Publications

PPA Eases the 25 Percent Plan Asset Rule

Fall 2006
Susan E. Bernstein | Mark E. Brossman | David M. Cohen | Laurence M. Moss | Ronald E. Richman | Holly H. Weiss
Employment & Employee Benefits Developments - Fall 2006

For investment funds, one of the PPA’s most important changes is that it narrows the situations in which the fund would be subject to the ERISA fiduciary rules and prohibited transaction restrictions. Previously, funds were subject to those rules and restrictions if 25 percent or more of the value of any class of equity interests was held by “benefit plan investors.” Those investors included foreign pension plans, U.S. state and local government pension plans, and church plans, as well as ERISA-covered plans and IRAs. Now only the last two categories — ERISA-covered plans and IRAs — are defined as “benefit plan investors.”