Grant of Individual Exemptions; Massachusetts Mutual Life Insurance Company

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 98-28; Exemption Application No. D-

10396, et al.]

Grant of Individual Exemptions; Massachusetts Mutual Life

Insurance 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.

Massachusetts Mutual Life Insurance Company (MM) Located in

Springfield, Massachusetts [Prohibited Transaction Exemption 98-28;

Exemption Application No. D-10396]

Exemption

Section I--Exemption for Certain Transactions Involving the Management

of Investments Shared by Two or More Accounts Maintained by MM

The restrictions of certain sections of the Act and the sanctions

resulting from the application of certain parts of section 4975 of the

Code shall not apply to the following transactions if the conditions

set forth in Section IV are met:

(a) Transfers Between Accounts

(1) The restrictions of section 406(b)(2) of the Act shall not

apply to

[[Page 33728]]

the sale or transfer of an interest in a shared investment (including a

shared joint venture interest) between two or more Accounts (except the

General Account), provided that each ERISA-Covered Account pays no

more, or receives no less, than fair market value for its interest in a

shared investment.

(2) 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 sale or transfer of an interest in a shared

investment (including a shared joint venture interest) between ERISA-

Covered Accounts and the General Account, provided that such transfer

is made pursuant to stalemate procedures, described in the notice of

proposed exemption, adopted by the independent fiduciary for the ERISA-

Covered Account, and provided further that the ERISA-Covered Account

pays no more or receives no less than fair market value for its

interest in a shared investment.

(b) Joint Sales of Property--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 sale to a

third party of the entire interest in a shared investment (including a

shared joint venture interest) by two or more Accounts, provided that

each ERISA-Covered Account receives no less than fair market value for

its interest in the shared investment.

(c) Additional Capital Contributions--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 either to the

making of a pro rata equity capital contribution by one or more of the

Accounts to a shared investment; or to the making of a Disproportionate

[as defined in Section V(e)] equity capital contribution by one or more

of such Accounts which results in an adjustment in the equity ownership

interests of the Accounts in the shared investment on the basis of the

fair market value of such interests subsequent to such contribution,

provided that each ERISA-Covered Account is given an opportunity to

make a pro rata contribution.

(d) Lending of Funds--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 lending of

funds from the General Account to an ERISA-Covered Account to enable

the ERISA-Covered Account to make an additional pro rata contribution,

provided that such loan--

(A) is unsecured and non-recourse with respect to participating

plans,

(B) bears interest at a rate not to exceed the greater of the prime

rate plus two percentage points or the prevailing rate on 90-day

Treasury Bills,

(C) is not callable at any time by the General Account, and

(D) is prepayable at any time without penalty.

(e) Shared Debt Investments--In the case of a debt investment that

is shared between two or more Accounts, including one or more of the

ERISA-Covered Accounts, (1) the restrictions of sections 406(a) and

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 any material

modification in the terms of the loan agreement resulting from a

request by the borrower, any decision regarding the action to be taken,

if any, on behalf of the Accounts in the event of a loan default by the

borrower, or any exercise of a right under the loan agreement in the

event of such default, and (2) the restrictions of section 406(b)(2) of

the Act shall not apply to any decision by MM thereof on behalf of two

or more ERISA-Covered Accounts: (A) not to modify a loan agreement as

requested by the borrower; or (B) to exercise any rights provided in

the loan agreement in the event of a loan default by the borrower, even

though the independent fiduciary for one (but not all) of such Accounts

has approved such modification or has not approved the exercise of such

rights.

Section II--Exemption for Certain Transactions Involving the Management

of Joint Venture Interests Shared by Two or More Accounts Maintained by

MM

The restrictions of certain sections of the Act and the sanctions

resulting from the application of certain parts of section 4975 of the

Code shall not apply to the following transactions resulting from the

sharing of an investment in a real estate joint venture between two or

more Accounts, if the conditions set forth in Section IV are met:

(a) Additional Capital Contributions--(1) 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

making of additional pro rata equity capital contributions by one or

more Accounts participating in the joint venture.

(2) 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 lending of funds from the General Account

to an ERISA-Covered Account to enable the ERISA-Covered Account to make

an additional pro rata capital contribution, provided that such loan--

(A) is unsecured and non-recourse with respect to the participating

plans,

(B) bears interest at a rate not to exceed the greater of the prime

rate plus two percentage points or the prevailing rate on 90-day

Treasury Bills,

(C) is not callable at any time by the General Account, and

(D) is prepayable at any time without penalty.

