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must be maintained to permit distributions, and the
safeguards and diversity that a prudent investor would
adhere to must be present. The conferees intend that to the
extent that a fiduciary meets the prudent man rule of the
labor provisions, he will be deemed to meet these aspects of
the exclusive benefit requirements under the Internal
Revenue Code. [H. Conf. Rept. 93-1280, supra at 302, 1974-3
C.B. at 463; emphasis added.]
We understand the underscored language to indicate a
congressional intent that the factors applied in determining
whether an investment meets the prudent investor requirement of
ERISA section 404(a)(1) are relevant to whether that investment
satisfies the exclusive benefit rule requirement of section
401(a)(2). We find nothing in that legislative history which
suggests that the prudent investor provision should be considered
in an exclusive benefit determination only if the plan is subject
to title I of ERISA. In view of our conclusion that the prudent
investor principles of ERISA apply in the instant case, we do not
decide whether the plan was subject to title I of ERISA when the
loan was made.
We previously have held that the standards for fiduciary
behavior set forth in ERISA section 404(a)(1) may be used to help
determine whether the exclusive benefit rule has been violated.
Ada Orthopedic, Inc. v. Commissioner, T.C. Memo. 1994-606; see
also Calfee, Halter & Griswold v. Commissioner, 88 T.C. 641, 652
(1987) ("the standards of Title I and Title II [of ERISA] were
closely coordinated by Congress specifically to develop a unified
set of rules").
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