[Federal Register: September 28, 2006 (Volume 71, Number 188)]
[Notices]
[Page 57007-57009]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28se06-93]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Exemption Application No. D-11330]
Prohibited Transaction Exemption 2006-13; Grant of Individual
Exemptions
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Grant of individual exemption.
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SUMMARY: This document contains an exemption 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).
A notice was published in the Federal Register of the pendency
before the Department of a proposal to grant such exemption. The notice
set forth a summary of facts and representations contained in the
application for exemption and referred interested persons to the
application for a complete statement of the facts and representations.
The application has been available for public inspection at the
Department in Washington, DC. The notice also invited interested
persons to submit comments on the requested exemption to the
Department. In addition the notice stated that any interested person
might submit a written request that a public hearing be held (where
appropriate). The applicant has represented that it has complied with
the requirements of the notification to interested persons. No requests
for a hearing were received by the Department. Public comments were
received by the Department as described in the granted exemption.
The notice of proposed exemption was issued and the exemption is
being granted solely by the Department because, effective December 31,
1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1
(1996), 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 exemption is administratively feasible;
(b) The exemption is in the interests of the plan and its
participants and beneficiaries; and
(c) The exemption is protective of the rights of the participants
and beneficiaries of the plan.
The Young Men's Christian Association Retirement Fund--Retirement Plan
(the Plan), Located in New York, NY
[Prohibited Transaction Exemption 2006-13; Application No. D-11330]
Exemption
Transactions and Conditions
(a) 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,
effective July 1, 2006, to:
(1) Any arrangement, agreement or understanding between The Young
Men's Christian Association Retirement Fund Retirement Plan (the Plan)
and any participating employer whose employees are covered by the Plan,
whereby the time is extended for the making of a contribution by such a
participating employer to such Plan, if the following conditions are
met:
(i) Prior to entering into such arrangement, agreement or
understanding, the Plan has made, or has caused to be made, such
reasonable, diligent and systematic efforts as are appropriate under
the circumstances to collect such contribution;
(ii) The terms of such arrangement, agreement or understanding are
set forth in writing and are reasonable under the circumstances based
on the likelihood of collecting such contribution or the approximate
expenses that would be incurred if the Plan continued to attempt to
collect such contribution through means other than such arrangement,
agreement or understanding;
(iii) Such arrangement, agreement or understanding is entered into
or renewed by the Plan in connection with the collection of such
contribution and for the exclusive purpose of facilitating the
collection of such contribution;
(iv) The Plan's procedures and the guidelines to be followed in
undertaking to collect such contributions are described in a notice
provided to all the employers participating in the Plan. This notice
details the Plan's standard operating guidelines for the collection of
late employer contributions (the Notice). The Notice provided to all
participating employers contains the methodology of the Plan that
applies with respect to the determination to extend the time period for
the making of such delinquent contribution or to permit such delinquent
contribution to be made in periodic payments. New participating
employers will receive the Notice within 30 days of signing the written
participation agreement; and
(v) The extension of time does not apply to any failure of an
employer to timely remit participant contributions to the Plan.
(2) A determination by the Plan to consider a contribution due to
the Plan from any participating employer any of whose employees are
covered by the Plan as uncollectible and to terminate efforts to
collect such contribution, if the following conditions are met:
(i) Prior to making such determination, the Plan has made, or has
caused to be made, such reasonable, diligent and systematic efforts as
are appropriate under the circumstances to collect such contribution or
any part thereof;
(ii) Such determination is set forth in writing and is reasonable
and appropriate based on the likelihood of collecting such contribution
or the approximate expenses that would be incurred if the Plan
continued to attempt to collect such contribution or any part thereof;
(iii) The Notice provided to all participating employers, which is
described in section (a)(1)(iv) above, must also contain the
methodology used by the Plan with respect to the determination that the
delinquent contribution is uncollectible and in deciding to terminate
efforts to collect such contribution; and
(iv) The determination that the contribution is uncollectible and
the decision to terminate efforts to collect such contribution do not
apply to any failure of an employer to timely remit participant
contributions to the Plan.
