Disqualified Person / Prohibited Transaction?

[Guest CABatty]

Here's the situation:

Retirement Plan owns investments in tangible property. A trustee of the Plan is a director of a 501c3 that operates a museum. Clearly, the trustee / director is a fiduciary of the plan and is a disqualified person. But, is the 501c3 a disqualified person with respect to the Retirement Plan for purposes of 4975 so that a prohibited transaction would occur if the museum displayed the Retirement Plan's tangible property?

Looking at the definition of a disqualified person in 4975(e)(2), the only way I could see the 501c3 being a disqualified person is if it's considered to be providing services to the plan under (e)(2)(B) (which I think is a stretch), or a corporation / partnership / trust / estate with the trustee / director fiduciary "controlling" 50% or more of the entity (paraphrased roughly) under (e)(2)(G) (again, something that seems like a stretch to me since a foundation is not a corporation / partnership / trust / estate).

Any thoughts would be greatly appreciated......

[jpod]

I haven't traced through the definitions of Disqualified Person and Party in Interest, but this smells like a potential self-dealing PT under Section 406(b)(1), in which case it doesn't matter whether the museum is a DP or a PII.

[Guest CABatty]

But, if the agreement to display the property is between the plan and the museum, how is the fiduciary trustee / director "dealing with the assets of the plan for his own interest or for his own account" (406(b)(1))?

[jpod]

I was making the assumption that the Trustee was making the decision to allow the museum to display the plan's property. Perhaps I should have not made that assumption. However, if my assumption was correct, the self-dealing prohibitions are not necessarily limited to direct financial gain. So, there would be a possibility (admittedly requiring further thought and study) that the Trustee's decision to allow the museum to use the plan's property constitutes prohibited self-dealing on his part.