Which of the following is considered an exempt transaction under ERISA?

The sale of employer securities is considered an exempt transaction under the Employee Retirement Income Security Act (ERISA) because it is specifically addressed within the guidelines aimed at allowing certain transactions that could otherwise be viewed as self-dealing or conflict of interest situations. ERISA generally seeks to protect plan participants and beneficiaries by regulating transactions that might pose a risk to their interests; however, it provides exemptions for transactions that can be justified as beneficial for the plan’s overall integrity and participant interests, such as the sale of securities.

Transactions like investment advice, plan termination, and loans to participants have stricter regulations under ERISA. Investment advice can potentially lead to conflicts of interest, plan termination involves complex regulatory compliance and possible liabilities, and loans to participants have specific conditions that must be met to avoid jeopardizing the plan’s tax-qualified status. The exemption of the sale of employer securities allows for more flexibility in managing plan assets and supporting company stock liquidity while still adhering to some protective provisions.