Section 3(14) of ERISA defines a party in interest to include, among others, fiduciaries or employees of the plan, any person who provides services to the plan, an employer whose employees are covered by the plan, an employee organization whose members are covered by the plan, a person who owns 50 percent or more of such an employer or employee organization, or relatives of such persons just mentioned.
Certain plan transactions with parties in interest are prohibited under ERISA Sections 406 and 407 and are required, without regard to their materiality, to be disclosed in the plan’s annual report to the DOL.
EBPAQC Primer, Employee Benefit Plans – Parties in Interest and Prohibited Transactions
This document provides a general understanding of employee benefit plan parties in interest and prohibited transactions under the Employee Retirement Income Security Act of 1974 (ERISA).
Identification of Parties In Interest and Related Parties
This non-authoritative tool is intended to be completed by plan management and includes information to assist them in identifying parties in interest and related parties.
Documentation of Procedures Performed to Identify Related Parties and Related Party Transactions, and Parties in Interest and Party in Interest Transactions
This non-authoritative tool may be used by plan auditors in documenting procedures performed to identify related parties and parties in interest, and transactions with those parties.
Documentation of the Consideration of Potential Prohibited Transactions in an EBP Financial Statement Audit
This non-authoritative tool is designed to assist auditors in documenting their consideration of possible prohibited transactions in an employee benefit plan audit.
Definition of Party in Interest – ERISA section 3(14) defines the term party in interest.
Prohibited Transactions – ERISA section 406 includes the definition of a prohibited transaction.
Exemptions from Prohibited Transactions – ERISA section 408(a) establishes a procedure to grant an exemption for a transaction.
The DOL EBSA website provides resources for obtaining authorization for non-exempt transactions:
29 CFR 2570 Prohibited Transaction Procedures - Contains the final regulation that describes the procedures for filing and processing applications for exemptions from the prohibited transaction provisions of the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code of 1986 (the Code), and the Federal Employees' Retirement System Act of 1986 (FERSA).
Class Exemptions Website – Lists the class exemptions granted.
EXPRO Exemptions Under PTE 96-62 Website – Lists the EXPRO exemptions granted.
Index of Granted Individual Exemptions Website – Lists the individual exemptions granted.
DOL’s Frequently Asked Questions on Reporting Delinquent Contributions on the Form 5500 - Provides guidance to plan administrators and accountants on complying with the requirements of the Form 5500 Annual Return/Report of Employee Benefit Plan for reporting delinquent participant contributions.
DOL’s Voluntary Fiduciary Correction Program Website – Includes information such as forms, tools, checklists and FAQs to help the plan sponsor in self-correcting ERISA violations.
IRS FAQs on Prohibited Transactions – Provides guidance on IRS excise taxes related to prohibited transactions and disqualified persons.
The AICPA Audit and Accounting Guide, Employee Benefit Plans, provides audit guidance related to party in interest transactions and prohibited transactions.