plan's interests by the Independent Fiduciary,

(2) the provision of Banking Services by the Bank to the Plan, (3) the

deposit of Plan assets in a deposit account maintained by the Bank, or

(4) the purchase by the Plan of CDs from the Bank.

Section III--Recordkeeping

(A) For a period of six years, the Bank and the Independent

Fiduciary will maintain or cause to be maintained all written reports

and other memoranda evidencing analyses and determinations made in

satisfaction of conditions of this exemption, except that: (a) A

prohibited transaction will not be considered to have occurred if, due

to circumstances beyond the control of the Independent Fiduciary and

the Bank the records are lost or destroyed before the end of the six-

year period; and (b) no party in interest other than the Bank and the

Independent Fiduciary 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 (2)

below;

(B)(1) Except as provided in section (2) of this paragraph (B) and

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

504 of the Act, the records referred to in paragraph (A) of this

Section III shall be unconditionally available at their customary

location during normal business hours for inspection by: (a) Any duly

authorized employee or representative of the U.S. Department of Labor

or the Internal Revenue Service, (b) any employer participating in the

Plans or any duly authorized employee or representative of such

employer, and (c) any participant or beneficiary of the Plans or any

duly authorized representative of such participant or beneficiary.

(2) None of the persons described in subsections (b) and (c) of

subsection (1) above shall be authorized to examine trade secrets of

the Independent Fiduciary or the Bank, or any of their affiliates, or

any commercial, financial, or other information that is privileged or

confidential.

Section IV--Definitions

(A) Authorizing Plan Fiduciary means, with respect to each Plan,

the board of trustees of the Plan or other appropriate plan fiduciary

with discretionary authority to make decisions with respect to the

investment of Plan assets;

(B) Bank means the Amalgamated Bank of New York;

(C) Banking Services means (1) custodial, safekeeping, checking

account, trustee services, and (2) investment management services

involving (a) fixed income securities (either directly or through a

collective investment fund maintained by the Bank), (b) the LongView

Fund maintained by the Bank, and, (c) effective January 3, 1998, the

LEI Fund maintained by the Bank.

(D) Independent Fiduciary means a person, within the meaning of

section 3(9) of the Act, who (1) is not an affiliate of the Union of

Needletrades, Industrial & Textile Employees (UNITE) and any successor

organization thereto by merger, consolidation or otherwise, (2) is not

an officer, director, employee or partner of UNITE, (3) is not an

entity in which UNITE has an ownership interest, (4) has no

relationship with the Bank other than as Independent Fiduciary under

this exemption, and (5) has acknowledged in writing that it is acting

as a fiduciary under the Act. No person may serve as an Independent

Fiduciary for the Plans for any fiscal year in which the gross income

(other than fixed, non-discretionary retirement income) received by

such person (or any partnership or corporation of which such person is

an officer, director, or ten percent or more partner or shareholder)

from UNITE and the Plans for that fiscal year exceed five percent of

such person's annual gross income from all sources for the prior fiscal

year. An affiliate of a person is any person directly or indirectly,

through one or more intermediaries, controlling, controlled by, or

under common control with the person. The term ``control'' means the

power to exercise a controlling influence over the management or

policies of a person other than an individual. Initially, the

Independent Fiduciary is U.S. Trust Company of California, N.A.

(E) Plans means any of the following employee benefit plans, and

their successors by reason of merger, spin-off or otherwise:

International Ladies Garment Workers Union Nation Retirement Fund;

International Ladies Garment Workers Union Death Benefit Fund;

Health Fund of New York Coat, Suit, Dress, Rainwear & Allied Workers

Union, ILGWU;

Health & Vacation Fund, Amalgamated Ladies Garment Cutters Union,

Local 10;

ILGWU Eastern States Health & Welfare Fund;

ILGWU Office, Clerical & Misc. Employee Retirement Fund;

ILGWU Retirement Fund, Local 102;

Union Health Center Staff Retirement Fund;

Unity House 134 HREBIU Plan Fund;

Puerto Rican Health & Welfare Fund;

Health & Welfare Fund of Local 99, ILGWU;

