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Trust Examination Manual

Appendix E — Employee Benefit Law
Reference Topic
Interagency Agreement to Refer Violations of ERISA to the Department of Labor
   

ERISA (Statute)

 
   
3 Definitions (Selected)
   
206  [Excerpt] Pledging by Participant of Vested Interest
   
401 Coverage 
   
402 Establishment of Plan
   
403 Establishment of Trust
   
404 Fiduciary Duties
   
405 Co-Fiduciary Liability
   
406 Prohibited Transactions
   
407 Investment in Sponsor Securities and Real Estate
   
408 Statutory Exemptions to Prohibited Transactions
   
408(b)(1)     Loans to Plan Participants
   
408(b)(2)      Ancillary Services
   
408(b)(3)      Loans to ESOPs
   
408(b)(4)      Deposits With Fiduciary Banks and Thrifts
   
408(b)(8)      Collective Investment Funds
   
408(c)(2)      Fiduciary Fees & Expenses
   
409 Liability for Breach of Fiduciary Duty
   
410 Exculpatory Provisions
   
411 Prohibition Against Certain Persons Holding Certain Positions
   
412 Bonding of Fiduciaries
   
502 Civil Money Penalties
   
Cross References Between ERISA and Internal Revenue Code
   

Summary of ERISA Regulations, Opinions, and Court Decisions

   
3 Definitions (Selected)
   
4 Plans Covered
   
404 Fiduciary Duties
   
405 Co-Fiduciary Liability
   
406 Prohibited Transactions
   
407  Investment in Sponsor Securities and Real Estate
   
408 Statutory Exemptions to Prohibited Transactions
   
408(b)(1)      Loans to Plan Participants
   
408(b)(2)     Ancillary Services
   
408(b)(3)      Loans to ESOPs
   
408(b)(4)     Deposits With Fiduciary Banks and Thrifts
   
408(b)(5)     Insurance Company Fiduciaries
   
408(b)(7)     Conversion of Securities
   
408(b)(8)     Collective Investment Funds
   
408(c)(2)     Fiduciary Fees & Expenses
   
410 Exculpatory Provisions
   
412 Bonding of Fiduciaries
   

Internal Revenue Code

   
72(p) Loans to Plan Participants Treated as Distributions
   
72(p)-1 Loans to Plan Participants Treated as Distributions – IRS Guidelines
   
408(h) Custodial Accounts
   
408(m) Investment in Collectibles by IRA and Self-Directed Accounts
   
408(q) Deemed Individual Retirement Accounts
   
409(e)  Qualifications for Tax Credit ESOPs – Voting Rights
   
417 Special Rules for Survivor Annuity Requirements
   
4975 Tax on Prohibited Transactions
   

Regulations

   
54.4975-11 IRS      ESOP Requirements
   
54.4975-12 IRS      "Qualified Employer Security" Defined
   
2510.3-101 DOL    Plan Assets (Pension and Welfare Benefits Administration Regulation)
   
2520.103-5  DOL    CIF Reports to Plan Administrators
   
2550.404a-1 DOL    Investment Duties (Prudence Regulation)
   
2550.404b-1 DOL    Indicia of ownership
   
2550.404c-1 DOL    ERISA Section 404(c) Plans
   
2550.404c-5 DOL Default Investment Alternatives Under Participant Directed Individual Account Plans (306KB PDF file - PDF Help)
   

Employer Securities and Real Property

   
2550.407a-1 DOL    General
   
2550.407a-2 DOL    Acquisition
   
2550.407d-5 DOL    "Qualifying" Defined
   
2550.407d-6  DOL    "Employee Stock Ownership Plan" Defined
   
2550.408b-1 DOL    Loans to Plan Participants and Beneficiaries
   
2550.408b-2  DOL    Services or Office Space
   
2550.408b-3 DOL    Loans to ESOPs
   
2550.408b-4 DOL    Investment in Own-Bank Interest-Bearing Deposits
   
2550.408b-6 DOL    Ancillary Services by Banks
   
2550.408c-2 DOL    Compensation for Services
   
2550.408e  DOL    Qualifying Employer Securities and Real Estate
   
2570.30 -.52 DOL    Individual and Class Prohibited Transaction Exemption Requests (Replaces ERISA Procedure 75-1)
   
   

IRS Revenue Rulings

   
59-60 Valuation of Non-Traded Assets
   
  IRS Rev Bulletin 2003-37
   
  IRS Revenue Procedure 2003-13 Deemed IRAs
   
  IRS Revenue Ruling 2004-67-Roth & Deemed IRA Group Trust Participation
   
  IRS Self Correction Program FAQ Guidance
   
  IRS Voluntary Compliance Program FAQ Guidance
   

IRS Interpretive Letter

  
EP:R:9 IRA Annual Valuations: Partnership Valuations, Inc.
   
