401(k) Benchmark Standard Creates Bad Incentives, Justices Told

Requiring workers challenging their 401(k) investment options to identify a “meaningful benchmark” in their complaints creates perverse incentives for retirement plan fiduciaries, multiple groups argued in a series of US Supreme Court briefs.

The friend-of-the-court briefs urge the justices to side with Intel Corp. employees and reject a rigid application of the meaningful benchmark standard, which has been used in varying iterations by the Sixth, Seventh, Eighth, Ninth, and Tenth circuits. The standard asks whether workers alleging fiduciary imprudence in their 401(k) plans have identified a better alternative that’s sufficiently similar to the fund being challenged. ...