* ERISA PROHIBITS A FIDUCIARY FROM ENGAGING in certain transactions with a party in interest. A CPA who audits a plan's assets is a party in interest.
Supreme Court made it clear that a nonfiduciary party in interest (such as a CPA) can be held liable under ERISA for participating in a prohibited transaction.
Second, section 406 of ERISA forbids a fiduciary from causing a plan to engage in certain "prohibited transactions" with a "party in interest." Prohibited transactions are per se violations of ERISA, regardless of whether they otherwise satisfy the fiduciary duties of section 404, or even if they are favorable for the plan.
Prohibited transactions include the following actions between an ERISA-covered plan and a party in interest:
The Department of Labor or a plan participant may sue any fiduciary or party in interest who engages in a prohibited transaction.
Supreme Court decision in Salomon Brothers, it was an open question whether a nonfiduciary party in interest could be held liable under ERISA for "participating" in a prohibited transaction.
In this capacity, Salomon was a party in interest, but not a fiduciary.
Because a CPA who provides services to a plan is an ERISA party in interest, the fees are considered a transfer of property from the plan to a party in interest.
* Any transaction between a party in interest to a plan and an insurance company general account in which the plan has an interest either as a contract holder or as the beneficial owner.
* The transaction must not be part of an agreement, arrangement or understanding designed to benefit a party in interest.
* The party in interest must not be the insurance company, any pooled separate account of the insurance company or an affiliate of the insurance company.
The furnishing of services, facilities and any goods incidental to such services and facilities by a place of public accommodation (e.g., a hotel) owned by an insurance company general account to a party in interest is exempt if such services, facilities and incidental goods are furnished on a comparable basis to the general public.