Providence Health $42.7 Million 401(k) Forfeiture Class Action Settlement — Paid Automatically

The two figures measure different things. The $106 is Class Counsel's estimate of the cash amount deposited into each class member's plan account, which comes from dividing the $21,424,532.72 in unallocated plan assets equally among the class. The larger figure reported in the trade press adds a second, non-cash benefit: Providence agreeing to pay the plan's recordkeeping and administrative expenses for 2026, 2027 and 2028, valued in the settlement at about $15.3 million. That second piece is money class members do not pay rather than money they receive, and it is spread across roughly 202,000 people.

Yes, if you were a participant in or beneficiary of the plan at any time from January 1, 2018 through June 4, 2026. The settlement requires Providence to reactivate the plan accounts of former participants who are class members, at Providence's own expense, so the money can be deposited. Once your account is reactivated you may request a distribution under the plan's normal rules, and accounts of $1,000.00 or less are subject to the plan's automatic distribution process. Distributions of that kind are paid by check from the recordkeeper, less any withholding the recordkeeper is required to apply.

No. The court certified the settlement class under Federal Rule of Civil Procedure 23(b)(1), which does not permit class members to exclude themselves. There was no opt-out form and no exclusion deadline. Class members who disagreed with the deal could object in writing by October 6, 2026; the Court found that no objections were filed and granted final approval on October 21, 2026, so every class member is bound by the release and the judgment.

The release is broad. Beyond the forfeiture claims actually pleaded, it covers claims connected to the plan's treatment or use of forfeitures during the class period, the fees and expenses charged to or paid by the plan or its participants, disclosures about the plan's forfeitures and fees, the compensation paid to the plan's service providers, the management and oversight of the plan and its fiduciaries, and alleged breaches of the duties of loyalty and prudence or prohibited transactions under ERISA. Class members who want to understand exactly what they are giving up should read paragraphs 1.42 and 1.43 of the Settlement Agreement, posted on the official settlement website.

When an employee leaves before becoming fully vested, the unvested portion of the employer's matching contributions is forfeited and moved into a plan forfeiture account. The amended complaint alleged that the Providence plan document required those forfeited amounts to be used first to pay plan expenses not paid by Providence, and that the plan's fiduciaries instead applied them to offset Providence's own employer contributions while participants continued to be charged administrative fees from their accounts. Providence denies all of it, denies that anyone suffered a loss, and maintains it administered the plan in compliance with ERISA. No court has ruled on the merits.