Proposed Exemptions From Certain Prohibited Transaction Restrictions, 61932-61957 [2010-24892]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 75, Number 193 (Wednesday, October 6, 2010)]
[Notices]
[Pages 61932-61957]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-24892]



[[Page 61931]]

-----------------------------------------------------------------------

Part III





Department of Labor





-----------------------------------------------------------------------



Employee Benefits Security Administration



-----------------------------------------------------------------------



 Proposed Exemptions From Certain Prohibited Transaction Restrictions; 
Notice

Federal Register / Vol. 75 , No. 193 / Wednesday, October 6, 2010 / 
Notices

[[Page 61932]]


-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Employee Benefits Security Administration


Proposed Exemptions From Certain Prohibited Transaction 
Restrictions

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice of Proposed Exemptions.

-----------------------------------------------------------------------

SUMMARY: This document contains notices of pendency before the 
Department of Labor (the Department) of proposed exemptions 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).
    This notice includes the following proposed exemptions: D-11576, 
Bank of America, NA et al.; D-11591, Citigroup Inc. and its affiliates 
(Citigroup), the Citigroup 401(k) Plan, the Citibuilder 401(k) Plan for 
Puerto Rico the (Citibuilder Plan) and collectively with the Citigroup 
401(k) Plan, the Participant Directed Plans, the Citigroup Pension Plan 
(and collectively with the Participant Directed Plans, the Plans) (the 
Applicants); and D-11611, The West Coast Bancorp 401(k) Plan (the 
Plan); et al.

DATES: All interested persons are invited to submit written comments or 
requests for a hearing on the pending exemptions, unless otherwise 
stated in the Notice of Proposed Exemption, within 45 days from the 
date of publication of this Federal Register Notice.

ADDRESSES: Comments and requests for a hearing should state: (1) The 
name, address, and telephone number of the person making the comment or 
request, and (2) the nature of the person's interest in the exemption 
and the manner in which the person would be adversely affected by the 
exemption. A request for a hearing must also state the issues to be 
addressed and include a general description of the evidence to be 
presented at the hearing.
    All written comments and requests for a hearing (at least three 
copies) should be sent to the Employee Benefits Security Administration 
(EBSA), Office of Exemption Determinations, Room N-5700, U.S. 
Department of Labor, 200 Constitution Avenue, NW., Washington, DC 
20210. Attention: Application No. ----, stated in each Notice of 
Proposed Exemption. Interested persons are also invited to submit 
comments and/or hearing requests to EBSA via e-mail or FAX. Any such 
comments or requests should be sent either by e-mail to: 
``moffitt.betty@dol.gov'', or by FAX to (202) 219-0204 by the end of 
the scheduled comment period. The applications for exemption and the 
comments received will be available for public inspection in the Public 
Documents Room of the Employee Benefits Security Administration, U.S. 
Department of Labor, Room N-1513, 200 Constitution Avenue, NW., 
Washington, DC 20210.
    Warning: If you submit written comments or hearing requests, do not 
include any personally-identifiable or confidential business 
information that you do not want to be publicly-disclosed. All comments 
and hearing requests are posted on the Internet exactly as they are 
received, and they can be retrieved by most Internet search engines. 
The Department will make no deletions, modifications or redactions to 
the comments or hearing requests received, as they are public records.

SUPPLEMENTARY INFORMATION:

Notice to Interested Persons

    Notice of the proposed exemptions will be provided to all 
interested persons in the manner agreed upon by the applicant and the 
Department within 15 days of the date of publication in the Federal 
Register. Such notice shall include a copy of the notice of proposed 
exemption as published in the Federal Register and shall inform 
interested persons of their right to comment and to request a hearing 
(where appropriate).
    The proposed exemptions were requested in applications filed 
pursuant to section 408(a) of the Act and/or section 4975(c)(2) of the 
Code, and in accordance with procedures set forth in 29 CFR Part 2570, 
Subpart B (55 FR 32836, 32847, August 10, 1990). 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 requested to the Secretary of Labor. 
Therefore, these notices of proposed exemption are issued solely by the 
Department.
    The applications contain representations with regard to the 
proposed exemptions which are summarized below. Interested persons are 
referred to the applications on file with the Department for a complete 
statement of the facts and representations.

Bank of America, NA et al. Located in Charlotte, North Carolina. 
Exemption Application Number D-11576

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Employee Retirement Income Security 
Act of 1974, as amended (ERISA or the Act), and section 4975(c)(2) of 
the Internal Revenue Code of 1986, as amended (the Code), and in 
accordance with the procedures set forth in 29 CFR Part 2570, Subpart B 
(55 FR 32836, 32847, August 10, 1990).\1\
---------------------------------------------------------------------------

    \1\ For purposes of this proposed exemption, references to 
section 406 of ERISA should be read to refer as well to the 
corresponding provisions of section 4975 of the Code.
---------------------------------------------------------------------------

Section I. Covered Transactions

    If the proposed exemption is granted, the restrictions of sections 
406(a) and 406(b) of the Act and the sanctions resulting from the 
application of 4975 of the Code, by reason of section 4975(c)(1)(A) 
through (F) of the Code, shall not apply: (a) Effective January 1, 
2009: (1) To the operation of the RPT Stable Value Agreements, pursuant 
to the terms thereof, and to the receipt of a fee by BANA in connection 
therewith; and (2) to transactions under the RPT Stable Value 
Agreements (the RPT Wrap-Related Transactions); (b) effective April 23, 
2009: (1) To the execution of the RPT Special Purpose Wrap Agreement; 
(2) to the operation of the RPT Special Purpose Wrap Agreement, 
pursuant to the terms thereof, and to the receipt of a fee by BANA in 
connection therewith; and (3) to transactions under the RPT Special 
Purpose Wrap Agreement (the Special Purpose Wrap-Related Transactions); 
and (c) effective January 1, 2009: (1) To the operation of the 
Separately Managed Account Wrap Agreements, pursuant to the terms 
thereof, and to the receipt of a fee by BANA in connection therewith; 
and (2) to transactions under the Separately Managed Account Wrap 
Agreements (the Separately Managed Account Wrap-Related Transactions), 
provided that the following conditions, as applicable, have been met.

