Amicus Curiae Brief — Winston R. Anderson, et al., Petitioners v. Intel Corporation Investment Policy Committee, et al.
Supreme Court briefJul 9, 2026
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No. 25-498
IN THE
Supreme Court of the United States
___________________
WINSTON R. ANDERSON, et al.,
Petitioners,
v.
INTEL CORPORATION INVESTMENT POLICY COMMITTEE,
et al.,
Respondents.
___________________
On Writ Of Certiorari
To The United States Court Of Appeals
For The Ninth Circuit
___________________
BRIEF OF AMICI CURIAE
THE AMERICAN INVESTMENT COUNCIL &
THE MANAGED FUNDS ASSOCIATION
IN SUPPORT OF RESPONDENTS
___________________
KARL G. NELSON
STEPHEN J. HAMMER
GIBSON, DUNN & CRUTCHER LLP
2001 Ross Avenue, Suite 2100
Dallas, Texas 75201
(214) 698-3100
EUGENE SCALIA
Counsel of Record
ANDREW KILBERG
AARON HAUPTMAN
GIBSON, DUNN & CRUTCHER LLP
1700 M Street, N.W.
Washington, D.C. 20036
(202) 955-8500
escalia@gibsondunn.com
JENNAFER M. TRYCK
GIBSON, DUNN & CRUTCHER LLP
3161 Michelson Drive, Suite 1200
Irvine, California 92612
(949) 451-3800
Counsel for Amici Curiae
TABLE OF CONTENTS
Page
INTEREST OF AMICI CURIAE ................................1
INTRODUCTION AND SUMMARY OF
ARGUMENT ...............................................................2
ARGUMENT ...............................................................4
I.
WORKERS SHOULD HAVE GREATER ACCESS TO
ALTERNATIVE ASSETS IN THEIR 401(K) PLANS. ...... 4
A. Alternative Assets Can Improve LongTerm Retirement Outcomes By Boosting
Returns And Reducing Risk. ..........................4
1. Defined-Benefit Plans And Other
Institutional Investors Already
Invest Heavily In Alternative Assets. .....6
2. Alternative Assets Offer Favorable
Returns And Diversification. ...................8
3. There Is No Sound Basis To Exclude
Alternative Assets From 401(k)s. ..........13
B. Unwarranted Litigation Risk Has
Discouraged Fiduciaries From Offering
Alternative Assets In 401(k)s. .....................16
II. THE MEANINGFUL-BENCHMARK STANDARD
DETERS MERITLESS SUITS BY IMPLEMENTING
THE TENET THAT PERFORMANCE IS RARELY
PROBATIVE OF PRUDENCE. ................................... 19
A. Under ERISA, Investment Performance
Is Seldom Probative Of Prudence. ...............19
1. ERISA’s Text And Purpose Establish
That Performance Says Little About
Prudence. ................................................20
ii
2. Trust Law Confirms That
Performance Rarely Indicates
Imprudence Under ERISA.....................22
B. Performance Can Be Probative Of
Prudence Only By Reference To A
Meaningful Benchmark................................25
C. The Meaningful-Benchmark Standard
Does Not Confer Immunity From Suit. .......29
CONCLUSION .......................................................... 31
iii
TABLE OF AUTHORITIES
Page(s)
Cases
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) .............................................. 26
Cent. States, Se. & Sw. Areas Pension
Fund v. Cent. Transp., Inc.,
472 U.S. 559 (1985) .............................................. 20
Cunningham v. Cornell Univ.,
604 U.S. 693 (2025) .............................................. 17
Davis v. Wash. Univ. in St. Louis,
960 F.3d 478 (8th Cir. 2020) ................................ 21
DeBruyne v. Equitable Life Assurance
Soc’y of the United States,
920 F.2d 457 (7th Cir. 1990) ................................ 17
Fifth Third Bancorp v. Dudenhoeffer,
573 U.S. 409 (2014) ........................................ 27, 28
Firestone Tire & Rubber Co. v. Bruch,
489 U.S. 101 (1989) ........................................ 23, 24
Hughes v. Nw. Univ.,
595 U.S. 170 (2022) ........................................ 25, 27
Johnson v. Parker-Hannifin Corp.,
122 F.4th 205 (6th Cir. 2024) .............................. 21
Nichols v. Eaton,
91 U.S. 716 (1875) ................................................ 23
iv
Tibble v. Edison Int’l,
575 U.S. 523 (2015) ........................................ 20, 21
Tussey v. ABB, Inc.,
746 F.3d 327 (8th Cir. 2014) ................................ 24
Varity Corp. v. Howe,
516 U.S. 489 (1996) .............................. 4, 19, 20, 22
Statutes
26 U.S.C. § 72 ............................................................ 10
29 U.S.C. § 1104 ............................ 3, 12, 14, 20, 21, 28
Treatises
Amy M. Hess, George G. Bogert &
George T. Bogert, Bogert’s The Law
of Trusts and Trustees
(2026 ed.) .............................................................. 23
Restatement (Second) of Trusts
(1959) ............................................ 22, 23, 24, 25, 29
Restatement (Third) of Trusts
(2007) .................................................................... 22
Other Authorities
2025 NACUBO-Commonfund Study of
Endowments, Nat’l Ass’n of College
& Univ. Business Officers &
Commonfund Institute .......................................... 7
2025 Retirement Security Report, Am.
Inv. Council ............................................................ 7
v
2026 Outlook: Disciplined Growth,
Resilient Returns, Antares Capital ....................... 9
Adding Alts to Your 401(k) Mitigates
Risk, Reduces Volatility, and Makes
It More Resilient, Managed Funds
Ass’n (Dec. 17, 2025) ...................................... 12, 13
Mercedes Aguirre & Brandon
McFarland, 2023 Asset Allocations in
Fortune 1000 Pension Plans, Willis
Towers Watson (Apr. 30, 2025) ............................. 7
Angela Antonelli, Making the Case:
Addressing the Myths About Private
Assets in Defined Contribution
Retirement Plans, Georgetown Univ.
Ctr. for Ret. Initiatives & Willis
Towers Watson (Aug. 2025) ........................... 10, 11
Angela M. Antonelli, Making the Case:
The Effect of Private Market Assets
on Retirement Income in Cases of
Disrupted Savings, Georgetown
Univ. Ctr. for Ret. Initiatives &
Willis Towers Watson (Aug. 2025) ...................... 11
As Private Equity Firms Work to Access
401(k) Market, Plaintiff Lawyers
Gear Up to Sue, The Capitol Forum
(Apr. 10, 2023) ...................................................... 18
Megan L. Blonigen, Hellman &
Friedman CEO Patrick Healy ’89
Appointed to HMC Board, Harvard
Crimson (May 18, 2026)......................................... 8
vi
Greg Brown et al., Private Equity:
Accomplishments and Challenges,
J. Applied Corp. Fin., Summer 2020 ..................... 9
Gregory Brown et al., Risk-Adjusted
Performance of Private Funds: What
Do We Know?, Inst. For Private
Capital (Mar. 27, 2025) .......................................... 9
Gregory W. Brown et al., Do Private
Equity Funds Manipulate Reported
Returns, 132 J. Fin. Econ. 267 (2019) ................. 15
Erin Cho & Richard Nowak, 401(k)
Alternative Investment Critiques
Gloss Over Key Details, Bloomberg
(Mar. 24, 2026) ..................................................... 18
Juliet Chung, University Endowments
Are About to Strike It Big on the
SpaceX IPO, Wall St. J.
