[Federal Register: March 13, 2008 (Volume 73, Number 50)]
[Notices]
[Page 13581-13587]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13mr08-86]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
Prohibited Transaction Exemptions; 2008-03, 2008-04, and 2008-05
Grant of Individual Exemptions Involving; D-11343, Wellington
Management Company, LLP (Wellington Management), PTE 2008-03; D-11389,
GE Asset Management Incorporated, PTE 2008-04; and D-11421, Toeruna
Widge IRA (the IRA), PTE 2008-05
AGENCY: Employee Benefits Security 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
(ERISA or 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
[[Page 13582]]
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.
Wellington Management Company, LLP (Wellington Management) and Its
Subsidiaries (together, Wellington) Located in Boston, MA
[Prohibited Transaction Exemption 2008-03; Exemption Application No. D-
11343]
Exemption
Section I. Covered Transactions
The restrictions of section 406(a)(1)(A) and (D) of the Act (or
ERISA) and the sanctions resulting from the application of section
4975(c)(1)(A) and (D) of the Code,\1\ shall not apply (1)
retroactively, from January 1, 2001 through December 31, 2003, and (2)
prospectively, from the date the notice granting the final exemption is
published in the Federal Register, to--
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\1\ For purposes of this exemption, references to provisions of
Title I of the Act, unless otherwise specified, refer also to the
corresponding provisions of the Code.
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(A) The acquisition, from an offshore corporation (the Offshore
Corporation) of certain non-voting equity securities (Shares), which
represents interests in the economic value of the Offshore Corporation,
by an ERISA-covered client plan (the Client Plan), where the Offshore
is a party in interest with respect to the Client Plan, due to the
ownership of all of the voting equity shares (Manager Shares) of the
Offshore Corporation by Wellington Global Administrator, Ltd.
(Wellington Global Administrator), a subsidiary of Wellington
Management, which is (or may become) a fiduciary and a service provider
with respect to the Client Plan; and
(B) The redemption of the Client Plan's Shares by the Offshore
Corporation either in cash or in kind.
Section II. Conditions
This exemption is conditioned upon adherence to the material facts
and representations described herein and upon satisfaction of the
following conditions, which apply both retroactively and prospectively,
unless otherwise excepted:
(a) All decisions to acquire or redeem Shares have been made or are
made on behalf of the Client Plan by an authorized fiduciary, which is
independent of Wellington and the applicable Offshore Corporation.
(b) At the time of acquisition of Shares from an Offshore
Corporation, each Client Plan either had or has assets at least equal
to $100 million.
(1) In the case of a master trust that holds assets of multiple
related Client Plans maintained by a single employer or a controlled
group of employers, as defined in section 407(d)(7) of the Act, this
requirement is satisfied if the master trust has aggregate assets at
least equal to $100 million (assuming the fiduciary responsible for
making the investment decision is the Client Plan sponsor or an
affiliate of the Client Plan sponsor).
(2) In the case of a pooled fund (e.g., a group trust) whose assets
are ``plan assets'' subject to the Act, this requirement is satisfied
as long as either (i) the pooled fund has at least $100 million in
aggregate assets and the fiduciary making the investment decision is
unrelated to Wellington and manages at least $200 million in assets
(exclusive of the aggregate assets invested in the Offshore
Corporations); or (ii) at least 50 percent of the units of beneficial
interest in the pooled fund are held by Client Plans, each of which has
total net assets of at least $100 million.
(c) Wellington has not provided and does not provide investment
advice (within the meaning of 29 CFR 2510.3-21(c)), nor is it a
fiduciary with respect to any Client Plan's investment in an Offshore
Fund.
(d) All acquisitions and redemptions of Shares by a Client Plan
have been made or are made for fair market value, determined as
follows:
(1) Equity securities have been valued or are valued at their last
sale price or official closing price on the market on which such
securities primarily trade using sources independent of Wellington and
the issuer. If no sales occurred on such day, equity securities are
valued at the last reported independent ``bid'' price or, if sold
short, at the last reported independent ``asked'' price.