Section II. Conditions Applicable to Transactions Described in Section 
I(a)

    (a) Effective June 1, 2009, B1ackRock Advisors may change the 
formula for calculating the Crediting Rate with respect to the Global 
Wrap Account or the Global Buy and Hold Account (either, a Global 
Account) only after obtaining prior approval from:
    (1) Each financial institution that has entered into a wrap 
agreement covering assets included in the applicable Global Account; 
and

[[Page 61933]]

    (2) The Independent Fiduciary, after BlackRock Advisors has 
provided the Independent Fiduciary with any information that the 
Independent Fiduciary has reasonably requested in determining whether 
to approve the proposed change in the Crediting Rate formula;
    (b) BANA may not reset a Crediting Rate attributable to a Global 
Account more frequently than on a monthly basis unless:
    (1) A crediting rate attributable to a non-BANA wrap agreement 
covering assets in the same Global Account is reset more frequently 
than on a monthly basis; and
    (2) BANA resets the Crediting Rate at the same time, and in the 
same manner, as such other non-BANA wrap agreement crediting rate;
    (c) Each financial institution entering into a wrap agreement 
covering assets included in a Global Account obtains information from 
BlackRock Advisors on a monthly basis regarding the investments 
included in such Global Account. This information must be sufficiently 
detailed to enable the financial institution to independently verify 
that the applicable Crediting Rate was calculated properly;
    (d) The fee received by BANA in connection with the BANA RPT Global 
Wrap Agreement or the BANA RPT Buy and Hold Wrap Agreement will be 
reasonable relative to market conditions and risks, as determined 
annually by the Independent Fiduciary. Notwithstanding the above, in no 
event shall the fee received by BANA under the BANA RPT Global Wrap 
Agreement or the BANA RPT Buy and Hold Wrap Agreement exceed the 
maximum percentage fee paid to any other financial institution pursuant 
to a wrap agreement covering assets in the applicable Global Wrap 
Account or the Global Buy and Hold Account, as relevant;
    (e) The Trustee may trigger immunization with respect to the BANA 
RPT Global Wrap Agreement only if:
    (1) The Trustee triggers immunization with respect to another wrap 
agreement covering assets in the Global Wrap Account immediately prior 
to, or at the same time as, the Trustee triggers immunization with 
respect to the BANA RPT Global Wrap Agreement; or
    (2) A financial institution not affiliated with BANA triggers 
immunization with respect to assets in the Global Wrap Account 
immediately prior to, or at the same time as, the Trustee triggers 
immunization with respect to the BANA RPT Global Wrap Agreement; or
    (3) The Trustee determines that BANA is no longer financially 
responsible and the Independent Fiduciary determines that immunization 
is in the interests of Plans invested in RPT;
    (f) Assets held in RPT will be valued at their current fair market 
value on a daily basis utilizing the following BlackRock firm-wide 
approved valuation process:
    (1) Valuations will be performed without regard to whether the 
security is held in RPT or another account or commingled vehicle 
advised by BlackRock;
    (2) Valuations will be based on the price that may be obtained in a 
current arm's-length sale to an unrelated third party;
    (3) BlackRock will first obtain prices for securities from 
independent third-party sources, including index providers, broker-
dealers and independent pricing services. BlackRock will maintain a 
hierarchy that prioritizes pricing sources by asset class or type and 
will value securities based on the price generated by the highest 
priority source. The hierarchy may vary by asset class or type, but not 
for a particular security;
    (4) If no third-party sources are available to value a security or 
the price generated by the third-party falls outside specified 
statistical norms and after review BlackRock determines that such price 
is not reliable, BlackRock will value the security using an analytic 
methodology in accordance with its written valuation policy. If 
BlackRock values a security using such analytic methodology, the 
Independent Fiduciary will review that methodology and valuation and 
will obtain its own valuation if it deems appropriate; and
    (5) Values determined in accordance with (1) through (4) above will 
be provided to each financial institution that has entered into a wrap 
agreement covering assets in the Global Wrap Account or the Global Buy 
and Hold Account, as the case may be;
    (g) Each financial institution that has entered into a wrap 
agreement covering assets in the Global Wrap Account and/or the Global 
Buy and Hold Account, including BANA, may raise an objection regarding 
a particular security's valuation, regardless of the source of such 
valuation. Once an objection is raised, wrap providers other than BANA 
may determine a new valuation for such security and BANA must accept 
this new valuation, provided that BANA is given reasonably satisfactory 
documentation supporting the new valuation;
    (h) Prior to a Plan sponsor's decision to include RPT as an 
investment option for its Plan's participants, the Trustee will provide 
the Plan sponsor with the following:
    (1) RPT's Declaration of Trust (as amended and restated as of April 
23, 2009, and as may be further amended from time to time);
    (2) A purchase agreement to be entered into by the Plan fiduciary 
and the Trustee;
    (3) Upon request, a copy of the Annual Report for RPT and a fact 
sheet describing RPT's investment objective and strategy and a 
performance analysis; and
    (4) A copy of this proposed exemption or, if granted, a copy of the 
final exemption;
    (i) The Trustee will provide the following ongoing disclosures to 
Plan fiduciaries regarding a Plan's investment in RPT:
    (1) The Annual Report for RPT; and
    (2) The Plan's Investment Summary and Accounting;
    (j) Plan participants will be provided the following disclosures 
regarding their investment in RPT:
    (1) Prior to and following their initial investment, information 
describing the investment objectives and performance of RPT; and
    (2) A statement, delivered at least quarterly, that sets forth the 
value of the participant's account contributions, withdrawals, 
distributions, loans and change in value since the prior statement;
    (k) The Independent Fiduciary must receive a copy of any RPT Stable 
Value Agreement amendment prior to the effective date of such 
amendment. The Independent Fiduciary must review and approve the 
amendment prior to its implementation, except that no such review and 
approval shall be required for an amendment that is purely ministerial 
in nature;
    (l) The dollar amount of Global Wrap Account assets covered by the 
BANA RPT Global Wrap Agreement shall not exceed 50% of the total assets 
held in such Account, and the terms associated with the BANA RPT Global 
Wrap Agreement at the time such Agreement was entered into, amended, 
modified or renewed shall be no less favorable to RPT than the terms 
associated with comparable agreements with unrelated parties;
    (m) The dollar amount of Global Buy and Hold Account assets covered 
by the BANA RPT Buy and Hold Wrap Agreement shall not exceed 60% of the 
total assets held in such Account, and the terms associated with the 
BANA RPT Buy and Hold Wrap Agreement at

[[Page 61934]]

the time such Agreement was entered into, amended, modified or renewed 
shall be no less favorable to RPT than the terms associated with 
comparable agreements with unrelated parties; and
    (n) Any RPT Wrap-Related Transaction that involves: (1) the 
exercise by BANA, the Trustee, or BlackRock Advisors of their rights 
under the RPT Stable Value Agreements; or (2) the performance by BANA, 
the Trustee, or BlackRock of their obligations under the RPT Stable 
Value Agreements, shall be subject to prior review and approval by the 
Independent Fiduciary if such exercise or performance affects the 
Crediting Rate or would otherwise have an adverse impact on the book 
value of a participant's or beneficiary's investment in RPT.

