A 2-1 majority of the U.S. Court of Appeals in St. Louis ruled Fidelity had no obligation to recapture for plan participants $1.7 million in overnight float income.
Lawyers for plaintiffs Clarice Whitmore and Helga Maria Schulzki claimed the asset manager raided the insurers cash reserves after taking control of them, threatening the security of the annuities they sold.
The unions, which include the biggest organizations representing state workers, called legislation signed into law last month by Democratic Governor Pat Quinn to reduce the shortfall theft, according to a statement.