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Notice

Grant of Individual Exemptions; Reagent Chemical & Research, Inc. Employees' Profit Sharing Plan and Trust (the Plan)

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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AGENCY:

Employee Benefits Security Administration, Labor.

ACTION:

Grant of individual exemptions.

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).

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.

Reagent Chemical & Research, Inc. Employees' Profit Sharing Plan and Trust (the Plan); Located in Middlesex, New Jersey

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 sale of a 73.4815% tenancy-in-common interest (the Property Interest) by the Plan to Brian Skeuse, a vice president and shareholder of Reagent Chemical & Research, Inc., and his spouse, Jan Skeuse, parties in interest with respect to the Plan, provided that the following conditions are satisfied:

(a) The sale is a one-time cash transaction;

(b) The Plan receives the greater of either: (i) $180,029.68; or (ii) the current fair market value for the Property Interest established at the time of the sale by an independent qualified appraiser; and

(c) The Plan pays no commissions or other expenses associated with the sale.

For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the Notice of Proposed Exemption published on December 30, 2002 at 67 FR 79654.

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FOR FURTHER INFORMATION CONTACT:

Khalif Ford of the Department, telephone (202) 693-8540 (this is not a toll-free number).

Michigan Conference of Teamsters Welfare Fund (the Plan); Located in Detroit, MI

Exemption

The restrictions of sections 406(a)(1)(A) and (D) of the Act shall not apply to the cash sale, by the Plan, of certain parcels of real estate (the Property) to the Detroit Teamsters Temple Association (DTTA), a party in interest with respect to the Plan and a lessee of a portion of such Property. Start Printed Page 10048

This exemption is subject to the following conditions:

(a) DTTA pays the fair market value as determined by a qualified, independent appraiser on the date of the transaction.

(b) The sale transaction has been reviewed and approved by an Independent Fiduciary, who was appointed by the United States District Court for the Eastern District of Michigan, Southern Division for purposes of enforcing a settlement agreement dated January 21, 1998.

(c) The sale is a one-time transaction for cash.

(d) The Plan pays no fees or commissions 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 the notice of proposed exemption published on November 18, 2002 at 67 FR 69566.

Extension of Comment Period

The notice of proposed exemption invited interested persons to submit comments to the Department on or before December 28, 2002. The applicant agreed to provide notice to interested persons by personal delivery or first class mail within ten days of the date that the proposal appeared in the Federal Register. A total of 23,511 notices was sent to Plan participants and other interested persons by first class mail. Of that total, 14,234 notices were sent on November 27, 2002 and 8,951 notices were sent on November 29, 2002 (November 28, 2002 being a federal holiday). On December 3, 2002, the applicant learned that 266 notices had not been included in the original mailings and that 66 envelopes from these mailings had been damaged. These remaining 332 notices were sent by first class mail on December 4, 2002.

To ensure that Plan participants would have a sufficient amount of time in which to provide their comments to the Department, the applicant decided to extend the comment period for another 46 days, or until February 14, 2003. In this regard, the applicant represents that on December 27, 2002, postcards were sent to the Plan's 5,662 retired participants by first class mail informing them that the period for submitting comments had been extended until February 14, 2003. In addition, on January 7, 2003, the applicant states that letters were sent by first class mail to the principal officers of the 19 Local Unions comprising the Michigan Conference of Teamsters instructing them to post an enclosure stating that the period for submitting comments had been extended until February 14, 2003. On January 8, 2003, a notice was posted on the Plan's website stating that the period for submitting comments had been extended until February 14, 2003.

Written Comments

During the comment period, the Department received two written comments with respect to the proposed exemption. The first comment expressed approval of the exemption transaction. The second comment, which was submitted by a Plan participant who chose to remain anonymous, stated matters that were not germane to the exemption request.

For further information regarding the comments received and other matters discussed herein, interested persons are encouraged to obtain copies of the exemption application file (Exemption Application No. L-11058) the Department is maintaining in this case. The complete application file, as well as all supplemental 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.

Accordingly, after giving full consideration to the entire record, including the written comments, the Department has decided to grant the exemption.

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FOR FURTHER INFORMATION CONTACT:

Ms. Anna M.N. Mpras of the Department, telephone (202) 693-8565. (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 transaction which is the subject of the exemption.

Start Signature

Signed at Washington, DC, this 26th day of February, 2003.

Ivan Strasfeld,

Director of Exemption Determinations, Employee Benefits Security Administration, Department of Labor.

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[FR Doc. 03-4922 Filed 2-28-03; 8:45 am]

BILLING CODE 4510-29-P