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Submission for OMB Review: Comment Request

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Information about this document as published in the Federal Register.

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Start Preamble June 30, 2006.

The Department of Labor (DOL) has submitted the following public information collection requests (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35). A copy of each ICR, with applicable supporting documentation, may be obtained by contacting Darrin King on 202-693-4129 (this is not a toll-free number) or e-mail: king.darrin@dol.gov.

Comments should be sent to Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for the Employee Benefits Security Administration (EBSA), Office of Management and Budget, Room 10235, Washington, DC 20503, 202-395-7316 (this is not a toll-free number), within 30 days from the date of this publication in the Federal Register.

The OMB is particularly interested in comments which:

  • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
  • Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
  • Enhance the quality, utility, and clarity of the information to be collected; and
  • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

Agency: Employee Benefits Security Administration.

Type of Review: Extension of currently approved collection. Start Printed Page 38662

Title: Prohibited Transaction Class Exemption 97-41; Collective Investment Funds Conversion Transactions.

OMB Number: 1210-0104.

Frequency: On occasion.

Type of Response: Recordkeeping and Third party disclosure.

Affected Public: Business or other for-profit and Not-for-profit institutions.

Number of Respondents: 50.

Number of Annual Responses: 105.

Estimated Annual Time per Respondent: Approximately 35 hours.

Total Burden Hours: 1,756.

Total Annualized capital/startup costs: $0.

Total Annual Costs (operating/maintaining systems or purchasing services): $281,570.

Description: The Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (Code) provide that the Secretary of Labor and the Secretary of Treasury, respectively, may grant exemptions from certain prohibited transaction provisions under ERISA and the Code. Section 408(a) of ERISA authorizes the Secretary of Labor to grant administrative exemptions from the restrictions of section 406 of ERISA, while section 4975(c)(2) of the Code authorizes the Secretary of Treasury or his delegate to grant exemptions from the prohibitions of section 4975(c)(1).

Reorganization Plan No. 4 of 1978 (43 FR 47713, October 17, 1978, effective on December 31, 1978) transferred the authority of the Secretary of the Treasury to issue exemptions under section 4975 of the Code, with certain enumerated exceptions, to the Secretary of Labor. As a result, the Secretary of Labor now possesses authority under section 4975(c)(2) of the Code as well as under 408(a) of ERISA to issue individual and class exemptions from the prohibited transaction rules of ERISA and the Code.

Prohibited Transaction Class Exemption (PTE) 97-41, which was finalized in 1997 in response to an application submitted on behalf of Federated Investors, permits an employee benefit plan to purchase shares of a registered open-end investment company (mutual fund) in exchange for plan assets transferred from a collective investment fund (CIF) maintained by a bank or plan adviser, even though the bank or plan advisor is the investment advisor for the mutual fund and also serves as a fiduciary for the plan, provided that the purchase and transfer is in connection with a complete withdrawal of the plan's investment in the CIF and certain other conditions are met.

Among other conditions, the exemption requires the bank or plan advisor to provide an independent fiduciary of the plan with advance written notice of the proposed transfer and full written disclosure of information concerning the mutual fund, including current prospectus; disclosure of the investment advisory and other fees the plan will be charged or pay to the bank or any unrelated third party, including the nature and extent of any differential between the rates of the fees; the reasons why the bank or plan advisor considers the in-kind transfers appropriate for the plan; and a statement of whether there are any limitations applicable to the bank with respect to which plan assets may be invested in the mutual fund and, if so, the nature of such limitations; and the identity of securities that will have to be valued for the transfer. The independent fiduciary must given prior written approval of the transfer (and written approval of any electronic transmission of subsequent confirmations from the bank or plan advisor); and the bank or advisor must send written (or electronic, if approved) confirmation of the transfer. Subsequent to a transfer, the bank or plan advisor must provide the plan with updated prospectuses at least annually for mutual funds in which the plan remains invested; the bank or plan advisory must also provide, upon the independent fiduciary's request, a report or statement of all fees paid by the mutual fund to the bank or plan advisor, which may be in the form of the most recent financial report.

