Brother as Investment Broker for 401(k) Plan

[ogilviesann]

We have a 401(k) plan that uses a bundled insurance product that each participant has control over for their investment choices. During the 2015 plan year, the plan trustee/15% owner of the company named his brother as the investment broker for the plan. He is only receiving commission from the insurance company. Is this allowed or is he a disqualified person and we have a prohibited transaction? The definition of family member is spouse, ancestor, lineal descendant and any spouse of a lineal descendant. The commissions he is being paid appear to be reasonable. I just want to make sure I let them know that it's okay to retain him as I initially told them that I didn't think they could. Egg on my face, of course

[My 2 cents]

We have a 401(k) plan that uses a bundled insurance product that each participant has control over for their investment choices. During the 2015 plan year, the plan trustee/15% owner of the company named his brother as the investment broker for the plan. He is only receiving commission from the insurance company. Is this allowed or is he a disqualified person and we have a prohibited transaction? The definition of family member is spouse, ancestor, lineal descendant and any spouse of a lineal descendant. The commissions he is being paid appear to be reasonable. I just to make sure I let them know that it's okay to retain him as I initially told them that I didn't think they could. Egg on my face, of course

Why isn't there a specific emoji for "egg on my face"?