(June 8, 2026) ....................................................... 12
Conrad S. Ciccotello, Private
Investments in Defined Contribution
Retirement Portfolios (June 1, 2026) ................... 11
Committee on Capital Markets
Regulation, Comment on Fiduciary
Duties in Selecting Designated
Investment Alternatives
(May 29, 2026) ...................................................... 16
Council of Economic Advisers, Retail
Access to Alternative Investments Via
Defined Contribution Plans (2025) ............ 8, 11, 12
vii
Corrie Driebusch, SpaceX Officially
Raises $75 Billion in RecordBreaking IPO, Wall St. J.
(June 11, 2026) ..................................................... 12
Diversifying Your Portfolio, Vanguard ............... 11, 21
ERISA Fiduciary Litigation in 2025:
Plaintiff Law Firms Continue the
Frenetic Pace, with Broader
Allegations Against Both Retirement
Plans and Health Plans, Encore
Fiduciary (Feb. 9, 2026) ....................................... 16
Exec. Order No. 14330, 90 Fed. Reg.
38,921 (Aug. 12, 2025) ........................................... 5
Fiduciary Duties in Selecting
Designated Investment Alternatives,
91 Fed. Reg. 16,088
(Mar. 31, 2026) ................................. 8, 9, 16, 18, 24
Press Release, Foundations’ Endowed
Portfolios Produced Double-Digit
Investment Returns in 2024; LongTerm Return Data Also Positive,
Commonfund (Aug. 27, 2025) ................................ 7
Global Private Equity Report 2020,
Bain & Company .................................................. 10
Vladimir Gorshkov & Elliot Hentov,
Investment Trends Among Sovereign
Wealth Funds, State Street Inv.
Mgmt. (Mar. 18, 2026) ........................................... 7
viii
Hamilton Lane, Private Markets
Overview (2026) .............................................. 10, 13
Hedge Funds 101,
Managed Funds Ass’n ............................................ 6
Private Credit 101,
Managed Funds Ass’n ............................................ 5
Private Equity FAQs,
Am. Inv. Council .............................................. 5, 29
David T. Robinson, Fiduciary Duties in
Selecting Designated Investment
Alternatives: Opportunities and
Considerations (June 1, 2026) ......................... 9, 16
The S&P 500 Index in 2024: A Market
Driven Once Again by the Mag 7,
First Trust (Jan. 8, 2025) .................................... 10
Structuring an Allocation: A Primer on
Drawdown & Evergreen Funds,
Blue Owl ............................................................... 15
Taft-Hartley Survey, Morgan Stanley
(2025) ...................................................................... 7
Ten Important Facts About 401(k)
Plans, Inv. Co. Inst. Rsch.
(July 2024) ............................................................ 10
Webster’s New Collegiate Dictionary
(9th ed. 1983)........................................................ 20
ix
Why Pension Funds Invest in Private
Equity and What It Means For U.S.
Savers, EQT Grp. (Apr. 16, 2026)...................... 6, 7
World Bank Group, Listed Domestic
Companies, Total - United States ....................... 12
INTEREST OF AMICI CURIAE 1
Amici are leading trade associations in the alternative asset industry. The American Investment
Council is an advocacy and research organization focused on the private investment industry and its contributions to the U.S. economy, American businesses,
and workers’ retirement security. Its mission is to advance access to capital, job creation, retirement security, innovation, and economic growth in the United
States by promoting responsible long-term investment. AIC’s members include many of the country’s
leading private equity and private credit firms.
Managed Funds Association represents the global
alternative asset management industry. MFA’s mission is to advance the ability of alternative asset managers to raise capital, invest it, and generate returns
for their beneficiaries. MFA has more than 180 fundmanager members, including traditional hedge funds,
private credit funds, and hybrid funds, which employ
a diverse set of investment strategies. Member firms
help pension plans, university endowments, charitable foundations, and other institutional investors diversify their investments, manage risk, and generate
attractive returns throughout the economic cycle.
Amici file this brief to explain how including alternative assets in retirement portfolios benefits
401(k) plan participants and how unwarranted litigation risk—exemplified by petitioners’ suit—has
1
Pursuant to this Court’s Rule 37.6, no counsel for a party authored this brief in whole or in part, and no person or entity other
than amici, their members, or their counsel made a monetary
contribution intended to fund the preparation or submission of
this brief.
2
prevented workers from enjoying those benefits. The
meaningful-benchmark standard applied by the court
below appropriately shields ERISA fiduciaries from
meritless litigation over investment decisionmaking,
thereby enabling workers to benefit from investments
in alternative assets.
INTRODUCTION AND
SUMMARY OF ARGUMENT
A chasm divides the American retirement landscape. On one side, defined-benefit plans—like other
institutional investors—invest heavily in alternative
assets such as private equity, private credit, and
hedge funds. On the other, defined-contribution
plans—including the 401(k) plans that countless
American workers rely on to save for retirement—
have scarcely any exposure to alternative assets at all.
The reason for that fissure is not that alternative
assets are unsuitable for defined-contribution plans.
On the contrary, alternative assets can increase
401(k) plan participants’ retirement savings by offering better returns while mitigating downside risk
through diversification. Exposure to alternative assets can readily be made available to participants
through professionally managed products that address the unique needs of participants in defined-contribution plans. Yet such opportunities are nearly
non-existent in today’s 401(k) plan options.
The main explanation for the disparity between
defined-benefit and defined-contribution plans’ use of
alternative assets is unwarranted litigation risk. Fiduciaries have learned through experience that adding a new or uncommon investment option to a 401(k)
plan can invite costly ERISA litigation, regardless of
the fiduciary’s prudence in selecting the investment.
3
The danger is that a prudently selected but new or
unique strategy will stand out—attracting nuisance
suits. And once a case makes it past a motion to dismiss, the litigation becomes too costly to sustain, even
if the fiduciaries would ultimately prevail. Plaintiffs’
lawyers are thus often able to win settlements of meritless claims, on terms typically far more lucrative for
the attorneys than their clients.
Petitioners’ suit is a case in point. Respondents—
the fiduciaries of Intel Corporation’s retirement
plans—adopted a risk-mitigation strategy designed to
avoid large losses during a bear market and used alternative assets to implement that strategy. Petitioners contend that was imprudent because investing in
alternative assets was uncommon among 401(k) plans
and public equities happened to perform well from
2011 to 2018, allegedly outperforming the fiduciaries’
conservative strategy.