Local 99 Exquisite Form Industries, Inc. Severance Fund;

Local 99 K-Mart Severance Fund;

Local 99 Kenwin Severance Fund;

Local 99 Lechters Severance Fund;

Local 99 Eleanor Shops Severance Fund;

Local 99 Monette Severance Fund;

Local 99 Moray, Inc. Severance Fund;

Local 99 Petri Stores, Inc. Severance Fund;

Local 99 Netco, Inc. Severance Fund;

Local 99 Misty Valley, Inc. Severance Fund; and

Local 99 Norstan Apparel Shops, Inc. Severance Fund.

(F) UNITE means the Union of Needletrades, Industrial & Textile

Employees and any successor organization thereto by merger,

consolidation or otherwise.

EFFECTIVE DATE: This exemption is effective as of July 1, 1995, except

for Plan investments in the LEI Fund, for which the effective date is

January 3, 1998.

Written Comments: The Department received no requests for a hearing

and one written comment submitted by the Amalgamated Bank of New York

(the Bank). The Bank's comment, and the Department's response thereto,

is summarized as follows:

(1) The Bank notes that section II(H)(1) of the proposed exemption

would require the Independent Fiduciary, U.S. Trust, to make a periodic

determination with respect to each Plan that the Banking Services, CDs

and depository accounts involving the Plan are necessary and

appropriate for the establishment or operation of the Plan. The Bank

maintains that this periodic determination is more appropriately made

by the Authorizing Plan Fiduciary with respect to each Plan, as the

parties have agreed under the terms of the appointment of the

Independent Fiduciary. The Bank requests that the condition be modified

to require the Independent Fiduciary to

[[Page 41091]]

receive such an annual determination from the Authorizing Plan

Fiduciary with respect to each Plan. The Department has determined to

modify the final exemption as requested. Accordingly, the Department

has added a requirement to section II(C) of the final exemption that

the Authorizing Plan Fiduciary make a periodic determination, at least

annually, that the Banking Services, CDs and depository accounts are

necessary or appropriate for the establishment or operation of the

Plan, and communicate such determination to the Independent Fiduciary.

The Department notes that the Independent Fiduciary is responsible

under the final exemption for making the other determinations required

under section II(H).

(2) The Bank notes that, in paragraph 8 of the Summary of Facts and

Representations in the Notice of Proposed Exemption, the Department

summarizes U.S. Trust's view of the Bank's financial condition using in

some instances language from U.S. Trust's original Independent

Fiduciary report. In the interest of complete accuracy of disclosure,

the Bank wishes to note that the third sentence following the

italicized heading, ``Financial condition of the Bank'', (commencing

with ``U.S. Trust represents that the duration positioning * * *'') was

deleted in the revised Independent Fiduciary report in favor of a more

detailed explanation, in Appendix A of the revised report, of the

effect of interest rate changes on the Bank. The Bank points out that

this change did not alter U.S. Trust's conclusion that the Bank is

operated conservatively and is well-capitalized and solvent.

(3) The Bank states that while the Department has accurately and

completely identified the Plans and the Bank's products and services as

they existed at the time of the filing of the exemption application,

the Plans' investment needs are dynamic and one or more Plans might

identify additional products offered by the Bank in the normal course

of its business that would fit the Plan's investment needs. The Bank

represents that this has occurred since the exemption application was

filed, with respect to two of the Bank's collective funds:

The LongView Fund: A commingled, equity investment fund which

invests proportionately in the securities that comprise the S&P 500

Index, designed to mirror the rate of return on the S&P 500 Index. The

LongView Fund currently has approximately $1.2 billion in assets. The

Bank has overall responsibility for the LongView Fund, acts as

custodian, and oversees investment of the Fund, which is offered to the

public in the ordinary course of the Bank's business. Although trustees

of the Plans have tentatively approved investments in the LongView

Fund, none of the Plans have yet invested in it.

