Vanguard Settles $40M Class Action: Here’s How to Find Out if You’re Eligible and What You Could Get

Vanguard, the investment management giant known for its low-cost index funds, recently reached a $40 million settlement in a class action lawsuit. This settlement could potentially benefit thousands of investors who held certain Vanguard Target Retirement Funds (TRFs) between specific dates.

If you invested in Vanguard TRFs, you might be wondering if you’re eligible and what kind of payout you could expect. Here’s a breakdown of the lawsuit, the settlement, and how to determine if you’re a member of the settlement class:

What Was the Lawsuit About?

The lawsuit, Di Piazza v. The Vanguard Group, Inc., alleged that Vanguard breached its fiduciary duty by selecting higher-cost share classes of certain underlying mutual funds within its TRFs when lower-cost share classes were available. Plaintiffs argued that this decision, while seemingly small, resulted in millions of dollars in unnecessary fees being charged to investors. Essentially, the plaintiffs claimed that Vanguard wasn’t prioritizing the lowest possible costs for its investors, a core tenet of their investment philosophy.

Who is Covered by the Settlement?

The settlement class includes individuals and entities who held or acquired an interest in the following Vanguard Target Retirement Funds between May 22, 2013, and May 16, 2023:

• Vanguard Target Retirement 2015 Fund (VTXVX)
• Vanguard Target Retirement 2020 Fund (VTWNX)
• Vanguard Target Retirement 2025 Fund (VTTVX)
• Vanguard Target Retirement 2030 Fund (VTHRX)
• Vanguard Target Retirement 2035 Fund (VTTHX)
• Vanguard Target Retirement 2040 Fund (VFORX)
• Vanguard Target Retirement 2045 Fund (VTIVX)
• Vanguard Target Retirement 2050 Fund (VFIFX)
• Vanguard Target Retirement 2055 Fund (VFFVX)
• Vanguard Target Retirement 2060 Fund (VTTSX)
• Vanguard Target Retirement 2065 Fund (VSXVX)

How Much Could You Receive?

The actual amount each eligible class member will receive depends on several factors, including:

• The total amount of the settlement fund (after deductions for legal fees, administrative costs, and other expenses).
• The amount of time you held the eligible Target Retirement Funds during the class period.
• The amount you invested in the eligible Target Retirement Funds during the class period.

It’s impossible to provide an exact estimate of the individual payouts at this time. The settlement administrator will calculate individual awards based on the data provided by Vanguard regarding class members’ investments.

How to Find Out if You’re Eligible and Make a Claim:

1. Visit the Official Settlement Website: The most reliable source of information is the official settlement website. You can usually find it by searching online for “Vanguard Target Retirement Settlement” or by looking for a notice you may have received in the mail. The website will contain the claim form, important deadlines, and answers to frequently asked questions.

2. Review Your Vanguard Account Statements: Check your past Vanguard account statements for the period between May 22, 2013, and May 16, 2023. Look for transactions involving the Target Retirement Funds listed above. This will help you verify if you are a member of the settlement class.

3. File a Claim: If you believe you are eligible, you must file a claim form by the designated deadline. The claim form will require you to provide information about your investments in the eligible Target Retirement Funds.

Important Dates to Remember:

• Claim Filing Deadline: Be sure to check the official settlement website for the claim filing deadline. Missing this deadline will likely prevent you from receiving any compensation.

What Happens Next?

Once the claim filing period closes, the settlement administrator will process the claims and calculate the individual payouts. It may take several months for the payments to be distributed.

Should You Do Anything Else?

• Read the Settlement Notice Carefully: Even if you skim this article, make sure to read the official settlement notice thoroughly. It contains crucial details about your rights and options.

• Consult with a Financial Advisor (Optional): If you are unsure whether to file a claim or how the settlement may affect your overall financial situation, consider consulting with a qualified financial advisor.

In Conclusion:

This $40 million settlement offers potential compensation to investors who held specific Vanguard Target Retirement Funds during a specific timeframe. While the individual payouts may not be substantial, it’s still important to determine if you are eligible and file a claim before the deadline. By taking the time to investigate and understand your rights, you can ensure you receive any compensation you are entitled to. Remember to rely on the official settlement website as your primary source of information and to meet all required deadlines.

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