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Ask the Experts May 6, 2025
Do Both ERISA and the Internal Revenue Code Have Prohibited Transaction Rules?
Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.
Reported by PLANSPONSOR Staff
Q: I was reading your Ask the Experts column on prohibited transactions and noticed that you were referencing the IRS prohibited transaction rules. Aren’t there ERISA prohibited transaction provisions as well? We sponsor an ERISA 403(b) plan.
Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:
A: Excellent question! There are indeed ERISA prohibited transaction provisions as well, and as an ERISA 403(b) plan sponsor, you must follow both the prohibited transaction rules of the Internal Revenue Code and ERISA. Though there is some overlap between the two sets of rules, there are also differences. As we suggested in our original column, counsel with specific expertise in this area should be consulted to determine how both sets of rules apply to your retirement plan.
NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.
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