Prohibited Transaction Exemptions and Grant of Individual Exemptions Involving: 2010-26, PNC Financial Services Group, Inc. (PNC or the Applicant), D-11456; and 2010-27, The Finishing Trades Institute of the Mid-Atlantic Region (the Plan), L-11609, 56564-56568 [2010-23058]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 75, Number 179 (Thursday, September 16, 2010)]
[Notices]
[Pages 56564-56568]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-23058]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration


Prohibited Transaction Exemptions and Grant of Individual 
Exemptions Involving: 2010-26, PNC Financial Services Group, Inc. (PNC 
or the Applicant), D-11456; and 2010-27, The Finishing Trades Institute 
of the Mid-Atlantic Region (the Plan), L-11609

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 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.

PNC Financial Services Group, Inc. (PNC or the Applicant)
Located in Pittsburgh, Pennsylvania
[Prohibited Transaction Exemption 2010-26;
Application No. D-11456]

Exemption

Section I--Exemption for Receipt of Fees

    In connection with the investment in an open-end investment company 
(a Fund(s)), as defined, below, in Section III, by certain employee 
benefit plans (Client Plan(s)) for which PNC (PNC or the Applicant), as 
defined below, serves as a fiduciary and is a party in interest with 
respect to such Client Plan, the restrictions of sections 406(a)(1)(D) 
and 406(b) of the Act and the sanctions resulting from the application 
of section 4975 of the Code, by reason of section 4975(c)(1)(D) through 
(F) \1\ of the Code, shall not apply, effective February 1, 2008 to:
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    \1\ For purposes of this exemption reference to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.

    ``(a) the receipt of fees by PNC and its affiliate PNC Capital 
Advisors, Inc. (PCA) from the Funds in connection with the 
investment by the Client Plans in shares of the Funds where PNC or 
its affiliate PCA acts as an investment advisor for such Funds; and
    ``(b) the receipt of fees by PNC or its affiliates from the 
Funds in connection with providing certain secondary services, as 
defined below, (Secondary Services) to such Funds in which a Client 
Plan invests;

[[Page 56565]]

provided that the conditions of Section II are met.''

