The Supreme Court is deciding a case that could have far-reaching implications for people whose employer-sponsored retirement funds underperform, but justices appeared skeptical of issuing a wide-ranging opinion. Intel centers on whether Intel operated irresponsibly in investing employees' retirement funds. Plaintiffs argue the company's fund underperformed compared to other funds, leaving employees with less money for retirement, but Intel argued that underperformance doesn't automatically mean there was a lack of care in how investments were made.
Justice Neil Gorsuch cautioned his fellow justices against weighing in on whether underperformance is the standard of proof for whether a company acted irresponsibly. "We should take care to bracket that question about the relative importance of underperformance in a prudence, imprudence claim. We're not going to answer that question," Gorsuch said during oral arguments on Tuesday.
Instead, Gorsuch told justices to focus on the question of what the benchmark is for comparing funds when trying to determine if a fund acted irresponsibly. Newsweek reached out to Intel and Anderson for comment. At the heart of the case is how imprudence with regard to retirement funds can be determined under the confines of the Employee Retirement Income Security Act (ERISA), which sets standards for private sector retirement and health benefits for employees.
ERISA focuses more on the process a company or fund followed and not the actual results. A fund can act responsibly if it earns less than another fund because of differing strategies, a point Intel's attorneys argued. So, the justices are deciding what the benchmark for imprudence should be in these cases.
Early in the oral arguments, Justice Clarence Thomas asked Anderson's attorney whether he agreed that "you can't compare apples and oranges." While the attorney agreed, he asked, "What is an apple and what is an orange?" Later, Kagan brought the conversation back to Thomas' analogy. She noted that the apple doesn't have to be identical in color and texture and taste. But, she added, "it's got to be kind of an apple." Other justices didn't use the fruit metaphor, but still raised the issue of comparisons.
Gorsuch pointed out that comparison is necessary when a claim is based on underperformance, and Justice Amy Coney Barrett pressed attorneys on whether a comparator was necessary to sustain allegations of underperformance. Intel argued that plaintiffs need a comparable fund when accusing a fund of violating ERISA. They argued that just because a fund was less successful than another, it doesn't mean anything irresponsible happened; it could reflect differing strategies, and that's not a violation of ERISA.
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