Vanguard Group $25M Investor TRF Securities Settlement

Investors who received capital gains distributions in 2021 from Vanguard Investor Target Retirement Funds (investor TRFs) held in a taxable account or a tax-advantaged account may be eligible to claim a cash payment from a class action settlement.

The Vanguard Group Inc. agreed to pay $25 million to settle a class action lawsuit alleging it and related defendants breached their fiduciary duties to shareholders regarding unusually large capital gains distributions, resulting in unexpected tax liabilities for investors who held these funds in taxable or certain tax-advantaged accounts during the class period.

The previous $40 million settlement in this case did not receive final approval. This new $25 million settlement is pending final court approval.

Who qualifies as a class member?

Class members who previously submitted a claim for the prior $40 million settlement in this action do not need to submit a new claim unless they wish to withdraw it.

The settlement class includes:

• Investors who reside in the United States
• Investors who held shares of the investor TRFs in 2021 in taxable accounts or other relevant accounts
• Investors who received capital gains distributions from the investor TRFs in 2021

How much is the Vanguard payout?

Pro rata payment: The total settlement fund is $25,000,000. The settlement administrator will distribute the fund, minus deductions for taxes, notice and administration costs, attorneys' fees and expenses, and any court-approved incentive awards to lead plaintiffs, to eligible class members.

The settlement administrator will determine each class member's recognized claim based on several factors, including:

• The amount of capital gains distributions they received in 2021 from each investor TRF held in a taxable or other relevant account
• The total number and size of claims filed by all class members
• The fund-specific weight assigned to each investor TRF to reflect the level of excess distribution and the time value of money

Payout calculation

The calculation is (capital gains distribution × fund weight = recognized claim) then (class member's recognized claim / total recognized claims for all class members) × net settlement fund = class member's payment.

Weights for each fund include:

• Vanguard Target Retirement 2015 Fund (VTXVX): 0.134
• Vanguard Target Retirement 2020 Fund (VTWNX): 0.560
• Vanguard Target Retirement 2025 Fund (VTTVX): 1.200
• Vanguard Target Retirement 2030 Fund (VTHRX): 2.235
• Vanguard Target Retirement 2035 Fund (VTTHX): 3.646
• Vanguard Target Retirement 2040 Fund (VFORX): 5.728
• Vanguard Target Retirement 2045 Fund (VTIVX): 8.309
• Vanguard Target Retirement 2050 Fund (VFIFX): 11.935
• Vanguard Target Retirement 2055 Fund (VFFVX): 16.681
• Vanguard Target Retirement 2060 Fund (VTTSX): 19.584
• Vanguard Target Retirement 2065 Fund (VLXVX): 4.082
• Vanguard Target Retirement Income Fund (VTINX): 0.134

How to claim a settlement payout

Class members can file the online claim form or download, print and complete the PDF claim form (Page 13) and mail it to the settlement administrator. The claim deadline is Feb. 3, 2026.

Settlement administrator's mailing address: Vanguard Chester Funds Litigation, c/o Strategic Claims Services, 600 N. Jackson St., Ste. 205, P.O. Box 230, Media, PA 19063

Class members who previously submitted a claim for the prior $40 million settlement in this action do not need to submit a new claim unless they wish to withdraw it.

What proof or documentation is required to submit a claim?

All claimants must provide:

• Their Social Security or taxpayer identification number
• Their identification number assigned by the claims administrator
• Class members who did not receive an identification number must provide one or more of the following:
• A Form 1099
• Stockbroker confirmation slips
• Stockbroker statements
• Other documents evidencing the 2021 capital gains distributions received from investor TRFs held in taxable accounts or other relevant accounts showing the relevant 2021 capital gains distributions in their taxable account or other relevant account

$25 million settlement fund breakdown

The $25,000,000 settlement fund covers:

• Attorneys' fees: Up to $8,333,333.33
• Attorneys' expenses: Up to $985,000
• Service awards to lead plaintiffs: Up to $240,000 total
• Payments to eligible class members: The remainder of the fund

Important dates

• Deadline to request exclusion: Dec. 16, 2025
• Fairness hearing: Jan. 6, 2026
• Deadline to file a claim: Feb. 3, 2026

When is the Vanguard securities settlement payout date?

The settlement administrator will issue payments to eligible class members after it resolves any appeals and the court grants final approval of the settlement.

Why did this class action settlement happen?

The class action lawsuit alleged Vanguard and other defendants breached their fiduciary duties to shareholders by causing the investor TRFs to make large capital gains distributions in 2021, which resulted in unexpected tax liabilities for investors in taxable and certain tax-advantaged accounts.

The Vanguard Group Inc. denies any wrongdoing but agreed to settle to avoid the risks and costs of continued litigation. 

Sources

1. Class notice
2. Settlement agreement