(3) 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 making of Disproportionate [as defined in

section V(e)] additional equity capital contributions (or the failure

to make such additional contributions) in the joint venture by one or

more Accounts which result in an adjustment in the equity ownership

interests of the Accounts in the joint venture on the basis of the fair

market value of such joint venture interests subsequent to such

contributions, provided that each ERISA-Covered Account is given an

opportunity to provide its proportionate share of the additional equity

capital contributions; and

(4) In the event a co-venturer fails to provide all or any part of

its pro rata share of an additional equity capital contribution, 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 making of Disproportionate additional equity capital

contributions to the joint venture by the General Account and an ERISA-

Covered Account up to the amount of such contribution not provided by

the co-venturer which result in an adjustment in the equity ownership

interests of the Accounts in the joint venture on the basis provided in

the joint venture agreement, provided that such ERISA-Covered Account

is given an opportunity to participate in all

[[Page 33729]]

additional equity capital contributions on a proportionate basis.

(b) Third Party Purchase Offers--(1) In the case of an offer by a

third party to purchase any property owned by the joint venture, 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 acquisition by the Accounts, including one or more

ERISA-Covered Account[s], on either a proportionate or Disproportionate

basis of a co-venturer's interest in the joint venture in connection

with a decision on behalf of such Accounts to reject such purchase

offer, provided that each ERISA-Covered Account is first given an

opportunity to participate in the acquisition on a proportionate basis;

and

(2) The restrictions of section 406(b)(2) of the Act shall not

apply to any acceptance by MM on behalf of two or more Accounts,

including one or more ERISA-Covered Account[s], of an offer by a third

party to purchase a property owned by the joint venture even though the

independent fiduciary for one (but not all) of such ERISA-Covered

Account[s] has not approved the acceptance of the offer, provided that

such declining ERISA-Covered Account[s] are first afforded the

opportunity to buy out both the co-venturer and ``selling'' Account's

interests in the joint venture.

(c) Rights of First Refusal--(1) In the case of the right to

exercise a right of first refusal described in a joint venture

agreement to purchase a co-venturer's interest in the joint venture at

the price offered for such interest by a third party, 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 acquisition by such Accounts, including one or more ERISA-

Covered Account[s], on either a proportionate or Disproportionate basis

of a co-venturer's interest in the joint venture in connection with the

exercise of such a right of first refusal, provided that each ERISA-

Covered Account is first given an opportunity to participate on a

proportionate basis; and

(2) The restrictions of section 406(b)(2) of the Act shall not

apply to any decision by MM on behalf of the Accounts not to exercise

such a right of first refusal even though the independent fiduciary for

one (but not all) of such ERISA-Covered Accounts has approved the

exercise of the right of first refusal, provided that none of the

ERISA-Covered Accounts that approved the exercise of the right of first

refusal decides to buy-out the co-venturer on its own.

(d) Buy-Sell Options--(1) In the case of the exercise of a buy-sell

option set forth in the joint venture agreement, 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

acquisition by one or more of the Accounts on either a proportionate or

Disproportionate basis of a co-venturer's interest in the joint venture

in connection with the exercise of such a buy-sell option, provided

that each ERISA-Covered Account is first given the opportunity to

participate on a proportionate basis; and

(2) The restrictions of section 406(b)(2) of the Act shall not

apply to any decision by MM on behalf of two or more Accounts,

including one or more ERISA-Covered Account[s], to sell the interest of

such Accounts in the joint venture to a co-venturer even though the

independent fiduciary for one (but not all) of such ERISA-Covered

Account[s] has not approved such sale, provided that such disapproving

ERISA-Covered Account is first afforded the opportunity to purchase the

entire interest of the co-venturer.

Section III--Exemption for Transactions Involving a Joint Venture or

Persons Related to a Joint Venture

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, if the

conditions in Section IV are met, to any additional equity or debt

capital contributions to a joint venture by an ERISA-Covered Account

that is participating in an interest in the joint venture, or to any

material modification in the terms of, or action taken upon default

with respect to, a loan to the joint venture in which the ERISA-Covered

Account has an interest as a lender, where the joint venture is a party

in interest solely by reason of the ownership on behalf of the General

Account of a 50 percent or more interest in such joint venture.

