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A long-fought battle over retirement plan mismanagement came to a close Thursday when a Minnesota federal judge granted final approval to a $69 million settlement in a class action targeting UnitedHealth Group's 401(k) plan for allegedly locking in underperforming Wells Fargo investment funds to maintain business ties.

In a swift eight-minute hearing, U.S. District Judge John R. Tunheim issued a text-only order greenlighting the deal. The package includes $23 million in attorney fees, reimbursement for over $735,000 in legal costs, and a $50,000 service award to Kim Snyder, the former UnitedHealth employee who spearheaded the case.

A Costly Allegiance? Wells Fargo Funds in the Spotlight

Filed in April 2021, the suit alleged UnitedHealth breached its fiduciary duty under ERISA by clinging to poorly performing Wells Fargo funds as the plan’s default investment. These funds, Snyder’s complaint asserted, ranked in the bottom 70% to 90% of comparable offerings for over a decade—eroding potential savings for nearly 350,000 employees.

Why? According to Snyder, UnitedHealth feared that cutting ties with the Wells Fargo fund suite could jeopardize its lucrative commercial relationship with the bank.

Despite denying wrongdoing, UnitedHealth stated Friday,

"Plan fiduciaries have always acted in the best interests of plan participants... This settlement allows all parties to put this matter behind them and move on."

Who Gets What? Allocation Formula Favors Longevity

Charles Field, co-lead counsel for Snyder and the class, told Law360 that Judge Tunheim’s only questions during the hearing concerned two letters from plan participants about the payout distribution. Field explained that the allocation formula accounts for time in the plan and investment in the challenged funds.

"If participants were in the plan a long time and nearing retirement, they’re likely to receive more," Field said.

Snyder herself flew in from Detroit to attend the hearing, having played an active role through four years of rigorous litigation.

"She wanted to see that her hard work paid off," Field added. "I couldn’t ask for a better client."

From Class Certification to Settlement

In February 2022, Judge Tunheim granted class certification, allowing Snyder to represent the affected group of UnitedHealth employees dating back to April 23, 2015. Then, in March 2024, the judge largely denied UnitedHealth’s motion for summary judgment, ruling that key facts remained disputed.

With trial looming, the parties reached a deal and asked the court for final approval earlier this month.

Counsel Behind the Curtain

The class is represented by a legal dream team from Sanford Heisler Sharp LLP and Halunen Law, including Charles Field, Leigh Anne St. Charles, David Sanford, and Susan M. Coler.
UnitedHealth is defended by lawyers from Kirkland & Ellis LLP and Faegre Drinker Biddle & Reath LLP, including Craig S. Primis and Deborah A. Ellingboe.

As gavel meets ink, the $69 million deal marks a pivotal win for retirement savers—and a cautionary tale for fiduciaries tempted to blend business with benefits.