§1106 Prohibited Transactions

Summary

A plan manager must not make the plan do business with people or groups closely tied to the plan, unless another part of the law allows it. That means the manager cannot set up sales, trades, or leases of property; lend money or extend credit; buy or sell goods, services, or use of facilities; move plan assets to benefit those people; or buy employer stock or employer real estate when that would break other rules. A manager who controls plan assets also must not let the plan hold employer stock or real estate if that would violate the other rule. A manager also must not use plan assets for personal gain, represent someone whose interests are against the plan or its participants, or take personal payments from anyone doing business with the plan. If a person tied to the plan transfers property that has a mortgage or similar lien the plan takes on, or that was put on the property by that person in the last 10 years, that transfer counts as a sale or exchange. Fiduciary = the person who manages the plan. Party in interest = someone connected to the plan (like the employer or service providers).