Page 437 TITLE 29—LABOR § 1108

(f) Maximum percentage of stock held by plan;

time of holding or acquisition; necessity of

legally binding contract

(1) Stock satisfies the requirements of this

paragraph if, immediately following the acquisition of such stock—

(A) no more than 25 percent of the aggregate

amount of stock of the same class issued and

outstanding at the time of acquisition is held

by the plan, and

(B) at least 50 percent of the aggregate

amount referred to in subparagraph (A) is held

by persons independent of the issuer.

(2) Until January 1, 1993, a plan shall not be

treated as violating subsection (a) of this section solely by holding stock which fails to satisfy the requirements of paragraph (1) if such

stock—

(A) has been so held since December 17, 1987,

or

(B) was acquired after December 17, 1987,

pursuant to a legally binding contract in effect on December 17, 1987, and has been so held

at all times after the acquisition.

(Pub. L. 93–406, title I, §407, Sept. 2, 1974, 88 Stat.

880; Pub. L. 100–203, title IX, §9345(a)(1), (2), (b),

Dec. 22, 1987, 101 Stat. 1330–373; Pub. L. 101–239,

title VII, §§7881(l)(1)–(4), 7891(a)(1), 7894(e)(2),

Dec. 19, 1989, 103 Stat. 2443, 2445, 2450; Pub. L.

101–540, §1, Nov. 8, 1990, 104 Stat. 2379; Pub. L.

105–34, title XV, §1524(a), Aug. 5, 1997, 111 Stat.

1071.)

REFERENCES IN TEXT

Section 10211(c)(2)(A) of the Revenue Act of 1987 (Public Law 100–203), referred to in subsec. (d)(5)(C), is set

out as a note under section 7704 of Title 26, Internal

Revenue Code.

AMENDMENTS

1997—Subsec. (b)(2), (3). Pub. L. 105–34 added par. (2)

and redesignated former par. (2) as (3).

1990—Subsec. (d)(5). Pub. L. 101–540 amended par. (5)

generally. Prior to amendment, par. (5) read as follows:

‘‘The term ‘qualifying employer security’ means an employer security which is stock or a marketable obligation (as defined in subsection (e) of this section). After

December 17, 1987, in the case of a plan other than an

eligible individual account plan, stock shall be considered a qualifying employer security only if such stock

satisfies the requirements of subsection (f)(1) of this

section.’’

1989—Subsec. (d)(3)(A), (6)(A), (7). Pub. L. 101–239,

§7891(a)(1), substituted ‘‘Internal Revenue Code of 1986’’

for ‘‘Internal Revenue Code of 1954’’, which for purposes

of codification was translated as ‘‘title 26’’ thus requiring no change in text.

Subsec. (d)(3)(C). Pub. L. 101–239, §7881(l)(1), realigned

margin.

Subsec. (d)(6)(A). Pub. L. 101–239, §7894(e)(2), substituted ‘‘money purchase plan’’ for ‘‘money purchase’’

and ‘‘employer securities’’ for ‘‘employee securities’’.

Subsec. (d)(9). Pub. L. 101–239, §7881(l)(2), substituted

‘‘such individual account plan’’ for ‘‘such arrangement’’ and realigned margin.

Subsec. (f)(1). Pub. L. 101–239, §7881(l)(3)(A), (4), substituted ‘‘paragraph’’ for ‘‘subsection’’ and ‘‘if, immediately following the acquisition of such stock’’ for

‘‘if’’.

Subsec. (f)(3). Pub. L. 101–239, §7881(l)(3)(B), struck

out par. (3) which read as follows: ‘‘After December 17,

1987, no plan may acquire stock which does not satisfy

the requirements of paragraph (1) unless the acquisition is made pursuant to a legally binding contract in

effect on such date.’’

1987—Subsec. (d)(3)(C). Pub. L. 100–203, §9345(a)(1),

added subpar. (C).

Subsec. (d)(5). Pub. L. 100–203, §9345(b)(1), inserted at

end ‘‘After December 17, 1987, in the case of a plan

other than an eligible individual account plan, stock

shall be considered a qualifying employer security only

if such stock satisfies the requirements of subsection

(f)(1) of this section.’’

