Prohibited Transaction Class Exemption 92-6: Sale of Individual Life Insurance or Annuity Contracts By a Plan

Federal Register / Vol. 67, No. 170 / Tuesday, September 3, 2002 / Notices
your workers are employed or which are
members of your association.
(3) A statement indicating whether
your firm/entity is willing to participate
in these reviews by providing
information requested by the
Commission.
(4) A statement of the likely effects of
the termination of the suspended
investigations on the Domestic Industry
in general and/or your firm/entity
specifically. In your response, please
discuss the various factors specified in
section 752(a) of the Act (19 U.S.C.
1675a(a)) including the likely volume of
subject imports, likely price effects of
subject imports, and likely impact of
imports of Subject Merchandise on the
Domestic Industry.
(5) A list of all known and currently
operating U.S. producers of the
Domestic Like Product. Identify any
known related parties and the nature of
the relationship as defined in section
771(4)(B) of the Act (19 U.S.C.
1677)(4)(B)).
(6) A list of all known and currently
operating U.S. importers of the Subject
Merchandise and producers of the
Subject Merchandise in each Subject
Country that currently export or have
exported Subject Merchandise to the
United States or other countries since
1996.
(7) If you are a U.S. producer of the
Domestic Like Product, provide the
following information on your firm’s
operation on that product during
calendar year 2001 (request quantity
data in short tons and value data in U.S.
dollars, f.o.b. plant). If you are a union/
worker group or trade/business
association, provide the information, on
an aggregate basis, for the firms in
which your workers are employed/
which are members of your association.
(a) Production (quantity) and, if
known, an estimate of the percentage of
total U.S. production of the Domestic
Like Product accounted for by your
firm’s(s’) production;
(b) the quantity and value of U.S.
commercial shipments of the Domestic
Like Product produced in your U.S.
plant(s); and
(c) the quantity and value of U.S.
internal consumption/company
transfers of the Domestic Like Product
produced in your U.S. plant(s).
(8) If you are a U.S. importer or a
trade/business association of U.S.
importers of the Subject Merchandise
from the Subject Countries, provide the
following information on your firm’s(s’)
operations on that product during
calendar year 2001 (report quantity data
in short tons and value data in U.S.
dollars). If you are a trade/business
association, provide the information, on

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an aggregate basis, for the firms which
are members of your association.
(a) The quantity and value (landed,
duty-paid but not including
antidumping or countervailing duties)
of U.S. imports and, if known, an
estimate of the percentage of total U.S.
imports of Subject Merchandise from
each Subject Country accounted for by
your firm’s(s’) imports;
(b) the quantity and value (f.o.b. U.S.
port, including antidumping and/or
countervailing duties) of U.S.
commercial shipments of Subject
Merchandise imported from each
Subject Country; and
(c) the quantity and value (f.o.b. U.S.
port, including antidumping and/or
countervailing duties) of U.S. internal
consumption/company transfers of
Subject Merchandise imported from
each Subject Country.
(9) If you are a producer, an exporter,
or a trade/business association of
producers or exporters of the Subject
Merchandise in the Subject Countries,
provide the following information on
your firm’s(s’) operations on that
product during calendar year 2001
(report quantity data in short tons and
value data in U.S. dollars, landed and
duty-paid at the U.S. port but not
including antidumping or
countervailing duties). If you are a
trade/business association, provide the
information, on an aggregate basis, for
the firms which are members of your
association.
(a) Production (quantity) and, if
known, an estimate of the percentage of
total production of Subject Merchandise
in each Subject Country accounted for
by your firm’s(s’) production; and
(b) the quantity and value of your
firm’s(s’) exports to the United States of
Subject Merchandise and, if known, an
estimate of the percentage of total
exports to the United States of Subject
Merchandise from each Subject Country
accounted for by your firm’s(s’) exports.
(10) Identify significant changes, if
any, in the supply and demand
conditions or business cycle for the
Domestic Like Product that have
occurred in the United States or in the
market for the Subject Merchandise in
the Subject Countries since the Order
Date, and significant changes, if any,
that are likely to occur within a
reasonably foreseeable time. Supply
conditions to consider include
technology; production methods;
development efforts; ability to increase
production (including the shift of
production facilities used for other
products and the use, cost, or
availability of major inputs into
production); and factors related to the
ability to shift supply among different

