UnitedHealth Group will pay $69 million to settle a class action alleging it kept underperforming Wells Fargo funds in its 401(k) plan to maintain a business relationship with the bank. The settlement, filed Friday in Minnesota federal court, is believed to be the largest ever in an Employee Retirement Income Security Act (ERISA) case focused on investment performance.
Historic Outcome in ERISA Litigation
Sanford Heisler Sharp McKnight LLP, representing the class alongside Halunen Law, praised the settlement as a monumental victory for retirement plan participants. “This is a tremendous and historic result,” said Charles H. Field, chair of Sanford Heisler’s ERISA litigation practice. Lead plaintiff Kim Snyder was also commended for her pivotal role in the litigation.
The court filing seeks preliminary approval of the settlement, which would end nearly four years of litigation. If approved, the agreement would resolve allegations that UnitedHealth breached fiduciary duties under ERISA.
Allegations of Mishandling 401(k) Investments
The lawsuit, filed in April 2021, alleged UnitedHealth prioritized its business ties with Wells Fargo over the financial well-being of its employees. The Wells Fargo funds, according to the complaint, underperformed relative to 70% to 90% of comparable funds over a decade.
