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abstract: Primary: Individuals or
households. Other: Business or other
for-profit, Not-for-profit institutions.
The data provided by this information
collection request is used by ATF to
determine if articles imported meet the
statutory and regulatory criteria for
importation and if the articles shown on
the permit application have been
actually imported.
(5) An estimate of the total number of
respondents and the amount of time
estimated for an average respondent to
respond: It is estimated that 20,000
respondents will complete a 24-minute
form.
(6) An estimate of the total public
burden (in hours) associated with the
collection: There are 8,000 estimated
annual total burden hours associated
with this collection.
FOR FURTHER INFORMATION CONTACT:
Brenda E. Dyer, Deputy Clearance
Officer, United States Department of
Justice, Policy and Planning Staff,
Justice Management Division, Suite
1600, Patrick Henry Building, 601 D
Street NW., Washington, DC 20530.
Dated: December 19, 2003.
Brenda E. Dyer,
Deputy Clearance Officer, United States
Department of Justice.
[FR Doc. 03–32143 Filed 12–30–03; 8:45 am]
BILLING CODE 4410–FY–M

DEPARTMENT OF LABOR
Employee Benefits Security
Administration
[Prohibited Transaction Exemption 2003–
39; Application No. D–11100]

Class Exemption for the Release of
Claims and Extensions of Credit in
Connection With Litigation
AGENCY: Employee Benefits Security
Administration, Department of Labor.
ACTION: Grant of class exemption.
SUMMARY: This document contains a
final class exemption from certain
prohibited transaction restrictions of the
Employee Retirement Income Security
Act of 1974 (ERISA or the Act) and from
certain taxes imposed by the Internal
Revenue Code of 1986, as amended (the
Code). The exemption permits
transactions engaged in by a plan, in
connection with the settlement of
litigation. This exemption was proposed
in response to concerns raised by the
pension community regarding the
impact of ERISA’s prohibited
transaction provisions on the settlement
of litigation by employee benefit plans
with parties in interest. The exemption

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affects all employee benefit plans, the
participants and beneficiaries of such
plans, and parties in interest with
respect to those plans engaging in the
described transactions.
EFFECTIVE DATE: The exemption is
effective January 1, 1975.
FOR FURTHER INFORMATION CONTACT:
Andrea W. Selvaggio, Office of
Exemption Determinations, Employee
Benefits Security Administration, U.S.
Department of Labor, Room N–5649,
200 Constitution Avenue NW.,
Washington, DC 20210 (202) 693–8540
(not a toll-free number).
SUPPLEMENTARY INFORMATION: On
February 11, 2003, the Department
published a notice in the Federal
Register (68 FR 6953) of the pendency
of a proposed class exemption from the
restrictions of section 406(a)(1)(A), (B)
and (D) of the Act and from the
sanctions resulting from the application
of section 4975 of the Code, by reason
of section 4975(c)(1)(A), (B) and (D) of
the Code. The Department proposed the
class exemption on its own motion,
pursuant to 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 Part 2570 Subpart B (55
FR 32836, August 10, 1990).1
The notice of pendency gave
interested persons an opportunity to
comment or request a public hearing on
the proposal. The Department received
five (5) public comments. Upon
consideration of all the comments
received, the Department has
determined to grant the proposed class
exemption, subject to certain
modifications. These modifications and
the major comments are discussed
below.
Executive Order 12866
Under Executive Order 12866, the
Department must determine whether a
regulatory action is ‘‘significant’’ and
therefore subject to the requirements of
the Executive Order and subject to
review by the Office of Management and
Budget (OMB). Under section 3(f), the
order defines a ‘‘significant regulatory
action’’ as an action that is likely to
result in a rule (1) having an annual
effect on the economy of $100 million
or more, or adversely and materially
affecting a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
1 Section 102 of 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 exemptions under section 4975(c)(2) of the
Code ot the Secretary of Labor. For purposes of this
exemption, references to specific provisions of Title
I of the Act, unless otherwise specified, refer also
to the corresponding provisions of the Code.

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State, local or tribal governments or
communities (also referred to as
‘‘economically significant’’); (2) creating
serious inconsistency or otherwise
interfering with an action taken or
planned by another agency; (3)
materially altering the budgetary
impacts of entitlement grants, user fees,
or loan programs or the rights and
obligations of recipients thereof; or (4)
raising novel legal or policy issues
arising out of legal mandates, the
President’s priorities, or the principles
set forth in the Executive Order.
Pursuant to the terms of the Executive
Order, it was determined that this action
is ‘‘significant’’ under Section 3(f)(4) of
the Executive Order. Accordingly, this
action has been reviewed by OMB.
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501–
3520) (PRA 95), the Department
submitted the information collection
request (ICR) included in the Class
Exemption For Release of Claims and
Extensions of Credit in Connection With
Litigation to the Office of Management
and Budget (OMB) for review and
clearance at the time the proposed class
exemption was published in the Federal
Register (February 11, 2003, 68 FR
6953). The ICR for the proposed class
exemption was combined with the ICR
in PTCE 94–71,2 also approved under
OMB control number 1210–0091,
because of the similarity of subject
matter between the two exemptions. No
comments were received about the
burden estimates and no substantial or
material changes have been made in the
grant of the exemption that would affect
the burden estimates in the proposal.
The approval for each of the ICRs
included in the two exemptions will
expire on April 30, 2006.
In order to grant an exemption
pursuant to section 408(a) of the Act,
the Department must, among other
things, make a finding that the terms of
the exemption are protective of the
rights of participants and beneficiaries
of a plan. To support making such a
finding, the Department normally
imposes certain conditions on
fiduciaries and parties in interest that
may make use of the exemption. The
information collection provisions of the
exemption are among these conditions.
The information collection provisions
are found in sections III(c), (e), (g), and
2 PTCE 94–71, 59 FR 51216, October 7, 1994, as
corrected, 59 FR 60837, November 28, 1994—
Settlement Agreements Resulting From An
Investigation, involving remedial settlements
resulting from an investigation of an employee
benefit plan conducted by the Department.

