Plain-English summary
Court narrows ERISA’s prohibited transaction rule for employer-provided services to employee retirement plans
The Court unanimously reversed the Second Circuit, holding that ERISA’s ban on fiduciaries engaging in certain transactions (29 U.S.C. §1106(a)(1)(C)) does not automatically forbid every instance where an employer or plan fiduciary provides goods, services, or facilities to its own plan. The case was remanded for further proceedings consistent with the Court’s interpretation.
Why this matters
ERISA’s prohibited‑transaction rules are a key protection against conflicts of interest in retirement plans. The Court’s interpretation limits blanket liability for employers and fiduciaries who provide services to their own plans, which affects when fiduciaries can be held liable for self‑dealing and how plans structure services and fees.
Who may feel it
- Employers that sponsor ERISA-covered retirement plans
- Plan fiduciaries and administrators
- Plan participants and beneficiaries (workers and retirees)
- ERISA litigators and fiduciary insurers
- Third-party service providers to plans
Key questions
- When does furnishing goods, services, or facilities by a plan fiduciary to the plan qualify as a prohibited transaction under 29 U.S.C. §1106(a)(1)(C)?