What does Party In Interest Transactions mean? Read on to discover the definition & meaning of the term Party In Interest Transactions - to help you better understand the language used in insurance policies.
Party In Interest Transactions
Otherwise legitimate transactions that are prohibited under the Employee Retirement Income Security Act (ERISA). The Act defines a party-in-interest as any fiduciary, legal counsel, employee of an employer-sponsored benefit plan, or service provider to the plan. Accordingly, pension plan funds cannot be used to buy or sell property to or from a person who is a party-in-interest. For example, a pension plan could not purchase shares of stock in a company owned by a member of the company's investment committee. ERISA provides for specific monetary fines and penalties for violations of party-in-interest rules. Fiduciary liability insurance policies cover the defense costs incurred in conjunction with allegations of party-in-interest violations; although no coverage is available for damages, fines, and penalties associated with such claims.
We hope the you have a better understanding of the meaning of Party In Interest Transactions.