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(h). These requirements are summarized
as follows:
Written Agreement. The exemption
requires that the terms of the settlement
be specifically described in a written
agreement or consent decree. In the
exemption as granted, the Department
has added that, with regard to
transactions involving assets other than
cash, the assets and their fair market
value, including the date for such
valuation, must be described in writing
in the settlement agreement. Because a
description and valuation of the assets
involved in a settlement transaction are
usually included in a settlement
agreement, the requirement serves only
as a clarification about assets that are
not cash for the parties seeking to use
the class exemption. In addition,
because the Department believes that
the ability to make changes with regard
to a settlement allows more flexibility to
the parties involved, it has also
provided in the final exemption that
certain adjustments, such as the right to
amend the plan, are permissible if
written into the agreement. These two
new requirements are only operative for
certain provisions and under certain
conditions that may or may not be
included in the settlement. Where
appropriate, including the provisions in
the agreement enables interested parties
described in the exemption to verify
that the conditions of the exemption
have been met. However, neither
requirement produces a measurable
burden beyond that which would be
considered usual business practice, and
no additional burden has been
accounted for in this ICR.
Acknowledgement by a Fiduciary. On
a prospective basis, the exemption also
requires that a fiduciary acting on behalf
of the plan acknowledge in writing that
it is a fiduciary with respect to the
settlement of the litigation. Under the
Act, a person that exercises ‘‘any
authority or control respecting
disposition of [the plan’s] assets,’’ is
considered a fiduciary. It is anticipated
that the applicable plan fiduciary will
incorporate this acknowledgement in
the written agreement outlining the
terms and conditions of its retention as
a plan service provider, and already in
existence, as part of usual and
customary business practice. As such, a
written acknowledgement is not
expected to impose any measurable
additional burden.
Recordkeeping. Prospectively, the
exemption requires a plan to maintain
for a period of six years the records
necessary to enable certain persons to
determine whether the conditions of the
exemption had been met. The six-year
recordkeeping requirement is consistent

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with the requirements in section 107 of
the Act as well as general recordkeeping requirements for tax
information under the Code. As such,
the Department has not accounted for a
burden related to recordkeeping for this
exemption.
The exemption may affect employee
benefit plans, the participants and
beneficiaries of those plans, and parties
in interest to plans engaging in the
specified transactions. It is not possible
to estimate the number of respondents
or frequency of response to the
information collection requirements of
the exemption due to the wide variety
of litigation involving plans, parties to
that litigation, and jurisdictions in
which litigation occurs. However, the
lack of an ascertainable number of
settlements does not impact the hour or
cost burden because no additional
burden is associated with the
information collection requirements of
the exemption.
I. Discussion of Comments Received
The comments received by the
Department were generally supportive
of the issuance of a class exemption for
the release of claims and extensions of
credit in connection with litigation.
However, commenters requested
specific modifications to the proposal in
the following areas:
A. Whether the settlement of litigation
with a party in interest is a prohibited
transaction. Several commenters argued
that settling litigation is not a
transaction, and, therefore, not
prohibited under section 406 of the Act.
Other commenters requested that the
Department clarify that only a fiduciary,
a participant or beneficiary, or the
Secretary of Labor, may bring suit to
enforce ERISA’s fiduciary duties. These
commenters asserted that, because the
statute does not identify a plan as a
party with standing to pursue ERISA
litigation, an ERISA claim is not a plan
asset and the release of such an asset, in
exchange for consideration from a party
in interest, would not be a prohibited
sale or exchange of any property under
section 406 of ERISA. Other
commenters asserted that the settlement
of litigation with a party in interest is a
prohibited transaction and urged stricter
conditions for the provision of
retroactive relief because the
Department’s position on this issue was
clearly articulated in its 1995 Opinion
Letter, AO 95–26A (October 17, 1995).
As the Department noted in proposing
this exemption, the fact that a
transaction is subject to an
administrative exemption is not
dispositive of whether the transaction
is, in fact, a prohibited transaction.

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Rather, the exemption is being granted
in response to uncertainty expressed on
the part of plan fiduciaries charged with
the responsibility under ERISA for
determining whether it is in the
interests of a plan’s participants and
beneficiaries to enter into a settlement
agreement with a party in interest. The
comments have confirmed the
Department’s earlier conclusion that
there was considerable uncertainty
surrounding this issue. After
considering all of the comments, the
Department has determined that the
exemption, as revised, appropriately
balances the concerns of these
commenters while allowing plan
fiduciaries to properly carry out their
responsibilities under ERISA.
In response to the comments that
ERISA civil actions for breach of
fiduciary duty may only be brought by
participants, beneficiaries, fiduciaries,
and the Secretary of Labor, the
Department has modified the final class
exemption to include the release of
claims by both the plan and a plan
fiduciary. As the Department noted in
the preamble to the proposed
exemption, many situations in which a
plan settles litigation may not give rise
to a prohibited transaction or may be
covered by an existing statutory or
administrative exemption. For example,
correction of a prohibited transaction
that complies with section 4975(f)(5) of
the Code 3; reimbursement of a plan
without a release of the plan’s claim;
settlement with a service provider of a
dispute related to the provision of
services or incidental goods to the plan
that is otherwise exempt under ERISA
408(b)(2) (See, Opinion Letter, AO 95–
26A); settlements authorized by the
Department pursuant to PTE 94–71 (59
FR 51216, October 7, 1994, as corrected,
59 FR 60837, November 28, 1994); and
judicially approved settlements where
the Labor Department or the Internal
Revenue Service is a party pursuant to
PTE 79–15 (44 FR 26979, May 8, 1979).
In addition, the Department notes that
this class exemption would be available
for settlement agreements relating to an
employer’s failure to timely remit
participant contributions to a plan,
including a collectively bargained
multiemployer or multiple employer
plan, to the extent the conditions
contained in this final exemption are
3 IRC Reg. sec. 141.4975–13 provides that for
purposes of the excise taxes on prohibited
transactions, the definition of the term ‘‘correction’’
under IRC Reg. sec. 53.4941(e)–1 (concerning excise
taxes on self-dealing with foundations) is
controlling.

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met.4 In this regard, the Department
notes that the relief provided by this
exemption is limited to the prohibited
transactions that arise where a plan
trustee and an employer enter into a
settlement involving the employer’s
failure to timely forward participant
contributions to the plan as required
under ERISA. Thus, nothing in this
class exemption should be construed as
exempting any of the prohibited
transactions described in section 406(a)
or 406(b) of ERISA that arise solely in
connection with an employer’s failure to
timely forward participant contributions
to a plan.5
This exemption does not, however,
apply to transactions described in PTE
76–1, A.I. (41 FR 12740, March 26,
1976, as corrected, 41 FR 16620, April
20, 1976) relating to delinquent
employer contributions to a collectively
bargained multiemployer or multiple
employer plan. Finally, PTE 76–1, A.I.
does not extend relief to those
settlement arrangements that arise from
the failure of an employer to timely
forward participant contributions to a
multiemployer or multiple employer
plan.
Section 502(d)(1) of the Act provides
that ‘‘an employee benefit plan may sue
or be sued under this title as an entity.’’
This exemption covers settlement of any
type of suit the plan has brought.
However this exemption is not available
for settlement of claims brought by a
party in interest against a plan. This
exemption does not cover a plan’s
payment of money or other things of
value to a party in interest in exchange
for the dropping of claims against the
plan. As with exchanges made for the
release of claims in favor of the plan, the
Department’s determination in this
regard is not dispositive of whether
such an exchange constitutes a
prohibited transaction.
Finally, the Department notes that a
settlement between a plan and a
participant or beneficiary made solely to
resolve claims against a plan for the
recovery of benefits, by a participant or
beneficiary, may not involve a
prohibited transaction. If the plan makes
payment to a participant who is a party
in interest to settle a benefits dispute,
such payment generally would be
viewed by the Department as the
4 The Department notes that the relief provided
by this exemption would be available for
settlements involving participant or employer
contributions to a single employer plan or to a noncollectively bargained multiple employer plan.
5 In this regard, the failure of an employer to
timely remit contributions made to a plan by an
employee of such employer violates ERISA sections
403(a), 403(c)(1), 404(a)(1)(A), 406(a)(1)(D), and
406(b)(1).

