The Supreme Court heard on Oct. 6 in Anderson v. Intel Corp. Investment Policy Committee, a case about whether employers can put private equity and hedge funds inside a 401(k).
The question is narrow: when an employee sues over poor returns, must the employee name a — a comparable fund to measure against?
The lower courts already said yes. The 9th Circuit threw out the Intel employee's claim, ruling that underperformance alone is not enough without a benchmark for a court to assess.
During arguments, the justices reached for the same metaphor from both sides of the bench. Justice Clarence Thomas said you cannot compare apples and oranges — a fund built for high, risky returns is not the same as one built to protect against losses. said what you need is another apple. asked the employees' lawyer to agree that a meaningful benchmark of some kind is required.
The employees' theory — that bad returns by themselves prove a breach of — looks unlikely to survive this court.
Lawyers who attended or read the transcript took the questioning as a sign the court will side with Intel and uphold the 9th Circuit. One analysis put it plainly: when justices ask opposing counsel to pick among the approaches for an opinion, they are probably not voting for that counsel.
A ruling for Intel would make some plan sponsors more comfortable adding to their 401(k) menus, though the largest employers may still move slowly.
, the law governing workplace retirement plans, says nothing about alternatives. pushed for their inclusion in his first term: the Labor Department issued an information letter in June 2020 meant to help Americans gain access to alternatives. Under Biden, the department reversed in December 2021, warning that most plan fiduciaries were not equipped to evaluate these investments — a move that chilled the market. Trump's second term reversed again: an August 2025 executive order, and a March 2026 proposed rule to ease the barriers. Comments closed June 1.
Most large companies still do not offer private investments in their 401(k)s, even though nothing in ERISA prohibits it. The largest employers are expected to be the slowest to add them, because they face the most litigation risk.
Asset managers are not waiting. In September, Constitution Capital Partners launched the Constitution Capital Horizon CIT, a , with more than $50 million in initial assets across 18 retirement plans and near-term commitments that would bring total plan assets above $1 billion.
Plan sponsors are stuck between the two clocks — the court's ruling and the department's final rule — and most are holding their 401(k) menus steady until both land.
Harvey Bines, a partner at Sullivan & Worcester, said there is a clear business case for giving employees a broad base of investment options. But the more novel and riskier the options, the more care and oversight an employer has to build in.
Even a win for Intel does not close the door. The Labor Department's six-factor test for picking investments is still subjective, and plaintiffs' lawyers can still sue large employers for failing to meet their obligations.