(2) Fixed income securities have been valued or are valued on
either the basis of ``firm quotes'' obtained at the time of the
acquisition or redemption of Shares from U.S.-registered or foreign
broker-dealers, which are registered and subject to the laws of their
respective jurisdiction, which quotes reflect the share volume involved
in the transaction, or on the basis of prices provided by independent
pricing services that determine valuations based on market transactions
for comparable securities and various relationships between such
securities that are generally recognized by institutional traders.
(3) Options have been valued or are valued at the mean between the
current independent ``bid'' price and the current independent ``asked''
price or, where such prices are not available are valued at their fair
value in accordance with Fair Value Pricing Practices by Wellington
Management's pricing committee, which utilizes a set of defined rules
and an independent review process.
(4) If current market quotations are not readily available for any
investments, such investments have been valued or will be valued at
their fair value by Wellington Management's pricing committee in
accordance with Fair Value Pricing Practices.
(e) A Client Plan's Shares have been redeemed or may be redeemed,
in whole or in part, without the payment of any redemption fee or other
penalty, on a pre-specified, periodic (not longer than semi-annual)
basis, upon no more than 45 days' advance notice, except for a one-year
lock-up period imposed on new investors.
(f) Redemptions of Shares in an Offshore Corporation by a Client
Plan have been made or are made in cash unless:
(1) A Client Plan consents to such in kind redemption; or
(2) Wellington requires that such redemption be made in kind on a
pro rata basis to protect the best interests of the Offshore Fund and
the remaining investors, including other Client Plan investors.
(g) In advance of the initial investment by a Client Plan in an
Offshore Corporation's Shares, the independent fiduciary of a Client
Plan has received or receives--
(1) A copy of the proposed exemption and the final exemption,
following the publication of these documents in the Federal Register.
(This disclosure provision applies to the prospective exemptive relief
described herein.)
(2) An offering memorandum describing the relevant Offshore
Fund(s), as well as the relevant investment objectives, fees and
expenses and redemption and valuation procedures; and
(3) All reasonably available relevant information as such
independent fiduciary may request.
(h) On an ongoing basis, Wellington has provided or provides a
Client Plan with the following information:
(1) Unaudited performance reports at the end of each month;
[[Page 13583]]
(2) Audited annual financial statements and access to a protected
internet site; and
(3) Client services group assistance for any investor inquiries.
(i) No commission or sales charge has been assessed or is assessed
against the Client Plan in connection with its acquisition of an
Offshore Corporation's Shares.
(j) Not more than 10% of the assets of the Client Plan has been
invested or is invested, in the aggregate, in Shares of all Offshore
Corporations (determined at the time of any acquisition of such Shares)
and not more than 5% of the assets of the Client Plan has been
indirectly invested or is invested, in the aggregate, in any one
offshore fund (the Offshore Fund), a separate collective investment
vehicle underlying an Offshore Corporation, (also determined at the
time of any acquisition of an interest in such Offshore Fund by such
Client Plan).
(k) For prospective transactions only (and following the
publication of the proposed exemption and the final exemption in the
Federal Register), each Offshore Corporation, each Offshore Fund,
Wellington Management Investment, Inc., Wellington Global Holdings,
Ltd., Wellington Hedge Management, LLC, and Wellington Global
Administrator--
(1) Has agreed to submit to the jurisdiction of the federal and
state courts located in the Commonwealth of Massachusetts;
(2) Has agreed to appoint an agent for service of process in the
United States, which may be an affiliate (the Process Agent);
(3) Has consented to service of process on the Process Agent; and
(4) Has agreed that any enforcement by a Plan of its rights
pursuant to this exemption will, at the option of the Plan, occur
exclusively in the United States courts.
(l) For prospective transactions only (and following the
publication of the proposed exemption and the final exemption in the
Federal Register), Wellington maintains in the United States for a
period of six years from the date of the covered transactions, such
records as are necessary to enable the persons described in paragraph
(m) of this section II to determine whether the conditions of this
exemption were met, except that:
(1) If the records necessary to enable the persons described in
paragraph (m) to determine whether the conditions of the exemption have
been met are lost or destroyed, due to circumstances beyond the control
of Wellington, then no prohibited transaction will be considered to
have occurred solely on the basis of the unavailability of those
records; and
(2) No party in interest other than Wellington 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 have not been maintained or are not available for examination
as required by paragraph (m) below.
