Purchase of plan assets

[bzorc]

I have seen many instances where an asset held in a retirement plan, such as an individual life insurance policy, is purchased by the individual owner, with the cash surrender value of the policy being remitted to the plan in exchange for the policy.

I have a situation where a plan owns a partnership interest, and the owner of the company would like to purchase this interest. I know no reason as to why, if the owner remitted the "fair value" of the partnership interest to the plan in cash, the partnership interest could then be re-registered in the name of the individual.

Am I off base? I do not believe this to be a prohibited transaction.

Thanks for any assistance.

[QDROphile]

It sounds like you have a bit of a lead.

If the owner is an employee, the owner is a party in interest under ERISA. If the owner owns 10 percent or more or is an officer or director, the owner is a party in interest under ERISA and a disqualified person under the tax code. The owner might be a fiduciary of the plan, which would be both a party in interest and a disqualified person. If the owner fits the definitions, the transaction is prohibited. Then you go looking for exemptions.