The Supreme Court may soon tell 401(k) savers to bring a “meaningful benchmark” to court. Before it does, savers should be able to get the numbers to build one. On Oct. 6, the justices heard Anderson v. Intel Corp. Investment Policy Committee, a challenge to private equity and hedge fund holdings inside Intel’s custom retirement funds. Justice Neil Gorsuch’s question: “whether, for claims predicated on fund underperformance, a meaningful benchmark is required.”
I’ve spent 30 years allocating to private equity and hedge funds, so I’ll say it plainly: The court’s question is fair. A fund that trails the wrong yardstick proves nothing. Justice Elena Kagan said, “it’s got to be kind of an apple.” (ERISA law now turns on produce.) The standard works only if a plaintiff can find the apple.
