A judge in Minnesota today granted final approval of a record-breaking $69 million settlement on behalf of more than 350,000 beneficiaries of the UnitedHealth Group 401(k) Savings Plan in a case alleging the healthcare giant breached its fiduciary duties to participants in its 401(k) and mismanaged participants’ retirement funds in violation of ERISA.
“Today’s decision underscores the fact that fiduciaries should be held to the highest standards in managing Plan participants’ assets.”
Charles Field, Sanford Heisler Sharp McKnight, LLP
Plaintiff attorney Sanford Heisler Sharp McKnight, LLP, a national civil rights law firm, announced the approval of the final settlement in a press release today. The settlement in the case was first announced in Dec. 2024.
Judge John R. Tunheim of the U.S. District Court for the District of Minnesota ruled from the bench during a Fairness Hearing held today, approving the settlement amount and granting counsel’s requested attorneys’ fees and a service award of $50,000 for sole class representative Kim Snyder. Judge Tunheim informed the parties that a more detailed order would follow his ruling.
“The firm is honored to have worked for the benefit of the Class for more than four years and to have recovered this settlement for Plan participants,” said David Sanford, chairman of Sanford Heisler Sharp McKnight and counsel for Plaintiff and the Class. “We will continue to bring cases like this on behalf of individuals planning for retirement.”
Plaintiff Kim Snyder first filed this case in April 2021, alleging that UnitedHealth Group failed to remove from its employee retirement plan a family of target retirement date funds managed by Wells Fargo that have underperformed their investment benchmarks and other similar target date funds significantly for over a decade.
The litigation asserted “the fix was in” to retain the investment funds managed by Wells Fargo, in order to protect UnitedHealth Group’s significant business relationship with the California-based bank, which was buying employee health insurance from the company’s UnitedHealthcare division.
“ERISA’s fiduciary standards are strict and exacting,” said Charles Field, a partner and Co-Chair of Sanford Heisler Sharp McKnight’s Financial Mismanagement and ERISA Litigation Practice Group and counsel for Plaintiff and the Class. “Today’s decision underscores the fact that fiduciaries should be held to the highest standards in managing Plan participants’ assets.”
Sanford Heisler Sharp McKnight was appointed Class Counsel in February 2022. After more than four years of litigation, Sanford Heisler Sharp McKnight reached the $69 million settlement on behalf of Plan participants, which the firm says is the largest-ever single-plan ERISA settlement alleging breach of fiduciary duty for failure to remove underperforming investment options.
The record previously belonged to In re G.E. ERISA Litig., Case No. 1:17-CV-12123-IT (D. Mass. Mar. 8, 2024), another case brought by Sanford Heisler Sharp McKnight that resulted in a $61 million settlement for the Plan.
“I am grateful for the role I was able to play in obtaining this result today,” said Leigh Anne St. Charles, a partner and Co-Chair of Sanford Heisler Sharp McKnight’s Financial Mismanagement and ERISA Litigation Practice Group and counsel for Plaintiff and the Class, who spoke in support of the settlement at today’s Fairness Hearing. “Even more so, I am grateful for Kim Snyder being brave enough to step forward and represent the Plan and the Class for the last four years. People like her make it possible to right these wrongs.”
The case is Kim Snyder v. UnitedHealth Group, et al., Case No. 0:21-CV-01049 (JRT/DJF), United States District Court for the District of Minnesota. Local Counsel is Susan M. Coler of Halunen Law.
UnitedHealth also sued for forfeiture misuse
UnitedHealth Group was also recently hit with a class action lawsuit over how it handles 401(k) forfeitures. As Ary Rosenbaum of The Rosenbaum Law Firm, P.C. pointed out in a recent update, the case, Kotalik et al. v. UnitedHealth Group Inc., accuses the company and its plan fiduciaries of violating ERISA by using more than $19 million in forfeited funds to offset employer contributions—without applying any of it toward plan expenses.
The plaintiffs in that case, representing over 250,000 participants in a $22 billion plan, claim this cost-cutting move shortchanged participants by more than $25 million in compounded value. The lawsuit alleges five ERISA violations, including breaches of loyalty, prudence, and failure to monitor fiduciaries.
SEE ALSO:
• UnitedHealth Group Agrees to Historic $69 Million 401(k) ERISA Settlement
• $61 Million Settlement Finalized in GE ERISA Case
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.