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national markets (including barriers to
importation in foreign markets or
changes in market demand abroad).
Demand conditions to consider include
end uses and applications; the existence
and availability of substitute products;
and the level of competition among the
Domestic Like Product produced in the
United States, Subject Merchandise
produced in the Subject Countries, and
such merchandise from other countries.
(11) (Optional) A statement of
whether you agree with the above
definitions of the Domestic Like Product
and Domestic Industry; if you disagree
with either or both of these definitions,
please explain why and provide
alternative definitions.
Authority: These reviews are being
conducted under authority of title VII of the
Tariff Act of 1930; this notice is published
pursuant to section 207.61 of the
Commission’s rules.
Issued: August 26, 2002.
By order of the Commission.
Marilyn R. Abbott,
Secretary to the Commission.
[FR Doc. 02–22356 Filed 8–30–02; 8:45 am]
BILLING CODE 7020–02–M

DEPARTMENT OF LABOR
Pension and Welfare Benefits
Administration
[Application Number D–10786]

Amendment to Prohibited Transaction
Exemption 92–6 (PTE 92–6) Involving
the Transfer of Individual Life
Insurance Contracts and Annuities
from Employee Benefit Plans to Plan
Participants, Certain Beneficiaries of
Plan Participants, Personal Trusts,
Employers and Other Employee
Benefit Plans
AGENCY: Pension and Welfare Benefits
Administration, U.S. Department of
Labor.
ACTION: Adoption of Amendment to PTE
92–6.
SUMMARY: This document amends PTE
92–6, a class exemption that enables an
employee benefit plan to sell individual
life insurance contracts and annuities
to: (1) A plan participant insured under
such policies; (2) a relative of such
insured participant who is the
beneficiary under the contract; (3) an
employer any of whose employees are
covered by the plan; or (4) another
employee benefit plan, for the cash
surrender value of the contract,
provided certain conditions are met.
The amendment affects, among others,
certain participants, beneficiaries and

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Federal Register / Vol. 67, No. 170 / Tuesday, September 3, 2002 / Notices

fiduciaries of plans engaged in the
described transactions.
DATES: The amendment is effective
February 12, 1992.
FOR FURTHER INFORMATION CONTACT: Mr.
Gary H. Lefkowitz, Office of Exemption
Determinations, Pension and Welfare
Benefits Administration, U.S.
Department of Labor, (202) 693–8540.
(This is not a toll-free number).
SUPPLEMENTARY INFORMATION: On May
10, 2002, notice was published in the
Federal Register (67 FR 31835) of the
pendency before the Department of a
proposed amendment to PTE 92–6 (57
FR 5189, February 12, 1992), which
amended Prohibited Transaction
Exemption 77–8 (PTE 77–8)(42 FR
31574, June 21, 1977). PTE 92–6
provides an exemption from the
restrictions of section 406(a) and
406(b)(1) and (b)(2) of the Employee
Retirement Income Security Act of 1974
(ERISA or the Act) and from the taxes
imposed by section 4975(a) and (b) of
the Internal Revenue Code of 1986 (the
Code), by reason of section 4975(c)(1)(A)
through (E) of the Code.
The amendment to PTE 92–6 adopted
by this notice was requested in an
exemption application filed by the
Chicago, Illinois law firm of
Sonnenschein, Nath & Rosenthal on
behalf of the General American Life
Group (the Applicant). The Department
is adopting the amendment pursuant to
section 408(a) of ERISA and section
4975(c)(2) of 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
For the sake of convenience, the
entire text of PTE 92–6, as amended, has
been reprinted with this notice.
A. Description of the Exemption
Section I of PTE 92–6 permits the sale
of an individual life insurance or
annuity contract by an employee benefit
plan to: (1) A plan participant; (2) a
relative of such insured participant who
is the beneficiary under the contract; (3)
an employer any of whose employees
are covered by the plan; or (4) another
employee benefit plan, if: (a) such
participant is the insured under the
contract; (b) such relative is a ‘‘relative’’
as defined in section 3(15) of the Act (or
a ‘‘member of the family’’ as defined in
section 4975(e)(6) of the Code), or is a
brother or sister of the insured (or a
spouse of such brother or sister), and the
beneficiary under the contract; (c) the
1 Section 102 of the Reorganization Plan No. 4 of
1978 (5 U.S.C. App. 1 [1996]) generally transferred
the authority of the Secretary of the Treasury to
issue administrative exemptions under section 4975
of the Code to the Secretary of Labor.

