Case Type: ERISA
Company Name: UnitedHealth Group
Sanford Heisler Sharp, LLP filed a class complaint in the U.S. District Court of Minnesota alleging that the UnitedHealth Group breaches basic fiduciary duties under ERISA and violates its employees’ trust by mismanaging their retirement funds. The complaint alleges UnitedHealth Group failed to remove from its employee retirement plan a family of eleven 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 consequences to employees are substantial: the decision not to remove the Wells Fargo Funds has cost UnitedHealth Group 401(k) Savings Plan its employees millions of dollars in retirement savings.
Plaintiff Kim Snyder filed the case individually and as representative of approximately 200,000 Plan participants in UnitedHealth Group’s $15 billion 401(k) Plan. Named as Defendants are UnitedHealth Group, Incorporated and its Board of Directors, the UnitedHealth Group Employee Benefits Plan Investment Committee and Plan Administrative Committee, and their members.
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David Sanford, chairman of Sanford Heisler Sharp and counsel for Plaintiffs and the proposed class, noted, “ERISA’s fiduciary standards are strict and exacting. Since 2010, the UnitedHealth Group has offered its employees these poor-performing target retirement date options which have been highly detrimental to the retirement savings of Plan participants. The UnitedHealth Group and the Plan committees should be held to the highest standard as fiduciaries.”
The complaint describes how UnitedHealth employees invest billions of dollars in the company’s Plan. Given the company’s sophistication and extensive assets, employees trust their employer to construct a best-in-class retirement plan. Yet, according to the complaint, the UnitedHealth Group failed to prudently monitor the investment performance of the Plan options as required by ERISA. As a result, the UnitedHealth Group kept funds despite habitual underperformance, causing the Plan, and hence participants, to suffer losses to their retirement savings.
Charles Field, a partner at Sanford Heisler and counsel for Plaintiffs and the proposed class, added, “Plan participants have invested over $7 billion in these eleven target retirement date funds. As a fiduciary to the Plan, the UnitedHealth Group is obligated to monitor the Plan to ensure these investments are prudent. This obligation is especially critical where these eleven funds make up almost half of the Plan’s assets. We believe the UnitedHealth Group neglected their sacrosanct duties.”
As relief, Plaintiffs and the class seek (1) restitution for financial losses to Plan participants and beneficiaries resulting from the Plan’s underperforming investments; (2) divestiture of imprudent investments; and (3) the removal of the fiduciaries who have violated their duties to the Plan’s participants and beneficiaries under ERISA.