Supreme Court Weighs RISKY 401(k) Bets — Is Yours On The Line?

401k letters on notebook with coins and jars — Photo: simon jhuan / Shutterstock

The Supreme Court is weighing a case from Intel workers who say the people running their 401(k) plan put their savings into risky investments that did poorly.

Story Highlights

The case is Anderson v. Intel Corp. Investment Policy Committee, No. 25-498.
Intel workers say plan managers leaned too hard on hedge funds and private equity and stuck with them through years of weak returns.
Lower courts threw the case out because the workers did not compare Intel’s funds with similar funds.
Several justices said a fair comparison means “apples” to “apples.”

The Supreme Court heard arguments on Tuesday, October 6, in a case brought by Intel workers who say the people running their 401(k) and retirement plans put their savings into risky, poor-performing hedge funds and private equity. The justices must decide how much a worker has to show before he can take those managers to court.

The answer reaches far past one company. Tens of millions of American workers have 401(k) money sitting in funds they did not design, chosen by plan managers they have never met. This case decides how easy or hard it is to sue those managers when the choices go badly. A ruling is expected by the end of June.

What the Intel Workers Say

Winston Anderson and another former Intel employee brought the case on behalf of workers in the company’s 401(k) and retirement plans. They say that after the 2008 financial crisis, Intel’s investment committee moved the plans toward hedge funds and private equity. Hedge funds are private investment pools that use complex trading strategies. Private equity funds buy stakes in companies that are not traded on the stock market. Both tend to be more volatile than the stock and bond funds most retirement plans use.

The workers say the returns were low compared with other funds and that the managers failed to change course after year upon year of weak results. They also say some choices helped Intel’s own venture capital interests at the workers’ expense. Intel’s committee denies acting carelessly.

The Legal Question

The people who run a retirement plan are called fiduciaries. That means they are legally bound to manage the money in the workers’ interest. The duty comes from the Employee Retirement Income Security Act, known as ERISA, the federal law that protects workplace retirement plans. It requires them to act with prudence, which means the care a careful expert would use.

A federal trial court dismissed the workers’ case, and in May 2025 the U.S. Court of Appeals for the 9th Circuit, the federal appeals court for the West, agreed. Both courts said the workers had to point to a “meaningful benchmark,” which is a similar fund with similar goals and risks that did better. The workers say that rule is too strict and that a court should look at the whole picture. Intel’s side says the duty is about a careful process, not about results.

What the Justices Said

At oral argument, the session where lawyers for each side answer the justices’ questions, fruit came up again and again. Justice Clarence Thomas opened by saying “you can’t compare apples and oranges” when funds carry different risks. Justice Elena Kagan said the workers needed “another apple.” Justice Samuel Alito pressed the workers’ lawyer, Matthew Wessler, on whether a claim can rest on “comparing apples and oranges.”

Justice Neil Gorsuch said “a meaningful benchmark of some kind, is required, apples, not oranges.” Justice Amy Coney Barrett noted that a court still has “to decide if an apple is an apple.” Luke McCloud argued for Intel’s committee. Aimee Brown argued for the federal government, which sided with Intel. The questions pointed toward a win for Intel’s plan managers, according to one report of the argument. The Court has not ruled.

What It Means for Your 401(k)

Most workers no longer have a pension that promises a set check. They have an account, and they carry the risk if it falls short. An advocacy group for older Americans told the Court that losses from poor plan choices “could force many older adults to work past retirement age or go back to work if they have already retired.”

If the justices side with Intel, a worker who thinks his plan was badly run will need to name a truly similar fund that did better before a court will hear him. That would end weak lawsuits early. It would also make it harder to challenge unusual investments, because the more unusual a fund is, the harder it is to find its twin. If the workers win, more of these cases would reach the stage where plan managers must turn over their records. Either way, the decision will set the rule for every 401(k) plan in the country.