But the thorny ERISA question the Court will consider is not whether the fiduciaries violated ERISA. Instead, the Court will decide whether the participants failed to provide a point of comparison, a “meaningful benchmark” to show that the fiduciaries’ conduct was “imprudent.”
The plaintiffs are, effectively, on trial.
Customized, proprietary investments
In their consolidated ERISA lawsuit, Christopher Sulyma and Winston Anderson argue that Intel’s Target Date Funds and Global Diversified Funds were imprudently managed because they included unusually large financial allocations to “non-traditional investments” like hedge funds and private equity. The funds were highly customized and proprietary, designed by Intel itself, with what has been described as “unique risk-mitigation strategies.”
Sulyma, Anderson and other similarly situated plaintiffs compared the performance of the Intel funds to mainstream, equity-heavy retail funds, like those tracking the S&P 500. This was to support their claim that Intel exposed participants to excessive risk and led to significant underperformance.
The Northern District of California granted Intel’s motion to dismiss the complaint. It found that the mainstream funds cited in the complaint were not sufficiently like the Intel funds for the comparison to be meaningful. The Ninth Circuit affirmed the dismissal “with prejudice,” which means that the complaint cannot be amended and re-filed.
It’s all in the timing
In their petition for Supreme Court review, the plaintiffs argue that, because their ERISA lawsuit was dismissed before they had the opportunity to seek internal Intel documents through discovery, they had not had the chance to find the information that would have permitted a more apt comparison.
It should be noted that, although ERISA plan fiduciaries have an obligation to disclose information about investment decisions to participants, they usually do so in only the most generic, summary terms. This is generally not the kind of information that would allow participants to find a similar point of comparison.
The Supreme Court granted certiorari in January 2026. The new schedule calls for the plaintiffs’ (now referred to as “the petitioners’” in Supreme Court parlance) brief to be submitted in April and Intel’s brief to be submitted in June. Oral argument will occur after the new Supreme Court term begins in October 2026. Realistically, that pushes any decision into mid-2027.
ERISA prudence and loyalty
The Employee Retirement Income Security Act (aka ERISA) governs most private-sector employee benefit plans. The core purpose of the law is to protect the financial future of folks who have worked all their lives and are lucky enough to save for old age.
ERISA sets out two rules for these trusted retirement money people (fiduciaries). These are:
- a fiduciary must act “with the care, skill, prudence, and diligence” that a prudent person would use in a similar enterprise; and
- those actions must be undertaken “solely in the interest” of the plan participants and beneficiaries.
This is very generic guidance that has been subject to evolving interpretation, especially as new investment options have emerged in the fifty years since ERISA was enacted.
The meaningful benchmark rule
The “meaningful benchmark” rule is generally used at the earliest stages of a lawsuit to determine if allegations of a fiduciary breach are plausible. It requires plaintiffs to provide a sound, “apples-to-apples” comparison when claiming that a retirement plan’s investment options were underperforming or that fees were excessive.
Overall, this seems reasonable. The Second, Eighth, Ninth and Tenth Circuits have adopted this approach to some extent. It could provide an additional way to evaluate fiduciary decisions – something beyond the process-focused evaluation currently used.
But the issue for plaintiffs is when and how they must provide this comparison. Must plaintiffs offer this in their initial complaint or can that evidence be presented after the parties have exchanged information?
READ MORE ERISA VIOLATION LEGAL NEWS
The petition for certiorari argues that the Ninth Circuit’s strict application of the “meaningful benchmark” requirement imposes a paralyzing pleading standard that fundamentally conflicts with ERISA’s core purpose, which is to protect the financial future of retirement savers.
The potential outlook for 401k plan participants is not rosy
The current administration appears to be poised to revise the regulatory guidance for 401k plan fiduciaries in ways that would allow them to consider “alternative assets” for investment. To some, this looks like a departure from the very conservative guidance initially offered to protect employee retirement income. More to the point, however, it could make it very difficult for any ERISA breach of fiduciary duty lawsuit to survive past the summary judgment phase.
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