The LEI Fund: A commingled, equity investment fund designed to

``outperform'' the S&P 500 Index by 100 basis points per annum, gross

of fees. The LEI Fund opened in January 1997 and has approximately $38

million in assets. The Bank has overall responsibility for the Fund,

acts as custodian and recordkeeper, and oversees the investment

managers. None of the Plans have invested in the LEI Fund, although

trustees of certain of the Plans have expressed an interest in such

investment.

The Bank requests, in view of the pendency of the current exemption

proposal, that the Department add these two funds to the exemption by

amending the definition of ``Banking Services'' in Section IV(c) of the

exemption specifically to include these funds. In support of this

request, the Bank requested that the Independent Fiduciary, U.S. Trust,

conduct the same type of review of the LongView and LEI Funds that it

conducted with respect to the other banking services and products that

are the subject of this exemption. The Independent Fiduciary's reports

with respect to each fund was submitted to the Department with the

Bank's comment. As with respect to the investment management services

reviewed in its original report, the Independent Fiduciary requested

that Towers Perrin prepare reports regarding these products, and the

Towers Perrin reports were also submitted to the Department with the

Bank's comment. The Bank states that inclusion of these funds in the

exemption at this time would be in the interests of administrative

convenience and feasibility for the Department and the parties to avoid

a second exemption proceeding. The Bank notes that the two additional

funds are fully described and analyzed in the reports of Towers Perrin

and the Independent Fiduciary, which were submitted with the comment.

With respect to the LongView Fund, in a supplemental report dated

January 14, 1997, the Independent Fiduciary summarizes its findings and

conclusions regarding that fund. The Independent Fiduciary states that

it considered information obtained from its own research as well as an

extensive report prepared by Towers Perrin which analyzed the Bank's

management structure regarding the LongView Fund, the investment

process, key investment professionals, performance results, fees, style

and risk characteristics, and clients. The Independent Fiduciary

concludes that making the LongView Fund available for investments by

the Plans would be reasonable, appropriate, and in the best interests

of the Plans.

With respect to the LEI Fund, in a second supplemental report dated

May 8, 1997, the Independent Fiduciary summarizes its findings and

conclusions regarding that fund. As with the LongView Fund, the

Independent Fiduciary states that it considered information obtained

from its own research as well as an extensive report on the LEI Fund by

Towers Perrin. On the basis of its review and evaluation, the

Independent Fiduciary determined that it would be in the best interests

of the Plans to make the LEI Fund available through inclusion in the

exemption. However, in view of the relatively short performance history

of the LEI Fund, the Independent Fiduciary intends to defer any Plan

investments in the LEI Fund until it completes its annual review of the

Bank's investment management services included under the exemption,

such review to occur effective January 3, 1998. If at that time the

Independent Fiduciary concludes that the LEI should continue to be made

available under the exemption, the Independent Fiduciary proposes to

authorize Plan investments in the LEI Fund.

The Bank represents that the inclusion of these two funds in the

exemption would be protective of the interests of participants and

beneficiaries of the Plans. In this regard, the Bank notes the

independent review and analysis of the funds by the Independent

Fiduciary and Towers Perrin, and the continuing oversight of the

Independent Fiduciary of any Plan investments in either of the Funds.

On the basis of the information contained in the reports of the

Independent Fiduciary reports and Towers Perrin, the Department has

determined that it would be appropriate to include the LongView Fund

and the LEI Fund in the exemption. Accordingly, the definition of

Banking Services in the exemption has been modified to include the

LongView Fund and, effective January 3, 1998, the LEI Fund.

For a more complete statement of the summary of facts and

representations supporting the Department's decision to grant this

exemption refer to the Notice of Proposed Exemption published on

February 18, 1997 at 62 FR 7269.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,

[[Page 41092]]

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

Operating Engineers Local 150, Apprenticeship Fund (the Fund), Located

in Plainfield, Illinois

[Prohibited Transaction Exemption 97-36; Exemption Application No. L-

10280]

Exemption

The restrictions of section 406(a) and 406(b) (1) and (2) shall not

apply to the sale (the Sale) of a certain parcel of improved real

property (the Property) from the Fund to International Union of

Operating Engineers, Local 150 (Local 150), a party in interest with

respect to the Plan provided that the following conditions are met:

(1) The fair market value of the Property is established by a

qualified and independent real estate appraiser;

(2) Local 150 pays the greater of $180,000 or the current fair

market value of the Property as of the date of the transaction;

(3) The Sale is a one time transaction for cash; and

(4) The Fund pays no fees or commissions related 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 published on April 17, 1997 at 62 FR

18803.

