$69M UnitedHealth Settlement Resolves Class Action Lawsuit Over Alleged Mismanagement of Retirement Plan

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UnitedHealth Group and several affiliates have agreed to pay a $69 million settlement that, if approved by the court, will resolve a proposed class action lawsuit that claimed the healthcare giant retained an underperforming Wells Fargo target fund suite as one of its employee retirement plan’s investment options, costing the plan millions in savings.

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The proposed class action settlement covers a class of more than 300,000 current and former participants in and beneficiaries of the UnitedHealth Group 401(k) savings plan who, through the plan, invested in the Wells Fargo target date funds at any time since April 23, 2015.

The lawsuit against UnitedHealth alleged that by retaining a poorly performing investment option for more than a decade, the company and its investment committee failed to act prudently and in the sole interest of plan participants, in violation of the defendants’ fiduciary duties and the federal Employee Retirement Income Security Act.

The plaintiff filed a motion and attendant memo detailing the terms of the agreement with UnitedHealth on December 13, 2024. The parties now await preliminary approval of the terms of the deal from United States District Judge John R. Tunheim.

If the $69,000,000 deal is initially approved by the court, class members will not need to do anything to receive a UnitedHealth settlement payout, the agreement relays.

Related Reading: UnitedHealth Kept Floundering Target Date Fund Suite to Curry Favor with Wells Fargo, Lawsuit Alleges

To determine individual payment amounts, a “settlement allocation score” will be calculated for each class member based on the dollar amount held in a fund of the Wells Fargo target fund suite and the performance of that fund during the relevant period, the settlement agreement says. Each individual’s pro-rated share of the settlement fund will be based on their score compared to the sum of all class members’ scores, the document states.

According to the agreement, if the settlement is approved, payments to current plan participants will be deposited into their respective plan accounts.

Payments to former participants and beneficiaries will be issued by check unless they complete the “former participant rollover form,” which provides the option to receive payment through a rollover to a qualified retirement account, the document shares.

The form will be available to submit online through the official settlement website once it is established.

ClassAction.org will update this page if and when the official UnitedHealth settlement website is launched.

Per the agreement, class members can expect to receive notice of the settlement by mail or email within 60 days following preliminary approval of the deal.

Did you know that some class action settlements require no proof to submit a claim? Check out the latest open class action settlements.