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payment of a plan benefit that would
not trigger the need for an exemption.
As the Supreme Court noted in
Lockheed Corp. v. Spink, 517 U.S. 882,
892–893 (1996), the payment of benefits
is not a prohibited transaction.
B. The plan must obtain advice from
an attorney representing the plan that a
genuine controversy exists. Several
commenters were concerned that
imposing this requirement on past
settlements would effectively limit the
availability of the exemption. These
commenters asserted that, prior to
publication of the Department’s
proposed exemption, many fiduciaries
were unaware that the settlement of
litigation might be considered a
prohibited transaction by the
Department. Even if an attorney was
retained in connection with the
litigation, it is unlikely that the attorney
would have opined as to whether or not
there was a genuine controversy. Other
commenters argued that: the filing of a
lawsuit should be sufficient to find the
existence of a genuine controversy; and
class action settlements should not have
to meet this requirement. Another
commenter suggested retaining the
requirement for a genuine controversy,
but without requiring an attorney’s
determination. This commenter also
suggested that the attorney review be
permitted, but not required, as a safe
harbor in certain situations. He
explained that fiduciaries might find it
prudent and in the interests of
participants and beneficiaries to settle a
frivolous case for a de minimus amount,
rather than incur the cost of litigation.
In this situation, such fiduciaries should
be able to meet the condition of the
class exemption by demonstrating that
they sought and obtained advice of
counsel before settling the case.
Several commenters asserted that the
genuine controversy condition was
unnecessary as the concern raised by
the Department, the possibility of a
collusive settlement, was addressed by
the condition that the settlement is not
an arrangement to benefit a party in
interest. Another commenter suggested
that independent legal advice and a
written agreement or consent decree
should be mandatory for all retroactive
relief because, even if the fiduciary was
unaware of the prohibited transaction
issue, a prudent fiduciary would have
obtained such written documentation
before entering into a settlement.
On the basis of these comments, the
Department has decided to amend the
genuine controversy condition. No
finding of genuine controversy will be
required where the case has been
certified as a class action by the court.
In addition, for transactions entered into

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prior to the publication of the final
exemption, and the first 30 days
thereafter, no attorney review will be
required to determine whether the
genuine controversy exists. On a
prospective basis, attorney review will
be required. In response to a question
from one of the commenters, the
Department confirms that the
independent fiduciary’s in-house
attorneys, as well as its outside counsel,
could provide the appropriate advice
concerning the existence of a genuine
controversy.
C. The decision-making fiduciary has
no interest in any of the parties involved
in the litigation that might affect the
exercise of its best judgment as a
fiduciary (independent fiduciary).
Several commenters suggested that the
Department eliminate the requirement
for an independent fiduciary or, in the
alternative, limit its application to
prospective relief. Among the
suggestions were: limit the requirement
for an independent fiduciary to material
claims where there are no alternative
safeguards; and eliminate the
independent fiduciary requirement
where a judge reviews the fairness of a
class action settlement. Other
commenters expressed concern that the
plan’s directed trustee, even if not a
defendant, should not be considered
sufficiently independent to make
decisions settling a case. They suggested
that an entirely independent fiduciary
be retained. Another commenter argued
that relief in large cases should be
conditioned upon the retention of an
independent fiduciary with no prior
relationship to the plan, or the
defendants, and no future relationship
with the plan for three years after the
engagement.
Except as noted above in connection
with the finding of genuine controversy,
the Department does not believe that it
would be appropriate to make a
distinction between the requirements
applicable to class action settlements
and other settlements. However, in
response to comments, the Department
has decided to eliminate the
requirement that the independent
fiduciary ‘‘negotiate’’ the settlement.
The Department realizes that many of
the settlements to which this class
exemption would apply are class action
settlements. Where the plan is not a lead
plaintiff, the plan fiduciary’s role in
negotiating the terms of the settlement
may be limited. The Department
recognizes, however, that even where
negotiation does not take place between
the plan and the defendant, a fiduciary
will be compelled, consistent with
ERISA’s fiduciary responsibility
provisions, to make a decision regarding

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the settlement on behalf of the plan,
even if that decision is merely to accept
or reject a proposed settlement
negotiated by other class members.
As modified, the final class
exemption covers settlements
authorized by a fiduciary that are
reasonable, in light of the plan’s
likelihood of full recovery, the risks and
costs of litigation, and the value of
claims foregone. Such settlements must
be no less favorable to the plan than
comparable arm’s-length terms and
conditions that would have been agreed
to by unrelated parties in similar
circumstances. In addition, the
transaction must not be part of an
agreement, arrangement or
understanding designed to benefit a
party in interest. Thus, an independent
fiduciary could satisfy the authorization
requirements under the final exemption
by deciding not to opt out of class action
litigation if, after a review of the
settlement, such fiduciary concludes
that the chances of obtaining any further
relief for the plan are not justified by the
expense involved in pursuing such
relief. Although the Department has
determined to delete the requirement for
negotiation as a specific condition of the
class exemption, the Department notes
that this modification does not diminish
the fiduciary’s responsibilities with
respect to the settlement terms.
As noted above, several of the
commenters expressed concern about
the degree of independence of
institutional fiduciaries, such as
directed trustees, that may serve as the
fiduciary contemplated by the class
exemption. Without agreeing or
disagreeing with this comment, the
Department emphasizes that this class
exemption does not provide relief from
section 406(b) of the Act. In addition,
the fiduciary’s decisions in authorizing
a settlement are subject to the fiduciary
responsibility provisions of the Act.
D. Plans must select an independent
fiduciary. Several commenters
expressed concern about the additional
cost of hiring independent fiduciaries in
connection with settlements. The
Department believes that plans often
will not need to retain fiduciaries
specifically to comply with this
exemption. In most cases, the plan will
be able to use a current fiduciary who
is not a party to the action and who is
not so closely allied with a party (other
than the plan) as to create a conflict of
interest. As with any other expense, the
Department expects that fiduciaries will
engage in prudent cost/benefit analysis
to select the appropriate independent
fiduciary in each case. In some cases,
the cost of the independent fiduciary
may be included in the damages

