Plan assets: Difference between revisions

1,743 bytes added ,  28 August 2018
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The concern is concern over the U.S. Department of Labor’s “[[plan asset regulations]]” which determine a [[fund]]'s assets will be treated as held directly by an [[ERISA plan investor]] for the purposes of [[ERISA]] and the [[Internal Revenue Code of 1986]].
The concern is concern over the U.S. Department of Labor’s “[[plan asset regulations]]” which determine a [[fund]]'s assets will be treated as held directly by an [[ERISA plan investor]] for the purposes of [[ERISA]] and the [[Internal Revenue Code of 1986]].
==={{tag|ERISA}} reps===
Even a non-US manager might be iunvited to make this sort of a representation:
{{Box|
'''No ERISA Funds'''. The assets of Party B do not include "[[plan assets]]" within the meaning of Section 3(42) of {{tag|ERISA}}, and Party B is not otherwise subject to Title I of ERISA or Section 4975 of the Code. <br>
'''Definitions'''.  Section {{isdaprov|14}} is hereby amended to include the following definitions in their appropriate alphabetical order:
:"'''Code'''" means the U.S. [[Internal Revenue Code of 1986]], as amended, or any successor statute.
:"'''ERISA'''" means the U.S. [[Employee Retirement Income Security Act of 1974]], as amended, or any successor statute.
}}
The second limb of this is rather tendentious. What has the [[Inland Revenue Code]] got to do with retirement plans? Well, if an {{tag|ERISA}} plan transacts with any party having a conflict of interest — its own manager, fiduciaries and so on — this is a [[prohibited transaction]] which is subject to a 15% tax. This is the kind of thing that freaks people out about ERISA.
Still, there’s a less tendentious way of getting there. Section 4795 of the [[Internal Revenue Code]] imposes a tax, but only on “prohibited transactions”, which are only with  [[disqualified person]]s. [[Disqualified person]]s are defined as “[[parties in interest]]” to an ERISA [[employee benefit plan]]. So, if you recraft the representation so, you achieve the same effect:
{{Box|
No ERISA Funds. Party B holds no “[[plan assets]]” and is not a “[[party in interest]]” to an [[employee benefit plan]], in each case as contemplated by the U.S. [[Employee Retirement Income Security Act of 1974]] (or any successor statute).
}}




{{seealso}}
{{seealso}}
*[[ERISA]]
*[[ERISA]]
{{ref}}