Health

Judge Advances Class Action Lawsuit On UnitedHealth Retirement Plan

A federal judge denied a UnitedHealth Group motion to dismiss a class action lawsuit alleging that the health care giant failed to effectively control the management of its retirement plan for its 200,000 employees and their families on Thursday.

Minnesota District Court Judge John Tunheim ruled that the plaintiff had clearly challenged the health care giant, demonstrating that UnitedHealth Group’s 401 (k) plans fell short of industry benchmarks for 11 years. The case was filed in April on behalf of Kim Snyder, a plan member who accused UnitedHealth Group defendants, its board of directors, former CEO David Winchmann, and the company’s employee compensation plan investment and management committees in breach of their fiduciary obligations under federal employee retirement income. Security Law.

According to the court ruling, the plan contains approximately $ 15 billion in employee contributed assets that are comparable to UnitedHealth Group. Members can choose from a variety of investment options for their 401 (k), one of which is a set date retirement fund managed by Wells Fargo.

The lawsuit alleges that each of Wells Fargo’s retirement funds consistently fell behind six key industry metrics for eleven years from 2010 to 2060. The original lawsuit compiled 33 spreadsheets that compared UnitedHealth Group’s retirement portfolio performance to other plan managers such as Morningstar.

UnitedHealth Group attributed its poor performance to a more conservative investment strategy aimed at overcoming economic downturns, questioning its reliability and its ability to compare to other plan managers, the court ruling said. The judge said it is too early to conclude that Wells Fargo’s measures cannot be compared to other plan managers at this time.

The plaintiff and the group are seeking damages for non-fulfillment of the plan, abandonment of imprudent investments and the termination of managers who have violated their obligations under ERISA.

UnitedHealth Group did not immediately respond to an interview request.


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