Ninth Circuit Dismisses Intel’s 401(k) Lawsuit Concerning Inclusion of Private Equity Investments

July 14, 2025
Hall Benefits Law, LLC

After six years of litigation, a three-judge panel of the Ninth Circuit has dismissed a 401(k) lawsuit filed by Intel employees against the company. The employees alleged that including private equity funds and hedge funds as investment options in its two defined contribution plans was a breach of fiduciary duties under the Employee Retirement Income Security Act (ERISA). 

The decision underscores that ERISA does not categorically exclude certain types of investment options from being available in participant-directed defined contribution plans. Instead, private fund investment alternatives, despite their higher fees and complexity, may be a prudent option to include in these plans, depending on the circumstances. 

Intel employees claimed in their lawsuit that offering high-priced hedge fund and private equity fund investment alternatives caused millions of dollars in losses to the company’s retirement plan. They also alleged that Intel violated its fiduciary duty of loyalty by directing retirement fund investments to companies in which its venture capital arm had already invested. 

The U.S. District Court for the Northern District of California dismissed the suit because the plaintiff failed to provide a valid comparison to the performance of the company’s funds. The Court also found that the plaintiff alleged no actionable conflict of interest supporting a breach of the duty of loyalty. On appeal, the Ninth Circuit affirmed the dismissal of the suit. 

The Ninth Circuit decision may finally resolve long-running challenges to plan sponsors’ attempts to diversify assets in their plans by including private equity. With this decision, access to private equity fund investment could constitute a well-diversified retirement portfolio. 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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