A federal judge in Minneapolis announced on Thursday that he would approve a$ 69 million settlement in a class action lawsuit alleging that UnitedHealth Group had depressed workers ‘ retirement savings for years by choosing 401( k ) plan investments that were not as good as they should.
According to the lawsuit,” the fix was in” to keep Wells Fargo’s investment funds in place to safeguard UnitedHealth Group’s substantial business relationship with the large banks, which was purchasing employee health insurance from the UnitedHealthcare section.
Judge John Tunheim of the U.S. District Court of Minnesota said last year that the situation was proceed after concluding that Kim Snyder, the prospect plaintiff, had accidentally caught the Eden Prairie-based business” with its side in the doughnut pot.”
UnitedHealth Group stated in a statement on Thursday that” this arrangement allows all parties to put this subject behind them and move upon,” despite alleging that the business failed to act in the best interest of strategy participants.
In a 2018 email, Chief Financial Officer John Rex complained that Wells Fargo was” shifting its healthcare business apart from United Healthcare,” despite the fact that Rex had” stepped in front of a cargo train” to keep Wells Fargo as the default retirement investment fund despite advice from an internal commission.
Snyder was unaware of this when she first brought the case, she claimed in an interview following Thursday’s court hearing for final settlement approval.
Snyder began to question why the investments hadn’t grown more after losing her job with the company’s Optum division about four years ago. Snyder, a 64-year-old nurse from Detroit, previously worked remotely for the pharmacy division of Optum.
Snyder claimed that they “taken the employees ‘ wealth.” When [workers ] were giving them money to invest,” they took advantage of that and used it for their own purposes.” That was the name of the freight train that no one knew.
Years ago, Wells Fargo sold its asset management company.
Tunheim said from the bench he would sign proposed orders drafted by attorneys without significant changes even though the final paperwork confirming the settlement had not yet been released.
According to the draft, attorneys were required to pay$ 23 million, or one-third of the settlement fund, plus a$ 735, 162 cost reimbursement. The remainder will be distributed among the tens of thousands of pensioners.
Snyder would also be given a$ 50, 000 service award as the only class representative.
According to Leigh Anne St Charles, a plaintiff attorney in Nashville who represented the class, the$ 69 million settlement represents between 20 % and 25 % of likely potential recovery if plaintiffs prevailed in court.
Only two out of more than 350, 000 class members submitted letters of opposition to the settlement. Even though age and service duration are already implied components of settlement distributions, both asked the court to take into account an alternate age-weighted distribution formula for payouts, according to St. Charles.
According to , a website with settlement details, each class member’s proportional share will be determined in part by the balance they have invested in specific Wells Fargo Target Date Funds at any time since April 23, 2015.
A , a settlement notice that was issued in the spring, claimed that class members are completely unrequited to pay.
Current plan participants will deposit their money into their account accounts in the form of a deposit. If former plan participants choose not to receive funds via rollover to a qualified retirement account, checks will be used to make payments to them.
Snyder filed a lawsuit in 2021 for the first time.
In March 2024, Tunheim objected to United’s request for summary judgment in the case, citing evidence that Rex requested “balance of trade” ledgers be produced to show how closely UnitedHealth Group and Wells Fargo collaborated.
United Health, a provider of health insurance to Wells Fargo, earned between$ 50 million and$ 60 million in revenue over the course of four years. On the other hand, Wells provided significant banking services to United Health, which the judge argued was the bank’s “largest client and lifeline” in the market for target-date funds.
The comparisons revealed that between the companies, Wells Fargo and UnitedHealth had the most lucrative relationships.
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The Minnesota Star Tribune, 2025.
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