Page 433 TITLE 29—LABOR § 1105

to any reversion after Sept. 30, 1990, if (1) in the case of

plans subject to subchapter III of this chapter, notice of

intent to terminate under such subchapter was provided to participants (or if no participants, to Pension

Benefit Guaranty Corporation) before Oct. 1, 1990, (2) in

the case of plans subject to subchapter I of this chapter

(and not subchapter III), notice of intent to reduce future accruals under section 1054(h) of this title was provided to participants in connection with termination

before Oct. 1, 1990, (3) in the case of plans not subject

to subchapter I or III of this chapter, a request for a determination letter with respect to termination was

filed with Secretary of the Treasury or Secretary’s

delegate before Oct. 1, 1990, or (4) in the case of plans

not subject to subchapter I or III of this chapter and

having only one participant, a resolution terminating

the plan was adopted by employer before Oct. 1, 1990,

see section 12003 of Pub. L. 101–508, set out as a note

under section 4980 of Title 26, Internal Revenue Code.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96–364 effective Sept. 26, 1980,

except as specifically provided, see section 1461(e) of

this title.

REGULATIONS

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.

PLAN AMENDMENTS NOT REQUIRED UNTIL

JANUARY 1, 1998

For provisions directing that if any amendments

made by subtitle D [§§1401–1465] of title I of Pub. L.

104–188 require an amendment to any plan or annuity

contract, such amendment shall not be required to be

made before the first day of the first plan year beginning on or after Jan. 1, 1998, see section 1465 of Pub. L.

104–188, set out as a note under section 401 of Title 26,

Internal Revenue Code.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1101, 1105, 1107,

1344, 1403 of this title.

§ 1105. Liability for breach of co-fiduciary

(a) Circumstances giving rise to liability

In addition to any liability which he may have

under any other provisions of this part, a fiduciary with respect to a plan shall be liable for a

breach of fiduciary responsibility of another fiduciary with respect to the same plan in the following circumstances:

(1) if he participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other fiduciary, knowing such act

or omission is a breach;

(2) if, by his failure to comply with section

1104(a)(1) of this title in the administration of

his specific responsibilities which give rise to

his status as a fiduciary, he has enabled such

other fiduciary to commit a breach; or

(3) if he has knowledge of a breach by such

other fiduciary, unless he makes reasonable

efforts under the circumstances to remedy the

breach.

(b) Assets held by two or more trustees

(1) Except as otherwise provided in subsection

(d) of this section and in section 1103(a)(1) and

(2) of this title, if the assets of a plan are held

by two or more trustees—

(A) each shall use reasonable care to prevent

a co-trustee from committing a breach; and

(B) they shall jointly manage and control

the assets of the plan, except that nothing in

this subparagraph (B) shall preclude any

agreement, authorized by the trust instrument, allocating specific responsibilities, obligations, or duties among trustees, in which

event a trustee to whom certain responsibilities, obligations, or duties have not been allocated shall not be liable by reason of this subparagraph (B) either individually or as a trustee for any loss resulting to the plan arising

from the acts or omissions on the part of another trustee to whom such responsibilities,

obligations, or duties have been allocated.

(2) Nothing in this subsection shall limit any

liability that a fiduciary may have under subsection (a) of this section or any other provision

of this part.

(3)(A) In the case of a plan the assets of which

are held in more than one trust, a trustee shall

not be liable under paragraph (1) except with respect to an act or omission of a trustee of a

trust of which he is a trustee.

(B) No trustee shall be liable under this subsection for following instructions referred to in

section 1103(a)(1) of this title.

(c) Allocation of fiduciary responsibility; designated persons to carry out fiduciary responsibilities

(1) The instrument under which a plan is

maintained may expressly provide for procedures (A) for allocating fiduciary responsibilities (other than trustee responsibilities) among

named fiduciaries, and (B) for named fiduciaries

to designate persons other than named fiduciaries to carry out fiduciary responsibilities

(other than trustee responsibilities) under the

plan.

