28 Sept 2026
Season 6, Episode 8: The Meanings Behind a “Meaningful Benchmark?”
The United States Supreme Court is set to examine an issuethat could dramatically impact the future of ERISA litigation. Ahead of that, Nevin (Adams) and Fred (Reish) look at the issues – and potential impact(s).
The Issue
The case - Anderson v. Intel - is about what a participant must allege to get an ERISA investment prudence claim past a motion to dismiss. More specifically, the question presented is: 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.”
Said another way, when a participant says an investment’sunderperformance suggests the fiduciaries acted imprudently, does the complaint have to identify a genuinely comparable investment to get past a motion to dismiss? The Court is weighing how to prevent hindsight comparisons fromstanding in for evidence of a flawed decision, while allowing a claim based on other facts that plausibly point to imprudence.
NOTE: It is not deciding whether Intel’s use of private equity and hedge funds was prudent.
Some Background
After the 2008 financial crisis, Intel changed the investment mix in its custom target-date and global diversified funds, adding hedge funds and private equity. Intel said – and communicated to participants – that the strategy was intended to reduce volatility and protect against largelosses in downturns, while acknowledging that it could lag funds with heavier stock allocations during rising markets. Former employee Winston Anderson challenged the strategy, alleging that the funds’ performance and costs, amongother facts, supported an inference that the fiduciaries had acted imprudently. He also alleged that investments benefited Intel’s venture-capital arm.
What’s at Issue
In essence, Anderson argues that courts must assess allthe allegations together: unusual allocations, alleged risks and costs, and performance evidence may collectively support an inference of imprudence even without a closely matched comparator. Intel responds that if relativeunderperformance is the basis for inferring a flawed process, the comparison must be meaningful; otherwise, a fund could look deficient simply because it pursued a different objective.
The Labor Department (https://www.napa-net.org/news/2026/7/dol-backs-meaningful-benchmark-standard-in-supreme-court-challenge) and most retirement industry trade groups (https://www.napa-net.org/news/2026/7/ara-industry-groups-back-intel-fiduciaries-in-supreme-court-case) have weighed in supporting Intel’s position. Meanwhile, participant advocate groups – and formerLabor Department officials (https://www.supremecourt.gov/DocketPDF/25/25-498/406686/20260430104108895_25-498%20Amicus%20Brief.pdf) are backing the position of theparticipant-plaintiff.
Why is the Supreme Court Considering the Issue?
Intel has prevailed at both the district court and appellatecourt levels on the issue. But different federal court districts have taken different positions on the requirement toassert a meaningful benchmark at the motion to dismiss stage. The Seventh, Eighth, Ninth and Tenth havesupported that requirement, though the Sixth Circuit has taken a somewhat different stance. However, the disagreement is chiefly about claims that infer imprudence from relative performance or cost, not whether every ERISA prudence complaint needs a benchmark.
And note - the proposed Investment Selection Rule (https://fredreish.com/alternative-assets-18-dol-proposal-and-the-six-defined-factors-performance-benchmark-1/) uses the same phrase for a different purpose. Its paragraph (k) would require a fiduciary selecting a designated investment alternative to identify a “meaningful benchmark” and compare the alternative’s risk-adjusted expected returns, net of fees, with it. However, the proposal defines that benchmark broadly: it could be an investment, strategy, index, or other comparator with similar mandates, strategies, objectives, and risks.
