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Pension Resource

ERISA § 406 (29 U.S.C. § 1106)

Prohibited transactions
USC 2024 ed., current through 2025-01-06 · current · last amended by Pub. L. 93-406
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(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.
Source credit, amendments & notes

(Pub. L. 93–406, title I, §406, Sept. 2, 1974, 88 Stat. 879.)

ERISA § 406 (29 U.S.C. § 1106) — Prohibited transactions · USC 2024 ed., current through 2025-01-06 · https://pensionresource.website/EAMain?content=EAMain.Law&id=usc29-1106&asof=1985-01-09 · printed Oct 16, 2026
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  • (a) Transactions between plan and party in interest
  • (b) Transactions between plan and fiduciary
  • (c) Transfer of real or personal property to plan by party in i…
Parallel provisions
Cited by (code & regs)

No regulations are linked to this section in the library.

Guidance addressing this section
Department of Labor (EBSA)
Final Rules
Proposed Rules
  • 88 FR 76032Proposed Nov 3, 2023 — Proposed Amendment to Prohibited Transaction Exemptions 75-1, 77-4, 80-83, 83-1, and 86-128 Comments due Jan 2, 2024 (b)
  • 88 FR 76004Proposed Nov 3, 2023 — Proposed Amendment to Prohibited Transaction Exemption 84-24 Comments due Jan 2, 2024 (a)(1)(A)(a)(1)(D)(b)
  • 88 FR 75979Proposed Nov 3, 2023 — Proposed Amendment to Prohibited Transaction Exemption 2020-02 Comments due Jan 2, 2024 (a)(1)(A)(a)(1)(D)(b)(b)(1)
  • 87 FR 45204Proposed Jul 27, 2022 — Proposed Amendment to Prohibited Transaction Class Exemption 84-14 (the QPAM Exemption) Comments due Sep 26, 2022 (a)(a)(1)(A)(b)(b)(1)
  • 87 FR 14722Proposed Mar 15, 2022 — Procedures Governing the Filing and Processing of Prohibited Transaction Exemption Applications Comments due Apr 14, 2022 (a)(a)(1)(E)(b)
  • 85 FR 40834Proposed Jul 7, 2020 — Improving Investment Advice for Workers & Retirees Comments due Aug 6, 2020 (a)(1)(A)(a)(1)(C)
  • 82 FR 7336Proposed Jan 19, 2017 — Proposed Best Interest Contract Exemption for Insurance Intermediaries (a)(a)(1)(A)(a)(1)(C)(a)(1)(D)(b)(b)(1)
  • 80 FR 22021Proposed Apr 20, 2015 — Proposed Amendment to and Proposed Partial Revocation of Prohibited Transaction Exemption (PTE) 86-128 for Securities Transactions Involving Employee Benefit P… Comments due Jul 6, 2015 (a)(a)(1)(A)(a)(1)(C)(a)(1)(D)(b)(b)(1)
  • 80 FR 22010Proposed Apr 20, 2015 — Proposed Amendment to and Proposed Partial Revocation of Prohibited Transaction Exemption (PTE) 84-24 for Certain Transactions Involving Insurance Agents and B… Comments due Jul 6, 2015 (a)(1)(A)(a)(1)(C)(b)
  • 80 FR 22004Proposed Apr 20, 2015 — Proposed Amendment to Prohibited Transaction Exemption (PTE) 75-1, Part V, Exemptions From Prohibitions Respecting Certain Classes of Transactions Involving Em… Comments due Jul 6, 2015 (a)(1)(B)(a)(1)(C)(b)
  • 80 FR 21989Proposed Apr 20, 2015 — Proposed Class Exemption for Principal Transactions in Certain Debt Securities between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs Comments due Jul 6, 2015 (a)(a)(1)(A)(a)(1)(B)(a)(1)(C)(b)(b)(1)
  • 80 FR 21960Proposed Apr 20, 2015 — Proposed Best Interest Contract Exemption Comments due Jul 6, 2015 (a)(1)(A)(a)(1)(C)(a)(1)(D)(b)(b)(1)(b)(2)
  • 75 FR 53172Proposed Aug 30, 2010 — Prohibited Transaction Exemption Procedures; Employee Benefit Plans Comments due Oct 14, 2010 (b)
  • 75 FR 9360Proposed Mar 2, 2010 — Investment Advice-Participants and Beneficiaries Comments due May 5, 2010
Advisory Opinions
