The Supreme Court heard arguments about Intel's 401(k) plan. Workers claim the plan offered underperforming private funds. Intel claims it did nothing wrong. Nine justices now pretend this matters to their grocery bill.
Employers across America wait for new Labor Department rules on private investments in retirement accounts. They will read these rules. They will hire consultants to explain these rules. They will then do whatever saves them the most money and call it fiduciary duty.
The case hinges on whether Intel breached its obligation by offering certain private equity funds that performed worse than public market alternatives. Retail traders everywhere lean forward in their chairs. They think this affects them. It does not. Their 401(k) offers three target-date funds and a money market account. They picked the one with 2045 in the name because that seemed far away enough to ignore.
Private funds in 401(k) plans represent approximately 0.3% of total plan assets nationwide. The Supreme Court will issue a ruling that clarifies standards for plan fiduciaries. HR departments will forward a memo. Nobody will read it. The funds will remain in the plan or they will not. Performance will continue to trail fees by exactly enough to keep everyone employed.
Intel has $68 billion in market cap. Its employees sued over basis points. The lawyers will make millions regardless of outcome. The plaintiffs will split what remains after legal fees and tell themselves they changed the system.
Oral arguments revealed justices struggling with technical questions about private market valuations and benchmark comparisons. They asked thoughtful questions. They demonstrated genuine curiosity about fiduciary standards. Then they will vote exactly how everyone predicted based on who appointed them.
Your 401(k) will underperform. The Supreme Court cannot fix this.
Photo by Ian Hutchinson on Unsplash
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