The Pleading, Not the Portfolio

The Supreme Court heard argument on Tuesday 6 October in Anderson v. Intel Corporation Investment Policy Committee, No. 25-498, a proposed class action by former Intel employees over how the company’s retirement plans were invested. The question before the justices is not whether those investments were wise. It is what a participant must put in a complaint before the case is allowed to go on.

The petition for certiorari asks “whether, for claims predicated on fund underperformance,” pleading that a fiduciary breached ERISA’s duty of prudence “requires alleging a ‘meaningful benchmark.’” The Court granted review on 16 January, the docket shows, and heard the case in the first week of the 2026 term.

The litigation is older than the question. It began with a suit Christopher Sulyma filed in 2015, which reached the Supreme Court once already: in Intel Corp. Investment Policy Committee v. Sulyma in 2020 the Court decided when ERISA’s limitations clock starts to run, not whether the funds were prudent. Winston Anderson’s 2019 case was later consolidated with it. The district court dismissed the consolidated complaint, and the Ninth Circuit, which heard argument on 5 October 2023, affirmed on 22 May 2025.

What the Ninth Circuit required

The employees allege that after the 2008 financial crisis Intel redesigned the plans’ target-date funds and a global diversified fund to hold hedge funds and private equity funds as well as stocks and bonds, and that the funds then lagged. Intel’s disclosures, the Ninth Circuit noted, said the aim was to “reduce investment risk by investing in assets whose returns are less correlated to equity markets,” and Intel measured the funds against its own composite benchmarks. The complaint compared them instead with “equity-heavy retail funds that pursued different objectives.”

That, the panel held, was not enough. A plaintiff who argues that a prudent fiduciary would have chosen a different fund “must provide a sound basis for comparison,” a phrase the court took from the Eighth Circuit. It located the requirement in the statute itself: by measuring a fiduciary against a prudent person running “an enterprise of a like character and with like aims,” ERISA makes a comparator with similar objectives, “not just a better-performing plan or investment,” implicit in its text.

The circuits disagree. The petition says the Sixth Circuit held in Johnson v. Parker-Hannifin in 2024 that ERISA imposes no “meaningful benchmark” threshold, while the Seventh, Eighth and Tenth Circuits require a sound basis for comparison at the pleading stage. The Ninth Circuit relied on those three.

What each side says the rule is

For the employees, Matthew Wessler told the Court that the rule is “out of step with Twombly and Iqbal and an unnecessary solution in search of a problem,” according to the official transcript. His point is that a court should weigh all of a complaint’s allegations together, not screen out the performance figures first. A brief from investment law scholars supporting the employees adds an information problem: when a plan uses customised vehicles, the relevant terms “are often set out in private fund documents or bespoke agreements unavailable before discovery.”

Intel’s merits brief says the requirement “is not an improper heightened pleading requirement” but “simply what Twombly/Iqbal plausibility analysis looks like” when applied to claims of underperformance. A comparator, it says, need only be similar enough to make the comparison “meaningful” as opposed to “meaningless,” and ERISA’s disclosure rules give participants enough to find one. The United States filed a brief supporting Intel on 9 July, and the Court granted the Solicitor General’s motion to take part in the argument; Aimee Brown, an assistant to the Solicitor General, argued on Intel’s side.

What the argument suggested

The bench treated the comparison as the case. Justice Thomas told Wessler that “you can’t compare apples and oranges” when one fund is built for high, risky returns and the other to protect against losses. Justice Kagan said that if a complaint’s other allegations did not clear the plausibility line on their own, “the thing that you need in addition is like another apple,” not “precisely the same apple,” and told him he was “suggesting a kind of caricature of the Ninth Circuit opinion.” Justice Alito said a strategy “cannot be judged based on how that strategy performed in one particular instance.”

The live question by the end was how much to say. Justice Alito asked the government’s lawyer “how much guidance do you think it would be prudent for us to give in this case?” Writing for SCOTUSblog, Ronald Mann said the second half of the argument was largely about how to write an affirmance, and that he would expect “a pretty brisk and likely unanimous affirmance.” That is one observer’s forecast, not a count of votes.

What is not known

No decision has issued. An affirmance could take two forms. The Court could endorse a benchmark requirement and say little about its content, which would move the next round of litigation to which comparators count. Or it could set out what makes a comparator meaningful, and that definition, rather than anything about hedge funds, would decide how many complaints of this kind get past a motion to dismiss.

Either way, the ruling will be about the text of a complaint. The funds it describes, and whether they served Intel’s employees well, are the part of the case the Court was not asked to decide.