FOR FURTHER INFORMATION CONTACT: Allison Padams of the Department,

telephone (202) 219-8971. (This is not a toll-free number.)

The Roquette America, Inc. Pension Plan, for Salaried Employees (the

Plan) Located in Keokuk, Iowa, [Prohibited Transaction Exemption 97-37;

Exemption Application No. D-10390]

Exemption

The restrictions of sections 406(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 (D) of the Code, shall not apply to

(1) the loan by Aon Consulting, Inc. (Aon Consulting) to the Plan, in

connection with certain excess distributions (the Overpayments) that

Aon Consulting inadvertently caused to be made under the Plan, and (2)

the potential repayment of the loan by the Plan to Aon Consulting.

This exemption is subject to the following conditions:

(1) The Plan pays no interest nor incurs any other expense relating

to the loan;

(2) The loan amount covers the Overpayments, plus lost opportunity

costs attributable to the Overpayments;

(3) Any repayment of the loan is restricted solely to the amount,

if any, recovered by the Plan with respect to the Overpayments in

litigation or otherwise; and

(4) A qualified, independent fiduciary for the Plan has reviewed

the terms and conditions of the loan on behalf of the Plan and

determined that such terms and conditions are in the best interests of

and appropriate for the Plan.

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 17, 1997 at 62 FR

18806.

Written Comments

The Department received two written comments with respect to the

notice of proposed exemption.

Both commenters expressed concern that the proposed exemption would

negatively affect their retirement benefits. Northern Trust, the Plan's

independent fiduciary, confirmed that the proposed exemption would not

change benefit payments under the Plan. The first commenter also stated

that Aon Consulting should make the Plan whole, not merely make the

Plan an interest-free loan. Northern Trust responded that the interest-

free loan would have the effect of making the Plan whole, since Aon

Consulting would receive repayment of the loan only to the extent that

the Plan recovered any portion of the Overpayments made to certain

Participants. The second commenter added that further legal action

should be taken against these Participants. Northern Trust responded

that under the proposed exemption, Aon Consulting would pay the legal

fees associated with recovering the Overpayments.

After a careful consideration of the entire record, the Department

has determined to grant the exemption as proposed.

FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department,

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

Robert A. Benz & Co., P. A., Certified Public Accountants

Employees Profit Sharing Plan (The Plan)

Located in Pensacola, Florida

[Prohibited Transaction Exemption 97-39;

Exemption Application No. D-10398]

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 both (1) the cash sale (the Sale) of

certain real property (the Property) to the Plan by Robert A. Benz &

Co., P.A., Certified Public Accountants (the Employer), a party in

interest with respect to the Plan, and (2) the lease-back (the Lease)

of the Property by the Plan to the Employer; provided:

(A) The terms and conditions of the transactions are at least as

favorable to the Plan as those obtainable from unrelated parties;

(B) The Plan is represented at all times and for all purposes with

respect to the Sale and the Lease by a qualified, independent

fiduciary;

(C) The Sale is a one-time transaction for a lump sum cash payment;

(D) The purchase price is the fair market value of the Property as

determined on the date of the Sale by a qualified, independent

appraiser;

(E) The monthly rents paid to the Plan will be adjusted every year

after the first 12 months of the Lease by an amount to reflect the

greater of either a 3 percent per year increase or the most recent

percentage increase in the U. S. Department of Labor Consumer Price

Index;

(F) In addition, the rents initially paid under the Lease are no

less than the fair market rental value of the Property as determined by

a qualified, independent appraiser, and thereafter are adjusted every

third year to be no less than the fair market rental value as then

determined by the independent appraiser;

