Supreme Court Hears Intel 401(k) Case on Benchmarking Underperformance Claims

Justices Express Skepticism in Anderson v. Intel Over Requirement for 'Meaningful Benchmark'

By LineZotpaper

Published11 October 2026

Read Time2 min

The Supreme Court heard oral arguments this week in a case concerning Intel's 401(k) plan that could shape how employers evaluate private investments in retirement plans. The key question is whether employees must provide a specific benchmark to prove a plan sponsor breached its fiduciary duty through underperformance.

The court heard arguments on Tuesday, Oct. 6, in Anderson v. Intel Corp. Investment Policy Committee, a case that has left plan sponsors in limbo as they await clarity on how to handle alternative assets like hedge funds and private equity in defined contribution plans.

The case does not challenge whether such assets can be included. Instead, it asks whether a claim of underperformance requires alleging a "meaningful benchmark" for courts to assess fiduciary prudence. Lower courts had dismissed the employees' claims, ruling that allegations of low returns alone were insufficient without a benchmark for comparison.

During oral arguments, justices appeared skeptical that plan sponsors' investment choices should be easy targets for litigation. Justice Clarence Thomas summed up the Ninth Circuit's reasoning with a fruit metaphor: "you can't compare apples and oranges." Justice Thomas noted that a fund designed for high returns but higher risk cannot be compared to a fund meant to protect against losses. Several other justices, including from the court's liberal wing, seemed to agree.

Elizabeth Hopkins, principal at Hopkins ERISA Law and a former senior trial attorney with the Labor Department, who filed an amicus brief on behalf of former high-ranking DOL officials, said: "I think companies want to know what's going to happen with the proposal and what's going to happen with the Supreme Court case before they go rushing in to change their investment strategies."

The asset management industry is preparing new products for private investments in 401(k)s, but many plan sponsors are waiting for the court's decision and finalized Labor Department rules before making changes.

Analysis

Why This Matters

The ruling will determine how easily 401(k) participants can sue plan sponsors for poor investment performance.
It could influence whether employers include private equity, hedge funds, and other alternative assets in retirement plan menus.
Plan sponsors and asset managers are awaiting clarity before adjusting investment strategies, potentially limiting innovation in retirement offerings.

Background

The case, Anderson v. Intel Corp. Investment Policy Committee, stems from a 2019 lawsuit by a former Intel employee alleging that the company's 401(k) plan underperformed due to imprudent investment choices. The lower courts required a "meaningful benchmark" to compare performance, a standard the plaintiffs argue is too high. The Supreme Court's interpretation of fiduciary duty under ERISA will set a precedent for future claims. The case also coincides with proposed Labor Department rules on alternative investments in retirement plans.

Key Perspectives

Employers (plan sponsors): Want protection from costly litigation that could discourage them from including diverse, potentially higher-return investments. They argue that comparing different fund types requires appropriate benchmarks. Employees (plaintiffs): Seek accountability for underperformance and argue that requiring a specific benchmark imposes an unreasonable burden on participants who lack access to detailed fund data. Asset management industry: Eager to offer private investment options but await legal and regulatory certainty to avoid future lawsuits.

What to Watch

The Supreme Court's written decision, expected by the end of the term, likely mid-2027.
The Labor Department's final rule on alternative investments in 401(k) plans.
Whether plan sponsors begin adding private equity and hedge fund options following the outcome.

Sources

How Supreme Court justices are leaning in major 401(k) case over private funds and underperformance — US Top News and Analysis