PTE

Prohibited Transaction Class Exemptions

   
75-1

Securities Transactions (67KB PDF file - PDF Help)

Also See 86-128

   
77-3   Investment in Mutual Funds by In-House Employee Benefit Plans
   
77-4  Investment in Mutual Funds advised by fiduciary bank or affiliated with fiduciary bank (proprietary mutual funds).
   
80-26   Interest-free loans (including overdrafts) between plans and parties in interest.
   
80-51 Collective Investment Funds [Replaced by PTE 91-38].
   
80-83  Investment of plan assets in a securities issue of plan sponsor used to reduce debt at fiduciary bank or its affiliates.
   
81-6 Securities lending between plans and banks, broker-dealers, and government securities dealers.
   
81-8   Covers four types of short-term investments: banker's acceptances, commercial paper, repurchase agreements, and certificates of deposit.
   
82-63  Securities lending: permits payment of compensation to fiduciary providing service.
   
82-87  Residential Mortgage Loans. First- and second-lien loans and participations on 1-to-4 family homes, townhouses, condominiums, and cooperative apartments.
   
84-14

QPAM: Qualified Professional Asset Managers. Permits certain transactions between independent QPAMs and (1) parties in interest, and (2) employers, subject to conditions.


Amendment to PTE-84-14 (80KB PDF file - PDF Help)

   
86-128 Securities Transactions With Broker-Dealers: Permits use of affiliated brokers, including for collective investment funds.
   
91-38 Collective Investment Funds [Formerly PTE 80-51].
   
91-55   Gold Coins: American Eagle gold coins permitted as IRA investment.
   
93-33  Receipt of Services by IRA and Self-Retirement Plan Beneficiaries [Formerly PTE 93-2]
   
94-20 Foreign exchange: use of fiduciary bank, and its affiliates, to invest in foreign exchange and foreign currency options.
   
96-23 In-House Professional Asset Managers
   
97-11

Relationship Brokerage (25KB PDF file - PDF Help)

Amendment #1 Amendment #2 (28KB and 44KB PDF files - PDF Help)

   
97-41 Collective Investment Fund Conversions to Mutual Funds
   
98-54 Foreign Exchange Transactions Executed Pursuant to Standing Instructions
   
2000-14  Temporary Amendment to PTE 80-26 for Certain Interest Free Loans
   
2002-12 Cross-Trading of Securities (201KB PDF file - PDF Help)
   
2002-13 Amendment to Clarify the Term "Plan" (42KB PDF file - PDF Help)
   
2002-51

Voluntary Fiduciary Correction Program (58KB PDF file - PDF Help)

Amendment to 2002-51 (66KB PDF file - PDF Help)

   
2003-39 Release of Claims and Extenstions of Credit in Connection with Litigation (72KB PDF file - PDF Help)
   
2004-16 Mandatory Distributions (108KB PDF file - PDF Help)
   
2006-06 Abandoned Individual Account Plans (116KB PDF file - PDF Help)
   
2006-16 Loans of Securities by Plans (108KB PDF file - PDF Help)
   
IB

Interpretive Bulletins

   
75-2 Interpretive Bulletins Relating to the Employee Retirement Income Security Act of 1974

   
75-3 Interpretive bulletin relating to investments by employee benefit plans in securities of registered investment companies.
   
75-4 Interpretive bulletin relating to indemnification of fiduciaries
   
75-6 Guidelines for determining when a party in interest with respect to an employee benefit plan may receive an advance for expenses to be incurred on behalf of the plan without engaging in a transaction prohibited by section 406 of the Employee Retirement Income Security Act of 1974
   
75-8 Questions and answers relating to fiduciary responsibility under the Employee Retirement Income Security Act of 1974
   
94-1 ETIs: Economically Targeted Investments (Social Investing)
   
94-2 Proxy Voting and Investment Policies
   
94-3 In-Kind Contributions to Plans
   
95-1 Interpretive bulletin relating to the fiduciary standard under ERISA when selecting an annuity provider
   
96-1 Participant Investment Education for 404(c) Individual Account Plans
   
TB  

Technical Bulletins

   
86-1 Soft Dollars and Directed Commissions for Securities Transactions
   
AO

Advisory Opinions/Individual Exemptions

   
77-46 Insured/Uninsured Deposits: Indicates diversification requirements do not apply to insured deposits, and that uninsured deposits will not violate diversification requirements if depository bank's assets are "diversified."
   
79-49 Own-bank plans: Prohibits fee for fiduciary services when bank acts as fiduciary for own-bank plan.
   
