Judge pushes class-action over UnitedHealth’s retirement plan forward


A federal judge denied UnitedHealth Group’s motion to dismiss a class-action alleging the healthcare giant failed to effectively oversee management of its retirement plan for its 200,000 employees and their families on Thursday.

U.S. District Court of Minnesota Judge John Tunheim ruled that the plaintiff plausibly pled imprudence by the healthcare giant by demonstrating that UnitedHealth Group’s 401(k) plans underperformed compared with industry benchmarks over the course of 11 years. The case was filed in April on behalf of Kim Snyder, a plan participant accusing defendants UnitedHealth Group, its board of directors, former CEO David Winchmann and the company’s employee benefit plan investment and administrative committees of violating their fiduciary duty under the federal Employee Retirement Income Security Act.

The plan holds approximately $15 billion in assets contributed by employees and matched by UnitedHealth Group, the judgment says. Plan participants can select from various investment options for their 401(k), one of which is a target date retirement fund that is managed by Wells Fargo.

The lawsuit alleges that Wells Fargo’s target date retirement funds from 2010 through 2060 each chronically underperformed on six key industry benchmarks over the course of eleven years. The original lawsuit compiled 33 tables comparing UnitedHealth Group’s retirement portfolio performance compared with other plan managers, like Morningstar.

UnitedHealth Group had credited its slow performance on a more conservative investment strategy intended to weather economic downturns, questioning the reliability and ability to compare it to other plan managers, the judgment says. At this point, it’s too early to conclude that Wells Fargo’s measures should not be compared to other plan managers, the judge said.

The plaintiff and class seek reimbursement for the losses resulting from the underperforming plan, divestiture of imprudent investments and removal of managers who violated their duties under ERISA.

UnitedHealth Group did not immediately respond to an interview request.

Source link


Please enter your comment!
Please enter your name here