On September 17, 2014, the Small Business Administration agreed to provide its credit enhancement guarantee in an Arizona bank’s financing transaction involving self-directed IRA investment in a startup operating company arrangement. This is an important development in the retirement plan industry where the self-directed segment consists of a growing $130 billion in plan assets. Moreover, it is well known SBA ERISA policy considerations frequent Department of Labor policy considerations.
Recent events in the courts and academic journals cast an unfavorable hue over such prospects. First, the United States Tax Court issued two 2013 decisions in Peek and Ellis distilling disqualified person operating company investment as a self-directed ERISA plan weak-form fiduciary abuse. The consequence was straightforward: the Read more