(m)(1) Except as provided in paragraph (m)(2) of this section II
and notwithstanding the provisions of subsections (a)(2) and (b) of
section 504 of the Act, the records referred to above in paragraph (l)
of this section II are unconditionally available for examination during
normal business hours at their customary location to the following
persons or an authorized representative thereof:
(i) Any duly authorized employee or representative of the
Department or the Internal Revenue Service (the Service);
(ii) Any fiduciary of a Client Plan; or
(iii) Any participant or beneficiary of a Client Plan or any duly
authorized employee or representative of such participant or
beneficiary.
(2) None of the persons described above in paragraphs (ii) and
(iii) of this paragraph (m)(1)(ii) and (iii) of this Section II shall
be authorized to examine trade secrets of Wellington, or any commercial
or financial information, which is privileged or confidential.
Section III. Definitions
(a) The term ``Wellington'' means Wellington Management Company,
LLP and its subsidiaries.
(b) An ``affiliate'' of Wellington means--
(1) Any person directly or indirectly through one or more
intermediaries, controlling, controlled by, or under common control
with the person;
(2) Any officer, director, employee, relative, or partner in any
such person; and
(3) Any corporation or partnership of which such person is an
officer, director, partner, or employee.
(c) The term ``control'' means the power to exercise a controlling
influence over the management or policies of a person other than an
individual.
(d) The term ``Offshore Corporation'' means --
(1) WMIB;
(2) Any future expansion of WMIB that includes an additional class
of securities or an additional Offshore Fund that is organized as a
Bermuda limited partnership, which corresponds to the new WMIB class
that is established by Wellington pursuant to the WMIB structure, and
conforms to the same conditions, rules and regulations described in
this exemption;
(3) Archipelago; or
(4) Any future ``fund of funds'' investment vehicle that is formed
by Wellington under Bermuda law and is set up in substantially the same
manner as Archipelago, with the same management structure, and conforms
to the same conditions, rules and regulations described in this
exemption.
(e) The term ``Offshore Fund'' means a collective investment
vehicle that is organized as a Bermuda limited partnership, which
corresponds to each class of WMIB securities. Each Offshore Fund
invests primarily in publicly-traded securities, although up to 15% of
each Offshore Fund may be invested in securities that are not readily
marketable.
(f) The term ``U.S. broker-dealer'' means a broker-dealer
registered in the United States under the Securities Exchange Act of
1934 (the 1934 Act) or exempted from registration under section
15(a)(1) of the 1934 Act as a dealer in exempted government securities
(as defined in section 3(a)(12) of the 1934 Act).
(g) The term ``foreign broker-dealer'' means a broker that has, as
of the last day of its most recent fiscal year, equity capital that is
the equivalent of not less than $200 million and is registered and
regulated, under the relevant securities laws of a governmental entity
of a country other than the United States, where such regulation and
oversight by the governmental entities is comparable to regulatory
regimes within the United States.
(h) ``Manager Shares'' refer to the equity securities of an
Offshore Corporation that have voting rights and control the election
of the Board of Directors of an Offshore Corporation. Manager Shares do
not participate in the economic performance of the Offshore Corporation
and are owned 100% by Wellington Global Administrator.
(i) ``Shares'' refer to the equity securities of an Offshore
Corporation that do not have voting rights. Such shares represent
substantially all of the economic value of the Offshore Corporation and
are or will be directly linked either (i) by class to a corresponding
Offshore Fund (in the case of WMIB) or (ii) to a mix of various WMIB
classes (in the case of Archipelago or any other fund of funds entity).
Effective Date: This exemption is effective retroactively for the
transactions involving Wellington and
[[Page 13584]]
two Client Plans that occurred from January 1, 2001 until December 31,
2003. For prospective transactions involving Wellington and a Client
Plan, this exemption is effective on the date the notice granting the
final exemption is published in the Federal Register.
Written Comments
The Department invited all interested persons to submit written
comments with respect to the notice of proposed exemption (the Notice)
within 45 days of the date of the publication of such notice in the
Federal Register on October 26, 2007. All comments were due by December
10, 2007.
