DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

The Supreme Court heard arguments on Tuesday, Oct. 6, in Anderson v. Intel Corp. Investment Policy Committee, a case that could shape employers’ willingness to place private investments inside 401(k) plans. At issue is how workers must plead claims that retirement fiduciaries invested imprudently.

The case does not challenge whether retirement plans may hold alternative assets such as hedge funds and private equity alongside stocks and bonds. Instead, the justices are considering whether an underperformance claim requires allegations involving a “meaningful benchmark.”

A former Intel employee alleged that company retirement plan fiduciaries breached their duties by investing in hedge funds and private equity, pointing partly to weak performance. Lower courts rejected the claims, reasoning that underperformance alone was insufficient without an appropriate comparison for evaluating results.

Several justices appeared skeptical of making plan sponsors’ investment decisions easy targets for litigation. Their questions repeatedly focused on whether employees must compare investments with genuinely similar alternatives before a claim can proceed.

Justice Clarence Thomas summarized the Ninth Circuit’s reasoning with a fruit analogy: “you can’t compare apples and oranges…if you have a fund…that is designed to produce high returns but riskier returns…you can’t compare that to a fund that is to protect against losses.”

Ronald Mann, co director of the Charles Evans Gerber Transactional Studies Center at Columbia Law School, wrote in an analysis on SCOTUSblog that several other justices appeared to share that reasoning. Justice Elena Kagan said, “the thing that you need … is another apple.”

Justice Samuel Alito pressed employees’ attorney Matthew Wessler on whether his position would allow someone to “state a claim by comparing apples and oranges but supplement that with the suggestion that the strategy was flawed.” Justice Amy Coney Barrett also used the fruit metaphor.

Justice Neil Gorsuch asked Wessler to “agree with the general principle that when we’re limited to underperformance claims … a meaningful benchmark of some kind is required, apples, not oranges.” Wessler did not respond to a request for comment in the source article.

The apparent sticking point was the absence of a benchmark. Aimee Brown, assistant to the Solicitor General, said the court should provide “some parameters” for identifying a meaningful benchmark, adding, “Prudence is about process and not about performance.”

Attorneys who attended the arguments, heard the recording, or reviewed the transcript interpreted the questioning as a sign that the court was leaning toward Intel and affirming the Ninth Circuit. On rebuttal, Wessler argued that the allegations should be considered together and holistically.

Employers are watching for a ruling that could reduce uncertainty around future litigation. Eugene Scalia, a Gibson Dunn & Crutcher partner and former U.S. Secretary of Labor, said private funds can be appropriate components of 401(k) investment choices and that an Intel victory would support Labor Department rulemaking.

Joshua Lichtenstein, a Ropes & Gray partner who leads the firm’s ERISA fiduciary practice, said a positive outcome could increase confidence among plan sponsors that have delayed adding private funds because of litigation concerns. He helped write an amicus brief for the Investment Company Institute.

Government policy has shifted repeatedly. The Labor Department issued an Information Letter in June 2020 intended to expand access to alternative investments, but a December 2021 supplemental statement under the Biden administration argued that most plan fiduciaries lacked the ability to assess their complexity and risk.

In August 2025, President Trump issued an executive order promoting access to alternative assets for 401(k) investors. Congressman Troy Downing introduced the Retirement Investment Choice Act in October 2025, and the Labor Department later proposed a rule easing legal and regulatory barriers, with comments due by June 1.

Kent Mason, a Davis & Harman partner, said most large companies still do not include private investments in their 401(k) plans, although ERISA does not prohibit them. He expects smaller and midsize businesses to move first because large employers face greater litigation exposure.

Mason also cautioned that proposed guidance still involves a subjective six factor analysis. Even with an Intel victory and adopted rules, he said plaintiffs’ attorneys would likely continue alleging that large employers violated fiduciary obligations.

Alternative investments are already common in defined benefit plans, while 401(k) plans have adopted them more slowly. Harvey Bines, a Sullivan & Worcester partner, said broader investment choice has a business case, but novel and riskier offerings require greater care and oversight.

Asset managers and plan providers are already forming partnerships, including announcements from Empower, Voya Financial, OneDigital, and Principal Financial Group. Constitution Capital Partners also announced a collective investment trust launched with more than $50 million across 18 retirement plans and commitments bringing total plan assets above $1 billion.

Voya Financial research found nearly 2 out of 3 participants want access to private market investments. Employers, however, remain focused on whether those investments can improve retirement outcomes while remaining consistent with their fiduciary duties.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.