Prohibited transaction?

Is it a PT if father provides investment services to son's plan and receives compensation?

I think so...just checking.

Similar thread here:

Although ERISA § 408(b)(2) and Internal Revenue Code § 4975(d)(2) might exempt from prohibited-transactions consequences the transaction of providing necessary services for reasonable compensation, the Labor and Treasury departments have (at least since 1976) interpreted that exemption as not providing relief for self-dealing.

“If the furnishing of office space or a service involves an act described in section 406(b) of the Act (relating to acts involving conflicts of interest by fiduciaries), such an act constitutes a separate transaction which is not exempt under section 408(b)(2) of the Act. The prohibitions of section 406(b) supplement the other prohibitions of section 406(a) of the Act by imposing on parties in interest who are fiduciaries a duty of undivided loyalty to the plans for which they act. These prohibitions are imposed upon fiduciaries to deter them from exercising the authority, control, or responsibility which makes such persons fiduciaries when they have interests which may conflict with the interests of the plans for which they act. In such cases, the fiduciaries have interests in the transactions which may affect the exercise of their best judgment as fiduciaries. Thus, a fiduciary may not use the authority, control, or responsibility which makes such person a fiduciary to cause a plan to pay an additional fee to such fiduciary (or to a person in which such fiduciary has an interest which may affect the exercise of such fiduciary’s best judgment as a fiduciary) to provide a service. Nor may a fiduciary use such authority, control, or responsibility to cause a plan to enter into a transaction involving plan assets whereby such fiduciary (or a person in which such fiduciary has an interest which may affect the exercise of such fiduciary’s best judgment as a fiduciary) will receive consideration from a third party in connection with such transaction. A person in which a fiduciary has an interest which may affect the exercise of such fiduciary’s best judgment as a fiduciary includes [and is not limited to], for example, a person who is a party in interest by reason of a relationship to such fiduciary described in section 3(14)(E), (F), (G), (H), or (I).”

29 C.F.R. § 2550.408b-2(e)(1) (emphasis added) https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-F/part-2550/section-2550.408b-2#p-2550.408b-2(e)(1).

Accord 26 C.F.R. § 54.4975-6(a)(5)(i) https://www.ecfr.gov/current/title-26/chapter-I/subchapter-D/part-54/section-54.4975-6#p-54.4975-6(a)(5)(i).

{Except for references to ERISA or tax Code sections, the Labor and Treasury rules are almost identical.}

If the son is the retirement plan’s fiduciary, his father might be a person in whom the fiduciary has an interest that could affect the son’s best judgment as a fiduciary.

Thanks/good stuff