UnitedHealth Group Inc., Minnetonka, Minn., was denied a motion to dismiss a fiduciary lawsuit filed by a 401(k) plan participant alleging the health organization breached its ERISA fiduciary duties in the oversight of its target-date funds.
The lawsuit filed by Kim Snyder in U.S. District Court in Minneapolis alleged the organization, its board of directors, investment committee and employee benefits plans administrative committee breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 by continuing to offer target-date funds managed by Wells Fargo Asset Management despite underperformance. WFAM, now known as Allspring Global Investments, is not a defendant in the lawsuit.
UnitedHealth Group had filed a motion to dismiss, saying the plaintiff had failed to sufficiently plead that the target-date funds underperformed the benchmarks shown in the original complaint and certain benchmarks used by the plaintiff were not meaningful, according to the Dec. 2 court filing.
Judge John R. Tunheim of the U.S. District Court in Minneapolis said in his Dec. 2 order that the plaintiff has plausibly pleaded imprudence by UnitedHealth and the committees because she provided an adequate number of benchmarks demonstrating the target-date funds had chronically underperformed.
"We are pleased with the court's ruling," said Charles Field, partner at Sanford Heisler Sharp, the plaintiff's attorney, in a news release. "Our factual allegations were backed up by 33 tables with data that showed each of the Well (sic) Fargo Funds chronically underperformed six different benchmarks over the course of eleven years."
As of Dec. 31, the UnitedHealth Group 401(k) Savings Plan had $17.2 billion in assets, according to its most recent Form 5500 filing.
UnitedHealth Group spokesman Eric Hausman could not be immediately reached for comment.