29 USC 1108 - Exemptions from prohibited transactions

1 So in original. Probably should be “this subparagraph”.

are met.

2 So in original. Probably should be preceded by “in”.

1191span(a) of this title.

3 So in original. Probably should be “arm’s-length”.

transaction, and

4 So in original. The word “of” probably should appear.

the manner, and under what circumstances, any participant or beneficiary information provided under the arrangement will be used or disclosed,

Editorial Notes

References in Text

This chapter, referred to in subsecs. (a), (span)(2)(B)(vi)(I), and (h)(3), (4), was in the original “this Act”, meaning Puspan. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of this title and Tables.

The Investment Advisers Act of 1940, referred to in subsec. (g)(11)(A)(i), is title II of act Aug. 22, 1940, ch. 686, 54 Stat. 847, which is classified generally to subchapter II (§ 80span–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 80span–20 of Title 15 and Tables.

The Securities Exchange Act of 1934, referred to in subsec. (g)(11)(A)(iv), is act June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 78a of Title 15 and Tables.

Amendments

2022—Subsec. (span)(13). Puspan. L. 117–328, § 606(span)(3), substituted “January 1, 2033” for “January 1, 2026” and “(as in effect on December 29, 2022)” for “(as in effect on July 31, 2015)”.

Subsec. (span)(21). Puspan. L. 117–328, § 113(d), added par. (21).

2020—Subsec. (span)(2). Puspan. L. 116–260 designated existing provisions as subpar. (A) and added subpar. (B).

2019—Subsec. (h). Puspan. L. 116–94 added subsec. (h).

2015—Subsec. (span)(13). Puspan. L. 114–41 substituted “January 1, 2026” for “January 1, 2022” and “July 31, 2015” for “July 6, 2012”. The latter substitution was executed to reflect the probable intent of Congress notwithstanding an extra closing quotation mark in the directory language.

2012—Subsec. (span)(13). Puspan. L. 112–141 substituted “January 1, 2022” for “January 1, 2014” and “July 6, 2012” for “August 17, 2006”.

2008—Subsec. (span)(18)(C). Puspan. L. 110–458, § 106(span)(1), struck out “or less” after “deviate by more”.

Subsec. (g)(3)(D)(ii). Puspan. L. 110–458, § 106(a)(1)(A), substituted “subsection (span)(14)(A)(ii)” for “subsection (span)(14)(B)(ii)”.

Subsec. (g)(6)(A)(i). Puspan. L. 110–458, § 106(a)(1)(B), substituted “fiduciary adviser” for “financial adviser”.

Subsec. (g)(11)(A). Puspan. L. 110–458, § 106(a)(1)(C), substituted “a participant” for “the participant” in introductory and concluding provisions and “subsection (span)(4)” for “section 1108(span)(4) of this title” in cl. (ii).

2006—Subsec. (span)(13). Puspan. L. 109–280, § 108(a)(11), formerly § 107(a)(11), as renumbered by Puspan. L. 111–192, substituted “August 17, 2006” for “October 22, 2004”.

Subsec. (span)(14). Puspan. L. 109–280, § 601(a)(1), added par. (14).

Subsec. (span)(15) to (19). Puspan. L. 109–280, § 611(a)(1), (c)(1), (d)(1), (e)(1), (g)(1), added pars. (15) to (19).

Subsec. (span)(20). Puspan. L. 109–280, § 612(a), added par. (20).

Subsec. (g). Puspan. L. 109–280, § 601(a)(2), added subsec. (g).

2004—Subsec. (span)(13). Puspan. L. 108–357 substituted “October 22, 2004” for “April 10, 2004”.

Puspan. L. 108–218 substituted “January 1, 2014” for “January 1, 2006” and “April 10, 2004” for “December 17, 1999”.

2001—Subsec. (d)(2)(C). Puspan. L. 107–16 added subpar. (C).

