Supreme Court Reviews Intel 401k Investment Case on Private Funds

The U.S. Supreme Court heard arguments in Anderson v. Intel Corp. Investment Policy Committee on October 6, 2026, in Washington, examining whether employees can challenge retirement plan investment choices without identifying a meaningful benchmark to measure performance.

The case involves a former Intel employee's claim that company retirement-plan fiduciaries breached their duty by using hedge funds and private equity investments that allegedly underperformed. Lower courts rejected the claims, finding underperformance alone was insufficient without a comparable benchmark.

Several justices focused on whether different investment strategies could be fairly compared during oral arguments, according to CNBC and SCOTUSblog. The court's eventual ruling could influence employer decisions about adding alternative investments to 401(k) plans.

Justice Clarence Thomas framed the comparison issue during arguments with an example about different types of funds. "you can't compare apples and oranges…if you have a fund … that is designed to produce high returns but riskier returns…you can't compare that to a fund that is to protect against losses." Thomas said.

Other justices also questioned the lack of a comparable investment standard in the employee claims. Justice Elena Kagan highlighted the need for a similar comparison point during the discussion.

"the thing that you need … is another apple." Kagan said.

Justice Samuel Alito asked whether the employee's legal theory could rely on comparisons between different investment approaches. "state a claim by comparing apples and oranges but supplement that with the suggestion that the strategy was flawed." Alito said.

Justice Neil Gorsuch pressed for a clear standard for evaluating underperformance allegations. "agree with the general principle that when we're limited to underperformance claims … a meaningful benchmark of some kind is required, apples, not oranges." Gorsuch said.

Justice Amy Coney Barrett also examined whether a valid comparison required identifying similar investments with similar characteristics, while the court considered what guidance a ruling should provide.

Aimee Brown, assistant to the Solicitor General, argued the court should provide direction on evaluating investment comparisons. "some parameters" Brown said.

Brown also described the focus of fiduciary review during the hearing. "Prudence is about process and not about performance," Brown said.

Matthew Wessler represented the former employee and argued that the overall allegations should be considered together rather than relying only on a benchmark comparison.

"I think that matters in a case like this, where you have an allegation about an imprudent either strategy or implementation of that strategy that then turns out badly," Wessler said.

Legal analyst Ronald Mann wrote that the justices' questioning suggested they may support Intel's position and affirm the Ninth Circuit decision. "When the justices are asking opposing counsel to pick and choose among the approaches to use in an opinion, it usually is a safe bet that they are not going to vote for you," Mann wrote.

Intel's position has drawn attention from employers considering alternative investments in retirement plans. Eugene Scalia, partner at Gibson Dunn & Crutcher, said private funds can have a role in workplace retirement plans.

"Private funds can be an effective and entirely appropriate component of 401(k) plan investment options," Scalia said.

Scalia also said a ruling favoring Intel could affect regulatory support for such investments. "A ruling for Intel by the court would affirm that and lend further support to the Labor Department rulemaking," Scalia said.

Joshua Lichtenstein, partner at Ropes & Gray, said a favorable outcome could change employer concerns about legal exposure.

"A positive outcome in this case will go a long way toward getting plan sponsors that have wanted to do this for years, but held off, for fear of being sued, feel more confident that they can do this with less fear of being sued," Lichtenstein said.