That legal theory lacks merit. A fiduciary who
chooses a strategy that is new or unique in the 401(k)
context is not for that reason less prudent than one
who follows the crowd, and the fact that public equities enjoyed a subsequent bull market says nothing
about the fiduciary’s decision “under the circumstances then prevailing.” 29 U.S.C. § 1104(a)(1)(B).
Affirming the meaningful-benchmark standard
applied by the court below will help alleviate the unwarranted litigation risk that has discouraged fiduciaries from offering 401(k) plan participants investment options that include alternative assets. The
standard derives from ERISA’s text, trust-law roots,
and its purpose—all of which establish that an investment’s performance is seldom probative of the prudence of selecting it. For claimants who nonetheless
allege that an investment’s performance—rather than
4
fiduciaries’ decisional process—supports an inference
of imprudence, the meaningful-benchmark standard
tests the plausibility of that inference by requiring
that performance comparisons drawn by plaintiffs be
with regard to investments that have a similar strategy and objective. The Court’s affirmation of this
standard will ensure that meritless suits based on
Monday-morning quarterbacking are disposed of
early, thereby reducing the pressure on fiduciaries to
settle and enabling them to offer 401(k) plan participants access to alternative assets without undue fear
of litigation.
ARGUMENT
I.
WORKERS SHOULD HAVE GREATER ACCESS TO
ALTERNATIVE ASSETS IN THEIR 401(K) PLANS.
Petitioners assert (at 1) that ERISA fiduciaries
typically “sh[y] away from” alternative assets such as
“[h]edge funds and private equity” because they
“make little sense” as a significant component of a retirement fund. That is incorrect. Allocating a substantial portion of a retirement portfolio to alternative
assets makes perfect sense: it tends to increase returns in the long run while diversifying the portfolio
and reducing the risk of large losses. The real reason
that ERISA fiduciaries have shied away from alternative assets is that “litigation expenses” driven by opportunistic plaintiffs’ lawyers have “unduly discourage[d] employers from offering” these investments.
Varity Corp. v. Howe, 516 U.S. 489, 497 (1996).
A. Alternative Assets Can Improve LongTerm
Retirement
Outcomes
By
Boosting Returns And Reducing Risk.
Alternative assets are, generally speaking, assets
other than traditional, publicly traded stocks and
5
bonds. Alternative assets include “private market investments,” “real estate,” “digital assets,” “commodities,” and “infrastructure.” Exec. Order No. 14330
§ 3(a), 90 Fed. Reg. 38,921, 38,922 (Aug. 12, 2025).
Private market investments—which include private
equity, private credit, and hedge funds—are the type
of alternative assets at issue in this case. See Pet.
App. 6a.
Private equity “invests capital in companies” that
are not publicly traded and “are perceived to have
growth potential.” Private Equity FAQs, Am. Inv.
Council, bit.ly/4wHUhCD (last visited July 8, 2026).
The investor then “works with” the company “to expand or turnaround the business,” before ultimately
selling it for a profit. Ibid. Investors “gain from
higher returns * * * than public markets” while private equity-backed companies “benefit from access to
capital as well as business mentorship and expertise.”
Ibid.
Private credit is “capital that businesses obtain
from private investment firms outside of public bond
markets and traditional bank lending.” Private Credit
101, Managed Funds Ass’n, bit.ly/4dEeFf4 (last visited July 8, 2026). Private credit is more flexible than
traditional banking, enabling private credit funds to
“offer customized terms, longer durations, and faster
execution,” giving borrowers ready access to capital to
“[h]ire workers, [i]nvest in research and development”
and “equipment,” and “[i]nnovate and grow,” while
providing investors “[s]table, risk-adjusted returns,
[and] [d]iversification beyond public markets.” Ibid.
Hedge funds “use a broader set of tools—such as
short selling, derivatives, and investing in a broad
6
range of noncorrelated assets—to make money in all
sorts of market environments, including periods of
heightened volatility.” Hedge Funds 101, Managed
Funds Ass’n, bit.ly/4eWCT6E (last visited July 8,
2026). The purpose of hedge funds, as their name implies, is to hedge risk, not maximize returns. Investors use them to “diversify portfolios, manage risk,
and generate returns in both rising and falling markets.” Ibid.
Allowing workers access to these alternative assets in their 401(k)s makes sense. Defined-benefit retirement plans and other institutional investors—including sovereign wealth funds and universities like
Harvard and Princeton—allocate substantial proportions of their portfolios to alternative assets. They do
so because alternative assets can offer favorable returns while also providing diversification that guards
against downside risk. Workers should be able to benefit from those advantages by accessing alternative
assets in their 401(k) plans.
1. Defined-Benefit Plans And Other
Institutional Investors Already Invest Heavily In Alternative Assets.
The value of alternative assets to a diversified investment portfolio is reflected in the widespread use
of those assets by defined-benefit retirement plans
and other institutional investors.
Managers of defined-benefit retirement plans
(who owe the same duty of prudence as 401(k) plan
managers) allocate substantial portions of their investment portfolios to alternative assets.
They
started doing so in the late 1970s and the practice has
since become widespread. See Why Pension Funds
7
Invest in Private Equity and What It Means For U.S.
Savers, EQT Grp. (Apr. 16, 2026), bit.ly/4gkvGxV. According to one recent study, 68% of Fortune 1000 companies that sponsor a defined-benefit plan invest in
alternative assets, with an average allocation of
10.3%. See Mercedes Aguirre & Brandon McFarland,
2023 Asset Allocations in Fortune 1000 Pension Plans,
Willis Towers Watson (Apr. 30, 2025), bit.ly/4vnl8T9.
Multi-employer union plans use them even more
widely, with 90% of such plans invested in alternatives at an average allocation of 17%. See Taft-Hartley Survey 23, Morgan Stanley (2025), bit.ly/4tMOGIg. Similarly, 89% of public pension plans invest in
private equity. See 2025 Retirement Security Report
9, Am. Inv. Council, bit.ly/43mkokV. Alternative assets account for 35% of public pension assets on a dollar-weighted basis. See id. at 8.
Other sophisticated institutional investors also
invest heavily in alternative assets. Sovereign wealth
funds, for example, allocate nearly 29% of their investments to alternative assets. See Vladimir Gorshkov
& Elliot Hentov, Investment Trends Among Sovereign
Wealth Funds, State Street Inv. Mgmt. (Mar. 18,
2026), bit.ly/4ulUIAb. And private charitable foundations allocate 45% of their endowments to alternative
assets. See Press Release, Foundations’ Endowed
Portfolios Produced Double-Digit Investment Returns
in 2024; Long-Term Return Data Also Positive, Commonfund (Aug. 27, 2025), bit.ly/4xbpTk2.
Universities allocate on average 45% of their endowments to alternative assets. See 2025 NACUBOCommonfund Study of Endowments 7, Nat’l Ass’n of
College & Univ. Business Officers & Commonfund Institute, bit.ly/4v1BEYw.