Section II--General Conditions

    (a) PNC, which serves as a fiduciary for a Client Plan, satisfies 
any one (but not all) of the following:
    (1) A Client Plan invested in a Fund does not pay any plan-level 
investment management fee, investment advisory fee, or similar fee 
(Plan-Level Fee(s)) to PNC or its affiliates with respect to any of the 
assets of such Client Plan which are invested in shares of such Fund 
for the entire period of such investment (the Offset Fee Method). This 
condition does not preclude the payment of investment advisory fees by 
the Funds to PNC under the terms of an investment management agreement 
adopted in accordance with section 15 of the Investment Company Act of 
1940 (the ``1940 Act'');
    (2) A Client Plan invested in the Funds pays an investment 
management fee or similar fee based on total Client Plan assets from 
which a credit has been subtracted representing such Client Plan's pro 
rata share of investment advisory fees paid by the Funds to PNC (the 
Subtraction Fee Method). If, during any fee period for which a Client 
Plan has prepaid its investment management or similar fee, the Client 
Plan purchases shares of such Fund, the requirement of this Section 
II(a)(2) shall be deemed to have been met with respect to such prepaid 
fee if, by a method reasonably designed to accomplish the same, the 
amount of the prepaid fee that constitutes the fee with respect to plan 
assets invested in shares of such Fund (i) is anticipated and 
subtracted from the prepaid fee at the time of payment of such fee, 
(ii) is returned to the Client Plan no later than during the 
immediately following fee period, or (iii) is offset against the 
prepaid fee for the immediately following fee period or for the fee 
period immediately following thereafter. For purposes of this Section 
II(a)(2), a fee shall be deemed to have been prepaid for any fee period 
if the amount of such fee is calculated as of a date not later than the 
first day of such period; or
    (3) A Client Plan invested in a Fund receives a ``credit'' \2\ (the 
Credit Fee Method) of such Plan's proportionate share of all fees 
charged to the Funds by PNC for investment advisory or similar 
services, on a date which is no later than one business day after 
receipt of such fees by PNC from the Fund. The crediting of all such 
fees to such Client Plan by PNC is audited by an independent accountant 
firm (the Auditor) on at least an annual basis to verify the proper 
crediting of such fees to such Client Plan.
    (a) The price paid or received by a Client Plan for shares in a 
Fund is the net asset value per share at the time of the transaction, 
as defined, below in Section III, and is the same price which would 
have been paid or received for such shares by any other investor in 
such Fund at that time;
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    \2\ PNC represents that it would be accurate to describe ``the 
credit'' as a ``credited dollar amount'' to cover situations in 
which the credited amount'' is used to acquire additional shares of 
a Fund, rather than being held by a Client Plan in the form of cash. 
It is represented that the standard practice is to reinvest the 
``credited dollar amount'' in additional shares of the same Fund 
with respect to which the fees were credited.
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    (b) PNC, including any officer or director of PNC, does not 
purchase or sell shares of the Funds from or to any Client Plan;
    (c) A Client Plan does not pay sales commissions in connection with 
any purchase or sale of shares of a Fund, and a Client Plan does not 
pay redemption fees in connection with any sale of shares to a Fund, 
unless
    (1) such redemption fee is paid only to a Fund, and
    (2) The existence of such redemption fee is disclosed in the 
prospectus for such Fund in effect both at the time of the purchase of 
such shares and at the time of such sale;
    (d) The combined total of all fees received by PNC for the 
provision of services by PNC to Client Plans and to Funds in which a 
Client Plan invests, is not in excess of ``reasonable compensation'' 
within the meaning of section 408(b)(2) of the Act;
    (e) PNC does not receive any fees payable pursuant to Rule 12b-1 
under the 1940 Act in connection with the transactions;
    (f) No Client Plan is an employee benefit plan sponsored or 
maintained by PNC;
    (g) A second fiduciary (Second Fiduciary), as defined below in 
Section III, who is acting on behalf of a Client Plan receives, in 
advance of any initial investment by a Plan Client in a Fund, full and 
detailed written disclosure of information concerning such Fund 
including but not limited to:
    (1) A current prospectus for each Fund in which a Client Plan is 
considering investing;
    (2) A statement describing the fees, including the nature and 
extent of any differential between the rates of such fees for:
    (i) Any investment advisory or similar services to be paid by such 
Fund,
    (ii) any Secondary Services to be paid by such Fund to PNC, and
    (iii) all other fees to be charged to or paid by the Client Plan 
and by such Fund;
    (3) The reason why PNC, acting as a fiduciary for such Client Plan, 
considers investment in such Fund to be appropriate for such Client 
Plan;
    (4) A statement describing whether there are any limitations 
applicable to PNC with respect to which assets of a Client Plan may be 
invested in such Fund, and if so, the nature of such limitations; and
    (5) Upon the request of the Second Fiduciary, acting on behalf of a 
Client Plan, a copy of the proposed exemption and/or copy of the final 
exemption, if granted, once such documents are published in the Federal 
Register.
    (h) On the basis of the information described, above, in Section 
II(h), a Second Fiduciary, acting on behalf of a Client Plan, 
authorizes in writing: (1) The investment of the assets of such Client 
Plan in shares of each particular Fund; and (2) the fees received by 
PNC in connection with services provided by PNC to such Fund. Such 
authorization by a Second Fiduciary must be consistent with the 
responsibilities, obligations, and duties imposed on fiduciaries by 
Part 4 of Title I of the Act.
    (i)(1) All authorizations described above, in Section II(i), made 
by a Second Fiduciary, regarding:
    (i) Investments by a Client Plan in a Fund;
    (ii) fees paid to PNC for investment management advisory services 
or similar services; and
    (iii) fees paid for Secondary Services shall be terminable at will 
by the Second Fiduciary, acting on behalf of such Client Plan, without 
penalty to such Client Plan, upon receipt by PNC, acting as fiduciary 
on behalf of such Client Plan, of a written notice of termination. A 
form (the Termination Form), as defined, below, in Section III(j), 
expressly providing an election to terminate the authorizations, 
described, above, in Section II(i), with instructions on the use of 
such Termination Form must be provided to such Second Fiduciary at 
least annually. However, if a Termination Form has been provided to 
such Second Fiduciary, pursuant to Section II(k) and (l), below, then a 
Termination Form need not be provided again, pursuant to this Section 
II(j), unless at least six (6) months but no more than twelve (12) 
months have elapsed, since a Termination Form was provided, pursuant to 
Section II(k) and (l), below.
    With respect to j(1)(i), (ii), (iii) above, all such investments 
and fees shall be terminable at will by the Second