(2) If a plan expressly provides for a procedure

described in paragraph (1), and pursuant to such

procedure any fiduciary responsibility of a

named fiduciary is allocated to any person, or a

person is designated to carry out any such responsibility, then such named fiduciary shall

not be liable for an act or omission of such person in carrying out such responsibility except to

the extent that—

(A) the named fiduciary violated section

1104(a)(1) of this title—

(i) with respect to such allocation or designation,

(ii) with respect to the establishment or

implementation of the procedure under this

paragraph (1), or

(iii) in continuing the allocation or designation; or

(B) the named fiduciary would otherwise be

liable in accordance with subsection (a) of this

section.

(3) For purposes of this subsection, the term

‘‘trustee responsibility’’ means any responsibility provided in the plan’s trust instrument (if

any) to manage or control the assets of the plan,

other than a power under the trust instrument

of a named fiduciary to appoint an investment

manager in accordance with section 1102(c)(3) of

this title.

(d) Investment managers

(1) If an investment manager or managers

have been appointed under section 1102(c)(3) of
§ 1106 TITLE 29—LABOR Page 434

this title, then, notwithstanding subsections

(a)(2) and (3) and subsection (b) of this section,

no trustees shall be liable for the acts or omissions of such investment manager or managers,

or be under an obligation to invest or otherwise

manage any asset of the plan which is subject to

the management of such investment manager.

(2) Nothing in this subsection shall relieve any

trustee of any liability under this part for any

act of such trustee.

(Pub. L. 93–406, title I, §405, Sept. 2, 1974, 88 Stat.

878.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1002, 1102, 1110,

1114 of this title; title 26 section 4975.

§ 1106. Prohibited transactions

(a) Transactions between plan and party in interest

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) Transactions between plan and fiduciary

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) Transfer of real or personal property to plan

by party in interest

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.

(Pub. L. 93–406, title I, §406, Sept. 2, 1974, 88 Stat.

879.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1101, 1108, 1114,

1132, 1203, 1399, 1411 of this title; title 26 section 4975.

§ 1107. Limitation with respect to acquisition and

holding of employer securities and employer

real property by certain plans

(a) Percentage limitation

Except as otherwise provided in this section

and section 1114 of this title:

(1) A plan may not acquire or hold—

(A) any employer security which is not a

qualifying employer security, or

(B) any employer real property which is

not qualifying employer real property.

(2) A plan may not acquire any qualifying

employer security or qualifying employer real

property, if immediately after such acquisition the aggregate fair market value of employer securities and employer real property

held by the plan exceeds 10 percent of the fair

market value of the assets of the plan.

(3)(A) After December 31, 1984, a plan may

not hold any qualifying employer securities or

qualifying employer real property (or both) to

the extent that the aggregate fair market

value of such securities and property determined on December 31, 1984, exceeds 10 percent

of the greater of—

(i) the fair market value of the assets of

the plan, determined on December 31, 1984,

or

(ii) the fair market value of the assets of

the plan determined on January 1, 1975.

(B) Subparagraph (A) of this paragraph shall

not apply to any plan which on any date after

December 31, 1974; and before January 1, 1985,

did not hold employer securities or employer

real property (or both) the aggregate fair market value of which determined on such date

exceeded 10 percent of the greater of

(i) the fair market value of the assets of

the plan, determined on such date, or

(ii) the fair market value of the assets of

the plan determined on January 1, 1975.

(4)(A) After December 31, 1979, a plan may

not hold any employer securities or employer

real property in excess of the amount specified

in regulations under subparagraph (B). This

subparagraph shall not apply to a plan after

the earliest date after December 31, 1974, on

which it complies with such regulations.

(B) Not later than December 31, 1976, the

Secretary shall prescribe regulations which

shall have the effect of requiring that a plan

divest itself of 50 percent of the holdings of

employer securities and employer real property which the plan would be required to divest before January 1, 1985, under paragraph

(2) or subsection (c) of this section (whichever

is applicable).