The information collection request is a set of third-party disclosures. Respondents are not required to submit information to the Department. Availability of the exemption is conditioned on the bank's or plan advisor's delivery of advance notice to the independent fiduciary of a plan concerning the withdrawal of the plan's assets from a CIF, and written (or electronic) confirmation to the same fiduciary after the completion of each transaction involving the transfer of assets. The notice and confirmation requirements incorporated in the class exemption are intended to protect the interests of plan participants and beneficiaries.

Agency: Employee Benefits Security Administration.

Type of Review: Extension of currently approved collection.

Title: Acquisition and Sale of Trust REIT Shares by Individual Account Plans Sponsored by Trust REITs.

OMB Number: 1210-0124.

Frequency: On occasion; Annually; and Quarterly.

Type of Response: Recordkeeping and Third party disclosure.

Affected Public: Business or other for-profit and Not-for-profit institutions.

Number of Respondents: 45.

Number of Annual Responses: 104,545.

Estimated Annual Time Per Respondent: Approximately 105 hours.

Total Burden Hours: 4,733.

Total Annualized capital/startup costs: $0.

Total Annual Costs (operating/maintaining systems or purchasing services): $39,690.

Description: The Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (Code) provide that the Secretary of Labor and the Secretary of Treasury, respectively, may grant exemptions from certain prohibited transaction provisions under ERISA and the Code. Section 408(a) of ERISA authorizes the Secretary of Labor to grant administrative exemptions from the restrictions of section 406 of ERISA, while section 4975(c)(2) of the Code authorizes the Secretary of Treasury or his delegate to grant exemptions from the prohibitions of section 4975(c)(1).

Reorganization Plan No. 4 of 1978 (43 FR 47713, October 17, 1978, effective on December 31, 1978) transferred the authority of the Secretary of the Treasury to issue exemptions under section 4975 of the Code, with certain enumerated exceptions, to the Secretary of Labor. As a result, the Secretary of Labor now possesses authority under section 4975(c)(2) of the Code as well as under 408(a) of ERISA to issue individual and class exemptions from the prohibited transaction rules of ERISA and the Code.

Prohibited Transaction Exemption 04-07, issued by the Department in 2004, permits an individual account pension plan sponsored by a real estate investment trust (REIT) that is organized as a business trust under State law (Trust REIT), or by its affiliates, to purchase, hold and sell publicly traded shares of beneficial interest in the Trust REIT. Such purchases, holdings, and sales would otherwise be prohibited under sections 406 of ERISA and 4975 of the Code.

The class exemption requires, among other conditions, that the Trust REIT (or its agent) provide the person who has authority to direct acquisition or sale of REIT shares with the most recent prospectus, quarterly report, and annual report concerning the Trust REIT immediately before an initial investment in the Trust REIT. The person with such authority may be, under the terms of the plan, either an Start Printed Page 38663independent fiduciary or a participant exercising investment rights pertaining to his or her individual account under the plan. Updated versions of the reports must be provided to the directing person as subsequently published. The exemption further requires the plan to maintain records concerning investments in a Trust REIT, subject to appropriate confidentiality procedures, for a period of six years and make them available to interested persons including the Department and participants and beneficiaries. The confidentiality procedures must be designed to protect against the possibility that an employer may exert undue influence on participants regarding share-related transactions, and the participants and beneficiaries of the plan must be provided with a statement describing the confidentiality procedures in place and the fiduciary responsible for monitoring these procedures.

The information collection requirements of the exemption are intended to protect the interests of Plan participants and beneficiaries by ensuring that Plan participants, Plan fiduciaries, and employers and employee organizations with employees and members covered by a Plan of the Trust REIT or one of its employer affiliates are informed about the plan's transactions involving Trust REIT shares and can monitor compliance with the conditions of the exemption. In addition, the disclosure requirements provide fiduciaries with sufficient information on which to decide whether to invest in Trust REIT shares and whether to continue such investments. The Department and the IRS, as well as the other specified interested persons, also can rely on the recordkeeping requirement to oversee compliance with the conditions of the exemption.

Start Signature

Ira L. Mills,

Departmental Clearance Officer.

End Signature End Preamble

[FR Doc. E6-10633 Filed 7-6-06; 8:45 am]

BILLING CODE 4510-29-P