As part of UnitedHealth Group's massive $69 million settlement over poorly performing target date funds in its 401(k) plan, the attorneys who filed the class action lawsuit have requested the court order $23 million in attorneys' fees. The attorneys at Sanford Heisler Sharp and Halunen Law included one-third of the settlement amount in fees, $735,163 in litigation costs, and a $50,000 service award for class plaintiff and former UnitedHealth employee Kim Snyder. According to the attorneys, Snyder's service award is justified by the 340 hours of personal time dedicated to the suit over the past four years. The $69 million deal, which represents up to 25% of the case's potential damages, is widely recognized to be the largest ERISA settlement for breach of fiduciary duty based on the plan's failure to remove a poorly performing Wells Fargo investment option.
Snyder initiated the lawsuit in April 2021 on behalf of UnitedHealth's 200,000 current and former employees. The suit was based on allegations that UnitedHealth violated its fiduciary duties of prudence and loyalty in choosing, retaining, and monitoring the Wells Fargo Target Fund Suite for its 401(k) plan. The class maintained that UnitedHealth leadership kept the poorly performing fund in place to maintain its close relationship with Wells Fargo, a critical customer and financier of the company. According to the complaint, UnitedHealth allegedly breached its fiduciary duties by disregarding the fund's 10-year history of returns, which were 70-90% behind those of similar funds. As a result, UnitedHealth employees lost hundreds of millions of dollars in their 401(k) plans.
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