Subsec. (d)(9). Pub. L. 100–203, §9345(a)(2), added par.

(9).

Subsec. (f). Pub. L. 100–203, §9345(b)(2), added subsec.

(f).

EFFECTIVE DATE OF 1997 AMENDMENT

Section 1524(b) of Pub. L. 105–34 provided that: ‘‘The

amendments made by this section [amending this section] shall apply to elective deferrals for plan years beginning after December 31, 1998.’’

EFFECTIVE DATE OF 1990 AMENDMENT

Section 2 of Pub. L. 101–540 provided that: ‘‘The

amendment made by section 1 [amending this section]

shall apply to interests in publicly traded partnerships

acquired before, on, or after January 1, 1987.’’

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7881(l)(1)–(4) of Pub. L. 101–239

effective, except as otherwise provided, as if included in

the provision of the Pension Protection Act, Pub. L.

100–203, §§9302–9346, to which such amendment relates,

see section 7882 of Pub. L. 101–239, set out as a note

under section 401 of Title 26, Internal Revenue Code.

Amendment by section 7891(a)(1) of Pub. L. 101–239 effective, except as otherwise provided, as if included in

the provision of the Tax Reform Act of 1986, Pub. L.

99–514, to which such amendment relates, see section

7891(f) of Pub. L. 101–239, set out as a note under section

1002 of this title.

Amendment by section 7894(e)(2) of Pub. L. 101–239 effective, except as otherwise provided, as if originally

included in the provision of the Employee Retirement

Income Security Act of 1974, Pub. L. 93–406, to which

such amendment relates, see section 7894(i) of Pub. L.

101–239, set out as a note under section 1002 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Section 9345(a)(3) of Pub. L. 100–203 provided that:

‘‘The amendments made by this subsection [amending

this section] shall apply with respect to arrangements

established after December 17, 1987.’’

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.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1101, 1104, 1106,

1108, 1114, 1222 of this title; title 19 section 2373.

§ 1108. Exemptions from prohibited transactions

(a) Grant of exemptions

The Secretary shall establish an exemption

procedure for purposes of this subsection. Pursuant to such procedure, he may grant a conditional or unconditional exemption of any fiduciary or transaction, or class of fiduciaries or

transactions, from all or part of the restrictions

imposed by sections 1106 and 1107(a) of this title.

Action under this subsection may be taken only

after consultation and coordination with the

Secretary of the Treasury. An exemption granted under this section shall not relieve a fiduciary from any other applicable provision of this

chapter. The Secretary may not grant an ex-
§ 1108 TITLE 29—LABOR Page 438

emption under this subsection unless he finds

that such exemption is—

(1) administratively feasible,

(2) in the interests of the plan and of its participants and beneficiaries, and

(3) protective of the rights of participants

and beneficiaries of such plan.

Before granting an exemption under this subsection from section 1106(a) or 1107(a) of this

title, the Secretary shall publish notice in the

Federal Register of the pendency of the exemption, shall require that adequate notice be given

to interested persons, and shall afford interested

persons opportunity to present views. The Secretary may not grant an exemption under this

subsection from section 1106(b) of this title unless he affords an opportunity for a hearing and

makes a determination on the record with respect to the findings required by paragraphs (1),

(2), and (3) of this subsection.

(b) Enumeration of transactions exempted from

section 1106 prohibitions

The prohibitions provided in section 1106 of

this title shall not apply to any of the following

transactions:

(1) Any loans made by the plan to parties in

interest who are participants or beneficiaries

of the plan if such loans (A) are available to

all such participants and beneficiaries on a

reasonably equivalent basis, (B) are not made

available to highly compensated employees

(within the meaning of section 414(q) of title

26) in an amount greater than the amount

made available to other employees, (C) are

made in accordance with specific provisions

regarding such loans set forth in the plan, (D)

bear a reasonable rate of interest, and (E) are

adequately secured. 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.

(2) Contracting or making reasonable arrangements with a party in interest for office

space, or legal, accounting, or other services

necessary for the establishment or operation

of the plan, if no more than reasonable compensation is paid therefor.

