Voluntary Fiduciary Correction Program

Federal Register / Vol. 71, No. 75 / Wednesday, April 19, 2006 / Notices
September 11, 1993. These Customer
Satisfaction Surveys provide
information on customer attitudes about
the delivery and quality of agency
products/services and are used as part
of an ongoing process to improve DOL
programs. This generic clearance allows
agencies to gather information from both
Federal and non-Federal users.
In addition to conducting Customer
Satisfaction Surveys, the Department
also includes the use of evaluation
forms for those DOL agencies
conducting conferences. These
evaluations are helpful in determining
the success of the current conference, in
developing future conferences, and in
meeting the needs of the Department’s
product/service users.

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II. Current Actions
Over the past three years the DOL has
conducted more than two dozen
customer satisfaction surveys and
conference evaluations, which have
helped assess the Department’s products
and services and has led to
improvements in areas deemed
necessary. Office of Management and
Budget approval for this collection of
information expires July 31, 2006. DOL
proposes to seek continued approval for
this collection of information for an
additional three years.
Type of Review: Extension of a
currently approved collection.
Agency: Office of the Assistant
Secretary for Administration and
Management.
Title: Customer Satisfaction Surveys
and Conference Evaluations Generic
Clearance.
OMB Number: 1225–0059.
Affected Public: Individuals and
households; business or other for-profit;
not-for-profit institutions; Farms;
Federal Government; and State, Local,
or Tribal Government.
Estimated Total Respondents/
Responses: 200,000.
Frequency: On occasion and usually
only one-time per respondent.
Average Time per Response: Varies by
survey/evaluation generally ranging
from 3 to 15 minutes with an average of
approximately 6 minutes.
Total Burden Hours: 20,000.
Total Burden Cost (Capital/Startup):
$0.
Total Burden Cost (Operating/
Maintenance): $0.
Comments submitted in response to
this notice will be summarized and/or
included in the request for Office of
Management and Budget approval of the
information collection request; they also
will become a matter of public record.

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Signed at Washington, DC, this 13th day of
April, 2006.
Darrin A. King,
Agency Clearance Officer, Office of the
Assistant Secretary for Administration and
Management.
[FR Doc. E6–5860 Filed 4–18–06; 8:45 am]
BILLING CODE 4510–23–P

DEPARTMENT OF LABOR
Employee Benefits Security
Administration
[Application No. D–11261]
RIN 1210–A05

Amendment to Prohibited Transaction
Exemption 2002–51 (PTE 2002–51) to
Permit Certain Transactions Identified
in the Voluntary Fiduciary Correction
Program
Employee Benefits Security
Administration, Department of Labor.
ACTION: Adoption of Amendment to PTE
2002–51.
AGENCY:

SUMMARY: This document amends PTE
2002–51 (67 FR 70623 November 25,
2002), a class exemption that provides
relief from certain prohibited
transaction restrictions imposed by
section 4975 of the Internal Revenue
Code of 1986 (the Code) for certain
eligible transactions identified in the
Department of Labor’s (the Department)
Voluntary Fiduciary Correction (VFC)
Program, which was adopted on March
28, 2002. This amendment is being
adopted in conjunction with the
Department’s adoption of the updated
VFC Program (final VFC Program),
which is being published
simultaneously in this issue of the
Federal Register. The VFC Program
allows certain persons to avoid potential
civil actions under the Employee
Retirement Income Security Act of 1974
(ERISA) initiated by the Department and
the assessment of civil penalties under
section 502(l) or 502(i) of ERISA in
connection with an investigation or civil
action by the Department. The
amendment affects plans, participants
and beneficiaries of such plans and
certain other persons engaging in such
transactions.
EFFECTIVE DATE: The class exemption is
effective May 19, 2006.
FOR FURTHER INFORMATION CONTACT:
Brian J. Buyniski, Office of Exemption
Determinations, Employee Benefits
Security Administration, U.S.
Department of Labor, Room N–5649,
200 Constitution Avenue, NW.,
Washington, DC 20210, (202) 693–8545
(this is not a toll free number).

