Plaintiffs seeks final OK of $69M UnitedHealth settlement in 401(k) lawsuit

A group of plaintiffs suing UnitedHealth Group over the fund selections in its company retirement plan is seeking final court approval for a $69 million settlement.

Judge John R. Tunheim scheduled a hearing on the motion for final approval for 10 a.m. Thursday.

The class-action lawsuit alleged that the health care giant cost workers millions in lost gains by forcing them into lower-performing 401(k) options. UnitedHealth Group settled in December. Since then, a claims administration firm has been busy tracking down nearly 352,000 class members, court documents say.

Also, Judge Tunheim, of the U.S. District Court of Minnesota, received two requests from former employees who say they more reliant on the settlement dollars than other class members. The employees asked the judge to consider an “age-weighted distribution” of the settlement.

The request for final settlement approval from lead plaintiff Kim Snyder makes scant mention of the request for an age-weighted distribution. Snyder's request stresses the agreement and fairness of the $69 million figure.

The court previously agreed that the settlement is “fair, reasonable, and adequate,” and “the result of serious, extensive arm’s-length and non-collusive negotiations," and "falling within the range of reasonableness warranting final approval... having no obvious deficiencies."

Of that payout, attorneys request $23 million, or one-third. Snyder's petition calls that figure, "fair and reasonable."

Angeion Group, the class settlement administrator, has taken 1,889 calls from class members, received 157,846 page views of the settlement website, and processed 3,239 former participant rollover forms since March 24, 2025, the final approval petition states. No settlement objections were received.

'One of the worst-performing' options

The 401(k) lawsuit dates to 2021 when Snyder alleged interference by the company’s CFO to retain certain Wells Fargo funds within the 401(k) plan. The bank was a large customer for UnitedHealth Group, Snyder claimed, including for coverage sold by its large UnitedHealthcare health insurance business.

The Wells Fargo fund was “one of the worst-performing target date options in the entire market,” the law firm alleged. UnitedHealth’s decision to keep the Wells Fargo fund as the default investment for the plan for over a decade violated fiduciary duties of prudence and loyalty under the Employee Retirement Income Security Act (ERISA).

The matter was certified as a class action in February 2022.

In order to justify keeping the poorly performing Wells Fargo Target Fund Suite, Snyder’s attorneys alleged that UnitedHealth “kept its decision-making secret and threw out key findings that the plan’s own Investment Committee had made, while abandoning the plan’s written criteria for screening investments.”

Snyder requested a $50,000 "class service award" for being the sole plaintiff listed on the lawsuit.

Payout terms outlined

Snyder's motion for final approval outlines how the $69 million will be distributed. Using a
settlement allocation scoring system, all class members will receive a prorated share of the settlement based on their "total investment amount in the Wells Fargo Target Funds and the relative quarterly performance of their holdings in the Wells Fargo Target Funds," the motion reads.

Class members still active in the 401(k) account will see their award deposited directly into their retirement accounts. Former participants will receive direct payments by check, the motion notes, but were given the option to have their distributions rolled over into an eligible retirement account.

"The allocation method will be effective and certainly falls within the range of what is needed to establish that Class Members are treated equitably," Snyder's motion for approval says.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.