The largest university
8
endowments are even more heavily allocated towards
alternative assets. See ibid. Two of the largest endowments in the nation, Harvard and Princeton, allocate more than 40% of their portfolios to private equity alone. See Megan L. Blonigen, Hellman & Friedman CEO Patrick Healy ’89 Appointed to HMC Board,
Harvard Crimson (May 18, 2026), bit.ly/4dY8QKM;
Princeton University Consolidated Financial Statements, June 30, 2025 and 2024, at 11,
bit.ly/3RpQPwb.
2. Alternative Assets Offer Favorable
Returns And Diversification.
Defined-benefit plans and other institutional investors invest so heavily in alternative assets for a
reason: they can improve portfolios by offering both
favorable returns and beneficial diversification.
Over the long run, alternative assets have outperformed traditional stocks and bonds. The White
House Council of Economic Advisers concluded that,
on average, an investment in a buyout fund that
started between 1980 and 2014 returned 27% more
over the course of the fund’s life than an equivalent
investment in public equities would have, net of fees.
See Council of Economic Advisers, Retail Access to Alternative Investments Via Defined Contribution Plans
9-10 (2025), bit.ly/4x91OdS. (A buyout fund is the
most common type of private equity fund, in which the
investor buys a majority stake in a mature but underperforming company.)
Other studies—including one submitted with
AIC’s recent comment letter on a proposed Labor Department rule, Fiduciary Duties in Selecting Designated Investment Alternatives, 91 Fed. Reg. 16,088
9
(Mar. 31, 2026)—have shown that private equity has
outperformed public markets even when adjusted for
the relative risk of private and public investments, net
of fees. See, e.g., Greg Brown et al., Private Equity:
Accomplishments and Challenges, J. Applied Corp.
Fin., Summer 2020, at 8-9; David T. Robinson, Fiduciary Duties in Selecting Designated Investment Alternatives: Opportunities and Considerations ¶ 4 (June
1, 2026), bit.ly/4ob2riO (finding “Private equity funds
have outperformed public markets net of fees in 26 of
31 vintage years between 1990 and 2020” on “an absolute and risk-adjusted basis”).
Another study found that North American private
credit funds produced 13% more wealth over their
lives than a comparable investment in publicly traded
loans. See Gregory Brown et al., Risk-Adjusted Performance of Private Funds: What Do We Know? 49,
Inst. For Private Capital (Mar. 27, 2025),
bit.ly/4dqrLxP (showing private debt had a “PME” of
1.13 compared to North American public debt). Notwithstanding recent “negative headlines” about private credit, “direct lending performance has held up
well, outperforming leveraged loans and only modestly trailing high yield.” 2026 Outlook: Disciplined
Growth, Resilient Returns, Antares Capital,
bit.ly/43diMdu (last visited July 8, 2026).
To be sure, the performance of private assets varies across investments and time, as with all investments. In some years, public markets outperform private ones. For example, over the past few years the
S&P 500 has had unusually high returns—in the 99th
percentile of its historical average since 2001—driven
mostly by the outsized performance of a handful of
technology companies known as the “Magnificent 7.”
10
See Hamilton Lane, Private Markets Overview 49
(2026), bit.ly/43eaXnM; The S&P 500 Index in 2024:
A Market Driven Once Again by the Mag 7, First Trust
(Jan. 8, 2025), bit.ly/4wOX11c. But private assets
have outperformed public equities in the long run.
And that will likely continue to be true, because
“[t]here’s little reason to believe that US equities will
somehow break out of ” their cyclical pattern and consistently “sustain * * * double-digit returns.” Global
Private Equity Report 2020, at 84, Bain & Company,
bit.ly/3REaTv5.
For workers saving for retirement in defined-contribution plans, it is the long run that matters. In
2022, nearly two-thirds of 401(k) participants were in
their forties or younger while only 14% were in their
sixties. See Ten Important Facts About 401(k) Plans
2, Inv. Co. Inst. Rsch. (July 2024), bit.ly/4uUXZqO.
Those younger participants generally had at least ten
years before they could withdraw from their 401(k) accounts without penalty, and many were decades away
from retirement. See 26 U.S.C. § 72(t)(2)(A)(i) (imposing a penalty for distributions made before an employee is 59 ½ years old).
Reaping higher long-term returns from alternative assets could meaningfully improve retirees’ annual income from their savings. Research from the
Georgetown Center for Retirement Initiatives found
that private-market returns, net of fees, outpaced
public markets by 3.6% on an annualized basis since
2000—and even modest exposure to private assets
could improve defined-contribution annual retirement
income by 7% to 8% across a range of participant savings patterns. See Angela Antonelli, Making the Case:
Addressing the Myths About Private Assets in Defined
11
Contribution Retirement Plans 11, Georgetown Univ.
Ctr. for Ret. Initiatives & Willis Towers Watson (Aug.
2025), bit.ly/4eamc5Q; Angela M. Antonelli, Making
the Case: The Effect of Private Market Assets on Retirement Income in Cases of Disrupted Savings 15,
Georgetown Univ. Ctr. for Ret. Initiatives & Willis
Towers Watson (Aug. 2025), bit.ly/43Rf8pC.
Other research corroborates that finding. The
Council of Economic Advisers estimated that permitting workers to allocate part of their portfolios to private markets would increase annuitized lifetime income by 2.5% for those with the longest time in the
market, and by 1% even for workers aged 55 to 64.
See Retail Access to Alternative Investments, supra, at
18-21. Similarly, a study submitted with AIC’s comments on the Labor Department’s proposed rule found
that allocating up to 15% of a portfolio to private assets improves risk-adjusted returns, net of fees, by
0.7% annually—16.8% over a 30-year time horizon—
and that larger allocations to private assets would
yield even larger risk-adjusted returns. See Conrad
S. Ciccotello, Private Investments in Defined Contribution Retirement Portfolios 25, 29 tab. 6 (June 1,
2026), bit.ly/4ob2riO.
The second benefit of alternative assets is increased diversification. A “diversified portfolio * * *
spreads * * * money across multiple investments,” so
if “one drops in value, the others can help offset the
losses.”
Diversifying Your Portfolio, Vanguard,
bit.ly/4fTZaCw (last visited July 8, 2026). For this
reason, ERISA commands fiduciaries to “diversif[y]
the investments of the plan so as to minimize the risk
of large losses, unless under the circumstances it is
12
clearly prudent
§ 1104(a)(1)(C).
not
to
do
so.”
29
U.S.C.
In recent years, however, it has become increasingly difficult to have a fully diversified portfolio without exposure to alternative assets. Public markets
have become concentrated in fewer companies and
fewer sectors. In 1996, there were more than 8,000
publicly listed companies in the United States. See
World Bank Group, Listed Domestic Companies, Total – United States, bit.ly/4udpeMk (last visited July
8, 2026). By 2025, there were fewer than 4,000. See
ibid. That is because many formerly public companies
have gone private, and new companies are remaining
private for longer than they once did. See Retail Access to Alternative Investments, supra, at 4-5. SpaceX
waited over 20 years to offer equity to the public,
growing to a valuation of over $1.7 trillion and greatly
benefiting the institutional investors that privately
held equity in it. See Corrie Driebusch, SpaceX Officially Raises $75 Billion in Record-Breaking IPO,
Wall St. J. (June 11, 2026), bit.ly/49RqrBY; Juliet
Chung, University Endowments Are About to Strike It
Big on the SpaceX IPO, Wall St. J. (June 8, 2026),
bit.ly/4eic0rT. The bottom line is that as a result of
the reduced number of public companies, a portfolio
limited to public stocks and bonds may give workers
less exposure to the broader economy than it once
did—especially because growth in the public markets
has been concentrated in a small handful of public
companies. Alternative assets can help solve that
problem.
