The Supreme Court heard arguments Oct. 6 in Anderson v. Intel, a case that will decide what workers must put in a complaint to sue over a 401(k) that trailed other funds. The justices spent the hour on one phrase, “meaningful benchmark,” and how similar a comparison fund has to be.
What the Supreme Court 401(k) Case Asks
The docket number is 25-498. SCOTUSblog’s case page lists the question as whether a worker alleging underperformance under the federal retirement law, ERISA, must plead a “meaningful benchmark” to show the plan’s managers breached their duty of prudence. The Court granted review Jan. 16, 2026, after the petition was filed Oct. 20, 2025.
The Ninth Circuit affirmed the dismissal on May 22, 2025, per Ballotpedia’s procedural history. The suit began in 2019, when a former Intel participant challenged how fiduciaries put parts of custom target-date and diversified funds into hedge funds and private equity, according to the American Retirement Association’s NAPA Net.
NAPA quoted the plaintiffs as alleging that the fiduciaries put billions of dollars of retirement savings into “high-priced, low-performing illiquid and opaque hedge funds.” Winston Anderson is the lead petitioner. The district court dismissed the case partly because he gave no meaningful benchmark for comparison, NAPA reported.
The Ninth Circuit held that allegations of poor performance or high costs are not enough without a sound comparison to other investments, 401(k) Specialist reported. Bloomberg Law reported that the workers are challenging the plan’s shift toward hedge funds and private equity after the 2008 financial crisis. Argument began at 10 a.m. Eastern, and the Court allotted one hour.
Intel Hedge Fund Allocation: the 21% Figure
The law firm Ropes & Gray noted in a client alert that the Intel 2030 target-date fund held about 21% of its assets in hedge funds by 2014. The firm described that share as well above what comparable plans held.
The dispute is over the comparison. The plaintiffs say Intel allocated far more to hedge funds and private equity than similar plans, which raised fees and cut returns, NAPA reported. Intel argues that different investment strategies explain the performance gap and that lower returns alone do not show imprudence, Newsweek reported. Under the Ninth Circuit’s rule, the worker has to name a fund with similar aims and strategies that did better.
How the Justices Questioned Both Lawyers
Matthew Wessler, who argued for the workers, told the Court that a single definition of a benchmark would be “a project doomed to fail,” Bloomberg Law reported. Charles McCloud argued for Intel that the standard fits the purposes of ERISA and market reality, according to the same report.
Justice Sonia Sotomayor asked Wessler, “How do you define what kind of apple should be compared?” per PlanSponsor. The outlet reported Justice Clarence Thomas pressed a related point: a fund built for higher but riskier returns cannot be fairly compared with one built to limit losses. Justice Amy Coney Barrett said the sides appeared to agree on the standard and were “fighting a little about what is meaningful,” PlanSponsor wrote.
Bloomberg Law reported Barrett also worried that insisting on “like aims and strategies” could push courts to hunt for an investment “twin.” Justice Elena Kagan floated a middle path. The Court could say a comparison must be “meaningfully similar” without being identical, Bloomberg Law reported. Justice Neil Gorsuch said the workers’ lawyer seemed to be “shifting ground” from the original question.
Newsweek reported that Gorsuch urged his colleagues not to decide how much underperformance alone proves imprudence. He said, “We should take care to bracket that question about the relative importance” of underperformance.
Who Backs Intel, and the split Among Appeals Courts
The federal government sided with Intel. Aimee Brown, an assistant to the Solicitor General, argued as a friend of the court, per SCOTUSblog. Ropes & Gray said the Solicitor General argued the stricter standard protects against “conclusory comparisons to market index composites.” Industry groups also filed briefs for Intel, including the Investment Company Institute, the ERISA Industry Committee and the American Retirement Association, NAPA reported. SCOTUSblog lists briefs from AARP, investment scholars and the U.S. Chamber of Commerce as well.
The appeals courts disagree. Ropes & Gray said the Ninth Circuit requires “a sound basis for comparison,” while the Sixth Circuit allows a more flexible, case-specific approach.
What it means for retirement savers
The ruling arrives while the Labor Department works on rules for alternative assets in retirement plans. Ropes & Gray reported the department submitted a proposed rule on fiduciary duties in choosing investment options on Jan. 13, 2026, to carry out a 2025 executive order from President Donald Trump on alternatives in defined contribution plans.
Employers who add hedge funds or private equity to a 401(k) menu will want to know how easy it is to be sued. If the Court upholds the Ninth Circuit’s benchmark rule, workers will need to name a closely matched fund before a judge lets a case proceed. If the Court rejects it, more complaints may reach discovery. Bloomberg Law reported that observers expect the Court to require a meaningful benchmark while rejecting any demand for an identical fund.
A decision is due by the end of the Court’s term, typically late June or early July, NAPA reported. Image: Exterior photo of the U.S. Supreme Court building from the Architect of the Capitol, a federal agency; public domain with a credit line.
