§ 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).