- within Insolvency/Bankruptcy/Re-Structuring topic(s)
On January 16, 2026, the U.S. Supreme Court granted certiorari in Anderson v. Intel Corp. Investment Policy Committee, No. 25-498 (U.S.), a case regarding what ERISA plaintiffs must allege at the pleading stage when they claim imprudent investment based on fund underperformance.
The dispute centers on Intel's use of custom target-date funds and a diversified fund designed to mitigate risk by allocating meaningful portions to hedge funds, private equity, and other alternative assets after the 2008 financial crisis. Plaintiffs allege that Intel's risk-mitigating design led to chronic underperformance and higher fees relative to common, equity-heavier target-date funds and category peers. The district court dismissed the complaint for failure to state a claim, after finding the proposed comparators inapt and the performance and fee allegations insufficient to support a plausible inference of imprudence.
The Ninth Circuit affirmed dismissal of the complaint, holding that underperformance and fee claims require a “meaningful benchmark” comparator with similar objectives and risk. The Ninth Circuit based its view on ERISA's text, which makes the standard of care that of a hypothetical prudent person “acting in a like capacity . . . in the conduct of an enterprise of a like character and with like aims.” When plaintiffs rely on relative results, they must compare against funds with similar aims, risks, and potential rewards, rejecting broad market indices, Morningstar categories, and large target-date families that did not share Intel's risk-mitigation objective. The concurrence agreed with the majority, while emphasizing that ERISA does not require a comparator in every case; plaintiffs can still plead imprudence through direct allegations about a flawed decision-making process or other context-specific facts.
The question now before the Court is whether plaintiffs alleging imprudence based on underperformance must plead a “meaningful benchmark” at the motion-to-dismiss stage and, if so, how closely the comparator must align with the challenged fund's objectives, risks, and strategy. The litigation follows the Supreme Court's 2020 Sulyma decision, which addressed ERISA's “actual knowledge” limitations rule and allowed related claims to proceed, but did not resolve the pleading question presented here.
Briefing and oral argument will occur this spring and a decision is expected in or before June 2026. If the Court endorses a meaningful-benchmark requirement, defendants may seek early dismissals of underperformance suits grounded in dissimilar comparators. If the Court relaxes or rejects the meaningful-benchmark rule, more claims may proceed past the pleadings, increasing the importance of examining the plan options, documenting the process and due diligence, and setting forth rationales for asset allocation and monitoring decisions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