Section III. Conditions Applicable to Transactions Described in Section 
I(b)

    (a) Below Investment Grade Securities will be transferred 
automatically to a RPT account (the Type D1 Account) and covered by the 
RPT Special Purpose Wrap Agreement. The RPT Special Purpose Wrap 
Agreement shall cover up to in the aggregate $200 million of the 
following:
    (1) Book value of Downgraded Securities that have not been sold; 
and/or
    (2) Aggregate unamortized realized losses with respect to sold 
Downgraded Securities;
    (b) The Minimum Ratio shall be maintained;
    (c) The total book value of the assets included in the Type D1 
Account and covered by the RPT Special Purpose Wrap, including the 
Permitted Securities, will not exceed $700 million without the prior 
written consent of the Trustee, BlackRock Advisors, BANA and the 
Independent Fiduciary;
    (d) The crediting rate with respect to the Type D1 Account (the 
Type D1 Account Crediting Rate) shall be 0.00% at times when there are 
unamortized losses (whether realized or unrealized) attributable to 
Downgraded Securities in the Type D1 Account, calculated in accordance 
with the provisions of the RPT Special Purpose Wrap Agreement. In the 
event there are no unamortized losses (i.e., neither realized nor 
unrealized) recorded to the Type D1 Account which relate to Downgraded 
Securities, the Type D1 Account Crediting Rate shall be determined in 
accordance with a formula that has been reviewed by the Independent 
Fiduciary;
    (e) Effective June 1, 2009, BlackRock Advisors may change the 
formula for calculating the Type D1 Account Crediting Rate only after 
obtaining prior approval from BANA and the Independent Fiduciary. 
BlackRock Advisors shall provide the Independent Fiduciary with any 
information it may reasonably request in determining whether to approve 
a proposed change in the Type D1 Account Crediting Rate formula;
    (f) The Type D1 Account Crediting Rate will not be reset more 
frequently than on a monthly basis;
    (g) Permitted Securities will have a maximum duration of 3.5 years 
at the time of purchase;
    (h) The fee charged by BANA for the RPT Special Purpose Wrap will 
be reasonable relative to market conditions and risks, as determined 
annually by the Independent Fiduciary. Notwithstanding the above, in no 
event shall the fee received by BANA under the BANA RPT Global Wrap 
Agreement or the BANA RPT Buy and Hold Wrap Agreement exceed the 
maximum percentage fee paid to any other financial institution pursuant 
to a wrap agreement covering assets in the applicable Global Wrap 
Account or the Global Buy and Hold Account, as relevant, as determined 
annually by the Independent Fiduciary. Notwithstanding the above, in no 
event shall such fee exceed 15 basis points per annum of the total book 
value of assets included in the Type D1 Account;
    (i) Assets covered by the RPT Special Purpose Wrap Agreement will 
be valued in accordance with the methodology specified in section II(f) 
above, provided, however, that if the Independent Fiduciary obtains a 
valuation, such valuation will be binding on BANA;
    (j) The Trustee has the right to immunize the portfolio of 
securities included in the Type D1 Account only if BANA elects to 
terminate the RPT Special Purpose Wrap Agreement, or if BANA defaults 
under the RPT Special Purpose Wrap Agreement. If an immunization 
election becomes effective (the RPT Special Purpose Immunization Date), 
the RPT Special Purpose Wrap Agreement would terminate on the later of: 
(1) The date that is the number of years after the RPT Special Purpose 
Immunization Date which does not extend beyond the modified duration 
(as defined in the RPT Special Purpose Wrap Agreement) of the 
underlying assets on the RPT Special Purpose Immunization Date; or (2) 
the first date on which the market value of the underlying assets 
equals or exceeds the book value under the wrap agreement;
    (k) No Below Investment Grade Securities will be added to the RPT 
Special Purpose Wrap Agreement after April 23, 2011, unless otherwise 
agreed by BANA, the Trustee, and the Independent Fiduciary. No party to 
the RPT Special Purpose Wrap Agreement is obligated to amend or extend 
the RPT Special Purpose Wrap Agreement;
    (l) The tasks performed by the Independent Fiduciary will include:
    (1) Determining whether the RPT Special Purpose Wrap Agreement and 
the portfolio arrangement for the Type D1 Account (including the wrap 
fee payable to BANA, the Minimum Ratio, the prefunding of the RPT 
Special Purpose Wrap Agreement and the formula for resetting the Type 
D1 Account Crediting Rate) are prudent and in the best interest of 
participants and beneficiaries of Plans investing in RPT;
    (2) Reviewing valuations generated by BlackRock (in connection with 
the RPT Special Purpose Wrap Agreement) in any situation where 
BlackRock is unable to obtain a reliable valuation from independent 
third party sources. If, after such review, the Independent Fiduciary 
deems appropriate, the Independent Fiduciary will obtain an independent 
valuation which will be binding on the parties;
    (3) Reviewing and monitoring whether the Type D1 Account Crediting 
Rate is calculated correctly;
    (4) Monitoring the addition and removal of Below Investment Grade 
Securities and any changes in Permitted Securities in the Type D1 
Account, and opining, in a written report, whether such addition, 
removal or change is appropriate;
    (5) If BANA objects to the calculation by the Trustee or its 
designee of the Type D1 Account Crediting Rate or the information used 
to calculate the Type D1 Account Crediting Rate, the Independent 
Fiduciary will make a conclusive and binding determination regarding 
such calculation or information;
    (6) Determining whether to approve any proposed change to the Type 
D1 Account Crediting Rate formula, including any proposed adjustment to 
the duration component of the Type D1 Account Crediting Rate formula;
    (7) No later than April 30, 2011, working with BANA, BlackRock, and 
the Trustee to review and determine whether additional Below Investment 
Grade Securities may be transferred to the Type D1 Account and be 
covered by the RPT Special Purpose Wrap Agreement;
    (8) Making an initial and, thereafter, annual determination 
regarding whether the fee described in paragraph (h) of this section is 
reasonable relative to the specific attributes of the RPT Special 
Purpose Wrap Agreement;

[[Page 61935]]

    (9) Making an annual determination regarding whether the continued 
maintenance of the RPT Special Purpose Wrap Agreement is appropriate 
and in the interest of Plans;
    (10) Making a monthly determination regarding whether the 
appropriate Type D1 Crediting Rate formula is being used; and
    (11) Reviewing and approving any amendment to a RPT Special Purpose 
Wrap Agreement consistent with paragraph (n) of this section;
    (m) Any Special Purpose Wrap-Related Transaction that involves: (1) 
The exercise by BANA, the Trustee, or BlackRock Advisors of their 
rights under the RPT Special Purpose Wrap Agreement; or (2) the 
performance by BANA, the Trustee, or BlackRock of their obligations 
under the RPT Special Purpose Wrap Agreement, shall be subject to prior 
review and approval by the Independent Fiduciary if such exercise or 
performance affects the Type D1 Crediting Rate or otherwise would have 
an adverse impact on the book value of a participant's or beneficiary's 
investment in RPT; and
    (n) The Independent Fiduciary must receive a copy of any RPT 
Special Purpose Wrap Agreement amendment prior to the effective date of 
such amendment. The Independent Fiduciary must review and approve the 
amendment prior to its implementation, except that no such review and 
approval shall be required for an amendment that is purely ministerial 
in nature.

