Update: Ninth Circuit Dismisses Intel’s 401(k) Lawsuit Over Private Equity Investments
- Sherrie Boutwell
- Jul 17
- 1 min read
Updated: Jul 24
Following up on our prior post on private equity investments in 401(k) plans, the Ninth Circuit Court of Appeals has now dismissed a six-year-long lawsuit brought by Intel employees against the company. The lawsuit centered on Intel’s inclusion of private equity and hedge funds in its 401(k) defined contribution plans, alleged that offering these investment options violated fiduciary duties under the Employee Retirement Income Security Act (ERISA).
The U.S. District Court for the Northern District of California initially dismissed the lawsuit, citing two key reasons:
Lack of Valid Comparison: The plaintiffs failed to provide a meaningful benchmark to demonstrate that Intel’s funds underperformed compared to alternative investments.
No Actionable Conflict of Interest: The court found no evidence to support claims of a breach of fiduciary duty of loyalty.
On appeal, the Ninth Circuit upheld the dismissal, reinforcing that ERISA does not prohibit the inclusion of private equity or other complex investment options in participant-directed plans. The court emphasized that such investments, even if they have higher fees and complexity, can be prudent choices depending on the plan’s circumstances and goals and how they are structured.
Stay tuned as 401(k) investments in private equity are still a hot topic (both for providers and in Congress and the executive branch).
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