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On April
6, 2005, a notice was published in the
Federal Register (70 FR 17476) of the
pendency before the Department of a
proposed amendment to PTE 2002–51.
PTE 2002–51 provides relief from the
sanctions resulting from the application
of section 4975 (a) and (b) of the Code,
by reason of section 4975(c)(1) (A)
through (E) of the Code. The
amendment expands the relief under the
exemption to additional transactions
included in the final VFC Program. The
amendment to PTE 2002–51 adopted by
this notice was proposed by the
Department on its own motion pursuant
to 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).1
The notice of pendency gave
interested persons an opportunity to
comment on the proposed amendment.
The Department received two comment
letters. Upon consideration of all the
comments received, the Department has
determined to grant the proposed
amendment, subject to certain
modifications. These modifications and
the comments are discussed below.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 Statement
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) of the
Executive Order, a ‘‘significant
regulatory action’’ is 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 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. OMB has determined that the
final VFC Program is significant under
1 Section 102 of Reorganization Plan No. 4 of
1978 (43 FR 47713, October 17, 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(c)(2) of the Code to
the Secretary of Labor.

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Federal Register / Vol. 71, No. 75 / Wednesday, April 19, 2006 / Notices

section 3(f)(4) because it raises novel
legal or policy issues arising from the
President’s priorities.
The amended PTE 2002–51 provides
excise tax relief for six of the
transactions identified in the final VFC
Program. Parties who wish to take
advantage of the exemption must have
met all of the applicable requirements of
the final VFC Program and the
conditions of the exemption. One of
those conditions is receipt of a no action
letter from the Employee Benefits
Security Administration (EBSA) with
respect to the transaction at issue. In
conjunction with the final VFC Program,
PTE 2002–51, as amended, has also
been determined to be significant under
section 3(f)(4) of the Executive Order.
Accordingly the Department has
assessed the costs and benefits of this
amendment to PTE 2002–51.
PTE 2002–51 provides relief from the
sanctions resulting from the application
of section 4975(a) and (b) of the Code,
by reason of section 4975(c)(1)(A)
through (E) of the Code. In general, the
exemption enhances the benefits of
participation in the VFC Program by
granting relief from excise taxes under
section 4975 for certain breaches of
fiduciary duty that are prohibited
transactions. The purpose of the VFC
Program is to encourage the correction
of breaches of fiduciary duty, resulting
in the recovery of lost earnings or profits
for the benefit of plan participants and
beneficiaries. The class exemption will
have positive economic effects by
eliminating excise taxes and promoting
increased participation in the VFC
Program.
The amendment to PTE 2002–51 is
being adopted in connection with the
final VFC Program, which is published
in this issue of the Federal Register. The
class exemption has been amended to
provide relief for two additional
transactions. One of the transactions
was introduced in the April 2005 VFC
Program and the proposed Amendment
to PTE 2002–51. That transaction has
now become effective in the amended
exemption. The transaction concerns
the purchase of an asset (including real
property) by a plan where the asset has
later been determined to be illiquid as
described in the final VFC Program,
and/or the subsequent sale of the
illiquid asset by the plan in a
transaction that was prohibited
pursuant to section 4975(c)(1) of the
Code. The second transaction included
in this amendment covers the use of
plan assets to pay expenses to a service
provider for services that are properly
characterized as settlor expenses,
provided such payments were not

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expressly prohibited in the plan
documents.
The Department has assumed, based
on experience, that not all applicants
who apply to the final VFC Program will
take advantage of the excise tax relief
provided under the exemption, either by
choice or because the exemption does
not provide relief for the transaction
they are correcting under the final VFC
Program. The Department has more
specifically calculated that the number
of applicants who will rely on the class
exemption will equal approximately
one-fifth of the total number of
applicants, or 250 applicants (.2 ×
1,250).
Paperwork Reduction Act
The amendment to PTE 2002–51
engenders no significant new paperwork
burden for the notification and other
written documentation requirements in
comparison with the previous version of
this exemption. Applicants to the final
VFC Program who rely on the amended
class exemption may be eligible, as well,
for a new optional provision. Under this
option, qualifying applicants may
choose not to send notices to interested
persons. The conditions of the optional
provision are described in detail in the
amendment to PTE 2002–51. However,
while these particular parties would be
relieved of the responsibility to send
notices to interested persons, they do
need to provide the Department with
certain additional documentation on
their calculations and the payment they
remitted to the plan when submitting
their application to the VFC Program.
Documentation of the calculation of the
amount of excise tax otherwise due
consists of a copy of a completed IRS
Form 5330 or equivalent written
evidence containing the information
required by IRS Form 5330; proof of
payment to the plan is required. The
Department has determined that the
difference between the paperwork
burden of plans using the optional
provision versus the burden of those
that do not is negligible.
Service providers will likely do the
work on behalf of parties relying on PTE
2002–51. For parties who do not rely on
the optional provision, service providers
will prepare and send out notices to
interested persons. A copy of the notice
must be provided to the Department. As
to those parties that opt not to provide
notice, service providers will submit to
the Department evidence of the required
calculations described in IRS Form 5330
and evidence of the payment to the plan
of the excise tax otherwise payable
along with the application to the final
VFC program. These respective tasks
should require no more than an hour for