(3) A loan to an employee stock ownership

plan (as defined in section 1107(d)(6) of this

title), if—

(A) such loan is primarily for the benefit

of participants and beneficiaries of the plan,

and

(B) such loan is at an interest rate which

is not in excess of a reasonable rate.

If the plan gives collateral to a party in interest for such loan, such collateral may consist

only of qualifying employer securities (as defined in section 1107(d)(5) of this title).

(4) The investment of all or part of a plan’s

assets in deposits which bear a reasonable interest rate in a bank or similar financial institution supervised by the United States or a

State, if such bank or other institution is a fiduciary of such plan and if—

(A) the plan covers only employees of such

bank or other institution and employees of

affiliates of such bank or other institution,

or

(B) such investment is expressly authorized by a provision of the plan or by a fiduciary (other than such bank or institution or

affiliate thereof) who is expressly empowered by the plan to so instruct the trustee

with respect to such investment.

(5) Any contract for life insurance, health

insurance, or annuities with one or more insurers which are qualified to do business in a

State, if the plan pays no more than adequate

consideration, and if each such insurer or insurers is—

(A) the employer maintaining the plan, or

(B) a party in interest which is wholly

owned (directly or indirectly) by the employer maintaining the plan, or by any person which is a party in interest with respect

to the plan, but only if the total premiums

and annuity consideration written by such

insurers for life insurance, health insurance,

or annuities for all plans (and their employers) with respect to which such insurers are

parties in interest (not including premiums

or annuity considerations written by the

employer maintaining the plan) do not exceed 5 percent of the total premiums and annuity considerations written for all lines of

insurance in that year by such insurers (not

including premiums or annuity considerations written by the employer maintaining

the plan).

(6) The providing of any ancillary service by

a bank or similar financial institution supervised by the United States or a State, if such

bank or other institution is a fiduciary of such

plan, and if—

(A) such bank or similar financial institution has adopted adequate internal safeguards which assure that the providing of

such ancillary service is consistent with

sound banking and financial practice, as determined by Federal or State supervisory

authority, and

(B) the extent to which such ancillary

service is provided is subject to specific

guidelines issued by such bank or similar financial institution (as determined by the

Secretary after consultation with Federal

and State supervisory authority), and adherence to such guidelines would reasonably

preclude such bank or similar financial institution from providing such ancillary service (i) in an excessive or unreasonable manner, and (ii) in a manner that would be inconsistent with the best interests of participants and beneficiaries of employee benefit

plans.

Such ancillary services shall not be provided

at more than reasonable compensation.

(7) The exercise of a privilege to convert securities, to the extent provided in regulations

of the Secretary, but only if the plan receives

no less than adequate consideration pursuant

to such conversion.

(8) Any transaction between a plan and (i) a

common or collective trust fund or pooled investment fund maintained by a party in interest which is a bank or trust company supervised by a State or Federal agency or (ii) a

pooled investment fund of an insurance company qualified to do business in a State, if—
Page 439 TITLE 29—LABOR § 1108

(A) the transaction is a sale or purchase of

an interest in the fund,

(B) the bank, trust company, or insurance

company receives not more than reasonable

compensation, and

(C) such transaction is expressly permitted

by the instrument under which the plan is

maintained, or by a fiduciary (other than

the bank, trust company, or insurance company, or an affiliate thereof) who has authority to manage and control the assets of

the plan.

(9) The making by a fiduciary of a distribution of the assets of the plan in accordance

with the terms of the plan if such assets are

distributed in the same manner as provided

under section 1344 of this title (relating to allocation of assets).

(10) Any transaction required or permitted

under part 1 of subtitle E of subchapter III of

this chapter.

(11) A merger of multiemployer plans, or the

transfer of assets or liabilities between multiemployer plans, determined by the Pension

Benefit Guaranty Corporation to meet the requirements of section 1411 of this title.

(12) The sale by a plan to a party in interest

on or after December 18, 1987, of any stock, if—

(A) the requirements of paragraphs (1) and

(2) of subsection (e) of this section are met

with respect to such stock,

(B) on the later of the date on which the

stock was acquired by the plan, or January

1, 1975, such stock constituted a qualifying

employer security (as defined in section

1107(d)(5) of this title as then in effect), and

(C) such stock does not constitute a qualifying employer security (as defined in section 1107(d)(5) of this title as in effect at the

time of the sale).