Section IV--General Conditions

(a) The decision to participate in any ERISA-Covered Account that

shares real estate investments must be made by plan fiduciaries who are

totally unrelated to MM and its affiliates. This condition shall not

apply to plans covering employees of MM.

(b) Each contractholder or prospective contractholder in an ERISA-

Covered Account which shares or proposes to share real estate

investments that are structured as shared investments under this

exemption is provided with a written description of potential conflicts

of interest that may result from the sharing, a copy of the notice of

pendency, and a copy of the final exemption.

(c) An independent fiduciary must be appointed on behalf of each

ERISA-Covered Account participating in the sharing of investments. The

independent fiduciary shall be either

(1) a business organization which has at least five years of

experience with respect to commercial real estate investments,

(2) a committee composed of three to five individuals (who may be

investors or investor representatives approved by the plans

participating in the ERISA-Covered Account, and) who each have at least

five years of experience with respect to commercial real estate

investments, or

(3) the plan sponsor (or its designee) of a plan (or plans) that is

the sole participant in an ERISA-Covered Account.

(d) The independent fiduciary or independent fiduciary committee

member shall not be or consist of MM or any of its affiliates.

(e) No organization or individual may serve as an independent

fiduciary for an ERISA-Covered Account for any fiscal year if the gross

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

by such organization or individual (or any partnership or corporation

of which such organization or individual is an officer, director, or

ten percent or more partner or shareholder) from MM, its affiliates and

the ERISA-Covered Accounts for that fiscal year exceeds five percent of

its or his or her annual gross income from all sources for the prior

fiscal year. If such organization or individual had no income for the

prior fiscal year, the five percent limitation shall be applied with

reference to the fiscal year in which such organization or individual

serves as an independent fiduciary. The income limitation shall not

include compensation for services rendered to a single-customer ERISA-

Covered Account by an independent fiduciary who is initially selected

by the Plan sponsor for that ERISA-Covered Account.

The income limitation will include income for services rendered to

the Accounts as independent fiduciary under any prohibited transaction

exemption(s) granted by the

[[Page 33730]]

Department. Notwithstanding the foregoing, such income limitation shall

not include any income for services rendered to a single customer

ERISA-Covered Account by an independent fiduciary selected by the Plan

sponsor to the extent determined by the Department in any subsequent

prohibited transaction exemption proceeding.

In addition, no organization or individual who is an independent

fiduciary, and no partnership or corporation of which such organization

or individual is an officer, director or ten percent or more partner or

shareholder, may acquire any property from, sell any property to, or

borrow any funds from, MM, its affiliates, or any Account maintained by

MM or its affiliates, during the period that such organization or

individual serves as an independent fiduciary and continuing for a

period of six months after such organization or individual ceases to be

an independent fiduciary, or negotiate any such transaction during the

period that such organization or individual serves as independent

fiduciary.

(f) The independent fiduciary acting on behalf of an ERISA-Covered

Account shall have the responsibility and authority to approve or

reject recommendations made by MM or its affiliates for each of the

transactions in this exemption. In the case of a possible transfer or

exchange of any interest in a shared investment between the General

Account and an ERISA-Covered Account, the independent fiduciary shall

also have full authority to negotiate the terms of the transfer. MM and

its affiliates shall involve the independent fiduciary in the

consideration of contemplated transactions prior to the making of any

decisions, and shall provide the independent fiduciary with whatever

information may be necessary in making its determinations.

In addition, the independent fiduciary shall review on an as-needed

basis, but not less than twice annually, the shared real estate

investments in the ERISA-Covered Account to determine whether the

shared real estate investments are held in the best interest of the

ERISA-Covered Account.

(g) MM maintains for a period of six years from the date of the

transaction the records necessary to enable the persons described in

paragraph (h) of this Section to determine whether the conditions of

this exemption have been met, except that a prohibited transaction will

not be considered to have occurred if, due to circumstances beyond the

control of MM or its affiliates, the records are lost or destroyed

prior to the end of the six-year period.