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each service provider to complete.
Assuming that as many as one-fifth of
the annual 1,250 applicants to the VFC
Program (250) also use the class
exemption, the burden cost posed by
PTE 2002–51 equals $8,625 ($34.50 × 1
hr. × 250). One-half of the parties using
the exemption (125) are estimated to be
eligible to take advantage of PTE 2002–
51’s new optional provision, thereby
being relieved of the notice requirement,
while the other half of the parties using
the exemption (125) are estimated as
being required to send notices to
interested persons. Notices will be sent,
on average, to 136 interested persons for
each plan. PTE 2002–51 permits
notification of interested persons by
electronic means. The Department
assumes that only 62 percent of the
parties using the exemption will send
notices to interested persons by first
class mail. Therefore, the total number
of notices sent by mail will be 10,540
(136 × 125 × 62 percent). The remaining
38 percent will be delivered
electronically. The total mailing costs
arising from the class exemption will
equal roughly $4,427 ($0.42 × 10,540
mailings). The Department assumes,
however, that all applicants who send
interested party notices will send the
Department its copy of the notice by
mail, using certified or overnight
delivery services and that this copy will
be included in the application package
described above under costs for the VFC
Program. The annual mailing costs for
notice to interested persons and the
Department is therefore estimated at
$4,427. In sum, the burden costs
attributable to the amended PTE 2002–
51 will be approximately $13,052
($8,625 + $4,427).
Persons are not required to respond to
the revised information collection
unless it displays a currently valid OMB
control number 1210–0118.
Description of the Exemption
Title I of ERISA, which establishes
certain standards of conduct for
fiduciaries of employee benefit plans
covered by ERISA, includes provisions
prohibiting fiduciaries from causing a
plan to engage in certain classes of
transactions with persons defined as
parties in interest. Similarly, Title II of
ERISA prohibits plans described in
section 4975(e)(1) of the Code from
engaging in certain classes of
transactions with persons defined under
the Code as disqualified persons.
Generally, such transactions are subject
to taxation under section 4975 of the
Code.
The VFC Program was adopted by the
Department on a permanent basis in

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March 2002.2 Under the VFC Program,
persons who are potentially liable for a
breach of fiduciary duty can avoid the
possibility of civil investigations and/or
civil actions initiated by the Department
for that breach and the imposition of
civil penalties under section 502(l) or
502(i) of ERISA if they satisfy the
conditions for correcting the breach as
described in the VFC Program. The VFC
Program was based on the Department’s
experience with the Pension Payback
Program, 61 FR 9203 (March 7, 1996),
and continued public interest in such
correction programs. In response to
comments received on the VFC Program
requesting that the Department provide
relief from the excise taxes imposed by
section 4975 of the Code for prohibited
transactions, the Department proposed a
class exemption for four of the eligible
transactions described in the VFC
Program. A final exemption, PTE 2002–
51, was published in the Federal
Register on November 25, 2002. The
four eligible transactions described in
the exemption are as follows:
(A) The failure to transmit participant
contributions to a pension plan within
the time frames described in the
Department’s regulations at 29 CFR
section 2510.3–102 and/or the failure to
transmit participant loan repayments to
a pension plan within a reasonable time
after withholding or receipt by the
employer.
(B) The making of a loan by a plan at
a fair market interest rate to a
disqualified person 3 with respect to the
plan.
(C) The purchase or sale of an asset
(including real property) between a plan
and a disqualified person at fair market
value.
(D) The sale of real property to a plan
by the employer and leaseback of such
property to the employer, at fair market
value and fair market rental value,
respectively.
Based on growing public utilization
and experience in administering the
VFC Program, EBSA decided to amend
and modify the VFC Program to expand
the categories of eligible transactions
and to make it more useful to employers
2 67 FR 15062 (Mar. 28, 2002). Prior to adoption
in March 2002, the VFC Program was made
available on an interim basis during which the
Department invited and considered public
comments on the Program. (See 65 FR 14164, Mar.
15, 2000).
3 The Department notes that the term ‘‘party in
interest’’ was used in the description of the eligible
transactions covered under PTE 2002–51 although
that exemption provided, and this amendment will
provide, relief only from the sanctions imposed
under section 4975 of the Code, which prohibits
certain transactions between a plan and a
‘‘disqualified person.’’ For purposes of clarity,
references in the exemption to a ‘‘party in interest’’
are changed to ‘‘disqualified person.’’