(13) Any transfer in a taxable year beginning

before January 1, 2001, of excess pension assets

from a defined benefit plan to a retiree health

account in a qualified transfer permitted

under section 420 of title 26 (as in effect on

January 1, 1995).

(c) Fiduciary benefits and compensation not prohibited by section 1106

Nothing in section 1106 of this title shall be

construed to prohibit any fiduciary from—

(1) receiving any benefit to which he may be

entitled as a participant or beneficiary in the

plan, so long as the benefit is computed and

paid on a basis which is consistent with the

terms of the plan as applied to all other participants and beneficiaries;

(2) receiving any reasonable compensation

for services rendered, or for the reimbursement of expenses properly and actually incurred, in the performance of his duties with

the plan; except that no person so serving who

already receives full time pay from an employer or an association of employers, whose

employees are participants in the plan, or

from an employee organization whose members are participants in such plan shall receive

compensation from such plan, except for reimbursement of expenses properly and actually

incurred; or

(3) serving as a fiduciary in addition to being

an officer, employee, agent, or other representative of a party in interest.

(d) Owner-employees; family members; shareholder employees

(1) Section 1107(b) of this title and subsections

(b), (c), and (e) of this section shall not apply to

a transaction in which a plan directly or indirectly—

(A) lends any part of the corpus or income of

the plan to,

(B) pays any compensation for personal services rendered to the plan to, or

(C) acquires for the plan any property from,

or sells any property to,

any person who is with respect to the plan an

owner-employee (as defined in section 401(c)(3)

of title 26), a member of the family (as defined

in section 267(c)(4) of such title) of any such

owner-employee, or any corporation in which

any such owner-employee owns, directly or indirectly, 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.

(2)(A) For purposes of paragraph (1), the following shall be treated as owner-employees:

(i) A shareholder-employee.

(ii) A participant or beneficiary of an individual retirement plan (as defined in section

7701(a)(37) of title 26).

(iii) An employer or association of employees which establishes such an individual retirement plan under section 408(c) of such

title.

(B) Paragraph (1)(C) shall not apply to a transaction which consists of a sale of employer securities to an employee stock ownership plan (as

defined in section 1107(d)(6) of this title) by a

shareholder-employee, a member of the family

(as defined in section 267(c)(4) of such title) of

any such owner-employee, or a corporation in

which such a shareholder-employee owns stock

representing a 50 percent or greater interest described in paragraph (1).

(3) For purposes of paragraph (2), the term

‘‘shareholder-employee’’ means an employee or

officer of an S corporation (as defined in section

1361(a)(1) of such title) who owns (or is considered as owning within the meaning of section

318(a)(1) of such title) more than 5 percent of the

outstanding stock of the corporation on any day

during the taxable year of such corporation.

(e) Acquisition or sale by plan of qualifying employer securities; acquisition, sale, or lease

by plan of qualifying employer real property

Sections 1106 and 1107 of this title shall not

apply to the acquisition or sale by a plan of

qualifying employer securities (as defined in

section 1107(d)(5) of this title) or acquisition,

sale or lease by a plan of qualifying employer

real property (as defined in section 1107(d)(4) of

this title)—

(1) if such acquisition, sale, or lease is for

adequate consideration (or in the case of a

marketable obligation, at a price not less favorable to the plan than the price determined

under section 1107(e)(1) of this title),

(2) if no commission is charged with respect

thereto, and
§ 1108 TITLE 29—LABOR Page 440

(3) if—

(A) the plan is an eligible individual account plan (as defined in section 1107(d)(3) of

this title), or

(B) in the case of an acquisition or lease of

qualifying employer real property by a plan

which is not an eligible individual account

plan, or of an acquisition of qualifying employer securities by such a plan, the lease or

acquisition is not prohibited by section

1107(a) of this title.

(f) Applicability of statutory prohibitions to

mergers or transfers

Section 1106(b)(2) of this title shall not apply

to any merger or transfer described in subsection (b)(11) of this section.

