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Text: Spink also alleged that the members of Lockheed's Retirement Committee who implemented the amended Plan violated Section(s) 406(a)(1)(D). As with the question whether Lockheed and the board members can be held liable under ERISA's fiduciary rules, the Court of Appeals erred in holding that the Retirement Committee members violated the prohibited transaction section of ERISA without making the requisite finding of fiduciary status. It is not necessary for us to decide the question whether the Retirement Committee members acted as fiduciaries when they paid out benefits according to the terms of the amended Plan, however, because we do not think that they engaged in any conduct prohibited by Section(s) 406(a)(1)(D).

17
The "transaction" in which fiduciaries may not cause a plan to engage is one that "constitutes a direct or indirect . . . transfer to, or use by or for the benefit of a party in interest, of any assets of the plan." 29 U. S. C. Section(s) 1106(a)(1)(D). Spink reads Section(s) 406(a)(1)(D) to apply in cases where the benefit received by the party in interest--in this case, the employer--is not merely a "natural inciden[t] of the administration of pension plans." Brief for Respondent 10. Lockheed, on the other hand, maintains that a plan administrator's payment of benefits to plan participants and beneficiaries pursuant to the terms of an otherwise lawful plan5 is wholly outside the scope of Section(s) 406(a)(1)(D). See Reply Brief for Petitioners 10. We agree with Lockheed.

18
Section 406(a)(1)(D) does not in direct terms include the payment of benefits by a plan administrator. And the surrounding provisions suggest that the payment of benefits is in fact not a "transaction" in the sense that Congress used that term in Section(s) 406(a). Section 406(a) forbids fiduciaries from engaging the plan in the "sale," "exchange," or "leasing" of property, 29 U. S. C. Section(s) 1106(a)(1)(A); the "lending of money" or "extension of credit," Section(s) 1106(a)(1)(B); the "furnishing of goods, services, or facilities," Section(s) 1106(a)(1)(C); and the "acquisition . . . of any employer security or employer real property," Section(s) 1106(a)(1)(E), with a party in interest. See also Section(s) 1108(b) (listing similar types of "transactions"). These are commercial bargains that present a special risk of plan underfunding because they are struck with plan insiders, presumably not at arms-length. See Commissioner v. Keystone Consol. Industries, Inc., 508 U. S., at 160. What the "transactions" identified in Section(s) 406(a) thus have in common is that they generally involve uses of plan assets that are potentially harmful to the plan. Cf. id., at 160-161 (reasoning that a transfer of unencumbered property to the plan by the employer for the purpose of applying it toward the employer's funding obligation fell within Section(s) 406(a)(1)'s companion tax provision, 26 U. S. C. Section(s) 4975, because it could "jeopardize the ability of the plan to pay promised benefits"). The payment of benefits conditioned on performance by plan participants cannot reasonably be said to share that characteristic.

19
According to Spink and the Court of Appeals, however, Lockheed's early retirement programs were prohibited transactions within the meaning of Section(s) 406(a)(1)(D) because the required release of employment-related claims by participants created a "significant benefit" for Lockheed. 60 F. 3d, at 624. Spink concedes, however, that among the "incidental" and thus legitimate benefits that a plan sponsor may receive from the operation of a pension plan are attracting and retaining employees, paying deferred compensation, settling or avoiding strikes, providing increased compensation without increasing wages, increasing employee turnover, and reducing the likelihood of lawsuits by encouraging employees who would otherwise have been laid off to depart voluntarily. Brief for Respondent 11.

20
We do not see how obtaining waivers of employment-related claims can meaningfully be distinguished from these admittedly permissible objectives. Each involves, at bottom, a quid pro quo between the plan sponsor and the participant: that is, the employer promises to pay increased benefits in exchange for the performance of some condition by the employee. By Spink's admission, the employer can ask the employee to continue to work for the employer, to cross a picket line, or to retire early. The execution of a release of claims against the employer is functionally no different; like these other conditions, it is an act that the employee performs for the employer in return for benefits. Certainly, there is no basis in Section(s) 406(a)(1)(D) for distinguishing a valid from an invalid quid pro quo. Section 406(a)(1)(D) simply does not address what an employer can and cannot ask an employee to do in return for benefits. See generally Alessi v. Raybestos-Manhattan, Inc., 451 U. S., at 511 (ERISA "leaves th[e] question" of the content of benefits "to the private parties creating the plan. . . . [T]he private parties, not the Government, control the level of benefits").6 Furthermore, if an employer can avoid litigation that might result from laying off an employee by enticing him to retire early, as Spink concedes, it stands to reason that the employer can also protect itself from suits arising out of that retirement by asking the employee to release any employment-related claims he may have.7

21
In short, whatever the precise boundaries of the prohibition in Section(s) 406(a)(1)(D), there is one use of plan assets that it cannot logically encompass: a quid pro quo between the employer and plan participants in which the plan pays out benefits to the participants pursuant to its terms. When Section(s) 406(a)(1)(D) is read in the context of the other prohibited transaction provisions, it becomes clear that the payment of benefits in exchange for the performance of some condition by the employee is not a "transaction" within the meaning of Section(s) 406(a)(1). A standard that allows some benefits agreements but not others, as Spink suggests, lacks a basis in Section(s) 406(a)(1)(D); it also would provide little guidance to lower courts and those who must comply with ERISA. We thus hold that the payment of benefits pursuant to an amended plan, regardless of what the plan requires of the employee in return for those benefits, does not constitute a prohibited transaction.8