How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Bill Your Own Question

Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3123
Experience:  EA, CEBS - 35 years experience providing financial advice
Type Your Tax Question Here...
Bill is online now
A new question is answered every 9 seconds

can a pension plan invest in the sponsoring companys bond

Customer Question

can a pension plan invest in the sponsoring company's bonds
Submitted: 4 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 4 years ago.

Hello, welcome, and thank you for choosing Just Answer.


Yes a pension plan can invest in sponsoring company's bonds. The vast majority of bonds are held by large institutions such as banks, pension plans and insurance companies. However, as all pension plans are not the same, you may want to check with pension plan administrator to see if this is something they will/can do.

Customer: replied 4 years ago.
Do you have an ERISA code section or case you could site to support your answer. I am still concerned about a conflict of interest.
Expert:  Tax.appeal.168 replied 4 years ago.
My apologies for the delay in responding, I've been away from the computer. Can you tell me what type of pension plan you are referring to and what type of bonds. Thank you.
Customer: replied 4 years ago.
SIMPLE IRA and privately issued corporate bonds. The company that issues the bonds is also the employer who withholds the SIMPLE IRA from its employees and remits to a third party fiduciary such as Merrill Lynch. Each employees then directs his own IRA's investments. Can he choose to invest his IRA funds in his own employer's corporate bonds without a conflict of interest? I would like to see an ERISA code section or a related court case to support your answer.
Expert:  Bill replied 4 years ago.

It may be possible as long as it is not considered a prohibited transaction. Since the SIMPLE IRA participant is a disqualified person/fiduciary of the account, it may not be an issue as long as the SIMPLE IRA participant does not benefit outside of the account by purchasing the bonds. For example, if the participant benefits by obtaining certain benefits from the company (title, ownership, compensation) by purchasing the bonds, then it may be considered a prohibited transaction. Another issue that could cause the transaction to be a prohibited transaction is if the SIMPLE IRA participant is considered a disqualified person with respect to the company (such as having a controlling ownership interest in the company).


A prohibited transaction is a transaction between a plan and a disqualified person that is prohibited by law.

Prohibited transactions generally include the following transactions:

  • a transfer of plan income or assets to, or use of them by or for the benefit of, a disqualified person;
  • any act of a fiduciary by which plan income or assets are used for his or her own interest;
  • the receipt of consideration by a fiduciary for his or her own account from any party dealing with the plan in a transaction that involves plan income or assets;
  • the sale, exchange, or lease of property between a plan and a disqualified person;
  • lending money or extending credit between a plan and a disqualified person; and
  • furnishing goods, services, or facilities between a plan and a disqualified person.

Certain transactions are exempt from being treated as prohibited transactions. For example, a prohibited transaction does not take place if a disqualified person receives a benefit to which he or she is entitled as a plan participant or beneficiary. However, the benefit must be figured and paid under the same terms as for all other participants and beneficiaries.,,id=163722,00.html


JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

Meet The Experts:

  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
< Last | Next >
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
  • Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    15+ years tax preparation and tax advice.
  • Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • Richard's Avatar


    Tax Attorney

    Satisfied Customers:

    29 years of experience as a tax, real estate, and business attorney.
  • jgordosea's Avatar


    Enrolled Agent

    Satisfied Customers:

    I've prepared all types of taxes since 1987.
  • MequonCPA's Avatar


    Certified Public Accountant (CPA)

    Satisfied Customers:

    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
  • R. Klein, EA's Avatar

    R. Klein, EA

    Enrolled Agent

    Satisfied Customers:

    Over 20 Years experience