The definition of "plan assets" impacts both investing plans and the entities in which they invest because it determines whether: (a) those who have discretion with respect to the management of the entity and its assets become fiduciaries of the investing plans; and (b) the financial transactions involving the entity's assets must be reported to the Department of Labor under ERISA's reporting and disclosure rules.

Thus, if assets of a limited partnership are deemed plan assets, the general partner who has responsibility for management of the partnership's assets could incur ERISA's fiduciary responsibilities. Trustees of the investing plans remain fully liable for fiduciary breaches committed by the general partner in managing the plan assets, unless the trustees had appointed such general partner an "investment manager" under ERISA.

The prohibited transactions rules of ERISA and the Code generally prohibit a person who has discretionary authority over the management of plan assets from entering into a transaction with the plan involving those assets. Thus, a limited partnership deemed to hold plan assets generally could not purchase property from its general partner (or an affiliate of the general partner) nor could the general partner hire an affiliate to manage the properties owned by the partnership, if the partnership paid an additional fee for such management services.