During the comment period, the Department received one written
comment concerning the Notice. The comment was submitted by Wellington
and it requests certain modifications or clarifications to the Notice
in the areas discussed below.
1. Footnote 3. In Footnote 3 of the Summary of Representations, the
last sentence states that, ``[b]ecause these two WMIB classes are not
Offshore Funds, as defined in this proposed exemption, no plans will be
permitted to invest in these WMIB classes.'' Wellington represents that
this statement is overly-broad in that ERISA-covered plans can invest
in these classes as long as such investment does not constitute a
prohibited transaction either because the Offshore Fund is not a party
in interest or because there is an alternative exemption available.
Accordingly, Wellington requests that the last sentence in Footnote 3
be limited to situations in which the investment is made ``pursuant to
this exemption.'' In addition, Wellington requests that the Department
clarify by adding the words ``pursuant to this exemption'' to such
footnote so that the sentence will only apply when this exemption is
being utilized.
In response to this comment, the Department has noted Wellington's
clarification to Footnote 3 of the Summary of Facts and
Representations.
2. Representation 5. Representation 5 of the Summary of Facts and
Representations contains a detailed discussion of the fact that the
Offshore Corporations are not ``highly leveraged'' relative to the
universe of hedge funds. Although Wellington agrees with this factual
statement, as a general matter, Wellington states that certain of the
details included in Representation 5 and accompanying Footnote 6 are
not entirely accurate because they are based on historical facts rather
than future events. For example, Wellington explains that Footnote 6
states that the long exposure number for the WMIB and Archipelago class
funds ``never exceeds 150%.'' While this statement was historically
true at the time Wellington submitted the information, it was intended
to be factual evidence supporting the general proposition that these
funds are not highly leveraged, not a representation that this
percentage would never exceed 150%. Accordingly, Wellington states that
the details of Representation 6 are intended to reflect the specific
historical information submitted by Wellington and are subject to
change over time as long as the Offshore Corporations remain not highly
leveraged on a relative basis. Also, on a related point, to be
consistent with its submissions, Wellington indicates that the word
``generally'' should be inserted immediately before the word
``subject'' in the third line, and immediately before the word
``limited'' in the eighth line, of the second paragraph of
Representation 5.
In response to this comment, the Department acknowledges
Wellington's clarifications to Representation 5 of the Summary of Facts
and Representations.
3. Representation 6. The last sentence of the first paragraph of
Representation 6 of the Summary of Facts and Representations states
that no Client Plans are currently invested in Shares. Wellington
represents that this statement is not entirely accurate because a
Client Plan may have acquired shares in reliance on PTE 96-23 (61 FR
15975, April 10, 1996), the class exemption for In-House Asset Managers
or another exemption. In any event, Wellington explains that this
statement is not material. Accordingly, Wellington requests that the
words ``but not by any Client Plans'' be deleted from Representation 6.
In response to this comment, the Department notes this
clarification to Representation 6 of the Summary of Facts and
Representations.
4. Representation 8. The last sentence of Representation 8 of the
Summary of Facts and Representations states that various offshore
Wellington affiliates will consent to the jurisdiction of certain U.S.
courts and appoint Wellington as their agent for service of process.
Wellington wishes to clarify that this will occur when a Client Plan
invests in an Offshore Corporation pursuant to this exemption.
In response to this comment, the Department notes Wellington's
clarification to Representation 8 of the Summary of Facts and
Representations.
5. Representation 11. In the Summary of Facts and Representations,
the fourth sentence of the first paragraph of Representation 11 (and a
similar reference in the third parargraph of this representation)
states that Wellington Global Administrator provides services to Client
Plans. Wellington points out that this entity provides services to the
Offshore Funds and the Offshore Corporations, which are not plan asset
vehicles. Accordingly, Wellington explains that Wellington Management
would not be considered a party in the interest by reason of its
ownership of Wellington Global Administrator. However, Wellington
explains that Wellington Management is (or may become) a party in the
interest with respect to the Client Plans by reason of its being a
service provider to such plans. In this regard, Wellington states that
Wellington Global Administrator would be a party in interest because it
is a corporation that is more than fifty percent owned by Wellington
Management, itself a fiduciary and service provider.
