The First Circuit Court of Appeals has ruled that float income is not a plan asset and therefore is not subject to fiduciary and prohibited transaction provisions of ERISA.  The decision was written by former Justice Souter who retired from the Supreme Court in 2009.  Float income arises in a plan, for example, when cash is held pending distribution from a plan to participants.  The court’s analysis of the plan asset rules and the role of Fidelity is interesting and worth further consideration for lawyers and others who are interested in such details.  On a practical level, the court’s opinion simply confirms the legality of Fidelity’s existing distribution practices, and that is about all.

Court’s opinion is here