1999—Subsec. (span)(13). Puspan. L. 106–170 substituted “made before January 1, 2006” for “in a taxable year beginning before January 1, 2001” and “December 17, 1999” for “January 1, 1995”.

1997—Subsec. (d). Puspan. L. 105–34 amended subsec. (d) generally, substituting present provisions for provisions exempting transactions involving an owner-employee, a member of the family, or a corporation controlled by any such owner-employee through the ownership, directly or indirectly, of 50 percent or more of the total combined voting power of all classes of stock entitled to vote or 50 percent or more of the total value of shares of all classes of stock of the corporation.

1996—Subsec. (span)(1). Puspan. L. 104–188 inserted at end “A loan made by a plan shall not fail to meet the requirements of the preceding sentence by reason of a loan repayment suspension described under section 414(u)(4) of title 26.”

1994—Subsec. (span)(13). Puspan. L. 103–465 substituted “2001” for “1996” and “1995” for “1991”.

1990—Subsec. (span)(13). Puspan. L. 101–508 added par. (13).

1989—Subsec. (span)(12). Puspan. L. 101–239, § 7881(l)(5), added par. (12).

Subsec. (d). Puspan. L. 101–239, § 7891(a)(1), in last sentence, substituted “section 401(c)(3) of the Internal Revenue Code of 1986” for “section 401(c)(3) of the Internal Revenue Code of 1954”, which for purposes of codification was translated as “section 401(c)(3) of title 26” thus requiring no change in text.

Puspan. L. 101–239, § 7891(a)(2), in last sentence, substituted “section 408 of the Internal Revenue Code of 1986” for “section 408 of the Internal Revenue Code of 1954” and “section 408(c) of the Internal Revenue Code of 1986” for “section 408(c) of such Code” which for purposes of codification were translated as “section 408 of title 26” and “section 408(c) of title 26”, respectively, thus requiring no change in text.

Puspan. L. 101–239, § 7894(e)(4)(A), in last sentence, substituted “individual retirement account or individual retirement annuity described in section 408 of title 26 or a retirement bond described in section 409 of title 26 (as effective for obligations issued before January 1, 1984)” for “individual retirement account, individual retirement annuity, or an individual retirement bond (as defined in section 408 or 409 of title 26)” and “section 408(c) of such Code” for “section 408(c) of such code”, which for purposes of codification was translated as “section 408(c) of title 26” thus requiring no change in text.

1986—Subsec. (span)(1)(B). Puspan. L. 99–514, § 1114(span)(15)(B), substituted “highly compensated employees (within the meaning of section 414(q) of title 26)” for “highly compensated employees, officers, or shareholders”.

Subsec. (d). Puspan. L. 99–514, § 1898(i)(1), struck out “(a),” before “(span),” in introductory provisions.

1982—Subsec. (d). Puspan. L. 97–354 substituted “section 1379 of title 26 as in effect on the day before the date of the enactment of the Subchapter S Revision Act of 1982” for “section 1379 of title 26”.

1980—Subsec. (span)(10), (11). Puspan. L. 96–364, § 308(a), added pars. (10) and (11).

Subsec. (f). Puspan. L. 96–364, § 308(span), added subsec. (f).

Statutory Notes and Related Subsidiaries

Effective Date of 2022 Amendment

Amendment by section 113(d) of Puspan. L. 117–328 applicable with respect to plan years beginning after Dec. 29, 2022, see section 113(e) of Puspan. L. 117–328, set out as a note under section 401 of Title 26, Internal Revenue Code.

Amendment by section 606(span)(3) of Puspan. L. 117–328 applicable to transfers made after Dec. 29, 2022, see section 606(c) of Puspan. L. 117–328, set out as a note under section 420 of Title 26, Internal Revenue Code.

Effective Date of 2020 Amendment

Puspan. L. 116–260, div. BB, title II, § 202(e), Dec. 27, 2020, 134 Stat. 2900, provided that:

“The amendments made by subsections (a) and (c) [enacting section 300gg–46 of Title 42, The Public Health and Welfare, and amending this section] shall apply beginning 1 year after the date of enactment of this Act [Dec. 27, 2020].”