Section IV. Conditions Applicable to Transactions Described in Section 
I(c)

    (a) Effective June 1, 2009, BlackRock Advisors may change the 
formula for calculating the Crediting Rate with respect to each 
Separately Managed Account Wrap Agreement only after obtaining prior 
approval from BANA and the Independent Fiduciary. BlackRock Advisors 
shall provide the Independent Fiduciary with any information it may 
reasonably request in determining whether to approve a proposed change 
in the Crediting Rate formula;
    (b) Effective June 1, 2009, the Crediting Rate will be reset no 
more frequently than on a monthly basis;
    (c) BANA will not receive a fee under the BANA Wal-Mart Separately 
Managed Wrap Agreement in excess of the maximum percentage fee received 
by any other Tier 3 Wrap Provider in the Wal-Mart Separately Managed 
Account; and BANA will not receive a fee under the BANA Hertz 
Separately Managed Wrap Agreement in excess of the maximum percentage 
fee received by any other financial institution that has entered into a 
wrap agreement covering assets in the Hertz Separately Managed Account;
    (d) Assets covered under each Separately Managed Account Wrap 
Agreement will be valued in accordance with the same methodology 
specified in section II(f) above; provided, however, that if BANA 
objects to the valuation of any asset, the Independent Fiduciary will 
make a binding determination of the value of the asset;
    (e) The tasks performed by the Independent Fiduciary will include:
    (1) Conducting a monthly review of the Crediting Rate, including, 
confirming: (A) The book value of the portfolio of assets wrapped by 
each Separately Managed Account Wrap Agreement; (B) the valuation of 
securities; (C) the duration of securities; (D) the market yield of 
securities; and (E) that the Crediting Rate formula was calculated 
properly;
    (2) Reviewing and approving any proposed amendment to a Separately 
Managed Wrap Agreement consistent with paragraph (i) below;
    (3) Reviewing any exercise of contract provisions by any of BANA, 
BlackRock Advisors or, in the case of the BANA Wal-Mart Separately 
Managed Wrap Agreement, the Trustee, and analyze its potential impact 
on investors;
    (4) Evaluating any changes to the fees paid to BANA under each 
Separately Managed Account Wrap Agreement to determine reasonableness 
relative to market conditions and risks; and
    (5) Providing quarterly reports to BlackRock Advisors and to the 
named fiduciaries of the Wal-Mart Plan and the Hertz Plan. These 
reports must certify that the Independent Fiduciary has reviewed the 
factors described above and state whether BlackRock Advisors has 
complied with all requirements of the contract. The Independent 
Fiduciary will inform the named fiduciaries of a Plan if it believes 
that BANA or BlackRock Advisors has taken any actions that are not in 
the best interests of the participants and beneficiaries in the Wal-
Mart Plan or the Hertz Plan, as relevant;
    (f) The Separately Managed Account Wrap Agreements shall authorize 
the Independent Fiduciary to:
    (1) Review and approve any proposed changes in the formula for 
calculating the Crediting Rate, prior to implementation of any such 
change;
    (2) If BlackRock Advisors generates its own valuation, review the 
valuation, and if the Independent Fiduciary deems appropriate, obtain 
an independent valuation, which shall be binding on the parties, 
subject to BANA's right to raise an objection to any valuation;
    (3) If BANA objects to the valuation of any asset, make a binding 
determination of the value of the asset;
    (g) The named fiduciaries (or their authorized representatives) for 
the Wal-Mart Plan have the right to terminate BlackRock Advisors, as 
investment manager for the Wal-Mart Separately Managed Account, on 90 
days' written notice. The named fiduciaries (or their authorized 
representatives) for the Hertz Plan have the right to terminate 
B1ackRock Advisors as investment manager for the Hertz Separately 
Managed Account, on 30 days' written notice;
    (h) Any Separately Managed Account Wrap-Related Transaction that 
involves: (1) The exercise by BANA, the Trustee, or BlackRock Advisors 
of their rights under a Separately Managed Account Wrap Agreement; or 
(2) the performance by BANA, the Trustee, or BlackRock of their 
obligations under a Separately Managed Wrap Agreement: shall be subject 
to prior review and approval by the Independent Fiduciary if such 
exercise or performance affects the Crediting Rate or otherwise would 
have an adverse impact on the book value of a participant's or 
beneficiary's investment in RPT;
    (i) The Independent Fiduciary must receive a copy of any amendment 
contemplated for a Separately Managed Wrap Agreement. The Independent 
Fiduciary must review and approve the amendment prior to its 
implementation, except that no such review and approval shall be 
required for an amendment that is purely ministerial in nature; and
    (j) BlackRock may not terminate a Separately Managed Account Wrap 
Agreement without the prior approval of the Independent Fiduciary.

Section V. General Conditions

    (a) BlackRock Advisors shall maintain in the United States the 
records necessary to enable the persons described in (b) below to 
determine whether the conditions of this exemption, if granted, were 
met, except that:
    (1) If the records necessary to enable the persons described in (b) 
below to determine whether the conditions of the exemption have been 
met are lost or destroyed, due to circumstances beyond the control of 
BlackRock Advisors, 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 BlackRock Advisors shall be 
subject to the civil penalty that may be assessed under section 502(i) 
of the Act or to the taxes imposed by sections 4975(a) and

[[Page 61936]]

(b) of the Code if the records have not been maintained or are not 
available for examination as required by paragraph (b) below;
    (b) Except as provided in paragraph (c) of this section V and 
notwithstanding the provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to in section V(a) are 
unconditionally available for examination during normal business hours 
at their customary location to the following persons or an authorized 
representative thereof:
    (1) Any duly authorized employee or representative of the 
Department or the Internal Revenue Service;
    (2) Any fiduciary of a Plan participating in RPT or the Hertz Plan 
or the Wal-Mart Plan;
    (3) Any participant or beneficiary of a Plan participating in RPT 
or the Hertz Plan or the Wal-Mart Plan; or
    (4) The Independent Fiduciary.
    (c) None of the persons described above in paragraphs (2), (3), and 
(4) of paragraph (b) of this section V shall be authorized to examine 
trade secrets of BlackRock, BANA, the Trustee or any of their 
Affiliates, or any commercial or financial information which is 
privileged or confidential. Should BlackRock Advisors refuse to 
disclose information on the basis that such information is exempt from 
disclosure, BlackRock Advisors shall, by the close of the thirtieth 
(30th) day following the request, provide written notice advising that 
person of the reason for the refusal and that the Department may 
request such information; and
    (d) Promptly following any publication of a final exemption in the 
Federal Register, the Trustee or BlackRock Advisors will provide a copy 
of the final exemption to the Plan sponsor of each Plan invested in 
RPT, and to the Plan sponsor of the Hertz Plan, and to the Plan sponsor 
of the Wal-Mart Plan.

