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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.
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:
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.