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and others who wish to avail themselves
of the relief provided. Specifically, the
VFC Program now includes relief under
Title I of ERISA for the purchase of an
asset by a plan where the asset was later
determined to be illiquid as described
under the final VFC Program.
In this regard, the final VFC Program
provides relief for both the plan’s
original acquisition of the asset that was
later determined to be illiquid under the
final VFC Program, as well as the
correction involving the sale of such
asset in a transaction that violates the
prohibited transaction rules under Title
I of ERISA, and section 4975 of the Code
provides that all of the requirements of
the final VFC Program are met.
Similarly, the class exemption has been
amended to provide relief from the
excise taxes imposed by section 4975 of
the Code for both the plan’s original
acquisition and/or the subsequent sale
of the illiquid asset by the plan in a
transaction prohibited pursuant to
section 4975(c)(1), provided all the
requirements of the class exemption are
met. Moreover, as distinguished from
the other eligible transactions covered
in the VFC Program 4 and PTE 2002–51,
correction in the VFC Program for this
category of eligible transactions will
involve a prohibited transaction.
The other category of transactions
being restructured under the final VFC
Program (see Section 7.6) includes the
use of plan assets to pay expenses,
including commissions or fees, that
should have been paid by the plan
sponsor, to a service provider for: (i)
services provided in connection with
the administration and maintenance of
the plan, in circumstances where a plan
provision requires that such plan
expenses be paid by the plan sponsor,
or (ii) services provided in connection
with the establishment, design, or
termination, of the plan, which relate to
the activities of the plan sponsor in its
capacity as settlor. The class exemption
is being amended to provide excise tax
relief where plan assets are used to pay
for services appropriately characterized
as settlor expenses, which relate to the
activities of the plan sponsor in its
capacity as settlor.
Discussion of Written Comments
Received
The Department received two letters
commenting on the proposed
amendments to PTE 2002–51. One
commenter suggested expanding the
scope of the VFC Program to include
4 Under

the VFC Program prior to the current
revision, correction could not be achieved by
engaging in a new prohibited transaction. See VFC
Program, 67 FR 15073 (Mar. 28, 2002) Section 2(d).

