Judge Dismissed Lawsuit Over 401(k) Plan Management
A federal court ruling clears UWM of claims that plan management harmed retirement savings for over 7,000 employees.
Updated on Sept. 25, 2026 in Retirement Planning
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U.S. District Judge Susan K. DeClercq dismissed a class action lawsuit alleging that United Wholesale Mortgage mismanaged its 401(k) plan. The ruling determined that the company did not violate the Employee Retirement Income Security Act.
Why it matters
The lawsuit claimed that using unvested employer contributions to pay for future contributions caused over $1.8 million in losses for plan participants. The court found that discretionary choices in plan management do not constitute a fiduciary breach.
The 401(k) plan, which had over 7,000 participants as of late 2023, is backed by $149 million in assets. UWM provided $8 million in contribution matches in 2025, up from $6.4 million in 2024.
The players
Susan K. DeClercq
The U.S. District Judge who presided over the case and issued the ruling regarding ERISA compliance.
United Wholesale Mortgage
A lender that provides retirement benefits, including a 401(k) plan with a 50% match on the first 3% of contributions.
The details
Plaintiffs alleged that the company used money from unvested employer contributions to fund future obligations, rather than using those funds for other plan purposes. The judge concluded that the plan language provided did not mandate the use of forfeiture proceeds to cover administrative costs. Consequently, the court ruled that the company's management decisions were permitted under existing federal law.
Timeline
2018: Onity and Wells Fargo ERISA litigation was initially filed.
2023: Total plan assets and participant count recorded at year end.
2024: UWM total employee contribution match reached $6.4 million.
2025: UWM total employee contribution match reached $8 million.
September 2026: Judge dismissed the class action lawsuit.
Money Landscape
This case sits within the broader regulatory oversight of corporate retirement plans under the Employee Retirement Income Security Act. It clarifies the scope of fiduciary responsibility regarding how companies handle unvested contributions.
Employees with employer-sponsored retirement plans should review their summary plan description to understand how their company handles forfeiture accounts. Consult a financial professional to discuss how your specific plan's contribution and vesting rules affect your long-term savings.
The takeaway
Fiduciary standards for 401(k) plans prioritize compliance with the specific language of the plan document. Review your latest 401(k) statement to verify your employer matching contributions and confirm your vesting status.
Further reading
For more on managing your nest egg, visit Retirement Planning.
Source note: This article includes information reported by National Mortgage News.
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