Justices sound skeptical of 401(k) suits that compare 'apples and oranges'
The Supreme Court heard Anderson v. Intel Corp. Investment Policy Committee (No. 25-498) on Tuesday. Former Intel employees say the company's plan fiduciaries breached their duties under ERISA by putting part of the plan's custom target-date and diversified funds into hedge funds and private equity, which then lagged ordinary stock-and-bond funds. The Ninth Circuit dismissed the suit, holding that a claim of underperformance must point to a meaningful benchmark, a comparable fund with similar aims. The U.S. government, through the Solicitor General's office and backed by the Labor Department, sided with Intel. According to Bloomberg Law, Courthouse News and Newsweek, none of the justices seemed ready to let workers sue over poor returns without some comparison. Justice Thomas described the lower court's view as 'you can't compare apples and oranges'; Justice Kagan said the comparison need not be identical but 'it's got to be kind of an apple.' Justice Barrett asked whether requiring 'like aims and strategies' would send judges looking for a twin. The Court seemed divided on how much guidance to give. A ruling is expected by June.
Alternative investments are moving into 401(k) plans under an executive order and Labor Department guidance from the past year. This case decides how easily workers can sue when those bets go wrong. A strict benchmark rule makes those suits harder to bring.
If your 401(k) target-date fund holds private equity or hedge funds, check the fund's fact sheet. The ruling will not change your fund, but it will shape whether anyone can challenge it in court.
Hindsight is not a legal claim. Plans that diversify into alternatives will sometimes trail an index fund; requiring a real comparison keeps courts from second-guessing every choice.
Private funds are opaque and expensive, and there is often no clean comparison for them. Demanding a 'twin' benchmark lets plans pick investments that cannot be judged.
The likely outcome is a loss for the workers with an important limit attached: a comparison is required, but it need not be a twin. Watch for that phrase in the opinion. It decides whether the next case over private equity in a 401(k) ever gets past a motion to dismiss.
DailyDrop U.S. No. 2 · October 6, 2026