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20137

relief for plans that are subject to the
prohibited transaction excise tax
described in section 4975 of the Code,
but are not subject to Title I of ERISA,
including individual retirement
accounts (IRAs) described in section 408
of the Code. This commenter suggested
that certain VFC Program applicants
(e.g., financial institutions) may have
caused ERISA–covered plans, as well as
plans that are subject only to the
prohibited transaction provisions of the
Code, to engage in prohibited
transactions. According to the
commenter, plan officials with respect
to these IRAs and certain other plans are
unable to participate in the VFC
Program and, therefore, are not eligible
for relief under PTE 2002–51.
Accordingly, these plan officials must
seek excise tax relief through an
individual exemption application
submitted to the Department.5 The
commenter believes that it would be
administratively convenient if the
Department extended VFC Program
eligibility to encompass the full range of
plans that are subject to section 4975 of
the Code. The Department has
determined that it cannot expand the
VFC Program as requested by the
commenter, since it lacks jurisdiction to
issue a no action letter under the VFC
Program with respect to violations of the
prohibited transaction provisions under
the Code. Consequently, in light of the
decision not to expand the VFC Program
to include plans only subject to section
4975 of the Code, the Department does
not believe that it would be appropriate
to modify the final exemption as
requested by the commenter.
Notwithstanding the foregoing, the
Department wishes to take the
opportunity to state that the grant of this
amendment does not foreclose its future
consideration of individual exemption
requests for transactions involving IRAs
that are outside the scope of relief
provided by both the VFC Program and
the class exemption under
circumstances when, for example, a
financial institution received a no action
letter applicable only to plans subject to
the Program for a transaction(s) that
involved both plans and such IRAs. The
Department cannot provide assurances
in advance that an individual
exemption will be issued with respect to
a particular transaction involving an
IRA, however, interested persons are
encouraged to contact the Department to
discuss the particular facts of their case.
5 PTE 2002–51 requires that a VFC Program
applicant comply with all of the applicable
requirements of the VFC Program and receive a no
action letter with respect to transactions corrected
under the VFC Program.

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The Internal Revenue Service (the
Service) submitted a comment
requesting a modification to the current
requirement in PTE 2002–51 which
provides that an applicant must notify
interested persons in writing of the
transactions for which relief is being
sought pursuant to the VFC Program
and this exemption.6 The Service
requested that the notice requirement
not apply in those situations where: (a)
The excise tax due under section 4975
of the Code for a failure to timely
transmit participant contributions and
loan repayments is less than or equal to
$100.00; (b) the excise tax that
otherwise would be owed and payable
to the United States Treasury is
contributed to the plan; and (c) the
contribution is allocated to the accounts
of the plan’s participants and
beneficiaries in a manner consistent
with the plan’s provisions concerning
the allocation of plan earnings. Lastly,
the Service noted that, under the
circumstances outlined above,
employers that meet the applicable
conditions of the class exemption would
not be required to file a Return of Excise
Taxes Related to Employee Benefit
Plans (IRS Form 5330) with the IRS.
After considering the issue, the
Department has determined to modify
the final exemption as requested by the
Service. The Department notes that, for
the purpose of determining whether the
excise tax due under section 4975 of the
Code for failing to timely transmit
participant contributions and loan
repayments is less than or equal to $100,
and determining the amount to be
contributed to the plan, an applicant
may calculate the excise tax that would
otherwise be imposed by section 4975 of
the Code based upon the Lost Earnings
amount computed using the Online
Calculator.
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
4975(c)(2) of the Code does not relieve
a fiduciary or other 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, the requirement that all
assets of an employee benefit plan be
held in trust by one or more trustees,
and the general fiduciary responsibility
provisions of ERISA which require,
among other things, that a fiduciary
6 The class exemption mandates that notice be
provided to interested persons of the transaction
and the method of correction.

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discharge his or her duties respecting
the plan solely in the interests of the
participants and beneficiaries of the
plan and in a prudent fashion; 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) The amendment will not extend to
transactions prohibited under section
4975(c)(1)(F) of the Code.
(3) In accordance with section
4975(c)(2) of the Code, the Department
finds that the amendment is
administratively feasible, in the
interests of plans and their participants
and beneficiaries, and protective of the
rights of participants and beneficiaries
of such plans.
(4) The amendment is supplemental
to and not in derogation of 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.
(5) The amendment is applicable to a
transaction only if the conditions
specified in the class exemption are
satisfied.
Amendment
Accordingly, the following
amendment to Sections I and II of PTE
2002–51 is granted under the authority
of section 4975(c)(2) of the Code and in
accordance with the procedures set
forth in 29 CFR 2570, subpart B (55 FR
32836, Aug. 10, 1990).
Section I. Eligible Transactions
The sanctions resulting from the
application of 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 following eligible
transactions described in Section 7 of
the Voluntary Fiduciary Correction
(VFC) Program, published
simultaneously in this issue of the
Federal Register, provided that the
applicable conditions set forth in
Sections II., III. and IV. are met:
A. Failure to transmit participant
contributions to a pension plan within
the time frames described in the
Department’s regulation at 29 CFR
section 2510.3–102, and/or the failure to
transmit participant loan repayments to
a pension plan within a reasonable time
after withholding or receipt by the
employer. (See VFC Program, Section
7.1(a)).
B. Loan at a fair market interest rate
to a disqualified person with respect to

