The case involved employee retirement benefits
of ConsumerAffairsUnitedHealth Group has agreed to pay $69 million to settle a class-action lawsuit that accused the company of breaching fiduciary duties under the Employee Retirement Income Security Act (ERISA) of 1974.
The lawsuit, filed in April 2021, claimed that UnitedHealth kept poorly performing target-date funds, specifically the Wells Fargo Target Fund Suite, on its 401(k) investment menu. The plaintiffs argued that UnitedHealths decision was influenced by its financial relationship with Wells Fargo.
The case was heard amid the uproar that followed the fatal shooting of UnitedHealth Care CEO Brian Thompson.
While UnitedHealth denied the allegations and maintained that its fund selection process followed ERISA standards, the settlement resolves the claims for approximately 300,000 plan participants who invested in the funds between April 2015 and the settlement date.
The $69 million settlement will be distributed among the affected participants based on their investments in the funds.
Current participants will receive allocations into their plan accounts, while former participants can opt for rollovers or payments by check. The settlement is considered one of the largest ERISA resolutions related to underperforming 401(k) investments. A fairness hearing will be held to determine final approval of the settlement.
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Posted: 2024-12-13 21:06:51
