US Supreme Court: Intel ERISA Fiduciary Benchmark Claims Face Doubt

The justices seemed to think Intel workers were making an apples to oranges analogy by comparing their pension plan's performance to stock market gains. The U.S. Supreme Court as seen from First Street SE in Washington, D.C. on May 14, 2026. (Kelsey Reichmann/Courthouse News) WASHINGTON (CN) — The Supreme Court seemed all but certain on Tuesday to rule against Intel employees unhappy with their retirement fund’s performance. The employees asked the justices to reverse an appeals court ruling dismissing their claims against Intel’s fiduciaries for investing retirement funds in nontraditional assets like hedge funds and private equity. But the high court looked unlikely to do so, seeming to unanimously support the lower court decision. Private employer pension plans are regulated by the Employee Retirement Income Security Act. The statute requires plan fiduciaries to follow standards of behavior and act solely in the interests of the participants. Two employees claimed Intel’s plan fiduciaries violated their duty under ERISA by labeling one of the company’s retirement funds as balanced investments — typically stocks, bonds and mutual funds — while making increasing allocations in alternative assets such as hedge funds and private equity. The employees said the plan fiduciaries’ decisions were to blame for the retirement fund’s poor performance, making comparisons to indices like the S&P 500 and Morningstar. But the Ninth Circuit found such comparisons lacking, dismissing the employees’ complaint for failing to identify a benchmark with a similar objective to Intel’s retirement fund. At the Supreme Court on Tuesday, the employees urged the justices to reject the rule, arguing it created an unfair requirement that would be difficult to meet when plan fiduciaries made unusual investment choices. The employees said their claim made non-performance accusations, arguing the plan fiduciaries’ over-allocation into hedge funds was risky and unprecedented. But the high court seemed to think a meaningful benchmark was necessary in these circumstances. “What the Ninth Circuit is saying is you can’t compare apples and oranges,” Justice Clarence Thomas, a George H.W. Bush appointee, said. Justice Elena Kagan, a Barack Obama appointee, said even without performance claims, the employees still needed something to compare their claims to. “The thing that you need in addition is like another apple,” Kagan said. “It doesn’t have to be precisely the same apple with precisely the same color and texture and taste and all of that, but it’s got to be kind of an apple.” While the employees conceded that some fund comparisons were necessary, they objected to a set of predetermined standards. You can’t compare apples to oranges, the employees said, but the question is what is an apple and what is an orange. The employees said what could count as a relevant benchmark shouldn’t be defined at the outset. Justice Amy Coney Barrett, a Donald Trump appointee, saw no way around such requirements. “Don’t you have to do that to decide if an apple is an apple?” Barrett asked. “Don’t you have to say, well, it has to be round, it has to come from a certain kind of tree?” The employees also argued their complaint focuses on the fiduciaries’ decision to make risky investments, not the performance of those investments. Justice Samuel Alito, a George W. Bush appointee, struggled to see how such a distinction helped the employees’ case. He said whether a particular strategy was reasonable couldn’t be judged on how the strategy performed in one particular instance. “If you want to analyze whether it’s a good strategy to try to convert a fourth down from the 1 yard line, you would have to look at a large number of instances where that’s done,” Alito said. “The fact that it didn’t work in a particular case doesn’t really show you anything, nor does the fact that it worked in a particular case show you anything.” By the second h

This impending Supreme Court decision clarifies the high bar for proving ERISA fiduciary breach claims based on investment underperformance, emphasizing the necessity of a 'meaningful benchmark' for comparison. Lawyers advising plan fiduciaries must ensure robust documentation and justification of investment strategies, particularly for alternative assets, and litigators should be aware of the stringent evidentiary requirements for such claims.

Source: Original reporting via Courthouse News Service