  • AO 2023-01A — This advisory opinion concerns the application of ERISA’s fiduciary responsibility provisions to a Citigroup program that involves a commitment by Citigroup an… (b)(b)(2)
Also cited in 45 other documents
Department of Labor (EBSA)
Proposed Rules
  • 91 FR 16088Proposed Mar 31, 2026 — Fiduciary Duties in Selecting Designated Investment Alternatives Comments due Jun 1, 2026
  • 91 FR 10033Proposed Mar 2, 2026 — Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure; Extension of Comment Period Comments due Apr 15, 2026
  • 91 FR 4348Proposed Jan 30, 2026 — Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure Comments due Mar 31, 2026 (a)(a)(1)(a)(1)(C)(b)
  • 90 FR 35646Proposed Jul 29, 2025 — Pooled Employer Plans: Big Plans for Small Businesses Comments due Sep 29, 2025
  • 89 FR 5624Proposed Jan 29, 2024 — Automatic Portability Transaction Regulations Comments due Mar 29, 2024
  • 88 FR 75890Proposed Nov 3, 2023 — Retirement Security Rule: Definition of an Investment Advice Fiduciary Comments due Jan 2, 2024 (b)(1)
  • 88 FR 9408Proposed Feb 14, 2023 — Amendment and Restatement of Voluntary Fiduciary Correction Program Comments due Nov 21, 2022
  • 87 FR 71164Proposed Nov 21, 2022 — Voluntary Fiduciary Correction Program Comments due Jan 20, 2023 (a)(1)(A)
  • 84 FR 37545Proposed Jul 31, 2019 — "Open MEPs" and Other Issues Under Section 3(5) of the Employee Retirement Income Security Act Comments due Oct 29, 2019
  • 82 FR 41365Proposed Aug 31, 2017 — Extension of Transition Period and Delay of Applicability Dates; Best Interest Contract Exemption (PTE 2016-01); Class Exemption for Principal Transactions in … Comments due Sep 15, 2017
  • 82 FR 31278Proposed Jul 6, 2017 — Request for Information Regarding the Fiduciary Rule and Prohibited Transaction Exemptions Comments due Aug 7, 2017
  • 82 FR 12319Proposed Mar 2, 2017 — Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice; Best Interest Contract Exemption (Prohibited Transaction Exemption … Comments due Mar 17, 2017
  • 81 FR 47534Proposed Jul 21, 2016 — Proposed Revision of Annual Information Return/Reports Comments due Oct 4, 2016
  • 80 FR 22035Proposed Apr 20, 2015 — Proposed Amendments to Class Exemptions 75-1, 77-4, 80-83 and 83-1 Comments due Jul 6, 2015 (b)(b)(1)(b)(2)(b)(3)
  • 80 FR 21928Proposed Apr 20, 2015 — Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice Comments due Jul 6, 2015 (b)(2)
  • 77 FR 74063Proposed Dec 12, 2012 — Amendments to the Abandoned Plan Regulations Comments due Feb 11, 2013
  • 75 FR 65263Proposed Oct 22, 2010 — Definition of the Term “Fiduciary” Comments due Jan 20, 2011 (a)(b)
Final Rules
  • 91 FR 13503 Mar 20, 2026 — Retirement Security Rule: Definition of an Investment Advice Fiduciary: Notice of Court Vacatur (a)(1)(A)
  • 90 FR 3667 Jan 15, 2025 — Prohibited Transaction Exemption (PTE) 2002-51 To Permit Certain Transactions Identified in the Voluntary Fiduciary Correction Program
  • 90 FR 4192 Jan 15, 2025 — Voluntary Fiduciary Correction Program (a)(1)(A)
  • 89 FR 43636 May 17, 2024 — Abandoned Plan Regulations
  • 89 FR 32302 Apr 25, 2024 — Amendment to Prohibited Transaction Exemption 84-24 (a)(1)(A)(b)(b)(1)
  • 89 FR 32122 Apr 25, 2024 — Retirement Security Rule: Definition of an Investment Advice Fiduciary (b)(b)(1)
  • 87 FR 73822 Dec 1, 2022 — Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights (a)(1)(D)
  • 85 FR 82798 Dec 18, 2020 — Prohibited Transaction Exemption 2020-02, Improving Investment Advice for Workers & Retirees (a)(a)(1)(A)(a)(1)(B)(a)(1)(C)(b)