That is especially true because private markets do
not always move in lockstep with public markets. See
Adding Alts to Your 401(k) Mitigates Risk, Reduces
13
Volatility, and Makes It More Resilient, Managed
Funds Ass’n (Dec. 17, 2025), bit.ly/4eUittb. For example, even at the public markets’ recent nadir—the
Great Recession—private equity produced a positive
10-year rolling return whereas the S&P 500 did not.
See Hamilton Lane, supra, at 49. In fact, the goal of
guarding against future public market volatility is
part of what led respondents to increase the allocation
of alternative assets in the target-date funds at issue
in this case. See Resp. Br. 8.
In short, defined-benefit plans and other institutional investors recognize alternative assets as wise
investments because they offer favorable returns and
valuable diversification benefits.
3. There Is No Sound Basis To Exclude
Alternative Assets From 401(k)s.
The millions of Americans who depend on 401(k)
plans for their retirement security should have access
to alternative assets for the same reasons. While petitioners assert (at 1) that alternative assets are too
“opaque” and “illiquid” for 401(k)s, neither criticism is
correct.
Start with opacity. As an initial matter, plan participants are hardly left to fend for themselves in evaluating whether alternative assets are suitable investments. Rather, their exposure to alternative assets is
guided by numerous professionals, many of whom are
subject to fiduciary obligations of their own. Consider
Company A, which offers a 401(k) plan to its workers.
Both the committee that oversees the plan and its
members are ERISA fiduciaries. The committee hires
an independent investment adviser to advise on the
selection of investment options; that adviser is also a
14
fiduciary. On the recommendation of the adviser, the
committee selects as a plan option a target-date
fund—the most common 401(k) investment option, in
which the asset allocation gradually becomes less
risky as the worker approaches his “target” retirement date. The manager of the target-date fund may
also be an ERISA fiduciary or a fiduciary under the
Investment Advisers Act of 1940. And the managers
of the vehicles in which the fund invests are sometimes also SEC-registered investment advisers. So
when a worker at Company A chooses the target-date
fund to invest his retirement savings, he does so with
the guidance of multiple layers of fiduciaries, each
tasked with evaluating alternative assets on behalf of
participants who may not themselves be knowledgeable about the investments.
See 29 U.S.C.
§ 1104(a)(1)(B).
It is also not correct that a “lack of transparency”
makes alternative assets “difficult to value.” Pet. Br.
17. To be sure, alternative assets do not have a market price like public stocks. But alternative assets can
nevertheless be valued using established accounting
methods and are subject to extensive independent
oversight. While the “reported values” of alternative
assets “often depend on appraisals, models, or periodic
judgments about comparable transactions, borrower
health, and expected cash flows,” Investment Law
Scholars Amici Br. 14, those valuations are typically
supported by independent third-party reviews. There
is no reason to think the valuations are unreliable. On
the contrary, the discipline of the market discourages
inflated valuations: Studies have shown that investors “punish” fund managers by withholding further
capital investment if there is an “appearance of
15
overstated performance.” Gregory W. Brown et al., Do
Private Equity Funds Manipulate Reported Returns,
132 J. Fin. Econ. 267 (2019). Petitioners’ complaints
about opacity fall short from every angle.
Petitioners’ complaints about liquidity fare no better. Liquidity can easily be managed when alternative assets are one part of a diversified, professionally
managed investment option. For example, in addition
to investing in public stocks and bonds, a target-date
fund might invest directly in an alternative asset vehicle, or might invest indirectly through another
pooled vehicle such as a collective investment trust,
which invests in one or more alternative asset vehicles. Either way, alternative assets would ordinarily
make up only a portion of the total retirement product
(and typically would decline as a percentage of the
fund’s holdings over time as the worker approaches
retirement), substantially reducing any impact on liquidity. Moreover, the alternative-asset vehicles used
in 401(k) products are typically “evergreen” funds,
which are more liquid than a traditional “drawdown
fund” because they continually raise and invest capital instead of raising initial capital and investing it
over time as opportunities arise. See Structuring an
Allocation: A Primer on Drawdown & Evergreen
Funds, Blue Owl, bit.ly/4atdj5Y (last visited July 8,
2026).
Because alternative asset vehicles designed for
401(k)s typically allocate only a portion of the fund to
alternative assets (and often use an evergreen structure), they ensure that there will be sufficient liquidity to pay out workers who take distributions or
change jobs and roll over their 401(k)s. Indeed, one of
the studies AIC submitted in commenting on the
16
Department of Labor’s proposed rule examined historical cash flows of 401(k) plans and confirmed that a
fund with up to a 35% allocation to private assets
would have sufficient liquidity to meet withdrawal demands greater than those experienced by 99% of plans
and still retain a majority of its liquid assets. See Robinson, supra, ¶¶ 74-76; see also Committee on Capital
Markets Regulation, Comment on Fiduciary Duties in
Selecting Designated Investment Alternatives 17-22
(May 29, 2026), bit.ly/3PNDI7P (performing similar
analysis).
B. Unwarranted Litigation Risk Has
Discouraged Fiduciaries From Offering
Alternative Assets In 401(k)s.
Despite the clear benefits alternative assets can
provide participants in 401(k) and other defined-contribution plans, very few defined-contribution plans
offer investment options that include alternative assets. “[O]nly 0.1 percent of all defined contribution
plan assets were in alternative investments in 2024.”
91 Fed. Reg. at 16,106.
The main reason for that deficit is the risk of classaction litigation. ERISA lawsuits challenging the selection or maintenance of investment options on
401(k) menus have become increasingly common. According to one report, 155 lawsuits alleging fiduciary
breaches against retirement plans were filed in 2025
alone. See ERISA Fiduciary Litigation in 2025: Plaintiff Law Firms Continue the Frenetic Pace, with
Broader Allegations Against Both Retirement Plans
and Health Plans, Encore Fiduciary (Feb. 9, 2026),
bit.ly/43Oxurm.
17
That flood of litigation has risen not because of the
quality of the underlying legal claims, but in spite of
it. Many of the scores of recent ERISA suits rely on
nothing more than hindsight. A plaintiff may point,
for example, to an investment that later performed
better than the one in his 401(k) to argue that the fiduciary should have made a different decision. Such
hindsight-based claims are weak because ERISA demands “prudence, not prescience.” DeBruyne v. Equitable Life Assurance Soc’y of the United States, 920
F.2d 457, 465 (7th Cir. 1990) (citation omitted). But
even those weak claims can be expensive to defend.
