A federal judge has tossed a class action complaint scrutinizing how the industry's biggest lender handles its retirement savings plan. 

U.S. District Judge Susan K. DeClercq sided with United Wholesale Mortgage this week in ruling against former account executives who alleged mismanagement of the massive retirement fund. The decision squashes the case at a relatively early stage, as other mortgage players have been embroiled in prolonged litigation for alleged Employee Retirement Income Security Act violations.

Plaintiffs cried foul over UWM using unvested employer contributions in the 401(k) plan to pay future employee contributions, rather than cover their administrative expenses. The lawsuit suggested the move cost UWM workers over $1.8 million from their retirement savings. 

According to the lawsuit, the megalender's 401(k) plan had over 7,000 participants and more than $149 million in assets at the end of 2023. UWM says it matches 50% of the first 3% of its workers' contributions, up to $2,500 per year. 

Judge DeClercq found that UWM's activities didn't violate ERISA, and that the plan's language did not force management to use unvested proceeds, or forfeitures from employees who departed before their proceeds fully vested, to cover administrative expenses and therefore prioritize employee savings.

"ERISA does not transform the Plan's discretionary choice into a fiduciary breach merely because another permissible choice could have produced a greater economic benefit for participants," the judge wrote in a 20-page ruling. 

Plaintiffs suggested their losses from UWM's 401(k) moves amounted to $1,857,731, a sum the judge questioned as the plaintiffs did not explain their math. 

Spokespersons for UWM didn't respond to requests for comment Wednesday, while an attorney for the plaintiffs didn't respond to an inquiry whether the employees would file an appeal.

According to its 2025 annual report, UWM matched $8 million in employee contributions last year, up from $6.4 million in 2024. 

The mortgage industry's retirement plan fights

Mortgage professionals have infrequently filed ERISA complaints against their employers in recent years, with some success. 

Plaintiffs secured a $650,000 ERISA settlement last year with Republic Mortgage Insurance Co., over allegations that an investment oversight cost the plan over $1 million. A final hearing for the settlement is scheduled for next month. 

Onity and Wells Fargo remain locked in legacy litigation over class action ERISA claims initially filed in 2018. The servicers won a ruling in 2023 regarding their purported fiduciary duties and whether the mortgages they oversaw were plan assets. But an appellate court earlier this year remanded that case for further proceedings.