(h)(1) Except as provided in paragraph (2) of this subsection (h)

and notwithstanding any provisions of subsection (a)(2) and (b) of

section 504 of the Act, the records referred to in subsection (g) of

this Section are unconditionally available at their customary location

for examination during normal business hours by--

(A) Any duly authorized employee or representative of the

Department or the Internal Revenue Service,

(B) Any fiduciary of a plan participating in an ERISA-Covered

Account engaging in transactions structured as shared investments under

this exemption who has authority to acquire or dispose of the interests

of the plan, or any duly authorized employee or representative of such

fiduciary,

(C) Any contributing employer to any plan participating in an

ERISA-Covered Account engaging in transactions structured as shared

investments under this exemption or any duly authorized employee or

representative of such employer, and

(D) Any participant or beneficiary of any plan participating in an

ERISA-Covered Account engaging in transactions structured as shared

investments under this exemption, or any duly authorized employee or

representative of such participant or beneficiary.

(2) None of the persons described in subparagraphs (B) through (D)

of this subsection (h) shall be authorized to examine trade secrets of

MM, any of its affiliates, or commercial or financial information which

is privileged or confidential.

Section V--Definitions

For the purposes of this exemption:

(a) An ``affiliate'' of MM includes--

(1) Any person directly or indirectly through one or more

intermediaries, controlling, controlled by, or under common control

with MM,

(2) Any officer, director or employee of MM or person described in

section V(a)(1), and

(3) Any partnership in which MM is a partner.

(b) An ``Account'' means the General Account (including the general

accounts of MM affiliates which are managed by MM), any separate

account managed by MM, or any investment advisory account, trust,

limited partnership or other investment account or fund managed by MM.

(c) The ``General Account'' means the general asset account of MM

and any of its affiliates which are insurance companies licensed to do

business in at least one State as defined in section 3(10) of the Act.

(d) An ``ERISA-Covered Account'' means any Account (other than the

General Account) in which employee benefit plans subject to Title I or

Title II of the Act participate.

(e) ``Disproportionate'' means not in proportion to an Account's

existing equity ownership interest in an investment, joint venture or

joint venture interest.

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 February 6, 1998 at 63 FR

6217.

Written Comments and Hearing Requests: The Department received no

hearing requests with respect to the proposed exemption. The only

written comments were submitted by MM in order to clarify certain of

the information contained in the summary of facts and representations

for the proposed exemption (the Summary).

First, MM states that with regard to the reference to health

insurance in Representation 1 of the Summary, Footnote 1 is intended to

indicate only the extent to which MM currently offers such health

insurance. The footnote states that MM sold its group life and health

subsidiary on March 31, 1996 and will no longer offer group life and

health insurance after the completion of a transition period under the

purchase and sale agreement relating thereto.

Second, with respect to the second paragraph of Representation 1 of

the Summary, MM wishes to clarify that the exemption will cover

Accounts (including ERISA-Covered Accounts) other than those currently

in existence, and which may invest in equity real estate and mortgage

investments.

Third, the last sentence of Representation 7 of the Summary

concerns those persons to whom MM must make certain disclosures

regarding its shared real estate investments. With respect to the

proposed exemption and other information to be contained in such

disclosures, MM seeks to clarify that it was only required to provide a

copy of the proposed exemption within 30 days of the publication of the

proposed exemption (i.e., March 8, 1998) to each current contractholder

in an ERISA-Covered Account that proposes to engage in transactions

which are structured as shared investments under the exemption. In

addition, MM states that it will provide a copy of this exemption (as

published in the Federal Register) before the Account begins to

participate in such investments.

[[Page 33731]]

Fourth, concerning the first sentence of Representation 8 of the

Summary, MM states that in order to more clearly define the persons to

whom certain disclosures must be made, the sentence should be rewritten

to read as follows:

With respect to new contractholders in an ERISA-Covered Account

that participates in the sharing of investments which are structured

as shared investments under this exemption, each such contractholder

must be provided with the description outlined above, a copy of the

notice of pendency and a copy of the exemption as granted, before

the Account begins to participate in the sharing of such

investments.

Fifth, with respect to Footnote 4 in Representation 12 of the

Summary, relating to the sophistication of investors participating in

MM's single customer and pooled closed-end real estate Accounts, MM

states that this footnote only refers to contractholders in its ERISA-

Covered Accounts which engage in transactions structured as shared

investments under this exemption.

Finally, the third sentence in Representation 18 of the Summary and

the fourth paragraph of Representation 21 of the Summary both refer to

the partition and sale of undivided and divided real estate investment

interests, respectively. In this regard, MM seeks to clarify that the

partition and sale of such interests is meant to establish a possible

resolution to the stalemates which are described in Representations 18

and 21 of the Summary. Such events would involve the partition of

property in which Accounts own a fractional undivided interest in the

whole, and the sale of one or more resulting divided interests,

including those interests which are co-owned by some of the Accounts.

