PHILADELPHIA, PA — A new $25 million class action settlement has been proposed for investors in Vanguard’s Investor Target Retirement Funds (Investor TRFs), according to an announcement approved by the U.S. District Court for the Eastern District of Pennsylvania. The case, overseen by Judge John F. Murphy, stems from unexpected 2021 capital gains distributions that triggered significant tax liabilities for fundholders.
The hearing to determine final approval of the proposed settlement is scheduled for January 6, 2026, at 10 a.m. in Philadelphia’s James A. Byrne U.S. Courthouse. The court will consider whether the agreement is “fair, reasonable, and adequate,” and whether to grant legal fees, expenses, and service awards to plaintiffs and counsel.
The proposal follows a previously rejected $40 million settlement and comes in addition to a $132.91 million Fair Fund established under an earlier settlement between The Vanguard Group and the U.S. Securities and Exchange Commission (SEC). That SEC settlement required Vanguard to pay $92.91 million in remediation, later increased by $40 million after the court declined to approve the prior class action deal. The new class settlement provides separate compensation to eligible investors without limiting their participation in the SEC’s Fair Fund program.
Eligible investors include U.S. residents who held shares of Vanguard’s Investor TRFs in 2021 and received capital gains distributions from taxable or certain tax-advantaged accounts. Claims must be submitted by February 3, 2026, and exclusion or objection requests by December 16, 2025.
Further details, including claim forms and exclusion procedures, are available through the claims administrator, Strategic Claims Services, via www.strategicclaims.net/vanguard or by phone at (866) 274-4004.
The case — a result of investor backlash to 2021 tax events tied to Vanguard’s fund reallocation decisions — highlights the growing scrutiny of target-date fund management practices in the retail investment industry.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.