Section VI. Definitions

    (a) The term Act means: The Employee Retirement Income Security Act 
of 1974, as amended;
    (b) The term Affiliate means: Any person, directly or indirectly, 
through one or more intermediaries, controlling, controlled by or under 
common control with such person;
    (c) The term BANA means: Bank of America, N.A. and its Affiliates;
    (d) The term BANA Hertz Separately Managed Wrap Agreement means: 
The agreement dated as of July 27, 2007 (and amended effective as of 
December 31, 2008) among BANA, BlackRock Advisors (as investment 
manager for a portion of the assets of the Hertz Plan), and the Bank of 
New York Mellon (the successor by operation of law to Mellon Bank N.A., 
and the trustee of the trust created pursuant to the Hertz Plan), as 
such agreement may be amended from time to time, pursuant to which BANA 
provides a book value benefit responsive facility with respect to a 
portion of the assets held in the Hertz Separately Managed Account;
    (e) The term BANA RPT Buy and Hold Wrap Agreement means: The 
agreement dated as of October 16, 1996, between Barclays Bank PLC and 
the Trustee (as assigned to BANA as of April 1, 1998, and amended 
effective as of December 31, 2008), as such agreement may be amended 
from time to time, pursuant to which BANA provides a book value benefit 
responsive facility with respect to an undivided portion of the assets 
held in the Global Buy and Hold Account;
    (f) The term BANA RPT Global Wrap Agreement means: The agreement 
dated as of May 1, 2004 (and amended effective as of December 31, 2008) 
between BANA and the Trustee, as such agreement may be amended from 
time to time, pursuant to which BANA provides a book value benefit 
responsive facility with respect to an undivided portion of the assets 
held in the Global Wrap Account;
    (g) The term BANA Wal-Mart Separately Managed Wrap Agreement means: 
The agreement dated as of August 19, 2003 (and amended effective as of 
December 31, 2008) between BANA and the Trustee, as such agreement may 
be amended from time to time, pursuant to which BANA provides a book 
value benefit responsive facility with respect to a portion of the 
assets held in the Wal-Mart Separately Managed Account;
    (h) The term Below Investment Grade Security means: Securities that 
cease to be covered by a benefit responsive contract in RPT (other than 
by the RPT Special Purpose Wrap Agreement) solely as a result of a 
downgrade in the credit rating of the security to below Baa3, BBB- or 
BBB- by Moody's Investors Services, Inc., Standard & Poor's Rating 
Group, or Fitch Ratings, respectively; provided, however, that a Below 
Investment Grade Security shall not include any security that is an 
Impaired Security;
    (i) The term BlackRock means: BlackRock, Inc.;
    (j) The term BlackRock Advisors means: BlackRock Investment 
Management, LLC and its Affiliates;
    (k) The term Code means: The Internal Revenue Code of 1986, as 
amended;
    (l) The term Crediting Rate means: The crediting rate described in 
sections II and IV that is used for purposes of determining the accrued 
interest to be added to the book value of an individual's account 
within RPT or the Separately Managed Accounts;
    (m) The term Downgraded Security means: A Below Grade Investment 
Security that is held in the Type D1 Account and covered by the RPT 
Special Purpose Wrap Agreement;
    (n) The term Global Buy and Hold Account means: The book account or 
sub-account maintained within RPT for purposes of identifying certain 
assets relating to the BANA RPT Buy and Hold Wrap Agreement;
    (o) The term Global Wrap Account means: The book account or sub-
account maintained within RPT for purposes of identifying certain 
assets relating to the BANA RPT Global Wrap Agreement;
    (p) The term Hertz Plan means: The Hertz Corporation Income Savings 
Plan;
    (q) The term Hertz Separately Managed Account means: The separately 
managed stable value account advised by BlackRock Advisors on behalf of 
the Hertz Plan;
    (r) The term Impaired Security means: (i) A security with respect 
to which the issuer or guarantor has failed to make one or more 
payments of principal or interest (after giving effect to any 
applicable grace period under the terms of such security or prescribed 
by any change in law, regulation, ruling or other governmental action); 
(ii) a security with respect to which the principal or interest has 
become due and payable before it otherwise would have been due or 
payable other than: (x) By reason of a call or other prepayment of such 
security made in accordance with its terms that does not constitute a 
default under such security, or (y) solely on account of any change in 
law, regulation, ruling or other governmental action; (iii) a security 
where the rate of interest thereon has been reset other than: (x) 
Pursuant to the original terms of such security, or (y) solely on 
account of any change in law, regulation, ruling or other governmental 
action; or (iv) a security with respect to which the issuer becomes 
insolvent or institutes or has instituted against it a proceeding 
seeking a judgment of insolvency or bankruptcy or any other relief 
under any bankruptcy or insolvency law or other similar law affecting 
creditor's rights;
    (s) The term Independent Fiduciary means an entity that is: (1) 
Experienced and knowledgeable in ERISA and the transactions and 
arrangements described herein; (ii) independent of and unrelated to 
BANA, Merrill,

[[Page 61937]]

BlackRock, and their Affiliates; and (iii) appointed to act on behalf 
of Plans investing in RPT or the Separately Managed Accounts with 
respect to the matters described herein. The Independent Fiduciary will 
not be deemed to be independent of and unrelated to BANA, Merrill, 
BlackRock, and their Affiliates if: (i) Such fiduciary directly or 
indirectly controls, is controlled by or is under common control with 
BANA, Merrill, or BlackRock; (ii) such fiduciary directly or indirectly 
receives any compensation or other consideration in connection with any 
transaction described in this exemption, if granted, other than for 
acting as an Independent Fiduciary in connection with the transactions 
described herein, provided that 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) the annual gross 
revenue received by the Independent Fiduciary, during any year of its 
engagement, from BANA, Merrill, BlackRock, and any of their Affiliates, 
exceeds five percent (5%) of the Independent Fiduciary's annual gross 
revenue from all sources (for federal income tax purposes) for its 
prior tax year;
    (t) The term Minimum Ratio means: A ratio of 2.5 to 1.0 of market 
value of Permitted Securities to the total unamortized unrealized and 
realized losses with respect to Downgraded Securities;
    (u) The term Permitted Securities means any security that: (i) Is a 
U.S. Treasury debenture, a security issued by the Government National 
Mortgage Association or a security guaranteed by the Federal Deposit 
Insurance Corporation; and (ii) has a modified duration on the date of 
purchase by RPT of 3.5 years or less;
    (v) The term Plan means: An employee benefit plan within the 
meaning of and subject to Title I of the Act or an individual 
retirement account within the meaning of section 4975 of the Code;
    (w) The term RPT means: The Merrill Lynch Retirement Preservation 
Trust maintained by the Trustee;
    (x) The term RPT Special Purpose Wrap Agreement means: The 
agreement dated as of April 23, 2009, as amended, between BANA and the 
Trustee, pursuant to which BANA provides a book value benefit 
responsive facility with respect to an undivided portion of the assets 
held in the Type D1 Account;
    (y) The term RPT Stable Value Agreements means: The BANA RPT Global 
Wrap Agreement and the BANA RPT Buy and Hold Wrap Agreement;
    (z) The term Separately Managed Accounts means: The Hertz 
Separately Managed Account and the Wal-Mart Separately Managed Account;
    (aa) The term Separately Managed Account Wrap Agreements means: The 
BANA Wal-Mart Separately Managed Wrap Agreement and the BANA Hertz 
Separately Managed Wrap Agreement;
    (bb) The term Type D1 Account means: The book account maintained 
within RPT for purposes of identifying Downgraded Securities, including 
unamortized losses with respect to Downgraded Securities that have been 
sold, and Permitted Securities covered by the RPT Special Purpose Wrap 
Agreement;
    (cc) The term Tier 3 Wrap Provider means: A financial institution 
that has entered into a wrap agreement with respect to assets held in 
the Wal-Mart Separately Managed Account that will not be accessed for 
purposes of making benefit payments until after two tiers of buffer 
assets are accessed;
    (dd) The term Trustee means: Bank of America, N.A.;
    (ee) The term Wal-Mart Plan means: The Wal-Mart Profit Sharing and 
401(k) Plan and the Wal-Mart Puerto Rico Profit Sharing and 401(k) 
Plan;
    (ff) The term Wal-Mart Separately Managed Account means: The 
separately managed stable value account advised by BlackRock Advisors 
on behalf of the Wal-Mart Plan;
    (gg) The term Merrill means: Merrill Lynch & Co., Inc. and its 
Affiliates;
    (hh) The term RPT Wrap-Related Transaction means: (1) The 
determination, calculation of and adjustments to the Crediting Rate, 
and any changes to the Crediting Rate formula; (2) valuations of 
securities covered by the BANA RPT Stable Value Agreements; (3) payment 
of wrap fees and any changes to wrap fees; (4) the purchase and sale of 
any security covered by the RPT Stable Value Agreements; (5) BANA's or 
the Trustee's exercise of its right to immunize or terminate the RPT 
Stable Value Agreements; (6) amendments to the RPT Stable Value 
Agreements; and (7) any other exercise by BANA, the Trustee, or 
BlackRock Advisors of their rights, or any performance by BANA, the 
Trustee, or BlackRock of their obligations, under the Stable Value 
Agreements;
    (ii) The term Special Purpose Wrap-Related Transaction means: (1) 
The transfer of Below Investment Grade Securities to the Type D1 
Account; (2) the sale or transfer of Downgraded Securities out of the 
Type D1 Account; (3) the purchase and sale of certain other securities 
permitted to be held in the Type D1 Account; (4) transactions relating 
to maintenance of a minimum ratio of Permitted Securities and 
Downgraded Securities; (5) the determination, calculation of and 
adjustments to the Type D1 Account Crediting Rate and any changes to 
the Type D1 Account Crediting Rate formula; (6) valuations of 
securities covered by the RPT Special Purpose Wrap Agreement; (7) 
payment of and any changes to wrap fees; (8) BANA's or the Trustee's 
exercise of its right to immunize or terminate the RPT Special Purpose 
Wrap Agreement; (9) the entering into and amendment of the RPT Special 
Purpose Wrap Agreement; and (10) any exercise by BANA, the Trustee, or 
BlackRock Advisors of their rights, or any performance by BANA, the 
Trustee, or BlackRock of their obligations, under the RPT Special 
Purpose Wrap Agreement;
    (jj) The term Separately Managed Account Wrap-Related Transaction 
means: (1) The determination, calculation of and adjustments to the 
Crediting Rate, and any changes to the Crediting Rate formula; (2) 
valuations of securities covered by the Separately Managed Account Wrap 
Agreements; (3) payment of wrap fees and any changes to wrap fees; (4) 
the purchase and sale of any security covered by the Separately Managed 
Account Wrap Agreements; (5) BANA's or the Trustee's exercise of its 
right to terminate the Separately Managed Wrap Agreements; (6) 
amendments to the Separately Managed Wrap Agreements; and (7) any other 
exercise by BANA, the Trustee, or BlackRock Advisors of their rights, 
or any performance by BANA, the Trustee, or BlackRock of their 
obligations, under the Separately Managed Wrap Agreements.