80-OCC Own-bank stock: Prohibits discretionary purchases, sales, and retention of stock of a fiduciary bank. Non-discretionary purchases, sales, retention permitted. Indicates discretionary purchases and retention would be imprudent.
   
85-36  Loan(s) that primarily generate jobs for union members/employers.
   
86-FRB Cash sweeps and related fees ("Plotkin Letter").
   
88-2  Cash sweeps for non-discretionary accounts into non-affiliated mutual funds.
   
88-9  Own-bank stock: Purchases of stock (including treasury stock) of the fiduciary bank (or its parent holding company) by self-directed IRA accounts.
   
88-18 Self-directed IRA account loans to a company in which the grantor/customer has a substantial interest.
   
88-28 Own-bank stock: Purchases of an initial public offering ("IPO") of stock of the fiduciary bank (or its parent holding company) by self-directed IRA accounts by a mutual savings bank converting to a stock institution.
   
89-03 Self-directed IRA account investments in stock of the customer's employer, including stock purchased directly from the employer company.
   
92-23 Own-bank stock: Permits non-discretionary purchase and retention of own-bank (or holding company) stock.
   
93-13 Mutual funds, proprietary: Provides guidance on how PTE 77-4 applies to purchase of affiliated mutual funds.
   
93-24 Float management involving demand deposit accounts.
   
93-26 Mutual funds, proprietary: Provides guidance on applicability of PTE 77-4 to use of affiliated mutual funds by IRA and Keogh accounts.
   
94-41A Escheating
   
94-OCC Collective investment funds conversions to mutual funds.
   
96-OCC Investment in derivatives.
   
97-15A Acceptance of Mutual Fund 12b-1 Fees; Letter to Frost National Bank; Discretionary and Non-Discretionary Accounts.
   
97-16A Acceptance of Mutual Fund 12b-1 Fees; Letter to Aetna Life Insurance and Annuity Company; Non-Discretionary Accounts.
   
98-06A Applicability of PTE-97-4 and PTE 77-3 to Investment of In-House Bank Employee Benefit Plans into Proprietary Mutual Funds
   
1999-03A Purchase of Mortgage-Backed Securities Representing Interests in a Trust Fund for which an Affliate of the Fiduciary Serves as a Sub-Servicer
   
1999-05A Application of Plan Assets Regulation to Certain Mortgage Pool Certificates Offered by Freddie Mac
   
1999-13A Treatment of QDROs Believed to be Questionable
   
2000-10A Whether allowing the owner of an IRA to direct the IRA to invest in a limited partnership, in which relatives and the IRA owner in his individual capacity are partners, will violate section 4975 of the Code
   
2001-01A The application of Title I of ERISA to the payment by plans of expenses relating to tax-qualification. See hypothetical examples. (www.dol.gov)
   
2001-10A Application of ERISA Secs. 408(b)(2) and 408(b)(6) to the provision of trustee services by Laurel Trust Company to two defined benefit plans which it sponsors and the payment by the plans of trustee fees in connection with those services
   
2002-04A Application of Sec. 408(e) of ERISA to certain transactions between a plan and various personal trusts and estates sharing a common trustee with the plan
   
2002-05A Whether the prohibition in PTE 77-4 (42 FR 18732, April 8, 1977) on sales commission payments would apply to commissions paid by a plan to an independent broker who executes the plan’s purchase or sale of shares of open-end investment companies registered under the Investment Company Act of 1940 through a securities exchange
   
2002-08A Whether indemnification and limitation of liability provisions in a plan's service provider contract would violate the fiduciary provisions of ERISA
   
2002-14A Guidance concerning the selection of annuity providers in connection with distributions from defined contribution plans. Specifically, the application of specific requirements of Interpretive Bulletin 95-1
   
2003-02A Regarding the application of ERISA to the provision of overdraft protection services, including any inherent extension of credit incident to such services, by banks, whether or not the bank exercises investment discretion over plan assets
   
2003-09A Whether a trust company’s receipt of 12b-1 and subtransfer fees from mutual funds, the investment advisers of which are affiliates of the trust company, for services in connection with investment by employee benefit plans in the mutual funds, would violate ERISA when the decision to invest in such funds is made by an employee benefit plan fiduciary or participant who is independent of the trust company and its affiliates
   
2003-11A Whether delivery of a Profile (as described in Rule 498 under the Securities Act of 1933) would satisfy the prospectus delivery requirements under ERISA section 404(c) regulations
   
2003-15A Whether a limited partnership in which employee benefit plans invest would be deemed a party in interest with respect to the plans under section 3(14)(G) of ERISA where the plan trustee would hold more than fifty percent of the interests in the limited partnership on behalf of the plans
   
