Health

Judge Advances UnitedHealth Retirement Plan Lawsuit

On Thursday, a federal judge rejected UnitedHealth Group’s petition to dismiss a lawsuit alleging that the healthcare giant failed to effectively control the management of its retirement plan for its 200,000 employees and their families.

Minnesota District Court Judge John Tunheim ruled that the plan’s requirements were strong enough to move on. Her complaint highlighted that UnitedHealth Group’s 401 (k) plans over 11 years fell short of expectations compared to industry benchmarks. Keith Snyder filed a lawsuit against UnitedHealth in April seeking class action status. She accused the healthcare giant, its board of directors, former CEO David Winchman, and the company’s investment and management committees of violating their fiduciary obligations under the Federal Employee Retirement Act.

According to the conclusion, the plan includes about $ 15 billion in assets contributed by employees and comparable 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.

The ruling says 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 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.

Correction: An earlier version of this story incorrectly stated that the case was given class action status. This bug has been fixed.


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