Key Takeaways
- • The Supreme Court heard oral arguments on Tuesday, October 6, in Anderson v. Intel Corp. Investment Policy Committee, a case that will determine whether ERISA plaintiffs must plead a "meaningful benchmark" to bring underperformance claims over 401(k) plan investments.
- • Justices across the ideological spectrum, including Thomas, Alito, Gorsuch, and Kagan, repeatedly used an "apples and oranges" framing, signaling skepticism toward underperformance claims made without a comparable benchmark, according to CNBC and SCOTUSblog analysis.
- • Legal observers following the arguments read the questioning as a sign the court is leaning toward affirming the Ninth Circuit in Intel's favor, which would smooth the path for private funds in 401(k) plans.
- • The ruling is expected to interact with pending Labor Department rulemaking on alternative investments, with a proposed rule issued in March and comments due June 1, and with the August 2025 executive order and the Retirement Investment Choice Act introduced in October 2025.
Summary
The Supreme Court heard arguments on Tuesday, October 6, in Anderson v. Intel Corp. Investment Policy Committee, a 2019 lawsuit brought by a former Intel employee over the performance of the company's 401(k) plan. The case does not challenge whether hedge funds and private equity may be used in a 401(k) alongside stocks and bonds. The question before the court is whether a plaintiff alleging retirement plan underperformance must identify a "meaningful benchmark." The lower courts held that underperformance alone is insufficient without such a benchmark, and the employees contend that Intel's relatively low plan returns reflect a breach of fiduciary duty.
According to CNBC's account of the hearing, justices appeared skeptical that plan sponsors' investment choices should readily support litigation. Justice Clarence Thomas said, "you can't compare apples and oranges," arguing that a fund designed for high but riskier returns cannot be compared with one designed to protect against losses. Justice Elena Kagan said, "the thing that you need … is another apple." Justice Neil Gorsuch asked the employees' counsel, Matthew Wessler, to agree that a meaningful benchmark is required when plaintiffs are limited to underperformance claims. Assistant to the Solicitor General Aimee Brown urged the court to set "some parameters" for a meaningful benchmark, stating, "Prudence is about process and not about performance." Ronald Mann of Columbia Law School, writing on SCOTUSblog, said the questioning suggested the court was leaning toward affirming the Ninth Circuit, observing that when justices ask opposing counsel to choose among approaches, "it usually is a safe bet that they are not going to vote for you."
Employers and industry groups are watching closely. Eugene Scalia of Gibson Dunn, who filed an amicus brief for the American Investment Council and the Managed Funds Association, said a ruling for Intel would support the Labor Department's rulemaking. Joshua Lichtenstein of Ropes & Gray said a favorable outcome would give plan sponsors more confidence to add private investments. Kent Mason of Davis & Harman, who represents major employers, said the largest companies are likely to move slowest because of litigation risk, with smaller and mid-size employers expected to adopt private investments first.
The regulatory backdrop has shifted repeatedly. A 2020 Labor Department information letter encouraged alternative investments, and a December 2021 DOL statement under the Biden administration cautioned against them. President Trump issued an executive order in August 2025 to expand access to alternative assets for 401(k) investors, and in March the Labor Department proposed a rule easing barriers to adding alternatives to plans. Asset managers and recordkeepers have continued launching products, including partnerships announced by Empower, Voya Financial, OneDigital, and Principal Financial Group, and Constitution Capital Partners' Horizon CIT, which launched with more than $50 million in initial assets across 18 retirement plans. Voya's research found nearly two-thirds of participants want access to private market investments, according to Amy Vaillancourt, Voya's president of retirement.
According to CNBC's account of the hearing, justices appeared skeptical that plan sponsors' investment choices should readily support litigation. Justice Clarence Thomas said, "you can't compare apples and oranges," arguing that a fund designed for high but riskier returns cannot be compared with one designed to protect against losses. Justice Elena Kagan said, "the thing that you need … is another apple." Justice Neil Gorsuch asked the employees' counsel, Matthew Wessler, to agree that a meaningful benchmark is required when plaintiffs are limited to underperformance claims. Assistant to the Solicitor General Aimee Brown urged the court to set "some parameters" for a meaningful benchmark, stating, "Prudence is about process and not about performance." Ronald Mann of Columbia Law School, writing on SCOTUSblog, said the questioning suggested the court was leaning toward affirming the Ninth Circuit, observing that when justices ask opposing counsel to choose among approaches, "it usually is a safe bet that they are not going to vote for you."
Employers and industry groups are watching closely. Eugene Scalia of Gibson Dunn, who filed an amicus brief for the American Investment Council and the Managed Funds Association, said a ruling for Intel would support the Labor Department's rulemaking. Joshua Lichtenstein of Ropes & Gray said a favorable outcome would give plan sponsors more confidence to add private investments. Kent Mason of Davis & Harman, who represents major employers, said the largest companies are likely to move slowest because of litigation risk, with smaller and mid-size employers expected to adopt private investments first.
The regulatory backdrop has shifted repeatedly. A 2020 Labor Department information letter encouraged alternative investments, and a December 2021 DOL statement under the Biden administration cautioned against them. President Trump issued an executive order in August 2025 to expand access to alternative assets for 401(k) investors, and in March the Labor Department proposed a rule easing barriers to adding alternatives to plans. Asset managers and recordkeepers have continued launching products, including partnerships announced by Empower, Voya Financial, OneDigital, and Principal Financial Group, and Constitution Capital Partners' Horizon CIT, which launched with more than $50 million in initial assets across 18 retirement plans. Voya's research found nearly two-thirds of participants want access to private market investments, according to Amy Vaillancourt, Voya's president of retirement.
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