  • 82 FR 56545 Nov 29, 2017 — 18-Month Extension of Transition Period and Delay of Applicability Dates; Best Interest Contract Exemption (PTE 2016-01); Class Exemption for Principal Transac…
  • 82 FR 16902 Apr 7, 2017 — Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice; Best Interest Contract Exemption (Prohibited Transaction Exemption …
  • 81 FR 95879 Dec 29, 2016 — Interpretive Bulletin Relating to the Exercise of Shareholder Rights and Written Statements of Investment Policy, Including Proxy Voting Policies or Guidelines
  • 81 FR 20946 Apr 8, 2016 — Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice (b)(b)(1)(b)(2)(b)(3)
  • 77 FR 41678 Jul 16, 2012 — Amendment Relating to Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure/Web Page (a)(1)(C)
  • 77 FR 5632 Feb 3, 2012 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure (a)(1)(C)
  • 76 FR 66637 Oct 27, 2011 — Prohibited Transaction Exemption Procedures; Employee Benefit Plans (b)
  • 75 FR 41600 Jul 16, 2010 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure (a)(a)(1)(C)(a)(1)(D)
Technical Releases
  • TR 2011-04 Dec 2, 2011 — Technical Release 2011-04
IRS / Treasury
Final Rules
  • 84 FR 28888 Jun 20, 2019 — Health Reimbursement Arrangements and Other Account-Based Group Health Plans (a)
  • 80 FR 54374 Sep 9, 2015 — Determination of Minimum Required Pension Contributions
Treasury Decisions
  • T.D. 9732 Sep 28, 2015 — These final regulations provide guidance on the determination of minimum required contributions for single-employer defined benefit pension plans and also cont…
  • T.D. 9694 Oct 6, 2014 — These final regulations provide guidance on the application of § 162(m)(6). Section 162(m)(6) limits the allowable deduction for remuneration for services prov…
Revenue Procedures
  • Rev. Proc. 2014-5 Jan 2, 2014 — Revised procedures are provided for furnishing technical advice to area managers and appeals office by the Office of the Division Commissioner, Tax Exempt and … (a)
  • Rev. Proc. 2013-5 Jan 2, 2013 — Technical advice. Revised procedures are provided for furnishing technical advice to area managers and appeals office by the Office of the Division Commissione… (a)
PBGC
Final Rules
  • 83 FR 46642 Sep 14, 2018 — Mergers and Transfers Between Multiemployer Plans (a)
  • 80 FR 79687 Dec 23, 2015 — Partitions of Eligible Multiemployer Plans
  • 79 FR 30459 May 28, 2014 — Multiemployer Plans; Valuation and Notice Requirements (a)
Proposed Rules
  • 81 FR 36229Proposed Jun 6, 2016 — Mergers and Transfers Between Multiemployer Plans Comments due Aug 5, 2016 (a)
  • 79 FR 4642Proposed Jan 29, 2014 — Multiemployer Plans; Valuation and Notice Requirements Comments due Mar 31, 2014 (a)
Tax Court (10) · DOL/Federal (3)
U.S. Tax Court (10)
Rulings that address this provision
Also cite this provision (7)
DOL and federal courts (3)
Rulings that address this provision
Also cite this provision (1)
Private Letter Rulings (2)
Private Letter Rulings (2)
Also cite this provision (2)
  • PLR 200109010 Mar 2, 2001 — Sale/Exchange UIL 4975.03-01, 4975.04-03 (a)(1) (a)(1)(A)
  • PLR 199925042 Jun 25, 1999 — Deduction for Contributions of Employer to an Employee's Trust or Annuity Plan and Compensation Under a Deferred-Payment Plan (Deduct. v. Not Deduct.) UIL 404.00-00, 4975.04-00

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EffectiveThroughSourceAmended by
Jan 4, 1995currentUSC 2024 ed., current through 2025-01-06 run 1Pub. L. 93-406View
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