The Department confirms that these scenarios are presented only as

examples of possible resolutions to the stalemates which are described

in Representations 18 and 21 of the Summary, and are not meant to

describe resolutions to other matters.

In addition, the Department acknowledges all of the above-described

clarifications by MM to the record which formed the basis for the

proposed exemption as published in the Federal Register.

Accordingly, after considering the entire record, including the

comments made by MM, the Department has determined to grant the

exemption as proposed.

For Further Information Contact: Gary H. Lefkowitz of the

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

Knoxville Surgical Group Qualified Retirement Plan (the Plan) Located

in Knoxville, Tennessee

[Prohibited Transaction Exemption 98-29; Exemption Application No: D-

10506]

Exemption

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 sections 4975(c)(1)(A) through (E) of the Code shall not

apply to the sale (the Sale) of a medical office condominium (the

Property) by the Plan to Hugh C. Hyatt, M.D., Richard A. Brinner, M.D.,

Randal O. Graham, Michael D. Kropilak, M.D., and P. Kevin Zirkle, M.D.,

parties in interest with respect to the Plan provided the following

conditions are satisfied: (1) The Sale will be a one time transaction

for cash; (2) the Property will be sold at a price equal to the greater

of $780,000 or the fair market value of the Property on the date of the

Sale; and (3) the Plan will pay no commissions or expenses associated

with the Sale.

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 6, 1998 at 63 FR 6216.

Written Comments: The Department received one comment from the

applicant. The applicant noted that during the Department's

consideration of the exemption application, the Knoxville Surgical

Group had originally planned to merge the Plan into the Premier

Surgical Plan. However, this merger did not occur. Rather, the Plan

will remain a dormant plan with all participants fully vested.

The Department has considered the entire record, including the

comment submitted by the applicant, and has determined to grant the

exemption as proposed.

For Further Information Contact: Allison Padams Lavigne, U. S.

Department of Labor, telephone (202) 219-8971. (This is not a toll-free

number.)

Jack Mayesh Wholesale Florist, Inc. Profit Sharing Plan (the Plan)

Located in Los Angeles, California

[Prohibited Transaction Exemption 98-30; Exemption Application No. D-

10524]

Exemption

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 the sale by the Plan of certain unimproved real

property (the Property) to Roy Dahlson, a party in interest with

respect to the Plan, provided that the following conditions are

satisfied: (1) The sale is a one-time transaction for cash; (2) the

Plan pays no commissions nor other expenses relating to the sale; and

(3) the Plan receives an amount which is the greater of either (a) the

fair market value of the Property as of the date of the sale, as

determined by a qualified, independent appraiser, or (b) the original

acquisition cost of the Property to the Plan, plus lost opportunity

costs attributable to the Property.

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 22, 1998 at 63 FR

19950.

For Further Information Contact: Ms. Karin Weng of the Department,

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

Pipefitters Local Union No. 537 Pension Fund (the Plan) Located in

Boston, Massachusetts

[Prohibited Transaction Exemption No. 98-31; Application No. D-10577]

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) of certain real property (the

Property) to the Plan by Local Union 537 (the Union) of the United

Association of Journeymen and Apprentices of the Plumbing and

Pipefitting Industry of the United States and Canada, a party in

interest with respect to the Plan; provided the following conditions

are satisfied:

(A) The terms and conditions of the transaction are no less

favorable to the Plan than those which the Plan would receive in an

arm's-length transaction with an unrelated party;

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

(C) The Plan incurs no expenses from the Sale;

(D) The Plan pays as consideration for the Property no more than

the fair market value of the Property as determined by a qualified,

independent appraiser on the date of the Sale; and

(E) The independent fiduciary for the Plan will undertake to

monitor and enforce the terms of the exemption.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this

[[Page 33732]]

exemption, refer to the Notice of Proposed Exemption published on April

22, 1998, at 63 FR 19953.

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 accurately describes all material terms of the transaction

which is the subject of the exemption.

Signed at Washington, D.C., this 16th day of June 1998.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 98-16337 Filed 6-18-98; 8:45 am]

BILLING CODE 4510-29-P