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Fiduciary responsibility rules, in general
The conference substitute establishes rules
governing the conduct of plan fiduciaries under the
labor laws (title I) and also establishes rules
governing the conduct of disqualified persons (who are
generally the same people as “parties in interest”
under the labor provisions) with respect to the plan
under the tax laws (title II). This division
corresponds to the basic difference in focus of the two
departments. The labor law provisions apply rules and
remedies similar to those under traditional trust law
to govern the conduct of fiduciaries. The tax law
provisions apply an excise tax on disqualified persons
who violate the new prohibited transaction rules; this
is similar to the approach taken under the present
rules against self-dealing that apply to private
foundations. [Id. at 295, 1974-3 C.B. 456.]
* * * * * * *
Prohibited transactions
In general.--The conference substitute prohibits plan
fiduciaries and parties-in-interest from engaging in a
number of specific transactions. Prohibited
transaction rules are included both in the labor and
tax provisions of the substitute. Under the labor
provisions (title I), the fiduciary is the main focus
of the prohibited transaction rules. This corresponds
to the traditional focus of trust law and of civil
enforcement of fiduciary responsibilities through the
courts. On the other hand, the tax provisions (title
II) focus on the disqualified person. This corresponds
to the present prohibited transaction provisions
relating to private foundations.2
The prohibited transactions, and exceptions there-
from, are nearly identical in the labor and tax
provisions. However, the labor and tax provisions
differ somewhat in establishing liability for violation
of prohibited transactions. Under the labor
provisions, a fiduciary will only be liable if he knew
or should have known that he engaged in a prohibited
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