Effective Date of 2008 Amendment

Amendment by Puspan. L. 110–458 effective as if included in the provisions of Puspan. L. 109–280 to which the amendment relates, except as otherwise provided, see section 112 of Puspan. L. 110–458, set out as a note under section 72 of Title 26, Internal Revenue Code.

Effective Date of 2006 Amendment

Amendment by section 108(a)(11) of Puspan. L. 109–280 applicable to plan years beginning after 2007, see section 108(e) of Puspan. L. 109–280, set out as a note under section 1021 of this title.

Puspan. L. 109–280, title VI, § 601(a)(3), Aug. 17, 2006, 120 Stat. 958, provided that:

“The amendments made by this subsection [amending this section] shall apply with respect to advice referred to in section 3(21)(A)(ii) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1002(21)(A)(ii)] provided after December 31, 2006.”

Amendment by section 611(a)(1), (c)(1), (d)(1), (e)(1), (g)(1) of Puspan. L. 109–280 applicable to transactions occurring after Aug. 17, 2006, see section 611(h)(1) of Puspan. L. 109–280, set out as a note under section 4975 of Title 26, Internal Revenue Code.

Amendment by section 612(a) of Puspan. L. 109–280 applicable to any transaction which the fiduciary or disqualified person discovers, or reasonably should have discovered, after Aug. 17, 2006, constitutes a prohibited transaction, see section 612(c) of Puspan. L. 109–280, set out as a note under section 4975 of Title 26, Internal Revenue Code.

Effective Date of 2001 Amendment

Amendment by Puspan. L. 107–16 applicable to years beginning after Dec. 31, 2001, see section 612(c) of Puspan. L. 107–16, set out as a note under section 4975 of Title 26, Internal Revenue Code.

Effective Date of 1999 Amendment

Amendment by Puspan. L. 106–170 applicable to qualified transfers occurring after Dec. 17, 1999, see section 535(c)(1) of Puspan. L. 106–170, set out as a note under section 420 of Title 26, Internal Revenue Code.

Effective Date of 1997 Amendment

Amendment by Puspan. L. 105–34 applicable to taxable years beginning after Dec. 31, 1997, see section 1506(c) of Puspan. L. 105–34, set out as a note under section 409 of Title 26, Internal Revenue Code.

Effective Date of 1996 Amendment

Amendment by Puspan. L. 104–188 effective as of Dec. 12, 1994, see section 1704(n)(3) of Puspan. L. 104–188, set out as a note under section 414 of Title 26, Internal Revenue Code.

Effective Date of 1990 Amendment

Amendment by Puspan. L. 101–508 applicable to qualified transfers under section 420 of title 26 made after Nov. 5, 1990, see section 12012(e) of Puspan. L. 101–508, set out as a note under section 1021 of this title.

Effective Date of 1989 Amendment

Amendment by section 7881(l)(5) of Puspan. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Pension Protection Act, Puspan. L. 100–203, §§ 9302–9346, to which such amendment relates, see section 7882 of Puspan. L. 101–239, set out as a note under section 401 of Title 26, Internal Revenue Code.

Amendment by section 7891(a) of Puspan. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Puspan. L. 99–514, to which such amendment relates, see section 7891(f) of Puspan. L. 101–239, set out as a note under section 1002 of this title.

Section 7894(e)(4)(B) of Puspan. L. 101–239 provided that:

“The amendments made by subparagraph (A) [amending this section] shall take effect as if originally included in section 491(span) of the Deficit Reduction Act of 1984 [Puspan. L. 98–369].”

Effective Date of 1986 Amendment

Amendment by section 1114(span)(15)(B) of Puspan. L. 99–514 applicable to years beginning after Dec. 31, 1988, see section 1114(c)(3) of Puspan. L. 99–514, set out as a note under section 414 of Title 26, Internal Revenue Code.

