Justices skeptical of retirement fund mismanagement claims
During oral argument in Anderson v. Intel Corp Investment Policy Committee, the justices appeared doubtful that employees can sue over retirement plan investment choices without evidence that comparable funds performed better. The case involves Intel’s use of hedge funds and private equity and whether ERISA’s fiduciary duty of prudence was violated. Several justices used an apples-to-oranges comparison to suggest that a meaningful benchmark is necessary for such claims.
At oral argument in Anderson v. Intel Corp Investment Policy Committee, the justices doubted whether employees may sue over retirement plan investments without proof that comparable funds performed better. Intel’s fiduciaries allegedly departed from customary practices by putting plan money largely into hedge funds and private equity. ERISA imposes a fiduciary duty of prudence.
The bench repeatedly invoked a fruit comparison, indicating a meaningful benchmark is necessary. Employees argued the investment strategy was imprudent as a whole, but the Court focused on the absence of comparator performance data. The Ninth Circuit’s decision appeared likely to be affirmed.
The outcome could affect retirement savers, plan sponsors, and courts. If a benchmark is required, employees may find it harder to challenge investment choices they view as imprudent, while employers and fiduciaries may gain clearer litigation standards. The ruling may also shape how lower courts assess ERISA prudence claims involving hedge funds, private equity, and other less traditional retirement plan investments.