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contract would, but for the sale, be
surrendered by the plan; (d) with
respect to sales of the policy to the
employer, a relative of the insured or
another plan, the participant insured
under the policy is first informed of the
proposed sale and is given the
opportunity to purchase such contract
from the plan, and delivers a written
document to the plan stating that he or
she elects not to purchase the policy
and consents to the sale by the plan of
such policy to such employer, relative
or other plan; (e) the amount received
by the plan as consideration for the sale
is at least equal to the amount necessary
to put the plan in the same cash
position as it would have been had it
retained the contract, surrendered it,
and made any distribution owing to the
participant on his vested interest under
the plan; and (f) with regard to any plan
which is an employee welfare benefit
plan, such plan must not, with respect
to such sale, discriminate in form or in
operation in favor of plan participants
who are officers, shareholders or highly
compensated employees. Section II of
PTE 92–6 amended PTE 77–8 to provide
that the relief for transactions described
in part I would be available, effective
October 22, 1986, for plan participants
who are owner-employees (as defined in
section 401(c)(3) of the Code) or
shareholder-employees (as defined in
section 1379 of the Internal Revenue
Code of 1954 as in effect on the day
before the date of enactment of the
Subchapter S Revision Act of 1982), if
the conditions set forth in part I are met.
The Department, at the request of the
Applicant, has amended PTE 92–6 in
order to expand the coverage of the
exemption to include the sale by an
employee benefit plan (the Plan) of an
individual life insurance or annuity
contract to a personal or private trust
(the Trust) established by or for the
benefit of an individual who is a
participant in the Plan and the insured
under the policy, or by or for the benefit
of one or more relatives (as defined in
Section I(2) of PTE 92–6) of the
participant.2 The amendment is
effective February 12, 1992.
2 Section 406(a)(1)(A) of the Act prohibits a direct
or indirect sale or exchange of any property
between a Plan and a party in interest. Section
406(a)(1)(D) of the Act prohibits a transfer to, or use
by or for the benefit of, a party in interest, of any
assets of the Plan. In most cases, the participant will
be a party in interest with respect to the Plan under
section 3(14)(H) of the Act, as an employee of an
employer any of whose employees are covered by
the Plan. In some cases, the participant or relative
will also be a party in interest under section
3(14)(A) or (E) as a fiduciary of the Plan, or as an
owner of 50% or more of the employer maintaining
the Plan. The Trust would be a party in interest
under section 3(14)(G) of the Act if 50% or more
of the beneficial interest of such Trust is owned or

