- Sale, exchange, or leasing of any property between a plan and a disqualified person;
- Lending of money or other extension of credit between a plan and a disqualified person;
- Furnishing of goods, services or facilities between a plan and a disqualified person;
- Transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan.
- Dealings by a fiduciary with the income or assets of a plan for his own account or in his own interest;
- Receipt by a fiduciary for his own personal account of any consideration from any party dealing with the plan in connection with a transaction involving the income or assets of the plan.
- (New as of 5/2013) Failure by a covered service provider (CSP) to disclose compensation received from a plan. Generally due July 1, 2012, or upon a new contract engagement or extension or renewal of an existing contract. Plan sponsors have engaged in a prohibited transaction if they have not received required disclosures from CSPs. Plan sponsors must have a “reasonable belief” that disclosures have been made and are complete in order to qualify for the prohibited transaction exemption.
Disqualified Person or Party in Interest:
- A person providing services to the plan;
- An employer whose employees are covered by the plan;
- An employee organization who has members covered by the plan;
- individual who owns:
a. 50% or more of all classes of stock entitled to vote, or
b. 50% or more of the profits or capital interests in a partnership, or
c. over 50% of the beneficial interest of a trust or other unincorporated enterprise which is an employer or employee organization described in 3 or 4 above.
- A family member of any of the above;
- Entity controlled by other disqualified persons;
- Certain employees and insiders of other disqualified persons;
- Certain partners or joint ventures with other disqualified persons.
Leased Employee – Worker who is on the payroll of one company but works for another. Must meet specific Code requirements; summarized:
- Under the recipient’s (your) primary direction and control.
- Provides services to recipient under agreement with the leasing organization.
- Performs services for recipient on a substantially full-time basis for 12 months.