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claimed by the plan and may be
reimbursed by the defendant in settling
the litigation.
One of the commenters suggested that
to avoid duplication, the independent
fiduciary should be permitted to rely on
the opinion of plaintiffs’ class counsel
or experts hired to assist class counsel.
The Department agrees that the
fiduciary should not spend plan
resources unnecessarily. Whether and to
what extent a fiduciary should rely on
a particular attorney or expert hired by
one of the other parties are decisions
that the fiduciary must make in
accordance with its fiduciary
responsibilities under ERISA.
In this regard, the Department notes
that on occasion the independent
fiduciary may wish to retain outside
experts to assist the fiduciary in
determining whether or not to settle
litigation. The following are some of the
factors that may assist the fiduciary in
its determination: the size of the claim,
the expertise of the fiduciary, and the
subject matter of the litigation.
Several of the commenters asked the
Department to clarify that the mere fact
that a party in interest pays for an
attorney, an independent fiduciary, or
other expert hired by the plan, does not
mean that these professionals are not
independent for purposes of the
exemption. The Department agrees with
this assertion, assuming that the
professional being paid by the party in
interest understands that the plan is
their client, not the party paying their
bill. In addition, the amount of
compensation paid to the professional
by the party in interest constitutes no
more than a small percentage of such
professional’s annual gross income.
E. What is the role of the independent
fiduciary where there is judicial
approval of a settlement? Several
commenters recommended that judicial
approval of a settlement should
eliminate the need for an independent
fiduciary. One of the commenters
suggested that where the settlement is
judicially approved, relief from section
406(b) of the Act should be available
under the exemption for those
fiduciaries that were defendants in the
litigation. The Department has
determined not to adopt these
suggestions. The court, in reaching its
conclusion that the settlement is fair,
must balance the interests of all the
litigants. ERISA, on the other hand,
requires that a fiduciary make its
decisions with an ‘‘eye single to the
interests of the participants and
beneficiaries.’’ Donovan v. Bierwirth,
680 F.2d 263, 271 (2d Cir. 1982), cert.
denied, 459 U.S. 1069 (1982). In
response to the request for relief from

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75635

section 406(b), the Department does not
believe that a sufficient showing has
been made that such relief would be
appropriate under the circumstances.
F. Should there be special rules for
settling class action litigation? Several
of the commenters explained that, with
respect to certain types of class actions,
class members do not have the option of
opting out of the class—all are bound by
the decision. The commenters explained
that ERISA class actions are often nonopt out cases. According to the
commenters, this means that where
class action litigation is brought by the
participants, the plan fiduciary may,
without taking any action, be bound by
the class action settlement. In light of
this, the commenters asked how such a
fiduciary could cause a prohibited
transaction where it took no action and
yet was bound by the settlement. The
Department does not regard this
exemption proceeding to be the
appropriate setting for resolving
questions concerning what types of
settlement are more or less likely to be
prohibited transactions.
The Department notes, however, that
the fiduciary is unlikely to remain
uninvolved in the settlement of an
ERISA lawsuit initiated by participants
for two reasons. First, the fiduciary will,
in all likelihood, be named as a party to
the lawsuit and the court will almost
certainly require the plan fiduciary’s
input on the settlement. Alternatively,
the party in interest likely will seek the
involvement of the fiduciary because
the party in interest (disqualified
person) may need to take advantage of
the relief provided by the class
exemption in order to avoid the possible
imposition of excise taxes under section
4975 of the Code. Under the Code, such
excise taxes are paid by the disqualified
person who participates in the
prohibited transaction, not the fiduciary
who caused the plan to engage in the
transaction.
In order to meet the conditions of the
class exemption, the fiduciary faced
with a non-opt out class action must
take such actions as are appropriate
under the particular circumstances. For
example, before such a settlement is
imposed on a non-opt out class,
generally there is an opportunity to
object to its terms. If the fiduciary does
not believe that the proposed terms and
conditions of the settlement are as
favorable to the plan as comparable
arm’s-length terms and conditions that
would have been agreed to by unrelated
parties under similar circumstances, it
should object to the settlement.
In securities fraud class action cases,
there is often an option to opt out of the
class. Where the plan or the plan

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trustee, as the holder of record of the
securities, is a class member, whatever
action or inaction that fiduciary
determines to undertake has
consequences for the plan. If the
fiduciary takes no action, and the case
is settled for far less than the full value
of the plan’s losses, the burden will be
on the fiduciary to justify its inaction.
The fiduciary responsible for
authorizing settlement of class action
claims must decide, not only whether or
not to opt out of the class action, but
also whether to protest the proposed
settlement during the fairness hearing.6
G. Only cash may be received in
exchange for the release, unless the
transaction at issue is being rescinded.
The commenters were universal in their
objection to this condition. They
pointed out that frequently, in cases
involving investment in employer
securities, the settlement consists of
additional employer securities. In
addition, settlements with plan
sponsors often include nonmonetary
relief, such as a promise of future
contributions and plan amendments
improving participants’ rights, for
example, the right to diversify their
investments.
In response to these comments, the
Department notes that the conditions for
retroactive relief do not specify the type
of the consideration that may be
provided in exchange for the release. On
a prospective basis, the Department has
decided to modify the final exemption
to permit assets other than cash to be
provided in exchange for the plan’s or
6 For example, in Great Neck Capital
Appreciation Investment Partnership v.
PriceWaterhouseCoopers, In re Harnischfeger
Industries, Inc. Securities Litigation, 212 F.R.D. 400
(E.D. Wisc. 2002), the original securities law class
action settlement proposal included release of
ERISA claims against the fiduciaries of the
Harnischfeger employee benefit plans, even though
the lawsuit had not alleged ERISA claims. At the
fairness hearing, a participant protested that the
participants’ ERISA claims might be extinguished if
this release was approved as part of the settlement.
After considering the parties positions, the judge,
during a conference call, ‘‘advised the parties that
[he] was inclined to view the proposed settlement
as unfair if its effect would be to extinguish the Plan
participants’ ERISA claims without compensation
and that it also appeared to be unfair to require Plan
participants to give up their right to participate in
the settlement as a condition of asserting ERISA
claims.’’ 212 F.R.D. at 406. The securities law
parties took the judge’s hint and voluntarily agreed
to exclude the ERISA claims from the release. In re
IKON Office Solutions, Inc. Securities Litigation,
194 F.R.D. 166 (E.D.Pa. 2000), on the other hand,
involved a securities law release that arguably
released at least some of the ERISA claims and
participants protested this at the fairness hearing.
The court held that it would be premature, in the
context of a settlement, for the court to address such
issues—participants could either opt out and not be
bound by the settlement, or take their chances
pursuing what was left of their ERISA claims after
receiving their portion of the securities class action
settlement.