“[G]etting by a motion to dismiss is often the whole
ball game because of the cost of discovery.” Cunningham v. Cornell Univ., 604 U.S. 693, 710 (2025) (Alito,
J., concurring). As a result, ERISA defendants who do
not prevail at the pleading stage often conclude “that
it is efficient to settle a case even though they are convinced that they would win if the litigation continued.” Id. at 710-11.
The scale of the problem is great. In the past five
years alone “there have been over 200 settlements of
excessive fee and imprudent investment lawsuits totaling more than” $1.3 billion. ERISA Fiduciary Litigation, supra. The beneficiaries of those lawsuits are
the plaintiffs’ attorneys—not plan participants.
While class-action attorneys have received almost
$450 million in settlements, “individual plan participants each obtain only $55-70 on average from these
same settlements.” Ibid.
The risk of unwarranted litigation is especially
acute when a fiduciary selects an investment option
that is newer or less common in 401(k) plans, such as
one that includes alternative assets. A new or unique
18
strategy sticks out, whereas a common strategy
blends in even when it offers lower returns than anticipated. The result is a herding effect, with fiduciaries concluding that the safest course is to offer the
most familiar investment options, even if other products would better serve participants over the long
term. See Erin Cho & Richard Nowak, 401(k) Alternative Investment Critiques Gloss Over Key Details,
Bloomberg (Mar. 24, 2026), bit.ly/4e3ToMf. The Department of Labor has recognized the problem, citing
survey evidence that “roughly 29 percent of respondents” had “decided against offering services or investment options simply because other similar plans were
not doing so, making the additional services or options
vulnerable to litigation.” 91 Fed. Reg. at 16,106 (citation omitted).
The fear of litigation that drives this behavior is
well founded. As one former chair of the Labor Department’s ERISA Advisory Council boasted: “[A]s
soon as I see a platform that has private equity or a
hedge fund” or any other “type of alternative asset, I
will sue in a second.” As Private Equity Firms Work
to Access 401(k) Market, Plaintiff Lawyers Gear Up to
Sue, The Capitol Forum (Apr. 10, 2023),
bit.ly/3S5zOYp. By and large, ERISA fiduciaries have
lain low rather than expose themselves to that danger.
While that head-down strategy reduces litigation
risk for the fiduciary, it also limits investment choices
for workers—costing them access to the long-term return and diversification opportunities that definedbenefit plans and other institutional investors commonly enjoy. Congress sought to avoid exactly this
scenario, in which “litigation expenses[ ] unduly
19
discourage employers from offering welfare benefit
plans” in the best interests of their workers. Varity,
516 U.S. at 497.
II. THE MEANINGFUL-BENCHMARK STANDARD DETERS MERITLESS SUITS BY IMPLEMENTING THE
TENET THAT PERFORMANCE IS RARELY PROBATIVE OF PRUDENCE.
The meaningful-benchmark standard helps alleviate the litigation risk that has deterred fiduciaries
from including alternative assets in 401(k) plans by
cutting off meritless hindsight-based claims at the
pleading stage. Far from a freshly-minted, judgemade pleading requirement, the standard flows from
a fundamental principle of ERISA law—that the performance of an investment alone is a poor proxy for
the fiduciary’s prudence in selecting it. To support
any plausible inference of imprudence, performance
must at a minimum be gauged against a comparator
sharing the same investment horizon, risk profile,
strategy, and related attributes—in other words, a
meaningful benchmark. Contrary to petitioners’ assertion, applying that standard will not categorically
foreclose imprudence claims involving novel investments. Rather, it will weed out meritless lawsuits
based on after-the-fact second-guessing, enabling
workers to gain the same access to prudently selected
alternative assets that defined-benefit plans and
other institutional investors currently enjoy.
A. Under ERISA, Investment Performance
Is Seldom Probative Of Prudence.
ERISA provides that a fiduciary must “discharge
his duties with respect to [the] plan * * * with the care,
skill, prudence, and diligence under the circumstances
20
then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with
like aims.” 29 U.S.C. § 1104(a)(1)(B). That duty “is ‘derived from the common law of trusts.’ ” Tibble v. Edison Int’l, 575 U.S. 523, 528 (2015) (quoting Cent.
States, Se. & Sw. Areas Pension Fund v. Cent.
Transp., Inc., 472 U.S. 559, 570 (1985)). Accordingly,
“courts often must look to the law of trusts” to “determin[e] the contours of an ERISA fiduciary’s duty,”
Tibble, 575 U.S. at 528-29, in addition to consulting
ERISA’s “language[,] * * * its structure, or its purposes,” Varity, 516 U.S. at 497.
ERISA’s text and its purpose as recognized by this
Court, as well as trust law, all establish that whether
an investment performs well relative to other options
is almost never probative of whether a fiduciary discharged his duty to select investments “with the care”
of “a prudent man.” 29 U.S.C. § 1104(a)(1)(B).
1. ERISA’s Text And Purpose Establish That Performance Says Little
About Prudence.
ERISA’s text indicates in three ways that investment performance is ordinarily not probative of a fiduciary’s prudence.
First, ERISA requires a fiduciary to “discharge his
duties * * * with the care” of “a prudent man.” 29
U.S.C. § 1104(a)(1)(B). The preposition “with” refers
to the fiduciary’s “manner of action.” Webster’s New
Collegiate Dictionary 1355 (9th ed. 1983). The statute
thus places the focus on the fiduciary’s manner of decisionmaking on the front end, rather than the outcome of those decisions on the back end. In other
21
words, the statute “focuses on ‘the process by which’
decisions are made, ‘rather than the results of those
decisions,’ ” Davis v. Wash. Univ. in St. Louis, 960
F.3d 478, 482 (8th Cir. 2020) (emphases added; citation omitted), confirming that “[t]he duty of prudence
is a process-driven obligation,” Johnson v. ParkerHannifin Corp., 122 F.4th 205, 213 (6th Cir. 2024).
Second, ERISA specifies that the prudence of a fiduciary’s decision must be evaluated based on “the circumstances then prevailing.” 29 U.S.C. § 1104(a)(1)(B).
An investment’s performance—let alone its performance relative to other investment options—cannot
be known in advance, so it is not a circumstance the
fiduciary can account for at the time of its decision.
And though a fiduciary must monitor the ongoing performance of an investment, see Tibble, 575 U.S. at
529-30, whether its past performance, be it strong or
poor, will characterize future results cannot be known
at the time the fiduciary decides to retain the investment.
Third, besides requiring an ERISA fiduciary to
“discharge his duties * * * with the care” of “a prudent
man,” the statute also requires a fiduciary to “diversify[ ] the investments of the plan so as to minimize
the risk of large losses.” 29 U.S.C. § 1104(a)(1)(B), (C).
Diversifying a portfolio by selecting a range of investments with different characteristics naturally may result in some “underperform[ance] relative to a winning investment.” Diversifying Your Portfolio, supra.
