Employment Law Resources


Nov 26 2014

Jonathan Cerrito Quoted in Bloomberg BNA Article on DOL Attempts to Treat 401K Investment Platform Providers As Fiduciaries

Bloomberg BNA quoted employee benefits partner Jonathan Cerrito in an article about two recent court decisions that rejected the DOL’s amicus position that the 401K platform provider at issue was a fiduciary. Jonathan explains how many of these 401K platform providers have a reservation of rights provision in their contracts. Pursuant to these provisions, a platform provider reserves the right to substitute funds in the investment menu. Depending on if/how this authority is exercised may determine whether the platform provider is an ERISA fiduciary.

In describing the impact of these two court decisions, it’s “business as usual” for many platform providers, Cerrito said. “Right now it’s a warning shot essentially that if they exercise that authority then arguably they’ll be held as fiduciaries by these two courts. That was the linchpin for those two courts in terms of rejecting the DOL’s argument,” Cerrito said.

The article, “As Fiduciary Rule Stalls, DOL Advances Amicus Brief Program, Targets Providers,” appeared as a Special Report in the November 24, 2014 issue of Pension & Benefits Daily.

The article may be read here.