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the plan fiduciary’s release of a claim.
As modified, the final exemption
permits contributions of qualifying
employer securities, or other marketable
securities, in certain instances. Any
assets contributed to the plan, in
connection with a settlement, must
consist of securities that can be
objectively valued to determine fair
market value, in accordance with
Section 5 of the Voluntary Fiduciary
Correction (VFC) Program (67 FR 15062,
March 28, 2002). The final exemption
has also been modified to provide that
plan amendments, additional employee
benefits, and the promise of future
contributions may be included as part of
a settlement agreement covered by this
exemption.
H. When is a settlement reasonable?
One commenter urged the Department
to apply this condition to all
transactions and to include the costs of
litigation among the factors to be
considered in determining whether a
settlement is reasonable. Another
commenter asked to include the value of
claims foregone. The Department has
adopted these suggestions. The final
exemption requires that the settlement
must be reasonable in light of the plan’s
likelihood of full recovery, the risks and
costs of litigation, and the value of
claims foregone. How these factors are
weighed by fiduciaries will differ,
depending on the type of case, but will
always involve a prudent decisionmaking process, given the facts and
circumstances of the particular
situation.
I. Should an interest rate be specified?
Most of the commenters urged the
Department to eliminate the
requirement that a reasonable interest
rate be charged for an extension of
credit in connection with a settlement
covered by the exemption. The
commenters explained that often a
settlement requires a payment of the
promised sum over several years,
without specifying an interest rate. In
response to these comments, the
Department has modified this condition
to delete the reference to interest in
connection with the loan or extension of
credit. As modified, any extensions of
credit must be made on terms that are
reasonable. Although the final
exemption provides more flexibility,
fiduciaries that agree to an extension of
credit with a party in interest
nonetheless must consider that party’s
creditworthiness and the time value of
money in evaluating the settlement.
As noted above, the settlement of
litigation with a plan sponsor often
involves the promise of future
contributions. Another commenter
requested that the Department clarify

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that the promise of future contributions
is not loan or other extension of credit.
The Department agrees with the
commenter.
The Department encountered a case
where the trustees had agreed to accept
payments over time in order to collect
amounts misappropriated by a party in
interest. In this case, the trustees
extended credit to the party in interest,
but did not release their cause of action
against him. In such a case, the class
exemption will apply if the extension of
credit is being made in connection with
a settlement and both the settlement and
the extension of credit meet all of the
conditions of this exemption.
Several commenters urged the
Department to require that extensions of
credit be secured by property or a letter
of credit. Although the Department has
decided not to adopt this suggestion as
a condition of the final exemption, the
Department encourages fiduciaries to
seek security for an extension of credit,
wherever feasible, to protect the plan
against the risk of default.
J. Certain applicants request that the
scope of AO 95–26A (October 17, 1995)
be extended. In AO 95–26A, the
Department opined that settlement of
litigation with a service provider may be
covered by the statutory exemption for
service providers provided under
section 408(b)(2) of the Act. Several
commenters asked whether the same
rationale extended to the settlement of
cases where the transaction at issue in
the litigation is of the type addressed by
a statutory or administrative exemption.
The Department notes that the issues
raised by the commenters, with respect
to the scope of AO 95–26A, are beyond
the scope of this exemption proceeding.
K. Who bears the burden of proof?
Several commenters expressed concern
that, if the retroactive conditions of the
exemption are too subjective or difficult
to meet, fiduciaries who acted in good
faith in settling cases, particularly
complex securities fraud cases, may be
subject to litigation. According to the
commenters, most practitioners were
unaware of the Department’s position
that settling litigation with a party in
interest might result in a prohibited
transaction until the Department
published the proposal for this class
exemption. These commenters argued
that, without a broad retroactive
exemption, frivolous litigation may
ensue.
Other commenters asserted that
whether or not the fiduciaries were
aware of potential prohibited
transactions, these fiduciaries knew
they were making decisions involving
plan assets. If they acted prudently and
in the interests of participants and

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beneficiaries in settling the litigation
with the party in interest, these
fiduciaries should have no trouble
meeting the retroactive requirements of
the exemption. These commenters
argued that, given the Department’s
guidance on this issue in 1995, it is
appropriate to shift the burden of
proving substantive and procedural
prudence from the person challenging
the settlement to the fiduciary seeking
the protection of the exemption.
In light of these comments, the
Department confirms that the party
seeking to take advantage of any
administrative exemption granted by the
Department has the burden of proving
that it met each condition of the
exemption. Nonetheless, the
Department has been persuaded that
many practitioners were unaware of the
prohibited transaction issues involved
in settlements. The Department is also
aware that some attorneys may have
advised their clients that the settlement
of litigation with a party in interest is
not the type of transaction intended to
be covered by section 406 of the Act.
After considering these comments, the
Department believes that it is
appropriate to modify the retroactive
relief under the final exemption.
Accordingly, for settlements entered
into on or before 30 days after the date
of publication of the final exemption,
the determination that there was a
genuine controversy need not have been
made by an attorney.
L. Should notice be required? Several
commenters urged the Department to
require notice to all participants and
beneficiaries in connection with the
settlement of litigation. One commenter
pointed out that the Department
requires notice in connection with PTE
94–71 (59 FR 51216, October 7, 1994, as
corrected, 59 FR 60837, November 28,
1994) (settlement agreements between
the U.S. Department of Labor and plans)
where the Department is a party to the
settlement. This commenter argued that
without the involvement of the
Department, notice is even more
important to the participants and
beneficiaries because their rights to
pursue their own ERISA litigation could
be compromised or waived entirely by
the plan fiduciary. The commenter
recommended that notice to participants
of the nature of the allegations leading
to the settlement and the terms of the
proposed settlement should be required.
This commenter also urged that all
settlements should take the form of a
proposed consent decree filed after, or
contemporaneous with, the Complaint.
In addition, the analytical basis for the
settlement should be open to inspection
by participants for a stated period of

