The Supreme Court is weighing how much a worker must show before he can sue the people who chose the investments in his 401(k).
Story Highlights
- The justices heard Anderson v. Intel Corp. Investment Policy Committee on Tuesday, October 6.
- Intel workers say their plan’s managers loaded retirement funds with hedge funds and private equity and stayed with them through weak returns.
- Two lower courts dismissed the case because the workers did not name a similar fund that did better.
- A ruling is expected by the end of June.
Winston Anderson worked at Intel from 2000 to 2015 and put his retirement savings where millions of workers put theirs, in the company plan. He says the people in charge of that plan steered his money, and his coworkers’ money, into hedge funds and private equity that cost more and earned less. Now the Supreme Court will decide whether workers like him get a day in court.
The reason this reaches your own account is simple. In a 401(k), the worker does not build the funds. A committee at the company does. If that committee chooses badly, the worker is the one who retires with less. This case sets how much a worker has to show before a judge will even look at those choices.
Where the Retirement Money Went
The case covers two Intel plans, the 401(k) Savings Plan and the Retirement Contribution Plan. Much of the money sat in target-date funds, which are funds that shift a worker’s mix of investments from riskier to safer as his retirement year gets closer. Many workers land in one without ever choosing it.
After the 2008 market crash, Intel’s investment committee rebuilt those funds. Alongside ordinary stocks and bonds, it added hedge funds, which are private pools of money that use complicated trading strategies, and private equity, which buys stakes in companies that are not sold on the stock market. Intel said the goal was “decreasing volatility and reducing the risk of large losses during a market downturn.”
What the Workers Say It Cost Them
Anderson says the plan paid for that safety twice. Hedge funds and private equity charge higher fees than plain stock and bond funds, and he says the Intel funds then brought in lower returns than other retirement funds did. His lawsuit says the committee “drastically departed from prevailing standards of professional asset managers” and did not change course as the weak years added up.
He also says some of the choices helped Intel Capital, the company’s own investment arm, at the workers’ expense. Intel’s committee denies both charges. It says the law judges the care that went into a decision, not how the market treated it afterward.
Why the Lower Courts Said No
The men and women who run a retirement plan are called fiduciaries, which means the law binds them to manage the money in the workers’ interest. That duty comes from the Employee Retirement Income Security Act, known as ERISA, the federal law that protects workplace retirement plans.
A federal trial judge threw the case out. On May 22, 2025, the U.S. Court of Appeals for the 9th Circuit, the federal appeals court that covers the West, agreed. It said Anderson had not given “a sound basis for comparison.” In plain terms, he needed to point to a fund with the same goals and the same risks that did better, which courts call a “meaningful benchmark.” The court said his charge about Intel Capital showed only “the mere potential for a conflict of interest.”
Inside the Courtroom
The justices took up the case at oral argument, the session where each side’s lawyer stands and answers the Court’s questions. One image ran through the whole hour. Justice Clarence Thomas said “you can’t compare apples and oranges.” Justice Elena Kagan said what a worker needs “is another apple.” Justice Neil Gorsuch said “a meaningful benchmark of some kind, is required.”
Justice Amy Coney Barrett pointed out that a court still has “to decide if an apple is an apple.” Matthew Wessler argued for the workers. Luke McCloud argued for Intel’s committee, and Aimee Brown argued for the federal government, which took Intel’s side. One account of the argument said the questions pointed toward a win for Intel’s managers. The Court has not ruled.
What a Ruling Means for Anyone With a 401(k)
If Intel’s committee wins, a worker who believes his plan was run poorly will have to find a closely matched fund that beat it before a court will hear him. That stops thin lawsuits early. It also protects the most unusual investments best, because the stranger the fund, the harder it is to find a match.
If the workers win, more of these cases will go forward to the point where a plan’s managers must hand over their records and explain their choices. Either result becomes the rule for every workplace retirement plan in the country. The worker’s part stays the same: read the plan statement, look at what the funds hold and what they charge, and ask the plan office when the answer is not on the page.
Sources:
law.cornell.edu, uschamber.com, law.justia.com, supremecourt.gov, justice.org, psca.org, oyez.org, caselaw.findlaw.com