On October 6, 2026, the Supreme Court heard oral argument in Anderson v. Intel Corporation Investment Policy Committee on whether a plaintiff challenging an investment fund’s performance in a defined contribution plan must allege underperformance compared to a “meaningful benchmark.” The Justices appear poised to answer yes. Less clear is whether the Court will use this opportunity to clarify what is required to plead a meaningful benchmark.
Background
In Anderson, plaintiffs alleged that the fiduciaries of Intel’s 401(k) plans violated ERISA by offering custom funds designed to mitigate market risk through hedge funds, private equity funds, and other alternative investments, and that those funds underperformed other options and were too expensive. The district court dismissed the complaint in early 2021, finding that plaintiffs failed to plausibly allege that the funds underperformed, or were more expensive than, any “meaningful benchmark.” On May 22, 2025, the Ninth Circuit affirmed. Anderson v. Intel Corp. Inv. Pol’y Comm., 137 F.4th 1015 (9th Cir. 2025).
The Ninth Circuit acknowledged that a plaintiff need not always identify a comparator—for example, when making direct allegations of imprudence. Id. at 1023. But “to the extent a plaintiff” like Anderson “asks a court to infer that a fiduciary used improper methods based on the performance of the investments, . . . he must compare that performance to funds or investments that are meaningfully similar.” Id. As the court explained:
[W]hen a plaintiff alleges imprudence based on a fiduciary’s decision to make one investment rather than an alternative, the key to nudging an inference of imprudence from possible to plausible is providing a sound basis for comparison—a meaningful benchmark—not just alleging that costs are too high, or returns are too low. . . . The need for a relevant comparator with similar objectives—not just a better-performing plan or investment—is implicit in ERISA’s text. Id. at 1022.
Plaintiffs’ complaint—which relied on circumstantial allegations—failed that standard because “rather than presenting a comparison to Intel’s [own] composite benchmarks or to available funds with similar risk-mitigation strategies and objectives, Anderson sought to compare Intel’s funds to equity-heavy retail funds that pursued different objectives—typically revenue generation.” Id. at 1023. Those comparators were not “meaningfully similar”; “truly comparable” funds must have the same “aims,” “risks,” and “potential rewards.” Id. The court applied the “same reasoning” to plaintiffs’ fee allegations. Id. And to the extent plaintiffs challenged the plans’ “risk-minimization strategy” rather than its “implementation,” the court rejected that theory as an impermissible “per se challenge” in light of authority rejecting “generalized attacks on hedge funds and private equity funds.” Id.
The Supreme Court granted certiorari on the following question:
Whether, for claims predicated on fund underperformance, pleading that an ERISA fiduciary failed to use the requisite “care, skill, prudence, or diligence” under the circumstances and thus breached ERISA’s duty of prudence when investing plan assets requires alleging a “meaningful benchmark.”
Supreme Court Oral Argument
At oral argument, plaintiffs urged the Court to reject any bright-line pleading standard in favor of a holistic review of a complaint’s allegations at the motion-to-dismiss stage. They characterized their complaint as a broad attack on the challenged funds’ overall strategy, with underperformance allegations playing only a supporting role, and argued that the Ninth Circuit improperly focused on performance to the exclusion of plaintiffs’ allegations that Intel’s investment strategy was misguided.
The Justices appeared unpersuaded, with several noting that the question presented is expressly limited to claims “predicated on fund underperformance.”
Most or all of the Justices seemed to agree that a prudence claim premised on underperformance must include a comparison to a benchmark, and that such benchmark must be “meaningful”—in other words, an apples-to-apples comparison to the challenged investment. On these points, the Court appears poised to affirm the Ninth Circuit.
The Justices were less settled on whether this case is the right vehicle for guiding lower courts on what makes a benchmark “meaningful.” Justice Barrett, for example, questioned whether the Court needed to weigh in at all, while other Justices’ questions suggested that a more precise standard would help lower courts. Both sides briefly discussed potential markers of a meaningful benchmark—a fund’s objectives, risk-adjusted returns, or stated benchmarks—but no Justice signaled which criteria matter most. Some Justices also asked whether and how the meaningful benchmark requirement interacts with other alleged evidence of a fiduciary process breach.
Whether and how many Justices are willing to go beyond the core issue will determine the ruling’s practical effect on underperformance challenges. We think it likely the Court will issue a decision at the beginning of next year.
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