(b) If an employer any of whose employees are covered by the Plan
enters into an arrangement, agreement or understanding with the Plan as
described in subparagraph (a)(1) with respect to the payment of such
contribution, or if the Plan makes a determination described in
subparagraph (a)(2), such employer
[[Page 57008]]
shall not 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, by reason of section 4975(c)(1)(A) through (D) of
the Code, except in the case of an arrangement, agreement or
understanding described in subparagraph (a)(1), where the terms thereof
are clearly unreasonable under the circumstances based on the
likelihood of collecting such contribution or the approximate expenses
that would be incurred if the Plan continued to attempt to collect such
contribution through means other than such arrangement, agreement or
understanding.
(c) The Plan maintains for a period of six years the records
necessary to enable the persons described in paragraph (d) below to
determine whether the conditions of this exemption have been met,
except that:
(1) A prohibited transaction will not be considered to have
occurred if, due to circumstances beyond the control of the Plan, the
records are lost or destroyed prior to the end of the six-year period,
and
(2) No party in interest other than the Plan's fiduciaries shall be
subject to the civil penalty that may be assessed under section 502(i)
of ERISA or to the taxes imposed by section 4975(a) and (b) of the Code
if the records are not maintained or not available for examination as
required by paragraph (d) below.
(d)(1) Except as provided in subparagraph (d)(2) below and
notwithstanding any provisions of section 504(a)(2) and (b) of ERISA,
the records referred to in paragraph (c) above are unconditionally
available at their customary location for examination during normal
business hours by:
(i) Any duly authorized employee or representative of the
Department of Labor or the Internal Revenue Service;
(ii) Any fiduciary of the Plan or any duly authorized employee or
representative of such fiduciary;
(iii) Any participating employer of the Plan; and
(iv) Any participant or beneficiary of the Plan or duly authorized
employee or representative of such participant or beneficiary.
(2) None of the persons described in subparagraph (d)(1)(ii), (iii)
and (iv) above shall be authorized to examine commercial or financial
information which is privileged or confidential, or records that are
unrelated to the Plan.
Comments: The Notice in the Federal Register, at 71 FR 41470 (July
21, 2006) (the Proposed Exemption), invited interested persons to
submit comments on the Proposed Exemption and/or to request that a
public hearing be held. In response to the solicitation of comments
from interested persons, the Department received one written comment
from an interested person. The comment was in full agreement with the
Proposed Exemption and stated that the overall quality of the Fund will
be greatly improved. The Department received one negative comment by
telephone from an interested person. The Department determined that
this comment did not relate to the transactions described in the
Proposed Exemption. The Department received no request that a public
hearing be held on the Proposed Exemption.
The Department has considered the entire record and has determined
to grant the exemption. For a complete statement of the facts and
representations supporting the Department's decision to grant this
exemption, refer to the Notice of the Proposed Exemption.
FOR FURTHER INFORMATION CONTACT: Wendy M. McColough of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
Little Rock Diagnostic Clinic, P.A. Profit Sharing Plan (the Plan),
Located in Little Rock, AR
[Prohibited Transaction Exemption 2006-14; Exemption Application No. D-
11350]
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 proposed cash sale by the Plan of a leased fee
interest (the Leased Fee Interest) in certain real property (the
Property) to LRDC Real Estate, LLC, a party in interest with respect to
the Plan.
This exemption is subject to the following conditions:
(a) The sale is a one-time transaction for cash.
(b) The sales price for the Leased Fee Interest is based on its
fair market value as established by a qualified, independent appraiser,
who updates the appraisal on the date of the sale is consummated.
(c) The terms of the proposed transaction are at least as favorable
to the Plan as those obtainable in an arm's length transaction with an
unrelated party.
(d) The Plan does not pay any real estate fees or commissions in
connection with the sale.
(e) An independent fiduciary is appointed to approve and monitor
the sale transaction on behalf of the Plan.
(f) Within 90 days of the date the notice granting this exemption
is published in the Federal Register, the Little Rock Diagnostic
Clinic, P.A., the Plan sponsor, files a Form 5330 with the Internal
Revenue Service and pays all applicable excise taxes that are
attributed to the past and continued leasing arrangement between the
Plan and the LRDC Land Company, of certain land comprising part of 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 July 21, 2006 at 71 FR
41475.
FOR FURTHER INFORMATION CONTACT: Ekaterina A. Uzlyan of the Department
at (202) 693-8552. (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 exemption 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) This exemption is 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 this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describes all material terms of the
[[Page 57009]]
transaction which is the subject of the exemption.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. E6-15922 Filed 9-27-06; 8:45 am]
BILLING CODE 4510-29-P