The Supreme Court heard oral arguments on a case, Anderson v Intel, centered on what investment vehicles are suitable for inclusion in 401(k) accounts, defined contribution retirement accounts that are entirely directed by the account holder.

The plaintiff, a former Intel employee, accused the company of violating its fiduciary duty by including private equity and hedge funds in its defined-contribution retirement plan, and alleged these investments performed worse than standard equity funds would have.
Tuesday’s Supreme Court debate hinged on whether a plaintiff needs to show underperformance versus an appropriate benchmark for a suit to survive a motion to dismiss.

The debate wholly missed the point. The question is not—or should not have been—whether this or that investment vehicle was underperforming by some threshold amount or in comparison with this or that benchmark and so should not be on offer in a 401(k). The central question is whether 401(k) account holders, grown adult human beings fully capable of independent and clear thought, are actually too stupid to make their own investment decisions. There is, after all, no requirement that an account holder must invest in a vehicle just because it’s available in the account.

Anderson and his fellow plaintiffs plainly think that every account holder must be as stupid as they apparently think themselves to be, and so they’ve engaged their foolish suit. Alternatively, they don’t want to be the only ones not capable and so they’re busily deprecating as many others’ intelligence as they can.

This case should have been squashed utterly at the district level. It has no business having gotten this far, and the Supreme Court, as it takes this frivolously cynical case seriously, needs to put it into the garbage landfill where it belongs.

The case is insulting as the plaintiffs insist that account holders are, in fact, too grindingly stupid to decide for themselves what investment vehicles included in a 401(k) account are suitable for a person to invest in.