(Pub. L. 93–406, title I, §408, Sept. 2, 1974, 88 Stat.

883; Pub. L. 96–364, title III, §308, Sept. 26, 1980,

94 Stat. 1295; Pub. L. 97–354, §5(a)(43), Oct. 19,

1982, 96 Stat. 1697; Pub. L. 99–514, title XI,

§1114(b)(15)(B), title XVIII, §1898(i)(1), Oct. 22,

1986, 100 Stat. 2452, 2957; Pub. L. 101–239, title

VII, §§7881(l)(5), 7891, 7894(e)(4)(A), Dec. 19, 1989,

103 Stat. 2443, 2445, 2450; Pub. L. 101–508, title

XII, §12012(b), Nov. 5, 1990, 104 Stat. 1388–571;

Pub. L. 103–465, title VII, §731(c)(4)(C), Dec. 8,

1994, 108 Stat. 5004; Pub. L. 104–188, title I,

§1704(n)(2), Aug. 20, 1996, 110 Stat. 1886; Pub. L.

105–34, title XV, §1506(b)(2), Aug. 5, 1997, 111 Stat.

1066.)

REFERENCES IN TEXT

This chapter, referred to in subsec. (a), was in the

original ‘‘this Act’’, meaning Pub. 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.

AMENDMENTS

1997—Subsec. (d). Pub. 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. (b)(1). Pub. 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. (b)(13). Pub. L. 103–465 substituted

‘‘2001’’ for ‘‘1996’’ and ‘‘1995’’ for ‘‘1991’’.

1990—Subsec. (b)(13). Pub. L. 101–508 added par. (13).

1989—Subsec. (b)(12). Pub. L. 101–239, §7881(l)(5), added

par. (12).

Subsec. (d). Pub. 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.

Pub. 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.

Pub. 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. (b)(1)(B). Pub. L. 99–514, §1114(b)(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). Pub. L. 99–514, §1898(i)(1), struck out

‘‘(a),’’ before ‘‘(b),’’ in introductory provisions.

1982—Subsec. (d). Pub. 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. (b)(10), (11). Pub. L. 96–364, §308(a),

added pars. (10) and (11).

Subsec. (f). Pub. L. 96–364, §308(b), added subsec. (f).

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by Pub. L. 105–34 applicable to taxable

years beginning after Dec. 31, 1997, see section 1506(c) of

Pub. L. 105–34, set out as a note under section 409 of

Title 26, Internal Revenue Code.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104–188 effective as of Dec. 12,

1994, see section 1704(n)(3) of Pub. L. 104–188, set out as

a note under section 414 of Title 26, Internal Revenue

Code.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101–508 applicable to qualified

transfers under section 420 of title 26 made after Nov.

5, 1990, see section 12012(e) of Pub. 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 Pub. L. 101–239 effective, except as otherwise provided, as if included in

the provision of the Pension Protection Act, Pub. L.

100–203, §§9302–9346, to which such amendment relates,

see section 7882 of Pub. L. 101–239, set out as a note

under section 401 of Title 26, Internal Revenue Code.

Amendment by section 7891(a) of Pub. L. 101–239 effective, except as otherwise provided, as if included in the

provision of the Tax Reform Act of 1986, Pub. L. 99–514,

to which such amendment relates, see section 7891(f) of

Pub. L. 101–239, set out as a note under section 1002 of

this title.

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

‘‘The amendments made by subparagraph (A) [amending this section] shall take effect as if originally included in section 491(b) of the Deficit Reduction Act of

1984 [Pub. L. 98–369].’’

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by section 1114(b)(15)(B) of Pub. L. 99–514

applicable to years beginning after Dec. 31, 1988, see

section 1114(c)(3) of Pub. L. 99–514, set out as a note

under section 414 of Title 26, Internal Revenue Code.

Section 1898(i)(2) of Pub. 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 Pub. L. 97–354 applicable to taxable

years beginning after Dec. 31, 1982, see section 6(a) of

Pub. L. 97–354, set out as a note under section 1361 of

Title 26, Internal Revenue Code.
Page 441 TITLE 29—LABOR § 1111

1So in original. This part does not contain subparts.