[[Page 56566]]

Fiduciary acting on behalf of such Client Plan.
    (2) The instructions for the Termination Form must include the 
following information:
    (i) The authorization, described above in Section II(i), is 
terminable at will by the Second Fiduciary acting on behalf of a Client 
Plan, without penalty to the Client Plan, upon receipt by PNC of 
written notice from such Second Fiduciary; and
    (ii) Failure by such Second Fiduciary to return the Termination 
Form will be deemed to be an approval by the Second Fiduciary and will 
result in the continued authorization, as described above, in Section 
II(i) of PNC to engage in the transactions described in this proposed 
exemption;
    (j) For a Client Plan invested in a Fund which uses one of the fee 
methods described, above, in Section II(a)(1), (a)(2), or (a)(3) in the 
event of a proposed change from one of the fee methods to another or in 
the event of a proposed increase in the rate of any fee paid by such 
Fund to PNC for any investment advisory service or similar service that 
PNC provides to a Fund over an existing rate for such service or method 
of determining the fee for such service, which had been authorized by 
the Second Fiduciary for such Client Plan, in accordance with Section 
II(i), above, PNC, at least thirty (30) days in advance of the 
implementation of such change and/or such increase, provides a written 
notice (which may take the form of a proxy statement, letter, or 
similar communication that is separate from the prospectus of such Fund 
and which explains the nature and amount of such change from one of the 
fee methods to another or increase in fee) to the Second Fiduciary of 
each Client Plan affected by such change from one fee method to another 
fee method or increase in fee. Such notice shall be accompanied by a 
Termination Form, with instructions on the use of such Termination 
Form, as described, above, in Section II(j).
    (k) In the event of:
    (i) A proposed addition of a Secondary Service for which an 
additional fee is charged; or
    (ii) A proposed increase in the rate of any fee paid by a Fund to 
PNC for any Secondary Service, or
    (iii) A proposed increase in the rate of any fee paid for Secondary 
Services that results from the decrease in the number or kind of 
services performed by PNC for such fee over an existing rate for 
services which had been authorized, in accordance with Section II(i), 
by the Second Fiduciary for a Client Plan invested in such Fund, PNC 
will at least thirty (30) days in advance of the implementation of such 
fee increase or additional service for which an additional fee is 
charged or a decrease in the number or kind of services being 
performed, provide a written notice (which may take the form of a proxy 
statement, letter, or similar communication that is separate from the 
prospectus of such Fund and which explains the nature and amount of the 
additional service for which an additional fee is charged or the nature 
and amount of the increase in fees or the decrease in the number or 
kind of services) to the Second Fiduciary of each Client Plan invested 
in such Fund which is proposing to increase fees or add services for 
which an additional fee is charged or decreasing the number or kind of 
services being performed. Such notice shall be accompanied by a 
Termination Form, with instructions on the use of such Termination 
Form, as described, above in Section II(j);
    (l) On an annual basis, PNC provides the Second Fiduciary of such 
Client Plan invested in a Fund with:
    (1) A copy of the current prospectus for such Fund in which such 
Client Plan invests,
    (2) Upon the request of such Second Fiduciary, a copy of the 
Statement of Additional Information for such Fund which contains a 
description of all fees paid by such Fund to PNC;
    (3) A copy of the annual financial disclosure report which includes 
information about Fund portfolios, as well as the audit findings of an 
independent auditor, within sixty (60) days of the preparation of such 
report; and
    (4) Oral or written responses to inquiries of the Second Fiduciary 
of such Client Plan, as such inquiries arise.
    (m) All dealings between a Client Plan and a Fund are on a basis no 
less favorable to such Client Plan than dealings between such Fund and 
other shareholders invested in such Fund.
    (n) PNC maintains for a period of six (6) years the records 
necessary to enable the persons described, below, in Section II(p) 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 solely because of circumstances beyond the control of PNC, 
the records are lost or destroyed prior to the end of the six-year 
period, and
    (2) No party in interest other than PNC 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 are not maintained or are not available for examination as 
required by Section II(p), below.
    (p)(1) Except as provided in Section II(p)(2) and notwithstanding 
any provisions of section 504(a)(2) of the Act, the records referred to 
in Section II(o) are unconditionally available at their customary 
location for examination during normal business hours by--
    (i) Any duly authorized employee or representative of the 
Department or the Internal Revenue Service,
    (ii) Any fiduciary of a Client Plan who has authority to acquire or 
dispose of shares of a Fund owned by such Client Plan, or any duly 
authorized employee or representative of such fiduciary, and
    (iii) Any participant or beneficiary of a Client Plan or duly 
authorized employee or representative of such participant or 
beneficiary.
    (2) None of the persons described in Section II(p)(1)(ii) and (iii) 
shall be authorized to examine trade secrets of PNC, or commercial or 
financial information which is privileged or confidential.