Summary of Facts and Representations

1. Applicants

    A. Bank of America, NA (BANA). BANA is a wholly-owned indirect 
subsidiary of Bank of America Corporation (BAC). BANA is engaged in a 
general consumer banking, commercial banking and trust business, 
offering a wide range of commercial, corporate, international, 
financial market, retail and fiduciary banking services.
    B. Merrill Lynch & Co., Inc. (Merrill). Merrill is a holding 
company that, through its affiliates, provides broker-dealer, 
investment banking, financing, advisory, wealth management, insurance, 
lending and related products and services. Merrill's subsidiaries 
included Merrill Lynch Bank & Trust Co., FSB (MLTC). MLTC merged into 
BANA during the fourth quarter of 2009.

[[Page 61938]]

    C. BlackRock, Inc. (BlackRock). BlackRock is an investment 
management firm that, as of December 31, 2008, had approximately $1.307 
trillion in assets under management.
    D. Merrill/BAC Merger. On September 15, 2008, BAC and Merrill 
entered into an agreement and plan of merger pursuant to which, 
effective as of the closing of the transactions contemplated thereby, a 
new, wholly-owned subsidiary of BAC merged with and into Merrill (the 
Merrill/BAC Merger). The Merrill/BAC Merger closed on January 1, 2009, 
at which time Merrill became a wholly-owned subsidiary of BAC and an 
affiliate of BANA.
    E. Merrill/BlackRock Transaction. On September 29, 2006, Merrill 
contributed Merrill Lynch Investment Managers, LLC and various other 
assets and subsidiaries that comprised its investment management 
business to BlackRock. As a result of that transaction (the Merrill/
BlackRock Transaction), from September 29, 2006, though December 26, 
2008, Merrill held an approximate 49% ownership interest in BlackRock 
and held 45% of the outstanding voting securities of BlackRock. 
Pursuant to an exchange agreement between Merrill and BlackRock, dated 
as of December 26, 2008, Merrill reduced its voting interest in 
BlackRock to 4.9%. However, Merrill retained an approximate 49.5% 
equity interest in BlackRock.
    F. BlackRock/Barclays Acquisition. On December 1, 2009, BlackRock 
acquired Barclays Global Investors. As part of this transaction, 
Merrill Lynch's economic ownership of BlackRock was reduced to 34.2%. 
Merrill Lynch currently has a 3.4% voting interest in BlackRock.

2. The Application

    The application submitted by the Applicants includes the following: 
An overview of stable value funds; a description of the Retirement 
Preservation Trust (RPT) stable value fund; a request for retroactive 
and prospective exemptive relief for the operation of, and certain 
transactions under, two stable value wrap agreements entered into 
between MLTC and BANA with respect to certain assets of the RPT; a 
request for retroactive and prospective exemptive relief for the 
execution and operation of, and certain transactions under, a ``special 
purpose'' wrap agreement entered into between MLTC and BANA with 
respect to certain assets of RPT; a request for retroactive and 
prospective exemptive relief for the operation of and transactions 
under two stable value wrap agreements entered into by BANA with 
respect to single plan separately managed accounts advised by BlackRock 
Advisers, a BlackRock affiliate, on behalf of the Hertz Plan and the 
Wal-Mart Plan; and numerous representations by Fiduciary Counselors 
Inc., who is currently the independent fiduciary (the Independent 
Fiduciary) responsible for representing the interests of the Hertz 
Plan, the Wal-Mart Plan, and employee benefit plans (Plans) investing 
in RPT for purposes of the transactions described in this proposed 
exemption, if granted.
Paragraphs 3-9. Applicants' Overview of Stable Value Funds
    3. Stable value funds are intended as conservative investment 
options that provide preservation of principal, liquidity and current 
income at levels that are typically higher than those provided by money 
market funds. To achieve this objective, stable value funds invest in 
traditional and synthetic guaranteed investment contracts (GICs). A 
traditional GIC is an investment contract that guarantees payments on 
deposits at a specified rate and is typically purchased through an 
insurance company. In a synthetic GIC structure, the plan or plan asset 
fund retains title to an underlying portfolio of fixed income assets 
and purchases a ``wrap agreement'' from a bank, insurance company or 
other financial institution. Synthetic GICs permit diversification away 
from the credit risk of an insurance company and provide an opportunity 
to achieve higher returns through an actively managed portfolio.
    4. Under the terms of standard wrap agreements, the wrap provider 
agrees that payments to participants upon retirement, death, 
disability, employment termination, hardship or transfer to a non-
competing investment alternative (generally referred to as ``benefit 
responsive payments'') will be made based on ``book value,'' regardless 
of fluctuations in the market value of the underlying portfolio of 
assets. Book value generally represents the value of deposits (i.e., 
the principal amount invested) plus interest (accumulated at a 
``credited rate'') minus withdrawals and minus adjustments for assets 
that become impaired.\2\ This provision of book value accounting at the 
participant level is the core feature of a stable value fund. However, 
not all payments to participants are made at book value. For example, 
withdrawals arising from a plan's decision to transfer to a competing 
investment alternative, or certain actions initiated by a plan sponsor, 
may be paid at market value, which could be less than book value 
depending on the performance of the underlying investment portfolio.
---------------------------------------------------------------------------

