Grant of Individual Exemptions; Bank of Ashland, Inc., et al.

[Federal Register Volume 60, Number 115 (Thursday, June 15, 1995)]
[Notices]
[Pages 31499-31500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14575]



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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Prohibited Transaction Exemption 94-45; Exemption Application No. D-
09841, et al.]


Grant of Individual Exemptions; Bank of Ashland, Inc., 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 [[Page 31500]] 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.

Bank of Ashland, Inc. (the Bank) Located in Ashland, Kentucky

[Prohibited Transaction Exemption 95-45; Application Nos. D-09841 thru 
D-09843]

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 as of December 23, 1994, to the cash sale of certain 
collateralized mortgage obligations (CMOs) by six employee benefit 
plans for which the Bank acts as trustee (the Plans) to Ashland 
Bankshares, Inc. (the Holding Company), a party in interest with 
respect to the Plans, provided that the following conditions were met:
    (a) Each sale was a one-time transaction for cash;
    (b) Each Plan received an amount which was equal to the greater of 
(i) the outstanding principal balance for the CMOs owned by the Plan, 
plus accrued but unpaid interest, at the time of sale, (ii) the 
amortized cost for the CMOs owned by the Plan, plus accrued but unpaid 
interest, as determined by the Bank based on the outstanding principal 
balance for each CMO on the date of sale, or (iii) the fair market 
value of the CMOs owned by the Plan as determined by an independent, 
qualified appraiser at the time of the sale;
    (c) The Plans did not pay any commissions or other expenses with 
respect to the sale;
    (d) The Bank, as trustee of the Plans, determined that the sale of 
the CMOs is in the best interests of each Plan and their participants 
and beneficiaries at the time of the transaction;
    (e) The Bank took all appropriate actions necessary to safeguard 
the interests of the Plans and their participants and beneficiaries in 
connection with the transactions; and
    (f) Each Plan received a reasonable rate of interest on the CMOs 
during the period of time it held the CMOs.

EFFECTIVE DATE: This exemption is effective as of December 23, 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 April 14, 1995, at 60 FR 
19090.

FOR FURTHER INFORMATION CONTACT: Mr. E.F. Williams of the Department, 
telephone (202) 219-8194. (This is not a toll-free number.)
Simplex Time Recorder Co., Employee Savings Plan (the Plan), Located in 
Gardner, Massachusetts

[Prohibited Transaction Exemption 95-46; Exemption Application No. D-
09935]

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 (1) the extension of credit (the Loan) to the Plan 
by Simplex Time Recorder Co., a party in interest with respect to the 
Plan, with regard to a group annuity contract (the GAC) issued by 
Executive Life Insurance Company of California (ELIC), and (2) the 
Plan's potential repayment of the Loan (the Repayment); provided the 
following conditions are satisfied:
    (A) No interest or expenses are paid by the Plan in connection with 
the transaction;
    (B) The Loan will be repaid only out of amounts paid to the Plan by 
ELIC, its successors, or any other responsible third party making 
payment with respect to ELIC's obligations under the GAC (the GAC 
Proceeds); and
    (C) Repayment of the Loan is waived with respect to the amount by 
which the Loan exceeds GAC proceeds.
    For a more complete statement of the facts and representations 
supporting this exemption, refer to the notice of proposed exemption 
published on April 27, 1995 at 60 FR 20769.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

General Information

    The attention of interested persons is directed to the following:
    (1) The fact that a transaction is the subject of an exemption 
under section 408(a) of the Act and/or section 4975(c)(2) of the Code 
does not relieve a fiduciary or other party in interest or disqualified 
person from certain other provisions to which the exemptions does not 
apply and the general fiduciary responsibility provisions of section 
404 of the Act, which among other things require a fiduciary to 
discharge his duties respecting the plan solely in the interest of the 
participants and beneficiaries of the plan and in a prudent fashion in 
accordance with section 404(a)(1)(B) of the Act; nor does it affect the 
requirement of section 401(a) of the Code that the plan must operate 
for the exclusive benefit of the employees of the employer maintaining 
the plan and their beneficiaries;
    (2) These exemptions are supplemental to and not in derogation of, 
any other provisions of the Act and/or the Code, including statutory or 
administrative exemptions and transactional rules. Furthermore, the 
fact that a transaction is subject to an administrative or statutory 
exemption is not dispositive of whether the transaction is in fact a 
prohibited transaction; and
    (3) The availability of these exemptions is subject to the express 
condition that the material facts and representations contained in each 
application are true and complete and accurately describe all material 
terms of the transaction which is the subject of the exemption. In the 
case of continuing exemption transactions, if any of the material facts 
or representations described in the application change after the 
exemption is granted, the exemption will cease to apply as of the date 
of such change. In the event of any such change, application for a new 
exemption may be made to the Department.

    Signed at Washington, D.C., this 9th day of June, 1995.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, U.S. Department of Labor.
[FR Doc. 95-14575 Filed 6-14-95; 8:45 am]
BILLING CODE 4510-29-P