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Investing in Plan Sponsor's Funds - Prohibited Transaction?


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Guest Richard Scheer
Posted

Client wants to set up a new 401(k) Plan. In addition to several outside mutual funds, they want to use their hedge fund as an investment alternative.

Since the client runs the Hedge Fund, the fund will pay the Plan Sponsor management/incentive fees.

Am I correct in stating that this is a Prohibited Transaction?

Posted

Yes. I'm not aware of any class exemptions that relate to hedge funds (there are some for mutual funds).

Jon C. Chambers

Schultz Collins Lawson Chambers, Inc.

Investment Consultants

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