2004-02A Time and Order of Issuance of Domestic Relations Orders
   
2004-05A Whether the execution of a securities transaction between a plan and party in interest through an alternative trading system constitutes a prohibited transaction under ERISA
   
2004-07A Non-depository, state chartered trust company that is a wholly-owned subsidiary of a bank holding company and is subject to regular examination and supervision by the Federal Reserve System, is exempt from certain bonding requirements in section 412 of ERISA
   
2004-09A Concerning the application of the prohibited transaction provisions under section 4975(c) of the IRC, to certain contributions to health savings accounts
   
2005-04A Whether a plan may invest in a mutual fund when one of the plan's trustees is the president, CEO, and significant shareholder of the mutual fund's investment advisor
   
2005-09A Whether in-kind investments in a bank collective investment fund are covered by ERISA section 408(b)(8), if the stated conditions are met
   
2006-01A Whether a lease by a company (LLC) 49% owned by an IRA to a company (S) which is a disqualified person with respect to that IRA is a prohibited transaction where the manager of the LLC is an officer of S. Whether 29 CFR 2509.75-2 makes the transaction an indirect prohibited transaction and whether it makes the transaction a violation of the Internal Revenue Code's exclusive benefit rule
   
2006-06A Whether the prohibition on the payment of sales commissions in PTE 77-3 applies to the payment of 12b-1 Fees by a proprietary mutual fund to an unrelated broker
   
2006-08A Whether a fiduciary of a defined benefit plan may, consistent with the requirements of section 404 of ERISA, consider the liability obligations of the plan and the risks associated with such liability obligations in determining a prudent investment strategy for the plan
   
2006-09A This advisory opinion concludes that a self-directed IRA‘s investment in notes of a corporation, a majority of whose stock is owned by the son-in-law of the IRA owner, would be a prohibited transaction under the Internal Revenue Code
   
2007-01A Whether transactions between a broker-dealer and a separate account managed by a QPAM under a 401(k) plan fail to satisfy section I(a) of PTE 84-14 where plan participants investing in such account receive investment allocation advice from a subsidiary of the broker-dealer
   
2007-02A Whether the 10% test applicable to pooled investment vehicles under the QPAM class exemption (84-14) does not require consideration of any underlying plan investors in a pooled fund investing in another pooled fund (47KB PDF file - PDF Help)
   
FAB DOL Field Assistance Bulletins
   
2002-01 ESOP Refinance Transactions
   
2002-02 Plan Amendments Made by Multiemployer Trustees
   
2002-03 Disclosure and Other Obligations Relating to "Float"
   
2003-01 Participant Loans to Corporate Directors and Officers
   
2003-02 Application of Participant Contribution Requirements to Multiemployer Defined Contribution Pension Plans
   
2003-03 Allocation of Expenses in a Defined Contribution Plan
   
2004-01 Health Savings Accounts
   
2004-02 Fiduciary Duties and Missing Participants in Terminated Defined Contribution Plans
   
2004-03 Fiduciary Responsibilities of Directed Trustees
   
2006-01 The Distribution to Plans of Settlement Proceeds Relating to Late Trading and Market Timing
   
2006-02 Health Savings Accounts - Q&As
   
2006-03 Periodic Benefit Statements - Pension Protection Act of 2006
   
2007-01 Statutory Exemption for Investment Advice
   
2007-02 ERISA Coverage of IRC§403(b) Tax-Sheltered Annuity Programs
   
2007-03 Periodic Pension Benefit Statements For Non-Participant Directed Individual Account Plans
   
2007-04 Supplemental health insurance coverage as excepted benefits under HIPAA and related legislation excepted benefits under sections 732(c)(3) and 733(c)(4) of ERISA?
   
2008-01 Fiduciary Responsibility for Collection of Delinquent Contributions
   

DOL Interpretive Letter

   
Receipt of Fees from Mutual Fund Distributors and Investment Advisors
   

ERISA Procedures

   
76-1 Advisory Opinion Requests: Establishes procedures for requesting ERISA opinions from Labor Department.
   
  Voluntary Correction Programs
   
  Voluntary Fiduciary Correction Program FAQs
   
  Participant Notice Voluntary Correction Program
   
  Prohibited Transaction Class Exemption 2002-51
   

Publications

   
794 IRS Determination Letters
   
Example Determination Letter
   
US Treasury Notice 2004-8 - Abusive Roth IRA Transaction
   
Miscellaneous Laws
   
  Pension Protection Act of 2006
   
  Economic Growth and Tax Relief Reconciliation Act of 2001
   
  Tax Relief and Health Care Act of 2006
   
  Medicare Prescription Drug Improvement Act of 2003

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Last Updated 04/02/2008

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