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time. Another commenter explained
that, in his experience, participants are
not aware of litigation, or at least the
plan’s involvement, until after the
settlement is final. Other commenters
strongly oppose notice. These
commenters asserted that such an
undertaking could be very costly and
disruptive, especially for minor
litigation.
The Department has determined not
to add a notice requirement as a
condition of this class exemption.
Requiring notice at the point where
litigation is about to be settled could
result in unnecessary delays and
additional costs. The Department
believes that the interests of the
participants and beneficiaries will be
sufficiently protected by the conditions
of this class exemption, especially the
requirement that the settlement is
authorized by a fiduciary who is
independent of the parties involved in
the litigation.
M. Discussion of other comments. One
of the commenters requested the
Department’s concurrence that, if ERISA
claims are not covered by the release
given by the plan or the plan fiduciary
in settlement of litigation, the fiduciary
need not obtain additional
consideration to account for such
claims. The Department agrees with this
statement.
One commenter urged the Department
to opine that, where a plan fiduciary
causes a plan to release all the plan’s
non-ERISA claims arising out of a
transaction, the fiduciary does not
automatically release the fiduciary’s
own claims for breach of fiduciary duty
arising out of the same transaction. The
commenter explained that the proposed
exemption did not distinguish between
claims brought by the plan, i.e., with the
plan itself as a named party, and claims
brought on behalf of the plan by a
fiduciary. ERISA § 502(d)(1), 29 U.S.C.
1132(d)(1), provides that an employee
benefit plan may sue and be sued as an
entity. Claims for violations of title I of
ERISA, however, may be brought by a
fiduciary, participant or beneficiary of
the plan or by the Secretary of Labor.
ERISA §§ 502(a)(2), 502(a)(3), 502(a)(4),
502(a)(5), and 502(e)(1), 29 U.S.C.
1132(a)(2), 1132(a)(3), 1132(a)(4),
1132(a)(5) and 1132(e)(1). Some courts
have concluded that plans may bring
actions under other laws, but may not
bring an action for a fiduciary breach
under title I of ERISA. E.g., Pressroom
Unions-Printers League Income Security
Fund v. Continental Assurance Co., 700
F.2d 889, 893 (2nd Cir. 1983). Other
courts have not adopted this distinction.
E.g., Saramar Aluminum Co. v. Pension
Plan for Employees of the Aluminum

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75637

Indus. and Allied Indus., 782 F.2d 577,
581 (6th Cir. 1986). The commenter
believes that a failure to distinguish
between claims that a plan can make in
its own name and those that must be
made by a plan fiduciary, for example,
could cause courts to conclude that
releasing a plan’s non-ERISA claims
automatically releases a plan
fiduciary’s, or participant’s or
beneficiary’s ERISA claims on behalf of
the plan.
The Department amended the
proposed exemption to clarify that it
applies to releases by the plan or by a
plan fiduciary. The issue of how a
release of claims by a plan or plan
fiduciary may affect ERISA claims that
could otherwise be brought by a
fiduciary, participant or beneficiary is
beyond the scope of this exemption
proceeding. In the Department’s view, a
fiduciary should understand, in advance
of signing, the legal effect that a
settlement agreement may have on all
claims that might be brought by or on
behalf of the plan or its participants and
beneficiaries. Plan fiduciaries may need
to obtain legal advice on the scope of
claims affected by a proposed settlement
agreement. The Department notes that it
has long held the view that a fiduciary’s
release of ERISA claims does not bind
the Secretary.
It is not uncommon for the same
transactions to give rise to both ERISA
and securities fraud claims. The plan,
and by extension, the participants and
beneficiaries of the plan, are entitled to
the same recovery as other shareholders
in the securities fraud settlement.
However, the participants and
beneficiaries may have another avenue
of recovery not available to other
shareholders. They are authorized,
under ERISA, along with the plan
fiduciary and the Secretary of Labor, to
bring suit to make the plan whole for all
losses caused by a breach of fiduciary
duty. As noted above, the Department
recognizes that, in a number of
securities fraud class action settlements,
the participants and/or plan fiduciaries
have successfully objected to the
original release and were able to modify
the terms of the release to permit the
plan to receive its share of the securities
fraud settlement without releasing its
ERISA claims against the parties in
interest. In other instances, fiduciaries
have successfully negotiated additional
relief for the plan beyond that provided
to shareholders who did not have ERISA
claims against the defendants. The
Department notes that plan fiduciaries
should consider whether additional
relief may be available for the ERISA
claims before agreeing to a broad
release.

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In conclusion, the Department
encourages participants, beneficiaries,
fiduciaries, parties in interest and other
interested persons to take advantage of
the wide range of compliance assistance
offered by the Department. Those with
questions about their rights and
responsibilities in particular situations
should look first to our web site: http:/
/www.dol.gov/EBSA/. You may also call,
toll-free, the Employee & Employer
Hotline 1–866–444–EBSA (3272). To
discuss substantive ERISA issues in
connection with particular cases, please
contact your local EBSA field office.
The EBSA web site mentioned above
includes a state-by-state list of phone
numbers and addresses for these offices.
Click on ‘‘About EBSA/EBSA Offices.’’
II. Description of the Exemption
The exemption provides retroactive
and prospective relief from the
restrictions of section 406(a)(1)(A), (B)
and (D) of the Act and from the taxes
imposed by section 4975(a) and (b) of
the Code by reason of section
4975(c)(1)(A), (B) and (D) of the Code,
for the following transactions, effective
January 1, 1975:
(1) The release by the plan or by a
plan fiduciary of a legal or equitable
claim against a party in interest in
exchange for consideration, given by, or
on behalf of, a party in interest to the
plan in partial or complete settlement of
the plan’s or the fiduciary’s claim; and
(2) An extension of credit by a plan
to a party in interest in connection with
a settlement whereby the party in
interest agrees to repay, over time, an
amount owed to the plan in settlement
of a legal or equitable claim by the plan
or a plan fiduciary against the party in
interest.
A. Conditions Applicable to All
Transactions
The exemption is conditioned upon
the existence of a genuine controversy
involving the plan unless the case has
been certified as a class action by the
court. The Department believes that this
condition is necessary to prevent the
plan and parties in interest from
engaging in a sham transaction
purporting to fall within this class
exemption, thus shielding a transaction,
such as an extension of credit or other
transaction with a party in interest, that
would otherwise be prohibited.
The fiduciary that authorizes the
settlement must have no relationship to,
or interest in, any of the other parties
involved in the litigation, other than the
plan, that might affect its best judgment
as a fiduciary. The Department intends
a flexible standard for fiduciary
independence, recognizing that the

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exemption will encompass a wide range
of situations, both in terms of the type
of litigation and the cost of pursuing
such litigation. For example, in some
instances where there are complex
issues and significant amounts of money
involved, it may be appropriate to hire
an independent fiduciary having no
prior relationship to the plan, its trustee,
any parties in interest, or any other
parties to the litigation. In other
instances, the plan’s current trustee or
investment manager, assuming that
fiduciary’s conduct is not at issue, may
be an appropriate party to make the
decision on behalf of the plan as to
whether to settle the litigation.
In response to comments received by
the Department regarding the settlement
of class action litigation in which the
ability to negotiate may be limited, the
Department eliminated the requirement
that the settlement be ‘‘negotiated’’ by
the fiduciary. In lieu of this
requirement, the exemption provides
that the fiduciary may authorize a
settlement if its terms and conditions
are no less favorable to the plan than
comparable arm’s-length terms and
conditions that would have been agreed
to by unrelated parties under similar
circumstances.
The exemption is conditioned upon
the settlement being reasonable given
the likelihood of full recovery, the costs
and risks of litigation, and the value of
claims foregone. The claims foregone
may include additional causes of action
not available to the other plaintiffs in
the same case. For example, where
shareholders have brought a class action
securities fraud case against the
Company and its officers, the
Company’s employee benefit plan or the
trustee, as the holder of record, may be
named as a member of the class because
it holds employer securities. The plan or
trustee may also have ERISA claims
against the Company and some or all of
its officers, as well as against other
parties. Before entering into a settlement
with any defendant, the plan fiduciary
should consider the value of these
additional claims against that
defendant. The plan fiduciaries may
also be able to pursue claims against
defendants not named in the securities
fraud case, including knowing
participants in the breach. Under certain
circumstances, the plan will have
additional sources of recovery,
including fiduciary liability insurance,
the plan’s fidelity bond, and the
personal assets of the defendants,
including their own employee benefit
plan accounts.7
7 Section 206(d)(4) of the Act permits a plan to
offset the benefits of a participant under an

