Intel Corp. defended its investment strategy, insisting the U.S. Supreme Court rely on “apples-to-apples” comparisons when assessing alleged fund underperformance, in a brief filed on July 2.
The chipmaker stressed that its investment decisions, which included investing some of the Intel 401(k) Savings Plans’ assets in hedge funds and private equity funds, were intended to decrease volatility and reduce risk during market downturns in the wake of the 2008 financial crisis. According to the filing, the fund did as intended by performing better than more equity-heavy funds in down years, though those funds “generally performed better” during much of the bull market that followed 2008.
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Still, Intel stated that the fund reduced volatility while delivering “significant returns to participants,” all of which it argued is in accordance with the Employee Retirement Income Security Act.
“Different funds with different aims and different levels of risk tolerance intend to achieve different outcomes,” the brief stated. “Some are equity-heavy index funds that try to mirror the stock market—up and down. Others seek to shield retirement savings from excessive volatility. ERISA embraces such variation; it does not punish it.”
President Donald Trump has pushed for wider access to alternative investments in defined contribution plans. Trump issued an executive order last year asking regulators to provide guidance that would provide more legal protection for employers such as Intel to add exposure to alternative investments in professionally managed funds, such as target-date funds. The Department of Labor issued its rule earlier this year that provides a framework for fiduciaries adding any investments to their plan, including those that include alternative investments, a rule currently being finalized.
Supreme Court to Weigh In
The Supreme Court will hear the plaintiffs’ appeal of Anderson v. Intel Corp. Investment Policy Committee in its next term, which begins in October, to review the “meaningful benchmark” rule.
The standard typically requires plaintiffs to identify a comparable investment fund when alleging mismanagement of a plan’s assets, which plaintiffs in the Intel case argue is too strict and inconsistent. The U.S. 9th Circuit Court of Appeals upheld a district court ruling for Intel in May 2025, finding that the plaintiffs failed to prove it made imprudent investment choices.
The 9th Circuit held that it is not enough for plaintiffs to merely claim that fiduciaries could have achieved higher investment returns. In this case, Intel had created its own customized benchmarks for the disputed Intel funds, which were specialized target-date funds that included alternative assets. The 9th Circuit criticized the plaintiffs for comparing the Intel funds to equity-heavy retail funds, rather than to the relevant custom benchmarks or to other funds with comparable risk-mitigation strategies and objectives.
That is precisely the argument Intel intends to rely on when the case reaches the Supreme Court, arguing in the brief that “to generate the required inference of an imprudent process, allegations of underperformance must be benchmarked against a meaningful comparator that obtained better results while pursuing similar aims.”