    \2\ The Applicants describe an impaired security as including a 
security with respect to which the issuer or guarantor has failed to 
make one or more payments of principal or interest.
---------------------------------------------------------------------------

    5. A wrap agreement does not guarantee that the book value of the 
wrapped assets will increase by a specified rate of return. Rather, 
interest is credited to the underlying portfolio based on a formula 
that is designed to equal the actual total rate of return on the 
underlying portfolio over time, while smoothing the gains and losses. 
To achieve this smoothing, the difference between the market value of 
the underlying portfolio and the book value of the underlying portfolio 
is amortized through periodic adjustments to the rate at which interest 
is credited to the book value of the underlying portfolio. The rate at 
which interest is credited is determined by means of a formula (the 
crediting rate formula) which takes into account the yield to maturity 
and the duration of the underlying portfolio as well as the ratio of 
the market value of the underlying portfolio to the book value.
    6. Stable value funds generally include: (1) a liquidity fund that 
may or may not be covered by a wrap agreement; and (2) multiple 
portfolios of assets, each covered by a different wrap agreement. The 
wrap agreements include rules establishing the priority for obtaining 
cash for withdrawals from the assets included in the stable value fund. 
Generally, these rules require that withdrawals be first met from new 
cash and then from the liquidity fund. Once these sources are 
exhausted, withdrawals are funded by selling securities in wrapped 
portfolios. Thus, for example, in the event there are significant 
participant withdrawals during a bond-market downturn (an environment 
in which there could be a significant difference between the wrap 
contract book value and the market value of the wrapped assets) the 
stable value fund would first access liquid assets in the fund in an 
attempt to make book value payments. Once those are exhausted, wrapped 
assets would be sold in a pre-specified order to provide liquidity 
needed to make book value payments. If all of the assets covered by a 
particular wrap contract were sold, and if the proceeds were 
insufficient to meet the book value payment, the wrap provider would 
pay the difference between the sale proceeds and the book value under 
the wrap contract before securities in the next lower tier would be 
sold to fund withdrawals.
    7. Wrap agreements can generally be terminated by either party 
(i.e., the

[[Page 61939]]

trustee of the stable value fund or the wrap provider) at market value. 
However, most wrap agreements have immunization provisions whereby if 
the wrap agreement is terminated: (1) More conservative investment 
guidelines (i.e., more conservative than the guidelines in effect 
before the immunization) will apply to the underlying portfolio; and 
(2) the wrap provider will continue to provide book value coverage 
until a date that is generally determined by reference to the 
underlying portfolio. If wrap contracts were terminable by the wrap 
provider on short notice at a time when the market value of the wrapped 
assets was below the wrapped contract book value, and another wrap 
provider could not be found as a substitute, the unwrapped assets would 
be immediately revalued down to their fair market value. Immunization 
is a ``middle ground,'' and provides a means of winding down and 
terminating a contract that otherwise would be ``evergreen.'' 
Immunization effectively permits an open-ended contract to be converted 
to a contract with a deferred termination date. During the immunization 
period, the wrapped contract continues to be ``benefit responsive'' and 
investors continue to receive payments at book value.
    8. Fees for wrap agreements are generally based on a percentage of 
the book value of assets covered by a wrap agreement. The fee is 
frequently paid from the assets of the Plan or Plan asset fund. The 
amount of the fee will vary depending upon the risk taken and the 
market conditions when the wrap agreement is negotiated. Since book 
value payments generally could occur when investments are moved to 
another non-competing investment option, when retirees or other 
inactive participants withdraw money from a plan and when participants 
take in-service withdrawals, book value payments are neither 
predictable nor controllable by the wrap provider. Notwithstanding that 
wrap contracts are structured in a manner that is intended to mitigate 
the risk of higher than expected or untimely participant withdrawals, 
the risk remains greater than zero. Fees for wrap agreements would be 
significantly higher if the wrap provider guaranteed the actual 
performance of the assets wrapped in circumstances beyond those 
described above.
    9. In the current distressed economic climate, the number of 
financial institutions that are willing to enter into wrap agreements 
has declined. To the extent wrap coverage can be obtained, the fees for 
providing such coverage have significantly increased from the fees 
generally available during the past ten years.
Paragraphs 10-22. Applicants' Description of RPT
    10. RPT is a ``stable value'' fund with approximately $11.7 billion 
book value of assets as of December 31, 2008. Payments to participants 
(or beneficiaries) upon retirement, death, disability, employment 
termination, hardship or transfer to a non-competing investment 
alternative are generally based on book value, such that a participant 
in RPT will receive his invested principal and interest at a crediting 
rate, as described in further detail below, even if the actual market 
value of the underlying assets is less.
    11. Bank of America, N.A. (hereinafter, either BANA or the Trustee) 
is the trustee of RPT. BlackRock Advisers, a wholly-owned subsidiary of 
BlackRock, is an investment adviser to RPT. The assets of RPT are 
divided into several portfolios, which include an actively managed 
portfolio with approximately $2.8 billion book value of assets (the 
Actively Managed Account) and a buy and hold portfolio with 
approximately $1.6 billion book value of assets (the Global Buy and 
Hold Account).
    12. In connection with the operation of RPT, the Trustee has 
entered into stable value wrap agreements with banks and other 
financial institutions to provide benefit responsive facilities with 
respect to certain assets of RPT. BANA is one of several financial 
institutions that have entered into stable value wrap agreements with 
the Trustee under RPT. In this regard, prior to the Merrill/BAC Merger, 
BANA had entered into two separate wrap agreements with the Trustee 
under RPT. One agreement, dated May 1, 2004, provides a benefit 
responsive facility with respect to the Actively Managed Account (the 
BANA RPT Global Wrap Agreement). The other agreement, dated October 16, 
1996 (assigned by Barclays Bank PLC to BANA effective April 1, 1998, 
and amended effective as of December 31, 2008), provides a benefit 
responsive facility with respect to the Global Buy and Hold Account 
(the BANA RPT Buy and Hold Wrap Agreement).
    13. The BANA RPT Global Wrap Agreement is one of four wrap 
agreements covering assets in a global wrap account (the Global Wrap 
Account). The Global Wrap Account represents approximately 24% of the 
total book value of the assets of RPT. The assets in the Global Wrap 
Account are actively managed. Under this wrap agreement, which RPT and 
BANA entered into prior to the Merrill/BAC Merger, BANA provide benefit 
responsive coverage for approximately 27% of the book value of the 
assets credited to the Global Wrap Account. Banks and financial 
institutions unaffiliated with BANA have entered into wrap agreements 
with the Trustee providing coverage for approximately 73% of the book 
value of the assets in the Global Wrap Account. The assets in the 
Global Wrap Account covered by the BANA RPT Global Wrap Agreement are 
not segregated from the assets in the Global Wrap Account covered by 
the other wrap agreements. Each wrap agreement covers a specified 
percentage of the book value of the assets in the Global Wrap Account 
as a whole. In this regard, the BANA RPT Global Wrap Agreement provides 
a benefit responsive wrap with respect to approximately 5.5% of the 
total book value of the assets of RPT.
    14. Under the BANA RPT Buy and Hold Wrap Agreement, prior to 
December 31, 2008, BANA provided a benefit responsive facility with 
respect to a segregated ``buy and hold'' portfolio of assets of RPT, 
with no other wrap provider providing a benefit responsive facility 
with respect to this portfolio. Effective as of December 31, 2008, the 
Applicants amended the BANA RPT Buy and Hold Wrap Agreement in a manner 
that: (a) Combined the ``buy and hold'' portfolio covered by the BANA 
RPT Buy and Hold Wrap Agreement with a portfolio of assets of RPT 
covered by a ``buy and hold'' benefit responsive wrap agreement between 
the Trustee and another unaffiliated wrap provider (Global Buy and Hold 
Wrap Provider 2) to form the Global Buy and Hold Account; and (b) 
provides that BANA will provide coverage for 50% of the book value of 
the assets held in the Global Buy and Hold Account. Global Buy and Hold 
Wrap Provider 2's wrap agreement with the Trustee was amended similarly 
to provide that it will provide coverage for 50% of the book value of 
the assets held in the Global Buy and Hold Account. As is the case with 
the BANA RPT Global Wrap Agreement, the assets in the Global Buy and 
Hold Account covered by the BANA RPT Buy and Hold Wrap Agreement are 
not segregated from the assets in the Global Buy and Hold Account 
covered by the other wrap agreement. Each wrap agreement covers a 
specified percentage of the book value of the assets in the Global Buy 
and Hold Account as a whole. The Global Buy and Hold Account as a whole 
represents approximately 13.6% of the book value of the assets of RPT, 
and the BANA RPT Buy and Hold Wrap Agreement