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a plan. (See VFC Program, Section
7.2(a)).
C. Purchase or sale of an asset
(including real property) between a plan
and a disqualified person at fair market
value. (See VFC Program, Sections 7.4(a)
and 7.4(b)).
D. Sale of real property to a plan by
the employer and the leaseback of the
property to the employer, at fair market
value and fair market rental value,
respectively. (See VFC Program, Section
7.4(c)).
E. Purchase of an asset (including real
property) by a plan where the asset has
later been determined to be illiquid as
described under the VFC Program in a
transaction which was a prohibited
transaction pursuant to section
4975(c)(1) of the Code, or in which the
asset was acquired from an unrelated
third party, and/or the subsequent sale
of such asset in a transaction prohibited
pursuant to section 4975(c)(1). (See VFC
Program, Section 7.4(f)).
F. Use of plan assets to pay expenses,
including commissions or fees, to a
service provider (e.g., attorney,
accountant, recordkeeper, actuary,
financial advisor, or insurance agent) for
services provided in connection with
the establishment, design or termination
of the plan (settlor expenses) 7, which
relate to the activities of the plan
sponsor in its capacity as settlor,
provided that the payment of the settlor
expense was not expressly prohibited by
a plan provision relating to the payment
of expenses by the plan. (See VFC
Program, section 7.6(b)).
Section II. Conditions
A. With respect to a transaction
involving participant contributions or
loan repayments to pension plans
described in Section I.A., the
contributions or repayments were
transmitted to the pension plan not
more than 180 calendar days from the
date the amounts were received by the
employer (in the case of amounts that a
participant or beneficiary pays to an
employer) or the date the amounts
otherwise would have been payable to
the participant in cash (in the case of
amounts withheld by an employer from
a participant’s wages).
B. With respect to the transactions
described in Sections I.B., I.C., I.D., or
I.E., the plan assets involved in the
transaction, or series of related
transactions, did not, in the aggregate,
exceed 10 percent of the fair market
value of all the assets of the plan at the
time of the transaction.
C. The fair market value of any plan
asset involved in a transaction described
7 See

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Federal Register / Vol. 71, No. 75 / Wednesday, April 19, 2006 / Notices
in Sections I.C., I.D., or I.E. was
determined in accordance with section
5 of the VFC Program.
D. The terms of a transaction
described in Sections I.B., I.C., I.D., I.E.,
or I.F., were at least as favorable to the
plan as the terms generally available in
arm’s-length transactions between
unrelated parties.
E. With respect to any transaction
described in Section I., the transaction
was not part of an agreement,
arrangement or understanding designed
to benefit a disqualified person.
F. (1) With respect to any transaction
described in Section I., the applicant
has not taken advantage of the relief
provided by the VFC Program and this
exemption for a similar type of
transaction(s) identified in the current
application during the period which is
three years prior to submission of the
current application.
(2) Notwithstanding the foregoing,
Section II.F.(1) shall not apply to an
applicant provided that:
(a) The applicant was a broker-dealer
registered under the Securities
Exchange Act of 1934, a bank
supervised by the United States or a
State thereof, a broker-dealer or bank
subject to foreign government
regulation, an insurance company
qualified to do business in a State, or an
affiliate thereof;
(b) The applicant was a disqualified
person (including a fiduciary) solely by
reason of providing services to the plan
or solely by reason of a relationship to
such service provider described in
section 4975(e)(2)(F) and (G) of the
Code;
(c) Neither the applicant nor any
affiliate (i) was a fiduciary (within the
meaning of section 3(21)(A) of ERISA
and 4975(e)(3)of the Code) with respect
to the assets of the plan involved in the
transaction and (ii) used its discretion to
cause the plan to engage in the
transaction;
(d) Individuals acting on behalf of the
applicant had no actual knowledge or
reason to know that the transaction was
not exempt pursuant to a statutory or
administrative exemption under ERISA
and/or the Code; and
(e) Prior to the transaction, the
applicant established written policies
and procedures that were reasonably
designed to ensure compliance with the
prohibited transaction rules and the
applicant engaged in periodic
monitoring for compliance.
G. With respect to a transaction
involving a sale of an illiquid asset
under the VFC Program described in
Section I.E., the plan paid no brokerage
fees, or commissions in connection with
the sale of the asset.

