Real prohibited transaction concern for retirement plans

[Guest ERISAKing]

ERISA section 408©(1) provides that it is not a prohibited transaction to pay benefits to a fiduciary (to the extent entitled as a participant under the terms of the plan). Where in the Code or ERISA is a similar exemption allowing a plan to pay benefits to non-fiduciary participants? Participants are parties in interest. Paying benefits to participants (pursuant to the plan document) is a transfer of plan assets to a party in interest. This is a prohibited transaction absent an exemption. Can anybody help me?

Similarly, an employer that maintains a plan is a party in interest with respect to the plan. An employer's contributions to the plan (in accordance with the plan document) would constitute an exchange of assets between the plan and a party in interest. This is a prohibited transaction, absent an exemption. Where does ERISA or the Code exempt this transaction from the 406(a) rules? Thanks, EK