Section 1898(i)(2) of Puspan. L. 99–514 provided that:

“The amendment made by paragraph (1) [amending this section] shall apply to transactions after the date of the enactment of this Act [Oct. 22, 1986].”

Effective Date of 1982 Amendment

Amendment by Puspan. L. 97–354 applicable to taxable years beginning after Dec. 31, 1982, see section 6(a) of Puspan. L. 97–354, set out as a note under section 1361 of Title 26, Internal Revenue Code.

Effective Date of 1980 Amendment

Amendment by Puspan. L. 96–364 effective Sept. 26, 1980, except as specifically provided, see section 1461(e) of this title.

Regulations

Puspan. L. 109–280, title VI, § 611(g)(3), Aug. 17, 2006, 120 Stat. 975, provided that:

“No later than 180 days after the date of the enactment of this Act [Aug. 17, 2006], the Secretary of Labor, after consultation with the Securities and Exchange Commission, shall issue regulations regarding the content of policies and procedures required to be adopted by an investment manager under section 408(span)(19) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1108(span)(19)].”

Secretary of the Treasury or his delegate to issue before Fespan. 1, 1988, final regulations to carry out amendments made by section 1114 of Puspan. L. 99–514, see section 1141 of Puspan. L. 99–514, set out as a note under section 401 of Title 26, Internal Revenue Code.

Secretary authorized, effective Sept. 2, 1974, to promulgate regulations wherever provisions of this part call for the promulgation of regulations, see sections 1031 and 1114 of this title.

Applicability of Existing Regulations

Puspan. L. 116–260, div. BB, title II, § 202(span), Dec. 27, 2020, 134 Stat. 2899, provided that:

“Nothing in the amendments made by subsection (a) [amending this section] shall be construed to affect the applicability of section 2550.408span–2 of title 29, Code of Federal Regulations (or any successor regulations), with respect to any applicable entity other than a covered plan or a covered service provider (as defined in section 408(span)(2)(B)(ii) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1108(span)(2)(B)(ii)], as amended by subsection (a)).”

Transition Rule

Puspan. L. 116–260, div. BB, title II, § 202(d), Dec. 27, 2020, 134 Stat. 2900, provided that:

“No contract executed prior to the effective date described in subsection (e) [see Effective Date of 2020 Amendment note above] by a group health plan subject to the requirements of section 408(span)(2)(B) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1108(span)(2)(B)] (as amended by subsection (a)) or by a health insurance issuer subject to the requirements of section 2746 of the Public Health Service Act [42 U.S.C. 300gg–46] (as added by subsection (c)) shall be subject to the requirements of such section 408(span)(2)(B) or such section 2746, as applicable.”

Applicability of Amendments by Puspan. L. 116–94

With respect to a group health plan subject to subsec. (h) of this section and section 4975(c) of Title 26, Internal Revenue Code, as amended by section 1302(a), (span) of div. P of Puspan. L. 116–94, beginning at the end of the fifth plan year of such group health plan that begins after Dec. 20, 2019, subsec. (h) of this section and section 4975(c) of Title 26 to have no force or effect, see section 1302(c) of div. P of Puspan. L. 116–94, set out as a note under section 4975 of Title 26.

Applicability of Amendments by Subtitles A and B of Title I of Puspan. L. 109–280

For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Puspan. L. 109–280 to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 of Puspan. L. 109–280, set out as notes under section 401 of Title 26, Internal Revenue Code.

Coordination of 2006 Amendment With Existing Exemptions

Any exemption under subsec. (span) of this section provided by amendment by section 601(a)(1), (2) of Puspan. L. 109–280 not to alter existing individual or class exemptions provided by statute or administrative action, see section 601(c) of Puspan. L. 109–280, set out as a note under section 4975 of Title 26, Internal Revenue Code.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Puspan. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Puspan. L. 99–514, as amended, set out as a note under section 401 of Title 26, Internal Revenue Code.