(G) The Lease is a triple-net lease under which the Employer as the

lessee is obligated for all expenses incurred by the Property,

including all taxes and assessments, maintenance, insurance, utilities,

and any other expense;

(H) The qualified, independent fiduciary of the Plan monitors and

enforces compliance with the terms and conditions of the Lease and this

exemption;

(I) At all times the qualified, independent fiduciary for the Plan

determines that the Lease is in the best interests of the Plan and its

participants and beneficiaries, and at all times determines that there

are adequate protections of the rights of the participants and

beneficiaries of the Plan, and takes all the necessary steps to protect

those rights;

(J) In the event the Plan sells the Property and the proceeds

received from the sale plus the net rentals received for the Property

are less than the Plan's cost of acquiring, holding, and maintaining

the Property plus a 5 percent per annum compounded rate of return on

the cost to the Plan in acquiring, holding, and

[[Page 41093]]

maintaining the Property, the Employer, or its successors, shall pay in

cash the difference to the Plan within 45 days of the sale;

(K) No commissions, expenses, or costs shall be incurred by the

Plan from the Sale or the Lease; and

(L) At all times during the Sale and Lease, the fair market value

of the Property represents less than 25 percent of the total assets of

the Plan.

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 4, 1997, at 62 FR

30616.

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

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

Gart Brothers Sporting Goods Company 401(k) Plan (the Plan) Located in

Denver, Colorado [Prohibited Transaction Exemption 97-39; Exemption

Application No. D-10403]

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 a

5 percent interest (the Interest) in the Hampden Enterprises Limited

Partnership (the Partnership) to the Gart Bros. Sporting Goods Company,

the sponsor of the Plan (the Employer) and a party in interest with

respect to the Plan; provided (1) the terms and conditions of the

transaction are at least as favorable to the Plan as those obtainable

from unrelated parties, (2) the Sale is a one-time transaction for

cash, (3) the Plan pays no commissions nor incurs any other expenses in

connection with the transaction, (4) the Plan receives as consideration

from the Sale the greater of either (a) the total funds expended by the

Plan in acquiring and holding the Interest, less any return of capital

realized from its investment in the Interest, or (b) the fair market

value of the Interest as determined on the date of the Sale by an

independent appraiser, and (5) if the Employer ever receives more from

the Interest than it pays the Plan when acquiring the Interest, the

Employer will pay the Plan the excess.

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 4, 1997, at 62 FR

30618.

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

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

BP America Inc. Retirement Trust, Located in Cleveland, Ohio; IBM

Retirement Plan Trust, Located in Armonk, New York; United States Steel

Corporation Plan, Located in Pittsburgh, Pennsylvania; and Retirement

Plan of Marathon Oil Company, Located in Findlay, Ohio; (collectively,

the Plans) [Prohibited Transaction Exemption No. 97-40; Exemption

Application Nos. D-10441 through D-10444]

Exemption

The restrictions of section 406(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 (D) of the Code, shall not apply to

(1) the granting to The Industrial Bank of Japan, Limited, New York

Branch (IBJ), as the representative of lenders (the Lenders)

participating in a credit facility (the Facility), of security

interests in limited partnership interests in The Westbrook Real Estate

Fund II, L.P. (the Partnership) owned by the Plans with respect to

which some of the Lenders are parties in interest; and (2) the

agreements by the Plans to honor capital calls made by IBJ in lieu of

the Partnership's general partner; provided that (a) the grants and

agreements are on terms no less favorable to the Plans than those which

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

parties; (b) the decisions on behalf of each Plan to invest in the

Partnership and to execute such grants and agreements in favor of IBJ

are made by a fiduciary which is not included among, and is independent

of, the Lenders and IBJ; and (c) with respect to plans that may invest

in the Partnership in the future, such plans will have assets of not

less than $100 million and not more than 5% of the assets of such plans

will be invested in the Partnership.

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 4, 1997 at 62 FR

30621.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz 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 accurately describes all material terms of the transaction

which is the subject of the exemption.

Signed at Washington, DC, this 25th day of July, 1997.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 97-20242 Filed 7-30-97; 8:45 am]

BILLING CODE 4510-29-P