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B. Written Comments and Hearing
Requests
The notice of pendency gave
interested persons an opportunity to
comment or to request a hearing on the
proposed amendment. No requests for a
hearing were received.
The Department received one
comment letter with respect to the
notice of proposed amendment. The
comment letter strongly supported the
Department’s amendment to PTE 92–6,
but also requested that the Department
clarify two points with respect to PTE
92–6.
The comment letter first requested
that the Department confirm the
commentator’s interpretation that, in a
participant directed defined
contribution plan, when a life insurance
policy is sold at the participant’s
direction, the requirement of condition
I(3) has been satisfied that ‘‘the contract
would, but for the sale, be surrendered
by the plan.’’ The Department agrees
that, in the case of a participant in a
defined contribution plan that provides
for participant direction, if the
participant has discretion and control of
his/her account in the plan, and has
exercised that authority, without being
subject to any undue influence, in
accordance with plan provisions for
individually-directed investment of
participant accounts, to sell a life
insurance contract in compliance with
the conditions of PTE 92–6, the
requirement of condition I(3) of the
exemption would be satisfied.
The comment letter also requested
that the Department confirm its
interpretation set out in Advisory
Opinion 98–07A (issued September 24,
1998) to the effect that PTE 92–6 applies
to a policy that insures both the
participant’s life and the life of another
individual in whom the participant has
an insurable interest. In Advisory
Opinion 98–07A, the Department
concluded that, to the extent state law
and pertinent plan provisions permit
the acquisition and holding of an
individual life insurance contract
covering the life of the participant and
the participant’s spouse, that such a
contract would constitute ‘‘an
individual life insurance contract’’ for
purposes of PTE 92–6. The Department
confirms that PTE 92–6 applies to life
insurance contracts that cover the life of
the participant and the participant’s
spouse. However, since the Department
does not have sufficient information
concerning contracts covering the life of
the participant and the life of another
individual in whom the participant has
held by persons described in section 3(14)(A) or (E)
of the Act.

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Federal Register / Vol. 67, No. 170 / Tuesday, September 3, 2002 / Notices
an insurable interest, other than the
participant’s spouse, it is unable to
conclude that PTE 92–6 would apply to
such contracts.
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 ERISA and section 4975(c)(2)
of the Code does not relieve a fiduciary,
or other party in interest or disqualified
person with respect to a plan, from
certain other provisions of ERISA and
the Code, including any prohibited
transaction provisions to which the
exemption does not apply and the
general fiduciary responsibility
provisions of section 404 of ERISA
which require, among other things, that
a fiduciary discharge his or her duties
respecting the plan solely in the
interests of the participants and
beneficiaries of the plan; 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 does not extend to
transactions prohibited under section
406(b)(3) of the Act or section
4975(c)(1)(F) of the Code;
(3) In accordance with section 408(a)
of ERISA and 4975(c)(2) of the Code, the
Department makes the following
determinations:
(i) The amendment set forth herein is
administratively feasible;
(ii) The amendment set forth herein is
in the interests of plans and of their
participants and beneficiaries; and
(iii) The amendment set forth herein
is protective of the rights of participants
and beneficiaries of plans;
(4) The amendment is applicable to a
particular transaction only if the
transaction satisfies the conditions
specified in the exemption; and
(5) The amendment is supplemental
to, and not in derogation of, any other
provisions of ERISA and the Code,
including statutory or administrative
exemptions and transitional 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.
Exemption
Accordingly, PTE 92–6 is amended
under the authority of section 408(a) of
the Act and section 4975(c)(2) of the
Code and in accordance with the
procedures set forth in 29 CFR 2570,
Subpart B (55 FR 32836, 32847, August
10, 1990), as set forth below:

