When James was about five, we went to a miniature golf course with one of his little cousins.
Based on that afternoon, you might have concluded that my golf game was amazing.
There were a few problems with that assessment. The children were more interested in running through the water traps, which they apparently regarded as miniature swimming pools. The other adults were there for fun.
And we were playing miniature golf.
That afternoon would tell you very little about how I would perform on a golf course alongside serious golfers. Change the course and the company, and the assessment changes considerably.
The comparison matters. So does understanding what you are trying to evaluate.
What does a lower return tell us?
A retirement investment earned less than another investment. Does that establish that the people responsible for the plan made a poor decision?
Not by itself. An investment designed to reduce losses may trail a more aggressive investment when markets rise. A meaningful comparison must account for differences in objectives, risk, and investment approach. That is the position the Department of Labor advanced in its Supreme Court brief in the Intel case. [1]
Comparing my miniature golf performance with a professional golfer’s tournament results would overlook rather consequential differences. Investment comparisons can make the same mistake.
But there is another question: Does performing reasonably against a chosen benchmark establish that choosing the investment was prudent?
The Royal Caribbean case explains why the answer is not necessarily yes.
Royal Caribbean: look beyond the scorecard
In Johnson v. Russell Investment Management, a participant challenged Royal Caribbean’s replacement of Vanguard target-date funds with Russell target-date funds. These funds adjust their investment mix as retirement approaches. Russell settled during the appeal; Royal Caribbean remained in the case. [2]
The lower court ruled against the participant because she had not provided a sufficiently comparable investment. The appeals court reversed, explaining that a comparable fund is not required in every case. [2]
The participant challenged the Russell funds’ distinctive features themselves. Evidence included limited market acceptance, an unfavorable analyst assessment of a related fund series, and internal concerns about fees and performance. Those matters required consideration alongside the numerical comparisons. The appeals court did not find Royal Caribbean liable; it sent the case back for further review. [2]
A custom benchmark incorporating the disputed features could help assess how the approach was implemented without resolving whether choosing it was prudent. [2]
In golf terms, the scorecard answers how I played on that course. It does not answer whether that course was appropriate for the purpose.
Home Depot: connect the decision to the loss
In Pizarro v. Home Depot, the Eleventh Circuit distinguished a deficient investment review process from a financial loss caused by that deficiency. Under that court’s rule, participants seeking damages had to establish that a properly informed, prudent decision-maker would not have made the same choices. They failed to do so, and the court upheld judgment for Home Depot. [3]
The lesson is specific: pointing to weaknesses in a review process does not, by itself, establish that those weaknesses caused participants’ losses. The allocation of that burden is the Eleventh Circuit’s rule, rather than a uniform rule across every court. [3]
Intel: how much comparison is enough?
On October 6, 2026, the Supreme Court heard Anderson v. Intel. The question concerns whether an investment-underperformance complaint must identify a meaningful benchmark to proceed beyond dismissal. It is not a ruling on whether private equity belongs in every retirement plan. No decision has been issued. [4]
During argument, Justice Thomas questioned comparing an investment seeking higher, riskier returns with one designed to protect against losses. Participants’ counsel agreed that such a comparison alone would be insufficient, but argued against a rigid rule that excludes performance evidence from a broader assessment of the allegations. [5]
Intel concerns what must be alleged at the beginning of a lawsuit. Royal Caribbean and Home Depot concern evidence assessed after the parties had gathered information. Those stages should not be confused. [2][3][4]
The Parting Glass
My takeaway from these cases is that investment oversight requires two questions:
- Are we evaluating results against a comparison that fits the investment’s purpose and risk?
- Have we examined whether the investment approach itself was a reasonable choice?
A fair comparison protects against misleading conclusions. A broader review keeps that comparison from becoming the entire inquiry.
Before deciding how good my golf game is, ask where I played, whom I played with, and what we were there to do.
Then check whether my competition was keeping score or splashing through the water trap.
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