[[Page 61940]]

provides a benefit responsive wrap with respect to approximately 6.8% 
of the total book value of the assets of RPT.\3\
---------------------------------------------------------------------------

    \3\ The Applicants represent that the conversion of the BANA RPT 
Buy and Hold Wrap Agreement into a ``global'' arrangement will not 
affect the Crediting Rate (referenced above and described in further 
detail below) applicable to a participant's account in RPT. In this 
regard, the Applicants state that the conversion involved a purely 
internal adjustment, based upon an objective mathematical formula, 
among BANA and the other wrap provider to reflect the different 
market to book ratios of assets wrapped by BANA and Global Buy and 
Hold Wrap Provider 2 at the time of conversion into the Global Buy 
and Hold Account. The Applicants represent that this adjustment is 
relevant only if the wrap contracts must be accessed to make benefit 
responsive payments and will have no effect on the participants.
---------------------------------------------------------------------------

    15. The BANA RPT Global Wrap Agreement and the BANA RPT Buy and 
Hold Wrap Agreement (the RPT Stable Value Agreements) provide for 
``buffer'' assets that would be liquidated to fund withdrawals from RPT 
before the assets held under the Global Wrap Account or the Global Buy 
and Hold Account are used to fund withdrawals. Under the RPT Stable 
Value Agreements, liquidity requirements for withdrawals would be 
satisfied in the following order:

    (1) Netting withdrawals from deposits whenever possible;
    (2) Simple interest payments and maturing proceeds;
    (3) Type ``A'' assets which include money market and other 
short-term investments as well as any short-term benefit responsive 
floaters;
    (4) Type ``B'' buffer contracts, which will generally be 
accessed on a pro rata basis;
    (5) Level ``C'' contracts on a pro rata basis; and
    (6) Level ``D'' contracts.

The RPT Stable Value Agreements cover Level C assets which, subject to 
a limited temporary exception for certain Plan level withdrawals from 
RPT, will not be accessed until assets in a higher category have all 
been accessed.\4\ A minimum of 8% of RPT's assets must be held as Type 
A and Type B combined. As of June 10, 2009, Type A and Type B assets 
accounted for approximately 13% of the assets of RPT. These ``buffer'' 
assets significantly reduce the likelihood that payments will be 
triggered for any of the wrap providers that wrap assets in the Global 
Wrap Account or the Global Buy and Hold Account.
---------------------------------------------------------------------------

    \4\ The Applicants represent that, to address liquidity concerns 
under RPT, the wrap providers covering assets in RPT have agreed to 
permit the Trustee and BlackRock Advisers to sell a vertical slice 
of securities held in RPT, other than securities covered by the 
Special Purpose Wrap Agreement (discussed below), to fund certain 
Plan-level withdrawals. In this regard, BAC will provide direct 
capital contributions to fund the difference between the market 
value and the book value of the assets attributable to the 
withdrawing Plans in an amount of up to $175 million. BAC's 
commitment to provide liquidity will be in effect for a maximum 
period of two years.
---------------------------------------------------------------------------

    16. The BANA RPT Stable Value Agreements effectively function to 
protect Plans that invest in RPT if there are significant withdrawals 
during negative market conditions. RPT has been structured with the 
expectation that RPT liquidity requirements can be satisfied without 
resort to the assets covered by the wrap contracts. Since RPT was 
established in 1989, the Trustee has never been required to access the 
wrap contracts. Eligible investments made by RPT are generally 
conservative and the buffer assets reduce the likelihood that a payment 
would need to be made under a wrap contract.\5\ Each of the RPT Stable 
Value Agreements also has strict investment guidelines regarding the 
investments that can be held under those contracts. Only in the event 
that there are substantial withdrawals from RPT at a time when the 
assets of RPT are significantly underperforming would there be any risk 
that the assets covered by the wrap contracts would need to be 
liquidated to satisfy withdrawals and a payment from a wrap provider 
would be required. Moreover, in the current distressed economic 
environment, participants in employee benefit plans have generally 
moved assets into conservative investments, such as stable value funds. 
RPT had a net inflow (i.e., contributions in excess of withdrawals) of 
approximately $300 million during the fourth quarter of 2008.
---------------------------------------------------------------------------

    \5\ The Department has not considered the issue, and is 
expressing no opinion herein, regarding whether RPT assets have been 
invested on a conservative basis or in a manner consistent with RPT 
guidelines.
---------------------------------------------------------------------------

    17. The crediting rate under a wrap agreement is the rate of 
interest that is used for purposes of determining the accrued interest 
to be added to the book value of the assets covered by the agreement. 
Under either RPT Stable Value Agreement, such crediting rate (the 
Crediting Rate) was set at the inception of the wrap agreement by 
agreement betw