Despite the DOL’s disagreement (as reported in the 1Q 2016 Litigation Update), the 1st U.S. Circuit Court of Appeals has ruled in line with the previous district court ruling that Fidelity did not violate ERISA in its use of “float income” retained while making distributions to retirement plan participants. The “float” has been determined not a plan asset. The float income in question was earned on assets that Fidelity redeemed for participants requesting distributions and placed into an interest bearing account until the distributions were in fact made. If participants requested electronic payment, the assets remained in such an account for one day, and if participants requested payment via check, the assets remained in the account until the check was cashed.
www.planadviser.com; July 15, 2016.