Title 29 — LaborRelease 119-73

§1106 Prohibited transactions

Title 29 › Chapter CHAPTER 18— - EMPLOYEE RETIREMENT INCOME SECURITY PROGRAM › Subchapter SUBCHAPTER I— - PROTECTION OF EMPLOYEE BENEFIT RIGHTS › Subtitle Subtitle B— - Regulatory Provisions › Part part 4— - fiduciary responsibility › § 1106

Last updated Apr 6, 2026|Official source

Summary

Except as allowed under section 1108, a person who manages a retirement or benefit plan must not make the plan do certain deals with people connected to the plan. Forbidden deals include things like buying, selling, exchanging, or leasing property; lending money or giving credit; providing goods or services; transferring or using plan assets for a connected person’s benefit; or getting employer stock or real estate when other rules forbid it. The manager must not use plan assets for their own benefit, act for someone whose interests conflict with the plan or its participants, or take any personal payment from someone dealing with the plan. If a connected person transfers property to the plan and the plan assumes a mortgage, or the connected person put a lien on the property within the last 10 years, that transfer counts as a sale or exchange. Definitions: fiduciary = person who controls or manages the plan’s assets; party in interest = an employer, plan manager, or someone closely tied to the plan.

Full Legal Text

Title 29, §1106

Labor — Source: USLM XML via OLRC

(a)Except as provided in section 1108 of this title:

(1)A fiduciary with respect to a plan shall not cause the plan to engage in a transaction, if he knows or should know that such transaction constitutes a direct or indirect—

(A)sale or exchange, or leasing, of any property between the plan and a party in interest;

(B)lending of money or other extension of credit between the plan and a party in interest;

(C)furnishing of goods, services, or facilities between the plan and a party in interest;

(D)transfer to, or use by or for the benefit of a party in interest, of any assets of the plan; or

(E)acquisition, on behalf of the plan, of any employer security or employer real property in violation of section 1107(a) of this title.

(2)No fiduciary who has authority or discretion to control or manage the assets of a plan shall permit the plan to hold any employer security or employer real property if he knows or should know that holding such security or real property violates section 1107(a) of this title.

(b)A fiduciary with respect to a plan shall not—

(1)deal with the assets of the plan in his own interest or for his own account,

(2)in his individual or in any other capacity act in any transaction involving the plan on behalf of a party (or represent a party) whose interests are adverse to the interests of the plan or the interests of its participants or beneficiaries, or

(3)receive any consideration for his own personal account from any party dealing with such plan in connection with a transaction involving the assets of the plan.

(c)A transfer of real or personal property by a party in interest to a plan shall be treated as a sale or exchange if the property is subject to a mortgage or similar lien which the plan assumes or if it is subject to a mortgage or similar lien which a party-in-interest placed on the property within the 10-year period ending on the date of the transfer.

Reference

Citations & Metadata

Citation

29 U.S.C. § 1106

Title 29 — Labor

Last Updated

Apr 6, 2026

Release point: 119-73