Anderson v. Intel: The Supreme Court Case on 401(k) Private Equity

The question, in plain terms

A lawsuit over a 401(k) fund starts with a complaint, and the defendant usually asks the court to dismiss it before any evidence is exchanged. At that stage the judge assumes the complaint's facts are true and asks whether they make a claim of wrongdoing plausible. The wrongdoing alleged here is a breach of ERISA's duty of prudence, which looks at the fiduciary's process, not the result. The Supreme Court is deciding how a participant can make that claim plausible when the evidence is a fund that did worse than others.

The Ninth Circuit held that the participant “must provide a sound basis for comparison”. That means naming a fund or index with similar aims and risks. In the court's words, the argument that no comparator exists because Intel's approach “was unusual, if not unparalleled” did not get around the rule. One Ninth Circuit judge, concurring, wrote that comparison is not a pleading requirement. The petitioners say a court must weigh all the allegations together, and they ask the Court to throw out the requirement, vacate the judgment and send the case back.

Source: Ninth Circuit opinion (cert petition appendix); petitioners' and respondents' merits briefs; Brief for the United States; Supreme Court docket 25-498.

The question is one the appeals courts have already split on. The petition says the Seventh, Eighth and Tenth Circuits require a sound basis for comparison, citing cases from 2018 to 2023, while the Sixth Circuit (122 F.4th 205, 2024) held that “a meaningful benchmark is not required to plead a facially plausible claim”, though it found the complaint there did plead one. A related petition, Parker-Hannifin v. Johnson (No. 24-1030), was distributed for the conference of January 16, 2026, and the docket we saved shows no later entry.

What the complaint says about Intel's funds

The dollar figures below come from the petition's description of the 163-page amended complaint, with record cites to the joint appendix. They are what the participants allege. The district court dismissed the case before any trial, so no court has tested them.

Source: Petition for certiorari, October 20, 2025, statement of the case, citing the joint appendix (3-ER). Allegations, not findings.

Intel's merits brief tells the other side. The strategy was meant to cut volatility, participants were told the funds “would not compare favorably” with equity-heavy funds in bull markets, the GDF's average return exceeded its 5% real annual target from 2011 through 2018, and every Intel target date fund beat the petitioners' Vanguard comparator in at least one year between 2011 and 2016. The Ninth Circuit's own summary is that Intel redesigned its funds after the 2008 crash to include hedge funds and private equity, aiming at “decreasing volatility and reducing the risk of large losses during a market downturn”. It also wrote that “ERISA fiduciaries are not required to adopt a riskier strategy simply because that strategy may increase returns.”

What was said at the argument on October 6, 2026

The official transcript runs 70 pages. Argument began at 10:03 a.m. and the case was submitted at 11:04 a.m., about 61 minutes (our arithmetic). We do not predict the outcome. Four moments show where the questions were.

• Petitioners' counsel opened by saying the Court has “consistently declined to inject judicially crafted bright-line rules” into the prudence inquiry, and called the benchmark rule “an unnecessary solution in search of a problem”.
• Justice Kavanaugh asked why performance matters when “half of all the funds are going to underperform or be lower than the median”, suggesting the real complaint was about the strategy or the use of hedge funds to carry it out.
• Intel's counsel said that “underperformance is going to rarely be indicative of any sort of imprudence”, and that a plaintiff who wants to attack the strategy itself, such as using hedge funds at all, can make that argument without a comparison. The Solicitor General's lawyer, for the United States, said the common-sense need for a comparison “does not mean that plaintiffs in every case need to plead a comparator”.
• Justice Gorsuch asked whether the Court should “bracket” the broader question of whether underperformance can ever be enough to show imprudence.

Five amicus briefs were filed April 27 to 30, 2026, after the petitioners' brief, and six on July 9, 2026, after Intel's, including the United States, the American Investment Council with the Managed Funds Association, the Chamber of Commerce, the Investment Company Institute, the American Benefits Council and the National Association of Manufacturers.

What this means for a 401(k) saver and for private assets

The decision will not say whether a plan may hold hedge funds, private equity or private credit. The United States' brief says the courts below “correctly rejected” the argument that hedge funds and private equity as an asset class are too risky for a prudent portfolio. The only live question is how easily a participant can bring a case over such a fund.

That matters because lawsuit risk is the reason industry groups give for how little private exposure plans hold. The American Investment Council's brief says “only 0.1 percent of all defined contribution plan assets were in alternative investments in 2024”, a figure it takes from the DOL proposal, and calls litigation risk “the main explanation” for the gap with pension plans. The same brief cites over 200 settlements of fee and investment cases in five years totalling more than $1.3 billion; that is the brief's cited figure, which we did not verify.

The Labor Department ties the case to its own rule. Its proposed 29 CFR 2550.404a-6(k), published March 31, 2026 (91 FR 16088), would require the plan fiduciary to determine that each option “has a meaningful benchmark” and to compare risk-adjusted expected returns against it. It defines the term as “an investment, strategy, index, or other comparator that has similar mandates, strategies, objectives, and risks”, and the preamble cites the Ninth Circuit's Anderson opinion for it. It adds that there is “no presumption or preference against new or innovative designated investment alternative designs”. In our reading, the same words now do two jobs: a pleading hurdle for participants if the Ninth Circuit rule stands, and a process step for plan sponsors if the DOL rule is finalized. Our page on the DOL 401(k) alternative investments rule has the six factors, the status of the proposal and the funds a saver can buy; the proposal had no final rule under its regulation number as of November 3, 2026.

Source: Questions presented; Brief for the United States; Federal Register 2026-06178; our reading.

What a reader can do with this

The ruling will not change what sits in your account today. These steps do not depend on it.

• Find out what your plan's funds hold. Ask the plan administrator whether the target date fund or any other option holds hedge funds, private equity, private credit or real estate funds. The fund fact sheet and the participant fee notice list holdings, expense ratio and any limits on transfers or withdrawals.
• Compare cost and role, not just the past year. An option built to lower volatility may lag in a rising market by design, which is the point both sides argue over. Compare its expense ratio and its stated goal with a plain index fund before deciding how much to keep in it.
• Treat the numbers above as claims. A dismissed complaint is not proof of anything. Use the case as a prompt for the questions above, not as a verdict on Intel or on private assets.
• Watch two dates. The Supreme Court's decision, expected before the end of June 2027, and a final DOL rule, for which we found no published date. Our guide to alternative investments for $250,000 investors covers what the other options are, and the qualified purchaser vs accredited investor page covers who can buy private funds outside a plan.

The Supreme Court is deciding how much a 401(k) participant must plead about a comparison fund before a lawsuit over hedge funds and private equity can go forward.

FAQ

Sources, read and saved on November 3, 2026: the Supreme Court docket for No. 25-498 and No. 24-1030; the petition for certiorari and its appendix, which contains the Ninth Circuit's opinion of May 22, 2025 (137 F.4th 1015); the petitioners' merits brief (April 23, 2026) and reply (August 3, 2026); Intel's merits brief (July 2, 2026, corrected July 10, 2026); the Brief for the United States as amicus curiae (July 9, 2026); the brief of the American Investment Council and the Managed Funds Association (July 9, 2026); the official argument transcript of October 6, 2026 from supremecourt.gov; Federal Register document 2026-06178 (DOL, Fiduciary Duties in Selecting Designated Investment Alternatives, 91 FR 16088); and a Federal Register API search run November 3, 2026. Percent changes, day counts and sums are our arithmetic. Dollar figures about Intel's funds are allegations as described in the petition. This is analysis of public documents, not investment, legal or tax advice.