In response to this comment, the Department acknowledges
Wellington's modification to Representation 11 of the Summary of Facts
and Representations.
6. Representation 13. The last sentence of Representation 13 of the
Summary of Facts and Representations, states that no more than five
percent of the securities that are not readily marketable will be
subject to Wellington's fair value pricing practices. Wellington
explains that this statement is incorrect in several respects. First,
Wellington indicates in its submission that not more than five percent
of the aggregate securities held by the Offshore Fund had been subject
to its fair value pricing practices. Second, Wellington explains that
this statement had been submitted as a historical fact rather than a
representation as to future events. Wellington further explains that
the first paragraph of Representation 2 of the Summary of Facts and
Representations correctly states that not more than 15% of the assets
of any Offshore Fund may be invested in securities that are not readily
marketable.
In response to this comment, the Department notes Wellington's
clarification to Representation 13 of the Summary of Facts and
Representations.
Accordingly, after giving full consideration to the entire record,
including the comment, the Department has determined to grant the
exemption as modified or clarified above. For further information
regarding the comment and other matters discussed herein, interested
persons are encouraged to obtain copies of the exemption application
file (Exemption Application No. D-11343) the Department is maintaining
in this case. The complete application file, as well as the comment and
all supplemental
[[Page 13585]]
submissions received by the Department, are made available for public
inspection in the Public Disclosure Room of the Employee Benefits
Security Administration, Room N-1513, U.S. Department of Labor, 200
Constitution Avenue, NW., Washington, DC 20210.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the Notice published on October 26, 2007 at 72 FR 60891.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 693-8556. (This is not a toll-free number.)
GE Asset Management Incorporated Located in Stamford, Connecticut
[Prohibited Transaction Exemption 2008-04; Exemption Application No. D-
11389]
Exemption
Section I--Exemption for In-Kind Redemption of Assets
The restrictions in sections 406(a)(1)(A) through (D) 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,\2\ effective March 1, 2006, to
certain in-kind redemptions (the Redemption(s)), by plans sponsored by
the General Electric Company (GE) or an affiliate (the Plan(s)), of
shares (the Shares) of certain proprietary mutual funds for which GE
Asset Management Incorporated (GEAM) provides investment advisory and
other services (the Mutual Fund(s)), provided that the following
conditions are satisfied:
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\2\ For purposes of this exemption, references to specific
provisions of Title I of the Act, unless otherwise specified, refer
also to the corresponding provisions of the Code.
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(A) The Plan pays no sales commissions, redemption fees, or other
similar fees in connection with the Redemption (other than customary
transfer charges paid to parties other than GEAM and any affiliates
thereof (GEAM Affiliates));
(B) The assets transferred to the Plan pursuant to the Redemption
consist entirely of cash and Transferable Securities, as such term is
defined in section II, below;
(C) With certain exceptions described below, the Plan receives in
any Redemption its pro rata portion of the securities that, when added
to the cash received, is equal in value to the number of Shares
redeemed, as determined in a single valuation performed in the same
manner and as of 4 p.m. (local time for the New York Stock Exchange) on
the same day, in accordance with Rule 2a-4 under the Investment Company
Act of 1940, as amended (the 1940 Act), and the then-existing
procedures established by the Board of Trustees of the Mutual Fund
(using sources independent of GEAM and GEAM Affiliates).
