The Supreme Court hears the case that decides whether 401(k)s can safely hold private equity

The US Supreme Court hears oral argument in Anderson v. Intel Corporation Investment Policy Committee (No. 25-498) on October 6, 2026, having granted certiorari on January 16, 2026. The question is whether a retirement-plan participant who claims a fund was imprudent because it underperformed must point to a “meaningful benchmark” — a comparable investment with similar goals and strategy — to get past a motion to dismiss. The Ninth Circuit affirmed dismissal of the claims against Intel.

The plaintiffs challenged custom target-date and diversified funds in Intel’s 401(k) that, by the end of 2013, held up to 36.71% in alternatives including private equity, hedge funds and commodities; Intel described the allocation as a post-2008 risk-mitigation strategy measured against custom benchmarks.

On July 10, 2026 the Labor Department filed an amicus brief supporting Intel, stating that “ERISA is a law of process, not results”, and the Solicitor General was granted time at argument. The US Chamber of Commerce, the American Investment Council and the Investment Company Institute also filed briefs.

The case sits beside a regulatory track. An August 7, 2025 executive order directed agencies to widen 401(k) access to alternative assets, and on March 30, 2026 the Labor Department proposed a process-based safe harbor for fiduciaries selecting such investments, weighing performance, fees, liquidity, valuation, benchmarks and complexity; comments closed June 1, 2026. The department cites $13.8 trillion in job-based retirement assets covering about 156 million workers.

As of the September 25, 2026 close, Blackstone (BX, $118.42) was 32.8% below its one-year high, KKR ($96.67) 32.3%, Apollo ($121.69) 20.3%, Ares ($122.01) 31.6%, TPG ($44.39) 36.3% and Blue Owl ($9.32) 47.5%.

Opportunity

The obvious reading is that “private equity in 401(k)s” is an old, fully told story: the executive order and the rule proposal were headline news, and every alternative manager has a retail and retirement slide in its deck. What the story usually skips is why plan sponsors have not moved. The binding constraint is not permission — alternatives have been legal in defined-contribution plans for years — but the fear of being sued the first time a private-asset sleeve lags a cheap index fund. Intel’s plan is the case that turned that fear into precedent-in-waiting.

A rule protects the process a fiduciary follows; a Supreme Court pleading standard decides whether a lawsuit survives long enough to become expensive. If the Court requires plaintiffs to name a like-for-like benchmark, a private-markets sleeve judged against other private-markets sleeves becomes hard to attack on returns alone, which is the scenario employers’ lawyers have been waiting for. The Labor Department is arguing that side, and a final safe harbor would stack on top of it.

Hypothesis: the alternative managers have been de-rated on private-credit worries and on rates, with the 30-year Treasury at its highest yield since 2004 on September 24, 2026, while the one development that could turn the defined-contribution channel from a slide into flows — removal of the litigation brake — has a dated hearing and a government brief on its side. The biggest beneficiaries may not be the headline managers but the firms that run the target-date wrappers and the valuation and administration plumbing a daily-priced private sleeve requires.

How it could play out

October 6 argument signals a majority for a meaningful-benchmark requirement → a ruling for Intel by June 2027, possibly alongside a final Labor Department safe harbor → large employers and recordkeepers approve private-asset sleeves inside target-date defaults → steady, fee-rich inflows that do not redeem in a downturn → re-rating of managers with ready-made defined-contribution products and of the valuation, administration and target-date providers that sit between the manager and the participant.

The failure path: the Court sides with the plaintiffs or rules narrowly on pleading mechanics, and sponsors stay on the sidelines regardless because fee and liquidity scrutiny remains.

Questions worth asking

• Does the October 6 argument signal a majority for the meaningful-benchmark standard, and would a ruling for Intel actually change behaviour at the largest plan sponsors, or do fee and liquidity concerns keep them out anyway?
• Which target-date and collective-trust providers already have private-market sleeves filed and ready to switch on, and how much of the fee goes to them rather than to the underlying manager?
• Daily valuation of private assets is one of the safe-harbor factors: who supplies independent valuation and fund administration at that scale, and are any of them listed?
• Which managers have the evergreen, semi-liquid vehicles suited to a daily-dealing 401(k) sleeve, and which depend on closed-end drawdown funds that do not fit?
• When does the Labor Department’s final rule reach OMB review, and could it land before the Court rules?

Where to look

• Blackstone (BX) — largest alternative manager with semi-liquid retail vehicles already at scale
• Apollo (APO) — has partnered with State Street on a target-date product that includes private assets
• KKR (KKR) and Blue Owl (OWL) — both have publicised defined-contribution partnerships and trade well below their highs
• Partners Group (PGHN.SW) — long-running evergreen private-markets funds suited to daily-dealing structures
• State Street (STT) and BlackRock (BLK) — target-date managers that decide whether the default fund carries a private sleeve
• SS&C Technologies (SSNC) — fund administration and valuation plumbing for private vehicles
• Houlihan Lokey (HLI) — one of the largest independent valuation-advisory practices for illiquid assets

Thesis check

The chain is well-sourced: a dated Supreme Court argument, a government brief on the defendant’s side, a pending federal safe harbor and an asset pool of $13.8 trillion, against a group of listed managers that has sold off hard in 2026.

The weak link is behavioural and slow. Even a clean win for Intel only lowers one barrier; plan sponsors also worry about fees, liquidity and headlines, the ruling may not come until June 2027, and any flows would build over years, so the market may treat the decision as a non-event for near-term earnings at Blackstone, KKR or Apollo.

Sources

Supreme Court October 2026 argument calendar · SCOTUSblog case page, Anderson v. Intel (25-498) · US Department of Labor, Jul 10 2026 · PLANSPONSOR, Jul 13 2026 · US Department of Labor, Mar 30 2026 · Federal Register, Mar 31 2026 · CNBC, Sep 24 2026 · Alston & Bird, Apr 2026