Supreme Court's New 401(k) Lawsuit Hurdle: What Changes

TL;DR: The Supreme Court is deciding how specific a 401(k) plaintiff must be when claiming a plan's investments underperformed. It is not deciding whether private equity can sit in a 401(k). If you hold a workplace plan, the ruling mostly affects how willing your employer will be to put private funds on the menu.

What happened in the Intel 401(k) case?

On October 6, the justices heard Anderson v. Investment Policy Committee, the Intel 401(k) case, and they are weighing what kind of investment benchmark a plaintiff has to point to before a claim that retirement savings went into imprudent investments can move forward, according to American Banker, which published its report on October 16, 2026.

The suit goes back to 2019, when a former Intel employee sued, as CNBC describes it. The plaintiffs say the plan's trustees broke federal retirement law by adding hedge funds and private equity funds to some of the 401(k) options after the 2008 collapse. American Banker says they allege violations of the Employee Retirement Income Security Act of 1974.

I covered the argument itself in our earlier piece on the Intel case. What does the benchmark fight mean for you?

What is the "meaningful benchmark" fight?

Most of this case turns on one procedural question. Several federal appeals courts make a plaintiff name a "meaningful benchmark" to compare a plan's investments against, and the plaintiffs asked the Supreme Court to reject that standard, per American Banker.

A benchmark requirement raises the bar for getting a lawsuit past its first stage. A higher bar means fewer suits survive. That changes how much legal risk a plan sponsor feels when it decides to add something unusual to the menu.

I spent years in the Navy signing off on work, more than 1,000 QA jobs, and the rule there was simple: nothing is approved until someone checks it against a standard. A plan committee vetting a private fund faces the same problem, and a court deciding which standard a plaintiff must name is deciding how that checking gets judged afterward.

Question	Is the court deciding it?
Must a plaintiff name a meaningful benchmark to bring an underperformance claim?	Yes, this is the issue before the justices
Can private equity and hedge funds be offered in a 401(k)?	No, CNBC reports the case does not challenge that
Did Intel's choices actually underperform?	Not as a question the court is answering now

The case involves private funds, but the legal question is about lawsuits. That is why the headline is easy to misread.

Does this change what's allowed in my 401(k)?

No. Two people American Banker quotes, Bock and Delany, said they doubt the decision will have any bearing on whether alternative investments belong in retirement plans. The excerpt I could read gives no first names, titles or firms for either of them, so weigh their view accordingly.

What can change is appetite. CNBC reports that a ruling for Intel could make some plan sponsors more comfortable adding alternatives, though the largest employers may still move slowly. I think the slow movers have it right. A new menu option is an untested one, and your employer's comfort level tells you nothing about its fees.

What is the Labor Department doing at the same time?

The Labor Department proposed a rule in March designed to give legal protection to plan sponsors who recommend alternatives for 401(k)s, according to American Banker. I could not read the Department's own notice, so I am relying on that description. I walked through the proposal in our piece on the new 401(k) rule.

The two fit together. CNBC says many sponsors are in limbo, waiting on both the Supreme Court and final Labor Department rules before changing their menus, even as asset managers prepare new products. Neither is final. For the Court's other recent work on investor-protection cases, see our look at Sripetch v. SEC.

Common mistakes

Reading a ruling for Intel as a green light for private funds in your account is the obvious one. It would change litigation risk, and your employer still decides the menu.

People also treat a new menu option as a vetted one. Intel shows why that fails: the plaintiffs say adding hedge and private equity funds breached the trustees' duty, and a lawsuit followed, per American Banker. A fund being allowed in a plan says nothing about its fees, its lockup, or how it behaves in a bad year. Read the fee stack before the pitch, whether the pitch comes from a sponsor or from your HR portal.

And if the plaintiffs lose at the pleading stage, don't conclude the plan did nothing wrong. That outcome only means the claim didn't clear the bar, and it says nothing about whether the investments were good. For the retirement-account side of the same question, our SEP-IRA vs Solo 401(k) comparison covers accounts you control yourself.

FAQ

Will the Supreme Court ban private equity in 401(k)s? No. The case does not challenge whether hedge funds and private equity can be used in a 401(k) alongside stocks and bonds, per CNBC. The question is how specific a plaintiff's underperformance claim must be.

Who sued Intel, and when? A former Intel employee filed the suit in 2019, according to CNBC. The plaintiffs say the plan's trustees mishandled 401(k) changes after the 2008 collapse.

What should I watch next? Two things: the Court's decision on the benchmark standard, and the final Labor Department rule. Sponsors are waiting on both before changing menus, per CNBC.

Where to go from here

I'll keep following both the decision and the final Labor Department rule, and I'll say plainly what each one does to the private funds you might see on a plan menu. Subscribe to the free AIN briefing and you'll get that read, downside first, when either one lands.

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