An ERISA investment’s relative underperformance often will reflect nothing more than a fiduciary’s prudent decision to reduce risk by diversifying the portfolio.
22
ERISA’s purpose as recognized by this Court cuts
in the same direction as the statutory text. The statute balanced Congress’s “desire to offer employees enhanced protection for their benefits” against “its desire not to create a system that is so complex that * * *
litigation expenses[ ] unduly discourage employers
from offering welfare benefit plans in the first place.”
Varity, 516 U.S. at 497.
That undue discouragement is exactly what would
happen if investment performance were treated as a
proxy for prudence. Consider petitioners’ insinuation
(at 21) that respondents might have been imprudent
because “[t]he returns from Intel’s GDF were regularly lower than * * * the median fund returns.” It is
axiomatic that half of all investment funds will fall below the median in any given year. If the fiduciaries of
those funds could be liable for breaching their duty of
prudence on that basis, many employers would stop
offering plans altogether.
2. Trust Law Confirms That Performance Rarely Indicates Imprudence Under ERISA.
The common law of trusts from which ERISA’s
duty of prudence is derived supports the same conclusion. Under longstanding principles of trust law, a
trustee’s compliance with the duty of prudence when
selecting investments “depends upon the circumstances at the time when the investment is made and
not upon subsequent events,” including whether “the
investment depreciates in value.” Restatement (Second) of Trusts § 227, cmt. o (1959); see also Restatement (Third) of Trusts § 90, cmt. b (2007) (explaining
that compliance with the duty of prudence “turns on
23
the prudence and propriety of the trustee’s conduct,
not on the eventual results of investment decisions”).
The near-irrelevance of subsequent investment
performance to prudence is also confirmed by the deference due to trustees’ investment decisions at common law. “Where discretion is conferred upon the
trustee with respect to the exercise of a power, its exercise is not subject to control by the court, except to
prevent an abuse by the trustee of his discretion.” Restatement (Second) of Trusts § 187. That deferential
rule “is applicable * * * to powers to lease, sell or mortgage the trust property or”—as relevant here—“to invest trust funds.” Id. § 187 cmt. c; accord id. § 227.
The rule that trustees’ exercise of their discretionary power is reviewable only for abuse of discretion
affords them considerable insulation from judicial second-guessing. Indeed, “[a] court is likely to find an
abuse of discretion only where the trustee’s action is
extraordinarily imprudent or unreasonable.” Amy M.
Hess, George G. Bogert & George T. Bogert, Bogert’s
The Law of Trusts and Trustees § 558 (2026 ed.). As
this Court put it over a century-and-a-half ago,
“[w]hen trustees are in existence, and capable of acting, a court of equity will not interfere to control them
in the exercise of a discretion vested in them by the
instrument under which they act.” Nichols v. Eaton,
91 U.S. 716, 724-25 (1875).
The Court has applied that same rule in the
ERISA context. In Firestone Tire & Rubber Co. v.
Bruch, the Court observed that “[t]rust principles
make a deferential standard of review appropriate
when a trustee exercises discretionary powers.” 489
U.S. 101, 111, 115 (1989) (citing Restatement (Second)
24
of Trusts § 187). It accordingly held that when a plan
confers an ERISA fiduciary with discretionary authority to determine eligibility for benefits or to construe
the terms of the plan, courts must review a denial of
benefits deferentially. Ibid. 2
Like a trustee’s decision to invest trust funds, the
selection of plan menu options for a defined-contribution plan is a prototypical exercise of discretion. In
the case at hand, Intel’s plans gave “asset management responsibility” to the Investment Policy Committee. J.A. 422, 545. The “Investment Committee
Defendants [accordingly] had the authority, discretion, and responsibility to select, monitor, and remove
or replace investment options in the 401(k) Savings
Plan and the Retirement Contribution Plan.” J.A. 59.
In selecting investment options for plan participants,
respondents therefore acted in the heartland of the
discretion committed to them by the plans.
It follows that courts should review such discretionary decisions deferentially under ERISA. “Such a
wide berth,” the United States has explained, “is consistent with the common law of trusts, under which a
trustee must weigh the competing interests of
2
The Eighth Circuit has held that there is “no compelling reason to limit Firestone deference to benefit claims.” Tussey v.
ABB, Inc., 746 F.3d 327, 335 (8th Cir. 2014). Indeed, Firestone
relied on the same Restatement section that reported an abuse
of discretion standard for trust investments. 489 U.S. at 111 (citing Restatement (Second) of Trusts § 187); see also 91 Fed. Reg.
at 16,092 (describing potential application of Firestone deference
outside benefits-eligibility context). The question whether Firestone deference applies to fiduciary decisionmaking beyond benefits eligibility is an important one, but this Court need not resolve it to affirm the judgment below.
25
maximizing returns and minimizing risks.” U.S. Amicus Br. at 12-13, Parker-Hannifin Corp. v. Johnson,
No. 24-1030 (Dec. 9, 2025) (citing Restatement (Second) of Trusts §§ 176, 181). As this Court has put it,
because “the circumstances facing an ERISA fiduciary
will implicate difficult tradeoffs,” courts reviewing
duty-of-prudence claims must “give due regard to the
range of reasonable judgments a fiduciary may make
based on her experience and expertise.” Hughes v.
Nw. Univ., 595 U.S. 170, 177 (2022).
That deferential standard confirms that post hoc
investment performance is rarely indicative of an
ERISA fiduciary’s prudence. Even where the relative
underperformance of an investment might lead a reviewing court to conclude that it “would have exercised the power differently,” that “is not a sufficient
reason for interfering with the exercise of the power.”
Restatement (Second) of Trusts § 187, cmt. e.
B. Performance Can Be Probative Of
Prudence Only By Reference To A
Meaningful Benchmark.
The meaningful-benchmark standard helps effectuate this principle that, under ERISA, investment
performance is rarely probative of prudence. While
“circumstantial factual allegations” can sometimes allow “the court [to] reasonably infer from what is alleged that the [fiduciary’s] process was flawed,” the
mere fact that one investment did not perform as well
as some other possible investment does not. Pet. App.
11a (citation and internal quotation marks omitted).
There are multiple “obvious alternative explanation[s]” for relative underperformance, ranging from
the fiduciary selecting the investment for diversification purposes, to the fiduciary discharging his duty
26
with care and selecting an investment that performed
well, but less well than some other alternative. Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 567 (2007). Because a fiduciary’s selection is necessarily forward
looking, subsequent performance is inherently dependent on market events that cannot be known at
the time of even the most prudent decisionmaking.
And when a fiduciary decides to retain an investment
that has not performed as well as another on the market, an “obvious alternative explanation” to imprudence is the fiduciary’s assessment that the market
conditions responsible for the relative underperformance will likely soon reverse—and that it would be
an error to sell low and buy high into the current market-leading investment.
