{
  "slug": "erisa-25-percent",
  "name": "ERISA 25% Plan-Asset Rule",
  "aliases": [
    "Plan Assets Regulation",
    "DOL 29 CFR 2510.3-101"
  ],
  "jurisdiction": "US",
  "regulator": "DOL",
  "kind": "regulation",
  "effective_date": "1986-11-13",
  "summary": "DOL regulation under ERISA defining when an investment fund's assets are deemed 'plan assets' subject to ERISA fiduciary duties. Hedge funds with 25%+ benefit-plan investor ownership in any class become plan-asset funds and the manager an ERISA fiduciary, drastically expanding compliance burden.",
  "scope": "Pooled investment vehicles whose investors include 'benefit plan investors' (ERISA plans, IRAs, certain other plans).",
  "key_provisions": [
    {
      "section": "25% threshold",
      "summary": "If 25% or more of any class of equity in a fund is held by benefit-plan investors (excluding the fund manager and its affiliates), all of the fund's assets become plan assets."
    },
    {
      "section": "VCOC/REOC exception",
      "summary": "Venture-capital and real-estate operating companies are exempt under detailed asset/operating tests."
    },
    {
      "section": "Hard-wired investor cap",
      "summary": "Many hedge funds limit benefit-plan investors to 24.99% to avoid ERISA's prohibited-transaction and self-dealing rules."
    }
  ],
  "thresholds": [
    {
      "name": "Plan-assets threshold (per equity class)",
      "value": 25,
      "unit": "%"
    }
  ],
  "applies_to": [
    "pooled investment vehicles with benefit-plan investors"
  ],
  "related_terms": [
    "benefit-plan-investor",
    "fiduciary-duty",
    "prohibited-transaction"
  ],
  "official_text_url": "https://www.ecfr.gov/current/title-29/section-2510.3-101",
  "history": "Originally adopted 1986; amended by the Pension Protection Act of 2006 to add the 25% per-class methodology."
}