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I(a). Effective January 1, 1975, the
restrictions of sections 406(a), 406(b)(1)
and 406(b)(2) of the Act, and the taxes
imposed by section 4975(a) and (b) of
the Code, by reason of section
4975(c)(1)(A) through (E) of the Code,
shall not apply to the sale of an
individual life insurance or annuity
contract by an employee benefit plan to:
(1) A participant under such plan; (2) a
relative of a participant under such
plan; (3) an employer any of whose
employees are covered by the plan; or
(4) another employee benefit plan,
provided that the conditions in section
II are met.
I(b). Effective February 12, 1992, the
restrictions of sections 406(a), 406(b)(1)
and 406(b)(2) of the Act, and the taxes
imposed by section 4975(a) and (b) of
the Code, by reason of section
4975(c)(1)(A) through (E) of the Code,
shall not apply to the sale of an
individual life insurance or annuity
contract by an employee benefit plan to
a trust established by or for the benefit
of one or more of the persons described
in (1) or (2) of section I(a) above,
provided that the conditions in section
II are met.
II. (a) Such participant is the insured
under the contract;
(b) such relative is a ‘‘relative’’ as
defined in section 3(15) of the Act (or
a ‘‘member of the family’’ as defined in
section 4975(e)(6) of the Code), or is a
brother or sister of the insured (or a
spouse of such brother or sister), and
such relative or trust is the beneficiary
under the contract;
(c) the contract would, but for the
sale, be surrendered by the plan;
(d) with respect to sales of the policy
to the employer, a relative of the
insured, a trust, or another plan, the
participant insured under the policy is
first informed of the proposed sale and
is given the opportunity to purchase
such contract from the plan, and
delivers a written document to the plan
stating that he or she elects not to
purchase the policy and consents to the
sale by the plan of such policy to such
employer, relative, trust or other plan;
(e) the amount received by the plan as
consideration for the sale is at least
equal to the amount necessary to put the
plan in the same cash position as it
would have been had it retained the
contract, surrendered it, and made any
distribution owing to the participant on
his vested interest under the plan; and
(f) with regard to any plan which is
an employee welfare benefit plan, such
plan must not, with respect to such sale,
discriminate in form or in operation in
favor of plan participants who are
officers, shareholders or highly
compensated employees.

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III. Effective October 22, 1986, the
exemption provided for transactions
described in part I is available for plan
participants who are owner-employees
(as defined in section 401(c)(3) of the
Code) or shareholder-employees as
defined in section 1379 of the Internal
Revenue Code of 1954 as in effect on the
day before the date of enactment of the
Subchapter S Revision Act of 1982) if
the conditions set forth in part II are
met.
Signed at Washington, DC, this 28th day of
August, 2002.
Ivan L. Strasfeld,
Director, Office of Exemption Determinations,
Pension and Welfare Benefits Administration,
Department of Labor.
[FR Doc. 02–22376 Filed 8–30–02; 8:45 am]
BILLING CODE 4510–29–P

NATIONAL SCIENCE FOUNDATION
Notice of Intent To Seek Approval To
Establish an Information Collection
National Science Foundation.
Notice and request for
comments.
AGENCY:
ACTION:

SUMMARY: The National Science
Foundation (NSF) is announcing plans
to request clearance of this collection. In
accordance with the requirement of
section 3506(c)(2)(A) of the Paperwork
Reduction Act of 1995 (Pub. L. 104–13),
we are providing opportunity for public
comment on this action. After obtaining
and considering public comment, NSF
will prepare the submission requesting
that OMB approve clearance of this
collection for no longer than three years.
DATES: Written comments on this notice
must be received by November 4, 2002
to be assured of consideration.
Comments received after that date will
be considered to the extent practicable.
FOR ADDITIONAL INFORMATION OR
COMMENTS: Contact Suzanne H.

Plimpton, Reports Clearance Officer,
National Science Foundation, 4201
Wilson Boulevard, Suite 295, Arlington,
Virginia 22230; telephone (703) 292–
7556; or send e-mail to
[email protected]. Individuals who use
a telecommunications device for the
deaf (TDD) may call the Federal
Information Relay Service (FIRS) at 1–
800–877–8339 between 8 a.m. and 8
p.m., Eastern time, Monday through
Friday. You also may obtain a copy of
the data collection instrument and
instructions from Ms. Plimpton.
SUPPLEMENTARY INFORMATION: Title of
Collection: Grantee Reporting
Requirements for Science and

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