Section III--Definitions

    For purposes of this exemption:
    (a) The term ``PNC'' means The PNC Financial Services Group, Inc., 
and any affiliate thereof as defined below in paragraph (b) of this 
section.
    (b) An ``affiliate'' of a person includes:
    (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 ``Client Plan'' means any employee benefit plan as 
defined in section 3(3) of the Act; as well as Keogh plans and 
individual retirement accounts, for which PNC is a fiduciary as defined 
in section 3(21) of the Act (excluding any employee benefit plans 
sponsored by PNC or its affiliates).
    (e) The term ``Fund'' or ``Funds'' shall mean the PNC Funds, Inc. 
or any other diversified open-end investment company or companies 
registered under the 1940 Act for which PNC serves as an investment 
advisor, but not sub-advisor, and for which PNC may serve as a 
custodian, dividend disbursing agent, shareholder servicing agent, 
transfer agent, fund accountant, or

[[Page 56567]]

provide some other ``Secondary Service,'' as defined below in Section 
III which has been approved by such Funds.
    (f) The term ``net asset value'' means the amount for purposes of 
pricing all purchases and sales of shares of a Fund calculated by 
dividing the value of all securities, determined by a method as set 
forth in the Fund's prospectus and statement of additional information, 
and other assets belonging to the Fund or portfolio of the Fund, less 
the liabilities charged to each such portfolio or Fund, by the number 
of outstanding shares.
    (g) The term ``relative,'' means a relative as that term is defined 
in section 3(15) of the Act (or a member of the family as that term is 
defined in section 4975(e)(6) of the Code), or a brother, a sister, or 
a spouse of a brother or a sister.
    (h) The term, ``Second Fiduciary(ies),'' means a fiduciary of a 
Client Plan who is independent of and unrelated to PNC. For purposes of 
this exemption, the Second Fiduciary will not be deemed to be 
independent of and unrelated to PNC if:
    (1) Such fiduciary, directly or indirectly controls, through one or 
more intermediaries, is controlled by, or is under common control with 
PNC;
    (2) Such fiduciary, or any officer, director, partner, employee, or 
relative of the fiduciary, is an officer, director, partner, or 
employee of PNC (or is a relative of such persons); or
    (3) Such fiduciary, directly or indirectly, receives any 
compensation or other consideration for his or her personal account in 
connection with any transaction described in this exemption.
    If an officer, director, partner, or employee of PNC (or relative 
of such persons) is a director of such Second Fiduciary, and if he or 
she abstains from participation in (i) the choice of such Client Plan's 
investment advisor, (ii) the approval of any such purchase or sale 
between such Client Plan and a Fund, and (iii) the approval of any 
change in fees charged to or paid by such Client Plan in connection 
with any of the transactions described in Section I above, then Section 
III(h)(2), above, shall not apply.
    (i) The term, ``Secondary Service(s),'' means a service which is 
provided by PNC to a Fund, including custodial, accounting, and/or 
administrative services. The fees for providing Secondary Services to a 
Fund are paid to PNC by such Fund.
    (j) The term, ``Termination Form,'' means the form supplied to a 
Second Fiduciary which expressly provides an election to such Second 
Fiduciary to terminate on behalf of a Client Plan the authorization 
described, above, in Section II(i).
    (k) The term, ``business day,'' means any day that
    (1) PNC is open for conducting all or substantially or 
substantially all of its banking functions, and
    (2) The New York Stock Exchange (or any successor exchange) is open 
for trading.
    Effective Dates: This exemption is effective as of February 1, 
2008.