To adequately plead after the fact that relative
underperformance “plausibly suggest[s] ([and is] not
merely consistent with)” imprudence, a plaintiff must
allege (among other things) that the investment underperformed relative to an investment using a similar strategy to pursue similar objectives. Twombly,
550 U.S. at 557. For example, consider a fiduciary
who selects Fund A, which is meant to track the S&P
500. If Fund A underperforms Fund B, which also
tracks the S&P 500, because the manager of Fund A
failed to actually track the index, that might indicate
that the fiduciary acted imprudently by failing to adequately consider the qualifications of the manager of
Fund A. But if Fund A underperforms Fund C, which
invests in both public and private equities to mitigate
risk, that does not imply that the fiduciary’s selection
of Fund A was imprudent. It just means that the fiduciary exercised her discretion to make a different
investment decision within “the range of reasonable
27
judgments a fiduciary may make.” Hughes, 595 U.S.
at 177. The requirement to allege a meaningful
benchmark therefore appropriately reflects the content of the duty of prudence in light of ERISA’s text,
purpose, and trust-law roots.
Petitioners’ attempt (at 30) to disparage the
meaningful-benchmark standard as a “judicially
crafted rule[ ]” falls flat. As an initial matter, it is petitioners, not respondents, who seek a special “judicially crafted rule[ ]” at the outer fringes of ERISA—a
rule under which a prudence claim survives a motion
to dismiss on hindsight underperformance alone, with
no well-pleaded allegation of an imprudent process.
Pet. Br. 30. And in any event, this Court has not hesitated to articulate pleading rules that reflect the content of the duty of prudence. For example, because
“the duty of prudence * * * does not require a fiduciary
to break the law,” this Court held that “[t]o state a
claim for breach of the duty of prudence on the basis
of inside information, a plaintiff must plausibly allege
an alternative action that the defendant could have
taken that would have been consistent with the securities laws.” Fifth Third Bancorp v. Dudenhoeffer, 573
U.S. 409, 428 (2014). Similarly, this Court held that
“where a stock is publicly traded, allegations that a
fiduciary should have recognized from publicly available information alone that the market was over- or
undervaluing the stock are implausible as a general
rule, at least in the absence of special circumstances.”
Id. at 426.
The meaningful-benchmark standard works the
same way. Allegations that a fiduciary should have
selected a different investment because it subsequently underperformed “are implausible as a general
28
rule, at least in the absence of ” the “special circumstance[ ]” where it underperformed relative to a similar investment. Dudenhoeffer, 573 U.S. at 426.
That principle applies neatly to this case. Petitioners’ assertion (at 19) that the “fiduciaries’ strategy
of high allocations to nontraditional investments like
hedge funds and private equity caused the Intel retirement funds to underperform” does not plausibly
plead imprudence. In an exercise of their discretion
over investment selections, the fiduciaries gave participants the option to allocate a portion of their plan
funds to alternative assets in order to “diversif[y]”
away from public equities, which had experienced
“large losses” in 2008. 29 U.S.C. § 1104(a)(1)(C). That
those investments generated lower returns than public markets is a natural result of diversification during
a period in which public equities—driven by a small
handful of technology stocks—have performed unusually well. The recent overperformance of public equities does not imply that it was imprudent to allow investment in alternative assets any more than the
overperformance of alternative assets for many years
implies it was imprudent not to allow investment in
alternative assets. Imprudence could be a plausible
inference only if Intel’s funds demonstrated marked
underperformance relative to a fund with similar
strategies and with similar stated investment objectives—an allegation petitioners failed to make.
Because the meaningful-benchmark standard operates at the pleading stage, it works to weed out meritless hindsight-based claims early. In so doing, it permits fiduciaries to avoid the cost of unnecessary discovery, mitigating the financial pressure to settle and
disincentivizing meritless future litigation. That
29
relief from litigation risk in turn encourages fiduciaries to include a wider array of investment options—
including alternative assets—in defined-contribution
plans, giving workers the benefits of favorable returns
and diversification broadly enjoyed by institutional
investors and those whom they serve.
C. The Meaningful-Benchmark Standard
Does Not Confer Immunity From Suit.
Petitioners maintain that requiring a meaningful
benchmark “confers almost complete immunity on fiduciaries who pursue novel * * * investment strategies,” which they suggest is especially inappropriate
because at common law “ ‘securities in new and untried enterprises’ [were] not considered to be ‘a proper
trust investment.’ ” Pet. Br. 47-48 (quoting Restatement (Second) Trusts § 227, cmt. f). But both the
premise (that investing in the sorts of alternative assets respondents chose is novel) and the conclusion
(that the meaningful-benchmark standard immunizes
fiduciaries) are wrong.
The premise of petitioners’ argument is off-base
because there is nothing “novel or reckless” about investing in alternative assets like private equity and
hedge funds. Pet. Br. 47. Investments in most alternative assets are not investments in “new and untried
enterprises.” Restatement (Second) of Trusts § 227,
cmt. f. On the contrary, “[p]rivate equity funds invest
in more mature companies * * * and work to improve
efficiencies and boost growth” of those companies.
Private Equity FAQs, supra. Hedge funds similarly
invest in established types of assets such as “stocks,
bonds, or commodities,” and are distinguished by the
strategies they use to trade those assets. Ibid. Moreover, defined-benefit plans and other institutional
30
investors allocate large portions of their portfolios to
alternative assets and have done so for nearly a half
century. See pp. 6-7, supra. Though investing in alternative assets is currently less common for definedcontribution plans, that is the result of the unwarranted litigation risk exemplified by this case.
Petitioners’ conclusion is just as flawed as their
premise. The requirement to allege a meaningful
benchmark does not immunize a fiduciary pursuing a
novel strategy from imprudence claims. As the Ninth
Circuit explained, a plaintiff could “alleg[e] facts that
would directly show that the fiduciaries employed unsound methods in making their investment decisions.”
Pet. App. 11a. Alternatively, even if a sufficiently
similar comparator fund did not exist, a plaintiff could
construct a composite benchmark—a blended benchmark that uses subsidiary benchmarks for each of the
fund’s types of assets. That would allow for a meaningful comparison to the selected investment because
the composite benchmark’s similar asset allocation
would reflect a similar strategy to the fund at issue.
What a plaintiff cannot do is bring claims based
on nothing more than hindsight. Because that is all
petitioners’ claims amounted to in this case, the Ninth
Circuit correctly affirmed their dismissal.
31
CONCLUSION
The judgment of the court of appeals should be
affirmed.
Respectfully submitted.
KARL G. NELSON
STEPHEN J. HAMMER
GIBSON, DUNN & CRUTCHER LLP
2001 Ross Avenue, Suite 2100
Dallas, Texas 75201
(214) 698-3100
JENNAFER M. TRYCK
GIBSON, DUNN & CRUTCHER LLP
3161 Michelson Drive, Suite 1200
Irvine, California 92612
(949) 451-3800
EUGENE SCALIA
Counsel of Record
ANDREW KILBERG
AARON HAUPTMAN
GIBSON, DUNN & CRUTCHER LLP
1700 M Street, N.W.
Washington, D.C. 20036
(202) 955-8500
escalia@gibsondunn.com
Counsel for Amici Curiae
July 9, 2026
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.