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H. With respect to any transaction
described in Section I.F., the amount of
plan assets involved in the transaction
or series of related transactions did not,
in the aggregate, exceed the lesser of
$10,000 or 5% of the fair market value
of all the assets of the plan at the time
of the transaction.
Section III. Compliance With the VFC
Program
A. The applicant has met all of the
applicable requirements of the VFC
Program.
B. EBSA has issued a no action letter
to the applicant pursuant to the VFC
Program with respect to a transaction
described in Section I.
Section IV. Notice
A. Written notice of the transaction(s)
for which the applicant is seeking relief
pursuant to the VFC Program, and this
exemption, and the method of
correcting the transaction, was provided
to interested persons within 60 calendar
days following the date of the
submission of an application under the
VFC Program. A copy of the notice was
provided to the appropriate Regional
Office of the United States Department
of Labor, Employee Benefits Security
Administration, within the same 60-day
period, and the applicant indicated the
date upon which notice was distributed
to interested persons. Plan assets were
not used to pay for the notice. The
notice included an objective description
of the transaction and the steps taken to
correct it, written in a manner
reasonably calculated to be understood
by the average Plan participant or
beneficiary. The notice provided for a
period of 30 calendar days, beginning
on the date the notice was distributed,
for interested persons to provide
comments to the appropriate Regional
Office. The notice included the address
and telephone number of such Regional
Office.
B. Notice was given in a manner that
was reasonably calculated, taking into
consideration the particular
circumstances of the plan, to result in
the receipt of such notice by interested
persons, including but not limited to
posting, regular mail, or electronic mail,
or any combination thereof. The notice
informed interested persons of the
applicant’s participation in the VFC
Program as amended and intention of
availing itself of relief under the
exemption.
C. Notwithstanding the foregoing,
Section IV.A. and B. shall not apply to
a transaction described in Section I.A.,
provided that (i) the applicant under the
VFC Program has met all of the other
Program requirements; (ii) the amount

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of the excise tax that otherwise would
be imposed by section 4975 of the Code
with respect to any transaction(s)
described in Section I.A. would be less
than or equal to $100.00; (iii) the
amount of the excise tax that otherwise
would be imposed by section 4975 of
the Code was paid to the plan and
allocated to the participants and
beneficiaries in the same manner as
provided under the plan with respect to
plan earnings; and (iv) the applicant
under the VFC Program provides a copy
of a completed IRS Form 5330 or
written documentation containing the
information required by IRS Form 5330
and proof of payment with the
submission of the application to the
appropriate EBSA Regional Office. For
the sole purpose of determining whether
the excise tax due under section 4975 of
the Code on the ‘‘amount involved’’
with respect to the prohibited
transaction involving the failure to
timely transmit participant
contributions and loan repayments is
less than or equal to $100, an applicant
may calculate the excise tax due based
upon the Lost Earnings amount
computed using the Online Calculator.
Signed at Washington, DC, this 12th day of
April, 2006.
Ivan L. Strasfeld,
Director of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. 06–3675 Filed 4–18–06; 8:45 am]
BILLING CODE 4510–29–P

DEPARTMENT OF LABOR
Bureau of Labor Statistics
Proposed Collection; Comment
Request
ACTION:

Notice.

SUMMARY: The Department of Labor, as
part of its continuing effort to reduce
paperwork and respondent burden,
conducts a pre-clearance consultation
program to provide the general public
and Federal agencies with an
opportunity to comment on proposed
and/or continuing collections of
information in accordance with the
Paperwork Reduction Act of 1995
(PRA95) [44 U.S.C. 3506(c)(2)(A)]. This
program helps to ensure that requested
data can be provided in the desired
format, reporting burden (time and
financial resources) is minimized,
collection instruments are clearly
understood, and the impact of collection
requirements on respondents can be
properly assessed. Currently, the Bureau
of Labor Statistics (BLS) is soliciting

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