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The exemption also provides that the
settlement must not be part of an
agreement, arrangement, or
understanding designed to benefit a
party in interest. The intent of this
condition is not to deny direct benefits
to other parties to a transaction but,
rather, to exclude transactions that are
part of a broader overall agreement,
arrangement or understanding designed
to benefit parties in interest.
Where a settlement includes an
extension of credit by a plan to a party
in interest for purposes of repaying an
amount owed in settlement of litigation,
the exemption requires that the credit
terms be reasonable. Fiduciaries must
consider the creditworthiness of the
party in interest and the time value of
money in evaluating extensions of credit
to settle litigation. The settling fiduciary
should also consider security for such
loans, such as a third party guarantee or
letter of credit, to protect against
default.
The Department has added a new
condition which clarifies that this class
exemption does not cover those
transactions that are described in PTE
76–1, A.I. (41 FR 12740, March 26,
1976, as corrected, 41 FR 16620, April
20, 1976) (relating to delinquent
employer contributions to
multiemployer and multiple employer
collectively bargained plans).
Finally, in response to a question
received during the comment period,
the Department has defined the terms
‘‘employee benefit plan’’ and ‘‘plan’’ to
include an employee benefit plan
described in section 3(3) of ERISA and/
or plans as defined in section 4975(e)(1)
of the Code.
B. Conditions Applicable to Prospective
Transactions
On a prospective basis, the existence
of a genuine controversy must be
determined by an attorney retained to
advise the plan unless the case has been
certified as a class action by the court.
That attorney must be independent of
the other parties to the litigation. All
terms of the settlement must be
specifically described in a written
agreement or consent decree and the
fiduciary authorizing the settlement
must acknowledge its fiduciary status in
writing.
The exemption provides that in
certain instances assets, other than cash,
employee pension plan against an amount that the
participant is ordered or required to pay, if the
order or requirement to pay arises under a judgment
of conviction of a crime involving the plan, a civil
judgment, including a consent order or decree,
entered into by a court, or where there is a
settlement agreement between the participant and
the Secretary of Labor or the PBGC in connection
with a violation of Part IV of ERISA.

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may be received by the plan from a
party in interest. Assets may be received
by the plan if necessary to rescind
transactions. The conditions for
retroactive relief do not specify the
nature of the consideration exchanged
for the release. On a prospective basis,
securities with a generally recognized
market may be exchanged for the
release, provided that such securities
can be objectively valued. In addition,
the contribution of additional qualifying
employer securities is permitted in
settlement of the dispute involving such
qualifying employer securities. Where
assets, other than cash, are provided to
the plan in exchange for a release, such
assets must be specifically described in
the written settlement agreement and
valued at their fair market value as
determined in accordance with section
5 of the Voluntary Fiduciary Correction
(VFC) Program (67 FR 15062 March 28,
2002). The final exemption also
provides that the settlement may also
include a written agreement to: make
future contributions, adopt amendments
to the plan, or provide additional
employee benefits.
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 section 4975(c)(2)
of the Code does not relieve a fiduciary
or other party in interest or disqualified
person from certain other provisions of
the Act 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 the Act
which require, among other things, that
a fiduciary discharge his duties with
respect to the plan solely in the interests
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) In accordance with section 408(a)
of the Act and section 4975(c)(2) of the
Code, and based upon the entire record,
the Department finds that the exemption
is administratively feasible, in the
interests of the plans and their
participants and beneficiaries, and
protective of the rights of participants
and beneficiaries of such plans;
(3) The exemption is applicable to a
particular transaction only if the
conditions specified in the class
exemption are met; and

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(4) The exemption is supplemental to,
and not in derogation of, any other
provisions of the Code and the Act,
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, the following exemption
is granted 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 part
2570, subpart B (55 FR 32836, 32847,
August 10, 1990.)
Section I. Covered Transactions
Effective January 1, 1975, the
restrictions of section 406(a)(1)(A), (B)
and (D) of the Act, and the taxes
imposed by section 4975(a) and (b) of
the Code, by reason of section
4975(c)(1)(A), (B) and (D) of the Code,
shall not apply to the following
transactions, if the relevant conditions
set forth in sections II through III below
are met:
(a) The release by the plan or a plan
fiduciary, of a legal or equitable claim
against a party in interest in exchange
for consideration, given by, or on behalf
of, a party in interest to the plan in
partial or complete settlement of the
plan’s or the fiduciary’s claim.
(b) An extension of credit by a plan
to a party in interest in connection with
a settlement whereby the party in
interest agrees to repay, over time, an
amount owed to the plan in settlement
of a legal or equitable claim by the plan
or a plan fiduciary against the party in
interest.
Section II. Conditions Applicable to All
Transactions
(a) There is a genuine controversy
involving the plan. A genuine
controversy will be deemed to exist
where the court has certified the case as
a class-action.
(b) The fiduciary that authorizes the
settlement has no relationship to, or
interest in, any of the parties involved
in the litigation, other than the plan,
that might affect the exercise of such
person’s best judgment as a fiduciary.
(c) The settlement is reasonable in
light of the plan’s likelihood of full
recovery, the risks and costs of
litigation, and the value of claims
foregone.
(d) The terms and conditions of the
transaction are no less favorable to the
plan than comparable arms-length terms
and conditions that would have been

