Opinion ID: 781612
Heading Depth: 4
Heading Rank: 1

Heading: providing benefits to participants and their beneficiaries[.]

Text: 32 29 U.S.C. § 1104(a)(1)(A)(i). This statutory duty of loyalty has been described by this Court as requiring that a fiduciary act, in Judge Friendly's felicitous phrase, with an eye single to the interests of the participants and beneficiaries. Donovan v. Bierwirth, 680 F.2d 263, 271 (2d Cir.). This requirement has also been described as the exclusive benefit rule. New England Health Care Employees Union, Dist. 1199 v. Mount Sinai Hosp., 65 F.3d 1024, 1032 (2d Cir.1995). 33 ERISA further seeks to safeguard the interests of fund recipients by imposing strict regulations on the ability of parties in interest with respect to a fund to transfer moneys from the fund to themselves or to third parties. The basic rule is set forth in ERISA section 406: 34
35 (1) A fiduciary with respect to a plan shall not cause the plan to engage in any transaction, if he knows or should know such transaction constitutes a direct or indirect — 36 (D) transfer to, or use by or for the benefit of, a party in interest, of any assets of the plan[.] 37 29 U.S.C. § 1106. Section 406 thus acts as a blanket ban, exempting only the specified transactions that are enumerated in Section 408. Section 408 provides, in relevant part: 38
39 The prohibitions provided in section 1106 of this title shall not apply to any of the following transactions: 40 (2) Contracting or making reasonable arrangements with a party in interest for office space, or legal, or accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor. 41