Written Comments

    In the Notice of Proposed Exemption (the Notice), the Department of 
Labor (the Department) invited all interested persons to submit written 
comments and requests for a hearing on the proposed exemption within 
forty-five (45) days of the date of the publication of the Notice in 
the Federal Register on April 30, 2010. All comments and requests for a 
hearing from interested persons were due by June 14, 2010; however, 
because the Applicant required additional time to mail the Notice to 
all interested parties, the Department extended the due date to June 
17, 2010 which was reflected in the Notice. The Department received no 
requests for a hearing. The Department received one written comment 
from the Applicant on June 15, 2010. The Applicant later clarified its 
written comments in a letter dated July 6, 2010.
1. Scope of Relief
    The Applicant requested that the scope of relief provided in the 
Notice be expanded to include all of section 406(a) of the Act instead 
of only section 406(a)(1)(D) of the Act. The Applicant represents that 
the Department has provided relief from section 406(a) in similar prior 
exemptions. In response, it is the Department's view that the PNC Funds 
are not parties in interest under section 3(14) of the Act with respect 
to the Plan. Accordingly, the Department has determined not to provide 
the requested relief under section 406(a)(1)(A) of the Act. A similar 
analysis would apply to sections 406(a)(1)(B) and (C) of the Act. 
Therefore, the Department has decided to limit relief to sections 
406(a)(1)(D) and 406(b) of the Act.
2. Credit Fee Method Implementation
    The Applicant also requested that the Department clarify the timing 
as to when the Applicant implemented the Credit Fee Method. The 
Applicant represents that although the Applicant had systems in place 
to implement the Credit Fee Method, it implemented the Credit Fee 
Method for investments in the PNC Funds in June 2010. The Department, 
in order to clarify this issue, has added the following sentence to the 
end of Representation 11 as follows:

    ``PNC represents that it had systems in place as of February 8, 
2008 to implement the Credit Fee Method; however, at that time PNC did 
not use the Credit Fee Method for Client Plan investments in the 
Funds.''

    In addition, due to a publication error, part of the first sentence 
of Footnote 3 in Representation 11 was missing. The first sentence of 
Footnote 3 in Representation 11 should have read:

    ``It is the view of PNC that the Credit Fee Method is covered by 
PTE 77-4.''
3. Summary Prospectus
    The Applicant also requested the Department's views on whether, for 
purposes of the exemptive relief requested, PNC may use a current 
``summary prospectus'' to satisfy the conditions contained in section 
II(h)(1) and II(m)(1) of the Notice. The condition in section II(h)(1) 
of this grant requires that the Second Fiduciary, who is acting on 
behalf of a Client Plan, receives in advance of any initial investment 
in a Fund, among other things, a current ``prospectus.'' The condition 
in section II(m)(1) of this grant also requires that, on an annual 
basis, PNC provides the Second Fiduciary of each Client Plan invested 
in a Fund with such Fund's current ``prospectus.'' The Applicant also 
requested the Department's views on whether, for purposes of the 
individual exemptive relief granted to PNC in Prohibited Transaction 
Exemption 2009-22 (PTE 2009-22), it may use a current ``summary 
prospectus'' to satisfy the conditions contained in section II(h)(1) 
and II(m)(1) of PTE 2009-22. The Department notes that: (1) Neither 
exemption defines the term ``prospectus;'' (2) the ``summary 
prospectus'' includes, among other things, fee and expense information 
and a legend containing an internet address and telephone number for 
obtaining a ``prospectus'' for the relevant Fund and other information 
free of charge; and (3) the exemptive relief is conditioned upon the 
affected plans receiving a separate fee disclosure, in advance of any 
initial investment and upon the occurrence of certain specified events, 
which fee disclosure contains more detailed information than the 
general fee information required to be included in a ``prospectus'' or 
``summary prospectus.'' Accordingly, the Department wishes to clarify 
solely for purposes of section II(h)(1) and section II(m)(1) of this 
grant and section II(h)(1)