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75639

agreed to by unrelated parties under
similar circumstances.
(e) The transaction is not part of an
agreement, arrangement, or
understanding designed to benefit a
party in interest.
(f) Any extension of credit by the plan
to a party in interest in connection with
the settlement of a legal or equitable
claim against the party in interest is on
terms that are reasonable, taking into
consideration the creditworthiness of
the party in interest and the time value
of money.
(g) The transaction is not described in
Prohibited Transaction Exemption (PTE)
76–1, A.I. (41 FR 12740, March 26,
1976, as corrected, 41 FR 16620, April
20, 1976) (relating to delinquent
employer contributions to
multiemployer and multiple employer
collectively bargained plans).
Section III. Prospective Conditions
In addition to the conditions
described in section II, the following
conditions apply to the transactions
described in section I (a) and (b) entered
into after January 30, 2004:
(a) Where the litigation has not been
certified as a class action by the court,
an attorney or attorneys retained to
advise the plan on the claim, and having
no relationship to any of the parties,
other than the plan, determines that
there is a genuine controversy involving
the plan.
(b) All terms of the settlement are
specifically described in a written
settlement agreement or consent decree.
(c) Assets other than cash may be
received by the plan from a party in
interest in connection with a settlement
only if:
(1) necessary to rescind a transaction
that is the subject of the litigation; or
(2) such assets are securities for which
there is a generally recognized market,
as defined in ERISA section 3(18)(A),
and which can be objectively valued.
Notwithstanding the foregoing, a
settlement will not fail to meet the
requirements of this paragraph solely
because it includes the contribution of
additional qualifying employer
securities in settlement of a dispute
involving such qualifying employer
securities.
(d) To the extent assets, other than
cash, are received by the plan in
exchange for the release of the plan’s or
the plan fiduciary’s claims, such assets
must be specifically described in the
written settlement agreement and
valued at their fair market value, as
determined in accordance with section
5 of the Voluntary Fiduciary Correction
(VFC) Program, 67 FR 15062 (March 28,
2002). The methodology for determining

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fair market value, including the
appropriate date for such determination,
must be set forth in the written
settlement agreement.
(e) Nothing in section III (c) shall be
construed to preclude the exemption
from applying to a settlement that
includes a written agreement to: (1)
Make future contributions; (2) adopt
amendments to the plan; or (3) provide
additional employee benefits.
(f) The fiduciary acting on behalf of
the plan has acknowledged in writing
that it is a fiduciary with respect to the
settlement of the litigation on behalf the
plan.
(g) The plan fiduciary maintains or
causes to be maintained for a period of
six years the records necessary to enable
the persons described below in
paragraph (h) to determine whether the
conditions of this exemption have been
met, including documents evidencing
the steps taken to satisfy sections II (b),
such as correspondence with attorneys
or experts consulted in order to evaluate
the plan’s claims, except that:
(1) if the records necessary to enable
the persons described in paragraph (h)
to determine whether the conditions of
the exemption have been met are lost or
destroyed, due to circumstances beyond
the control of the plan fiduciary, 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 the
plan fiduciary responsible for recordkeeping, 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 paragraph
(h) below;
(h)(1) Except as provided below in
paragraph (h)(2) and notwithstanding
any provisions of section 504(a)(2) and
(b) of the Act, the records referred to in
paragraph (g) are unconditionally
available at their customary location for
examination during normal business
hours by—
(A) any duly authorized employee or
representative of the Department or the
Internal Revenue Service;
(B) any fiduciary of the plan or any
duly authorized employee or
representative of such fiduciary;
(C) any contributing employer and
any employee organization whose
members are covered by the plan, or any
authorized employee or representative
of these entities; or
(D) any participant or beneficiary of
the plan or the duly authorized

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22:42 Dec 30, 2003

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employee or representative of such
participant or beneficiary.
(2) None of the persons described in
paragraph (h)(1)(B)–(D) shall be
authorized to examine trade secrets or
commercial or financial information
which is privileged or confidential.
Section III. Definition
For purposes of this exemption, the
terms ‘‘employee benefit plan’’ and
‘‘plan’’ refer to an employee benefit plan
described in section 3(3) of ERISA and/
or a plan described in section 4975(e)(1)
of the Code.
Signed at Washington, DC this 24th of
December, 2003.
Ivan L. Strasfeld,
Director, Office of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. 03–32191 Filed 12–30–03; 8:45 am]
BILLING CODE 4520–29–P

DEPARTMENT OF LABOR
Employment and Training
Administration
[TA–W–53,551]

Allegheny Ludlum Corporation,
Brackenridge Works, Brackenridge, PA
Notice of Termination of Investigation
Pursuant to Section 221 of the Trade Act
of 1974, as amended, an investigation
was initiated on November 17, 2003 in
response to a petition filed by a
company official on behalf of workers at
Allegheny Ludlum Corporation,
Brackenridge Works, Brackenridge,
Pennsylvania.
The petitioning group of workers is
covered by an earlier petition instituted
on November 14, 2003 (TA–W–53,538)
that is the subject of an ongoing
investigation for which a determination
has not yet been issued. Further
investigation in this case would
duplicate efforts and serve no purpose;
therefore the investigation under this
petition has been terminated.
Signed at Washington, DC this 19th day of
November, 2003.
Linda G. Poole,
Certifying Officer, Division of Trade
Adjustment Assistance.
[FR Doc. 03–31982 Filed 12–30–03; 8:45 am]
BILLING CODE 4510–30–P

PO 00000

Frm 00158

Fmt 4703

Sfmt 4703

DEPARTMENT OF LABOR
Employment and Training
Administration
[TA–W–42,222 and TA–W–42,222A]

EHV–Weidmann Industries, Inc., a
Subsidiary of Wicor Americas, St.
Johnsbury, Vermont; and Weidmann
Systems International, Inc., St.
Johnsbury, Vermont; Amended
Certification Regarding Eligibility To
Apply for Worker Adjustment
Assistance
In accordance with section 223 of the
Trade Act of 1974 (19 U.S.C. 2273) the
Department of Labor issued a Notice of
Certification Regarding Eligibility to
Apply for Worker Adjustment
Assistance on November 25, 2002,
applicable to workers of EHV–
Weidmann Industries, Inc., a subsidiary
of Wicor Americas, St. Johnsbury,
Vermont. The notice was published in
the Federal Register on December 23,
2002 (67 FR 78258).
At the request of the company, the
Department reviewed the certification
for workers of the subject firm. The
workers are engaged in the production
of electrical insulation boards and
components.
Information from the company shows
that worker separations occurred at
Weidmann Systems International, St.
Johnsbury, Vermont a sister company of
the subject firm. Workers at Weidmann
Systems International, Inc. provide sales
and customer services supporting the
production of electrical insulation
boards and components at the subject
firm.
Based on these findings, the
Department is amending the
certification to include workers of
Weidmann Systems International, Inc.,
St. Johnsbury, Vermont.
The intent of the Department’s
certification is to include all workers of
EHV–Weidmann Industries, Inc., a
subsidiary of Wicor Americas, St.
Johnsbury, Vermont, who were
adversely affected by increased imports.
The amended notice applicable to
TA–W–42,222 is hereby issued as
follows:
‘‘All workers of EHV–Weidmann
Industries, Inc., a subsidiary of Wicor
Americas, St. Johnsbury, Vermont (TA–W–
42,222) and Weidmann Systems
International, Inc. St. Johnsbury, Vermont
(TA–W–42,222A), who became totally or
partially separated from employment on or
after September 17, 2001, through November
25, 2004, are eligible to apply for adjustment
assistance under Section 223 of the Trade Act
of 1974.’’

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