Notwithstanding the foregoing, Transferable Securities that are odd lot
securities, fractional shares, and accruals on such securities may be
distributed in cash;
(D) Neither GEAM, nor any affiliate thereof, receives any direct or
indirect compensation, or any fees, including any fees payable pursuant
to Rule 12b-1 under the 1940 Act, in connection with any Redemption of
the Shares;
(E) Prior to a Redemption, GEAM provides in writing to an
independent fiduciary, as such term is defined in section II
(Independent Fiduciary), a full and detailed written disclosure of
information regarding the Redemption;
(F) Prior to a Redemption, the Independent Fiduciary provides
written authorization for such Redemption to GEAM, such authorization
being terminable at any time prior to the date of Redemption without
penalty to the Plan;
(G) Before authorizing a Redemption, based on the disclosures
provided by GEAM to the Independent Fiduciary, the Independent
Fiduciary determines that the terms of the Redemption are fair to the
Plan, and comparable to, and no less favorable than, terms obtainable
at arm's length between unaffiliated parties, and that the Redemption
is in the best interests of the Plan and its participants and
beneficiaries;
(H) Not later than thirty (30) business days after the completion
of a Redemption, the Mutual Fund will provide to the Independent
Fiduciary a written confirmation regarding such Redemption containing:
(i) The total number of Shares of the Mutual Fund and the
percentage held by the Plan immediately before the Redemption (and the
related per Share net asset value and the total dollar value of the
Shares held);
(ii) The identity (and related aggregate dollar value) of each
security provided to the Plan pursuant to the Redemption, including
each security valued in accordance with Rule 2a-4 under the 1940 Act
and the then-existing procedures established by the Board of Trustees
of the Mutual Fund (using sources independent of GEAM and GEAM
Affiliates);
(iii) The current market price of each security received by the
Plan pursuant to the Redemption; and
(iv) The identity of each pricing service or market-maker consulted
in determining the value of such securities;
(I) The value of the securities received by the Plan for each
redeemed Share, when added to the cash received, equals the net asset
value of such Share at the time of the transaction, and such value
equals the value that would have been received by any other investor
for shares of the same class of the Mutual Fund at that time;
(J) Subsequent to a Redemption, within 180 days of the date of such
Redemption, the Independent Fiduciary performs a post-transaction
review that will include, among other things, testing a sampling of
material aspects of the Redemption deemed in its judgment to be
representative, including pricing;
(K) Each of the Plan's dealings with the Mutual Funds, the
investment advisers to the Mutual Funds, the principal underwriter for
the Mutual Funds, or any affiliated person thereof, are on a basis no
less favorable to the Plan than dealings between the Mutual Funds and
other shareholders holding shares of the same class as the Shares;
(L) GEAM will maintain, or cause to be maintained, for a period of
six years from the date of any covered transaction such records as are
necessary to enable the persons described in paragraph (M) below to
determine whether the conditions of this exemption have been met,
except that (i) this record-keeping condition shall not be violated if,
due to circumstances beyond the control of GEAM, the records are lost
or destroyed prior to the end of the six year period, (ii) no party in
interest with respect to the Plan other than GEAM 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 such
records are not maintained or are not available for examination as
required by paragraph (M) below;
(M) (1) Except as provided in subparagraph (2) of this paragraph
(M), and notwithstanding any provisions of section 504(a)(2) and (b) of
the Act, the records referred to in paragraph (L) above are
unconditionally available at their customary locations for examination
during normal business hours by (i) any duly authorized employee or
representative of the Department of Labor, the Internal Revenue
Service, or the Securities and Exchange Commission, (ii) any fiduciary
of the Plan or any duly authorized representative of such fiduciary,
(iii) any participant, beneficiary, or union employee covered by the
Plan or duly authorized representative of such participant,
beneficiary, or union
[[Page 13586]]
employee, (iv) any employer whose employees are covered by Plan and any
employee organization whose members are covered by such Plan.
(2) None of the persons described in paragraphs (M)(1)(ii), (iii)
and (iv) shall be authorized to examine trade secrets of GEAM or the
Mutual Funds, or commercial or financial information that is privileged
or confidential; and
(3) Should GEAM or the Mutual Funds refuse to disclose information
on the basis that such information is exempt from disclosure pursuant
to paragraph (2) above, GEAM shall, by the close of the thirtieth
(30th) day following the request, provide a written notice advising
that person of the reasons for the refusal and that the Department may
request such information.
Section II--Definitions
(A) The term ``affiliate'' means:
(1) Any person (including a corporation or partnership) directly or
indirectly through one or more intermediaries, controlling, controlled
by, or under common control with the person;
(2) Any officer, director, employee, relative, or partner in any
such person; and
(3) Any corporation or partnership of which such person is an
officer, director, partner, or employee.
(B) The term ``control'' means the power to exercise a controlling
influence over the management or policies of a person other than an
individual.
