Supreme Court weighs what makes a fund benchmark meaningful in Intel ERISA case

Tuesday's oral argument in Anderson v. Intel Corp. Investment Policy Committee circled a phrase that has decided ERISA cases for years without ever being defined — the meaning of 'meaningful benchmark' — as a majority of the justices, according to PLANADVISER's account of the hearing, signaled they see a need to say what it means when courts evaluate retirement plan investments.

The question before the court is procedural on its face and consequential in practice: when a 401(k) participant sues a plan fiduciary for imprudence in selecting an investment, must the complaint identify a comparable investment with similar aims, risks and strategies that performed better, and must it do so in enough detail to survive a motion to dismiss? If the answer is yes, the case can end at the pleading stage; if the court then moves the line in either direction, every imprudence complaint filed after this term will be drafted to match.

What emerged was narrower than the headline question suggests, because all parties accepted that a plaintiff must supply a meaningful benchmark of some kind to get past a motion to dismiss, and they disagreed almost entirely about what the word means. That gap is where the case lives: the plaintiffs contend the current requirement is too strict and inconsistent, while Intel's defense of its menu rests on the argument that its choices did what they were designed to do.

The case itself began in 2019 with a challenge to the investment approach of two target-date funds on the Intel plan's menu, wound through the district court, and reached the U.S. 9th Circuit Court of Appeals, which in May 2025 upheld a ruling for Intel after finding the plaintiffs had not shown imprudent investment choices. The Supreme Court took the case from there, making Tuesday's argument the first substantive look at how the justices read the pleading requirement.

Matthew Wessler of Gupta Wessler LLP, arguing for the plaintiffs, told the court that Intel's heavy allocation to hedge funds and private equity hurt participants' performance enough to justify naming a comparator fund and letting the other imprudence allegations proceed. Intel's answer, laid out in a July 2 brief, is that the allocation was designed to cut volatility and reduce risk during downturns after the 2008 crisis and that it worked, with better returns than more equity-heavy funds in down-market years even as those same equity-heavy funds 'generally performed better' through much of the bull market that followed.

That concession is the whole argument in miniature: a plan can beat its peers in the years a participant most needs protection and lag them in the years a participant most notices, and both statements can be true. A benchmark that measures only one of those periods tells the court almost nothing, and one that measures only the other tells it almost as little, which is why the justices appeared to be reaching Tuesday for a definition flexible enough to account for a stated purpose while still concrete enough to litigate at the pleading stage.

For plan sponsors and the advisers who sit alongside them on committees, the practical stakes sit in the investment menu review file, because private equity and hedge fund sleeves entered 401(k) lineups on a risk-reduction rationale and Intel's brief is a defense of that rationale in its purest form. If the court writes a benchmark standard that requires plaintiffs to name a comparator with the same downside-protection objective, the defense of alternatives in plan menus gets easier, since the pool of plausible comparators shrinks and with it the number of complaints that clear a motion to dismiss; if the court writes a looser standard, the same allocation decisions become far more exposed.

The fiduciary committees that will feel this first are the ones that have already added or are weighing private-markets and hedge fund options, and their minutes, their consultant's performance reports, and the peer groups those reports rely on are, in effect, the benchmarks they are choosing in advance. A ruling that says something specific about what counts as meaningful would give sponsors a drafting target for those records, while giving plaintiffs a target for picking them apart.

This publication has argued that participant-level fiduciary standing is the next unlock in 401(k) advice, a world in which whoever controls the login sets the price of advice. Anderson v. Intel sits upstream of that fight: before anyone argues about who owes a duty at the individual account, the court will settle what a participant must show about the investment itself. A tightening here makes the advice-layer argument less urgent for sponsors, while a loosening makes every committee decision, and the adviser who documented it, a more visible record.

The opinion's treatment of the word 'meaningful' itself — whether the court writes a test a district judge can apply on the briefs or leaves the term to develop case by case, pushing the real definition down to the circuits — will determine how immediately the standard bites, and the losing side's reasoning will matter for the 2019 target-date allegations that started this, since the 9th Circuit's May 2025 ruling for Intel is the backdrop the justices are now reviewing.

Intel's plan made its choices with a stated purpose — less pain in bad markets, at the cost of participation in good ones — and the court's job in this case is to decide how specifically a plaintiff must describe the alternative before a judge can weigh whether that trade was a breach.

Intel's filing does not claim the plan's alternatives-heavy approach beat equities across the cycle; it claims the approach reduced volatility and cut risk in downturns and points to better returns than more equity-heavy funds in down-market years as evidence the design worked, while acknowledging those equity-heavy funds generally outperformed across much of the post-2008 bull market.

That framing matters for how a meaningful-benchmark standard would operate, because a comparator drawn from a traditional stock-and-bond peer group would have posted higher returns across most of the period in question while a comparator built around the same volatility-reduction objective would not, and which of those two the court regards as the right measuring stick is, functionally, the outcome of the case.

It is also the point on which the justices seemed most aligned, and whether the opinion that follows supplies a definition or leaves the phrase to be refined in the lower courts is the open question.