3981 / What is a “disqualified person” for purposes of the prohibited transaction rules?
A disqualified person is:
(1) a fiduciary (see Q 3982);
(2) a person providing services to the plan;
(3) an employer or employee organization, any of whose employees or members are covered by the plan;
(4) a 50 percent owner, directly or indirectly, of an employer or employee organization described in (3);
(5) a family member of any person described in (1) through (4);
(6) a corporation, partnership, trust, or estate that is 50 percent or more owned by any person described in (1), (2), (3), or (5);
(7) an officer, director, 10 percent or more shareholder, or highly compensated employee of a person described in (3), (4), or (6); or
(8) a 10 percent or more (in capital or profits) partner or joint venturer of a person described in (3), (4), or (6).1
Family Member
A family member is defined as a spouse, ancestor, lineal descendant, or any spouse of a lineal descendant.2
Highly Compensated Employee
A highly compensated employee is defined as any employee earning 10 percent or more of the yearly wages of an employer.3