[[Page 56568]]

and section II(m)(1) of PTE 2009-22 that wherever a ``prospectus'' is 
required to be provided by those sections, such requirement can also be 
satisfied by the provision of a ``summary prospectus.'' \3\
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    \3\ The Department notes that consistent with the prudence 
requirements of section 404, a fiduciary has a duty to consider all 
available relevant information regardless whether the information is 
actually provided to the fiduciary.

    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 30, 2010 at 
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75 FR 22853.

    For Further Information Contact: Mr. Anh-Viet Ly of the Department 
at (202) 693-8648. (This is not a toll-free number.)

The Finishing Trades Institute of the Mid-Atlantic Region (the Plan)
Located in Philadelphia, Pennsylvania
[Prohibited Transaction Exemption 2010- ; Exemption Application No. 
L-11609].

Exemption

    The restrictions of sections 406(a)(1)(A) through (D) and 
406(b)(1) and (b)(2) of the Act shall not apply to the proposed loan 
of approximately $1,081,416 (the Loan) to the Plan by the 
International Union of Painters and Allied Trades, District Council 
21 (the Union), a party in interest with respect to the Plan, for 
(1) the repayment of an outstanding loan (the Original Loan) made to 
the Plan by Commerce Bank and currently held by TD Bank, both of 
which are unrelated parties; and (2) to facilitate the expansion of 
a training facility (the Facility) that is situated on certain real 
property (the Land) \4\ owned by the Plan, provided that the 
following conditions are met:
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    \4\ Unless otherwise stated herein, the Facility and the Land 
are together referred to as the ``Property.''
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    (a) The terms and conditions of the Loan are at least as 
favorable to the Plan as those which the Plan could have obtained in 
an arm's length transaction with an unrelated party;
    (b) The Plan's trustees determine in writing that the Loan is 
appropriate for the Plan and in the best interests of the Plan's 
participants and beneficiaries;
    (c) A qualified, independent fiduciary that is acting on behalf 
of the Plan (the Qualified Independent Fiduciary) reviews the terms 
of the Loan and determines that the Loan is an appropriate 
investment for the Plan and protective of and in the best interests 
of the Plan and its participants and beneficiaries;
    (d) In determining the fair market value of the Property that 
serves as collateral for the Loan, the Qualified Independent 
Fiduciary (1) obtains an appraisal of the Property from a qualified, 
independent appraiser (the Qualified Independent Appraiser); and (2) 
ensures that the appraisal prepared by the Qualified Independent 
Appraiser is consistent with sound principles of valuation;
    (e) The Qualified Independent Fiduciary monitors the Loan, as 
well as the terms and conditions of the exemption, and takes 
whatever actions are necessary and appropriate to safeguard the 
interests of the Plan and its participants and beneficiaries under 
the Loan;
    (f) The Loan is repaid by the Plan solely with the funds the 
Plan retains after paying all of its operational expenses; and
    (g) The Plan does not pay any fees or other expenses in 
connection with the servicing or administration of the Loan.
    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 2, 2010 at 75 
FR 38561.

    For Further Information Contact: Brian Shiker of the Department, 
telephone (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 transaction 
which is the subject of the exemption.

    Signed at Washington, DC, this 10th day of September, 2010.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security 
Administration, U.S. Department of Labor.
[FR Doc. 2010-23058 Filed 9-15-10; 8:45 am]
BILLING CODE 4510-29-P