UnitedHealth Agrees to $69 Million Settlement in Lawsuit over ‘Low-Performing’ 401(k) Funds

The lawsuit alleged that UnitedHealth CFO John Rex interfered with the company’s decision to drop “one of the worst-performing target-date options in the entire market.”

By Lynn Cavanaugh | December 27, 2024 at 05:14 PM

After three years of litigation, UnitedHealth Group has agreed to pay $69 million to settle a class-action lawsuit, Snyder v. UnitedHealth Group, et al., according to an announcement in mid-December from law firm Sanford Heisler Sharp McKnight. The settlement amount is believed to be the largest ever of an Employee Retirement Income Security Act of 1974 (ERISA) case stemming from poorly performing investment options in a 401(k) plan, according to the law firm.

The case stems from allegations that UnitedHealth violated its fiduciary duties, under the federal ERISA, by “imprudently and disloyally selecting, retaining, and monitoring a suite of poorly performing target-date funds—the Wells Fargo Target Fund Suite—for the plan’s investment menu,” according to the suit.

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UnitedHealth Agrees to $69 Million Settlement in Lawsuit over ‘Low-Performing’ 401(k) Funds

The lawsuit alleged that UnitedHealth CFO John Rex interfered with the company’s decision to drop “one of the worst-performing target-date options in the entire market.”

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UnitedHealth Agrees to $69 Million Settlement in Lawsuit over ‘Low-Performing’ 401(k) Funds

The lawsuit alleged that UnitedHealth CFO John Rex interfered with the company’s decision to drop “one of the worst-performing target-date options in the entire market.”

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