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 of the Treasury or his delegate to issue before Feb. 1, 1988, final regulations to carry out amendments made by section 1114 of Pub. L. 99–514, see section 1141 of Pub. 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.

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 Pub. 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 Pub. L. 99–514, as amended, 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, 1106, 1107,

1403 of this title; title 5 section 8477; title 26 section

4975.

§ 1109. Liability for breach of fiduciary duty

(a) Any person who is a fiduciary with respect

to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally

liable to make good to such plan any losses to

the plan resulting from each such breach, and to

restore to such plan any profits of such fiduciary

which have been made through use of assets of

the plan by the fiduciary, and shall be subject to

such other equitable or remedial relief as the

court may deem appropriate, including removal

of such fiduciary. A fiduciary may also be removed for a violation of section 1111 of this

title.

(b) No fiduciary shall be liable with respect to

a breach of fiduciary duty under this subchapter

if such breach was committed before he became

a fiduciary or after he ceased to be a fiduciary.

(Pub. L. 93–406, title I, §409, Sept. 2, 1974, 88 Stat.

886.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1132 of this title.

§ 1110. Exculpatory provisions; insurance

(a) Except as provided in sections 1105(b)(1)

and 1105(d) of this title, any provision in an

agreement or instrument which purports to relieve a fiduciary from responsibility or liability

for any responsibility, obligation, or duty under

this part shall be void as against public policy.

(b) Nothing in this subpart 1 shall preclude—

(1) a plan from purchasing insurance for its

fiduciaries or for itself to cover liability or

losses occurring by reason of the act or omission of a fiduciary, if such insurance permits

recourse by the insurer against the fiduciary

in the case of a breach of a fiduciary obligation by such fiduciary;

(2) a fiduciary from purchasing insurance to

cover liability under this part from and for his

own account; or

(3) an employer or an employee organization

from purchasing insurance to cover potential

liability of one or more persons who serve in a

fiduciary capacity with regard to an employee

benefit plan.

(Pub. L. 93–406, title I, §410, Sept. 2, 1974, 88 Stat.

886.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1114 of this title.

§ 1111. Persons prohibited from holding certain

positions

(a) Conviction or imprisonment

No person who has been convicted of, or has

been imprisoned as a result of his conviction of,

robbery, bribery, extortion, embezzlement,

fraud, grand larceny, burglary, arson, a felony

violation of Federal or State law involving substances defined in section 802(6) of title 21, murder, rape, kidnaping, perjury, assault with intent to kill, any crime described in section

80a–9(a)(1) of title 15, a violation of any provision of this chapter, a violation of section 186 of

this title, a violation of chapter 63 of title 18, a

violation of section 874, 1027, 1503, 1505, 1506, 1510,

1951, or 1954 of title 18, a violation of the LaborManagement Reporting and Disclosure Act of

1959 (29 U.S.C. 401), any felony involving abuse or

misuse of such person’s position or employment

in a labor organization or employee benefit plan

to seek or obtain an illegal gain at the expense

of the members of the labor organization or the

beneficiaries of the employee benefit plan, or

conspiracy to commit any such crimes or attempt to commit any such crimes, or a crime in

which any of the foregoing crimes is an element,

shall serve or be permitted to serve—

(1) as an administrator, fiduciary, officer,

trustee, custodian, counsel, agent, employee,

or representative in any capacity of any employee benefit plan,

(2) as a consultant or adviser to an employee

benefit plan, including but not limited to any

entity whose activities are in whole or substantial part devoted to providing goods or

services to any employee benefit plan, or

(3) in any capacity that involves decisionmaking authority or custody or control of the

moneys, funds, assets, or property of any employee benefit plan,

during or for the period of thirteen years after

such conviction or after the end of such imprisonment, whichever is later, unless the sentencing court on the motion of the person convicted

sets a lesser period of at least three years after

such conviction or after the end of such imprisonment, whichever is later, or unless prior to

the end of such period, in the case of a person so

convicted or imprisoned (A) his citizenship

rights, having been revoked as a result of such

conviction, have been fully restored, or (B) if the

offense is a Federal offense, the sentencing judge

or, if the offense is a State or local offense, the