Fidelity Dodges New Jersey ERISA Lawsuit

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Fidelity Dodges New Jersey ERISA Lawsuit

by Gary S. Young on September 12, 2012

Fidelity Management Co. recently obtained a dismissal of a New Jersey class-action lawsuit over the fees that it charged to divide the proceeds of 401(k) accounts during divorce. The court’s decision, in Danza v. Fidelity Management Trust Co., 11-cv-2893, hinged entirely on whether Fidelity was considered a fiduciary under the Employee Retirement Income Security Act (ERISA).

The Facts of the Case

Nicholas Danza was a participant in a 401(k) plan offered by the Great Atlantic and Pacific Tea Co. Fidelity Management Trust Co. served as the plan’s trustee and provided certain administrative services to the 401(k) plan, including those related to domestic relations orders (DRO). Pursuant to ERISA, Danza was required to obtain a DRO in order to divide his plan account as part of his divorce proceedings.

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