(C) The term ``net asset value'' means the amount for purposes of
pricing all purchases and sales calculated by dividing the value of all
securities, determined by a method as set forth in the Mutual Fund's
prospectus and statement of additional information, and other assets
belonging to the Mutual Fund, less the liabilities charged to each such
Mutual Fund, by the number of outstanding shares.
(D) The term ``Independent Fiduciary'' means a fiduciary who is:
(i) Independent of and unrelated to GEAM and its affiliates, and (ii)
appointed to act on behalf of the Plan with respect to the in-kind
transfer of assets from one or more Mutual Funds to, or for the benefit
of, the Plan. For purposes of this exemption, a fiduciary will not be
deemed to be independent of and unrelated to GEAM if: (i) Such
fiduciary directly or indirectly controls, is controlled by, or is
under common control with GEAM, (ii) such fiduciary directly or
indirectly receives any compensation or other consideration in
connection with any transaction described in this exemption (except
that an independent fiduciary may receive compensation from GEAM in
connection with the transactions contemplated herein if the amount or
payment of such compensation is not contingent upon or in any way
affected by the independent fiduciary's ultimate decision), and (iii)
an amount equal to more than two percent (2%) of such fiduciary's gross
income, for federal income tax purposes, in its prior tax year, will be
paid to such fiduciary by GEAM and its affiliates in such fiduciary's
current tax year.
(E) The term ``Transferable Securities'' means securities that are
traded on public securities markets or for which quoted bid and asked
prices are available from persons independent of GEAM and would not
include the following types of securities or assets: (a) Securities
that would have to be registered under the Securities Act of 1933, as
amended; (b) securities issued by entities in countries that restrict
the holdings of securities by non-nationals, including investment
vehicles such as the Mutual Funds, or otherwise limit the ability to
transfer the security other than through a local securities exchange
transaction; and (c) certain portfolio assets (such as forward currency
contracts, futures and option contracts, swap transactions, and
repurchase agreements) that, although they may be liquid and
marketable, involve the assumption of contractual obligations, require
special trading facilities, or may be traded only with the counterparty
to the transactions in order to effect a change in beneficial
ownership.
(F) The term ``relative'' means a ``relative'' as such term is
defined in section 3(15) of the Act (or a ``member of the family,'' as
such term is defined in section 4975(e)(6) of the Code), or a brother,
sister, or a spouse of a brother or a sister.
Effective Date: This exemption is effective as of March 1, 2006.
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 October 26, 2007 at 72 FR
60899.
FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department,
telephone (202) 693-8557. (This is not a toll-free number.)
Toeruna Widge IRA (the IRA)
Located in Mertztown, Pennsylvania Prohibited Transaction Exemption
2008-05; Exemption Application No. D-11421
Exemption
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 approximately 59.99 acres of
unimproved real property located at Fredericksville Road and Sweitzer
Road, Rockland Township, Berks County, Pennsylvania (the Property) by
the IRA to Dr. Toeruna Widge (the Applicant), a disqualified person
with respect to the IRA,\3\ provided that the following conditions are
satisfied:
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\3\ Pursuant to 29 CFR 2510.3-2(d), the IRA is not within the
jurisdiction of Title I of the Employee Retirement Income Security
Act of 1974 (the Act). However, there is jurisdiction under Title II
of the Act pursuant to section 4975 of the Code.
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(A) All terms and conditions of the Sale are at least as favorable
to the IRA as those which the IRA could obtain in an arm's-length
transaction with an unrelated party;
(B) The Sales price will be the greater of $390,000 or the fair
market value of the Property as of the date of the Sale;
(C) The fair market value of the Property has been determined by a
qualified, independent appraiser;
(D) The Sale is a one-time transaction for cash; and
(E) The IRA will not pay any commissions, costs or other expenses
in connection with the Sale.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
notice of proposed exemption published on January 17, 2008 at 73 FR
3281.
FOR FURTHER INFORMATION CONTACT: Anh-Viet Ly of the Department,
telephone (202) 693-8648 (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
[[Page 13587]]
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 transaction
which is the subject of the exemption.
Signed at Washington, DC this 7th day of March 2008.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. E8-4982 Filed 3-12-08; 8:45 am]
BILLING CODE 4510-29-P
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