Justices pressed both sides on how to define a "meaningful benchmark" in a suit over Intel's retirement funds. The Solicitor General backed Intel's fiduciaries.
The Supreme Court on Tuesday heard arguments in a case that could make it easier, or harder, for employers to put private equity and hedge funds into workers' retirement accounts.
Anderson v. Intel, No. 25-498, asks whether a claim that retirement-plan fiduciaries acted imprudently by choosing investments that underperformed must identify a "meaningful benchmark" for comparison. The case arrives from the Ninth Circuit; the court agreed to hear it on .
The plaintiffs challenged Intel's decision to include alternative investments in some of its 401(k) funds. The complaint alleged that by the end of 2013, up to 36.71% of Intel's Global Diversified Fund was invested in private equity, hedge funds and commodities.
The justices appeared skeptical of the challenge. A majority signaled that the case turns on defining what counts as a meaningful benchmark. Justice Clarence Thomas observed that "you can't compare apples to oranges," and Justice Sonia Sotomayor asked how such a benchmark should be defined. The parties broadly agreed that some benchmark is needed but disagreed on what it should be.
The federal government sided with Intel. The Solicitor General argued as a friend of the court in support of the company's fiduciaries. So did a coalition of industry groups, including the American Investment Council, which represents private equity firms, the Managed Funds Association, the Investment Company Institute and the U.S. Chamber of Commerce.
Why the industry is watching
The stakes go beyond Intel. Buyout firms have been pushing to reach individual retirement savers, a vast pool of capital that has largely been closed to them. One of the main obstacles has been litigation risk: employers fear being sued if alternative investments lag simpler index funds.
A ruling for Intel would raise the bar for such lawsuits at the earliest stage, requiring plaintiffs to show a comparable benchmark before a case can proceed. That would lower the legal risk for plan sponsors considering alternatives. A ruling for the plaintiffs would leave that risk in place.
Regulation is moving on a parallel track. A Labor Department rule on alternative assets in 401(k) plans remains in proposed form.
What to watch
A decision is expected before the court's term ends, likely by mid-2027. The definition of "meaningful benchmark" the justices settle on will matter as much as who wins.