Update on 401(k) Alternatives: Supreme Court Chooses to Hear Intel and DOL Guidance Expected Imminently

As the new year gets underway, the landscape for alternative investments in 401(k) plans is rapidly evolving. This is a key time for asset managers to evaluate opportunities and take appropriate steps to join in the growing movement to create tangible options for 401(k) plan alternatives.

On January 13, 2026, the U.S. Department of Labor (“DOL”) submitted its proposed regulation entitled “Fiduciary Duties in Selecting Designated Investment Alternatives” to the Office of Management and Budget to implement President Trump’s Executive Order (the “Order”) on alternative investments in ERISA-governed defined contribution plans. (See our Alert here along with related podcasts here and here for further discussion.) The DOL’s submission arrives ahead of the 180-day timeframe originally imposed by the Order, which would not have elapsed until early February.

Shortly after the rule was submitted, on January 16, 2026, the U.S. Supreme Court agreed to hear an appeal from two former Intel Corporation employees in Anderson v. Intel Corp. Inv. Pol'y Comm., 137 F.4th 1015, 1021 (9th Cir. 2025) (“Intel”), which is the leading case to date on alternative assets in defined contribution plans. Regardless of the timing or ultimate outcomes, the combination of the rulemaking and the Supreme Court’s attention to this area is expected to accelerate awareness of alternatives for 401(k) plan sponsors. It is critical for asset managers to be prepared to answer questions on strategy and product offerings as prospective investors express interest.

The Supreme Court’s ruling in Intel will have important implications for the market for alternative assets in 401(k) plans as it addresses the question of whether a plan sponsor can be held liable for a breach of fiduciary duty as a result of including nontraditional investment strategies in the plan’s investment lineup. It is reasonable to expect the Court will seek to resolve the circuit split over whether, for claims predicated on fund underperformance, a plaintiff must allege a “meaningful benchmark” when pleading that an ERISA fiduciary failed to use the requisite “care, skill, prudence, or diligence” under the circumstances. Given the strength of the district court’s multiple opinions dismissing the plaintiffs’ allegations and the Ninth Circuit’s affirmance last year, the Court may take this opportunity to elaborate on those rulings and provide a potential roadmap for fiduciary decision-making processes that could limit plaintiffs’ ability to bring class action lawsuits based on alleged investment underperformance, whether those assets are traditional funds or alternative assets. Any ruling that could decrease the flood of class action lawsuits would be a welcome development for plan sponsors, and for asset managers, it could help alleviate the litigation risk that has imposed a significant hurdle to wider consideration of alternative investments by 401(k) plans.

Background of the Intel Litigation

The underlying dispute centers on claims that Intel’s fiduciaries breached their ERISA duty of prudence by allocating billions of dollars in retirement plan assets to custom target-date funds (“TDFs”) that provided exposure to hedge funds, private equity funds and other non-traditional investments starting in 2009. The plaintiffs alleged that this strategy was unprecedented: for example, by 2014, the Intel 2030 TDF had approximately 21% of its assets allocated to hedge funds, allegedly exceeding comparable TDFs offered to other defined contribution plans, which typically have little or no allocation to hedge fund investments.

The plaintiffs contend that this investment approach caused the Intel funds to underperform relative to comparable mutual funds while charging higher fees, leading plan participants to lose millions of dollars in retirement savings. The case has a lengthy procedural history, including a prior trip to the Supreme Court in 2020 (see our prior Alerts here and here for discussion), where the Court held that employers cannot shorten the six-year window for participants to file ERISA fiduciary breach claims by simply posting plan information online or sending disclosures in the mail.

The “Meaningful Benchmark” Standard at Issue

At the heart of the current appeal is whether ERISA imposes a “meaningful benchmark” requirement at the pleading stage for claims predicated on fund underperformance. In May 2025, the Ninth Circuit, in affirming dismissal of the plaintiffs’ claims, held that when an ERISA plaintiff alleges imprudence based on a theory that a prudent fiduciary in like circumstances would have selected a different fund based on cost or performance, that plaintiff must provide “a sound basis for comparison—a meaningful benchmark”—not just allege that costs are too high or returns are too low. The Ninth Circuit acknowledged that nothing in ERISA’s text explicitly requires such a standard but reasoned that the requirement was “implicit” in the statute’s standard of care. The court emphasized that the need for a relevant comparator with similar objectives is built into ERISA’s text, which defines the standard of care as that of a hypothetical prudent person “acting in a like capacity … in the conduct of an enterprise of a like character and with like aims.”

Circuit Court Disagreement and the Parker-Hannifin Connection

This case reaches the Supreme Court against a backdrop of significant circuit court disagreement. The Sixth Circuit, in Johnson v. Parker-Hannifin Corp., 122 F.4th 205 (6th Cir. 2024), held that imprudent-investment claims could proceed past the pleading stage without strictly requiring a “meaningful benchmark,” reasoning that the inquiry is “context-specific” and that a benchmark may be more or less important depending on the other allegations in the complaint. By contrast, in addition to the Ninth Circuit in Intel, the Seventh, Eighth and Tenth Circuits have adopted variations of the meaningful benchmark standard, requiring plaintiffs to provide a sound basis for comparison when alleging that a fiduciary acted imprudently in selecting investments. See Meiners v. Wells Fargo & Co., 898 F.3d 820 (8th Cir. 2018); Albert v. Oshkosh Corp., 47 F.4th 570 (7th Cir. 2022); Matney v. Barrick Gold of N. Am., 80 F.4th 1136 (10th Cir. 2023). The Supreme Court’s decision to grant certiorari in Intel suggests it intends to provide definitive guidance to resolve this circuit split.

The Supreme Court previously called for the views of the U.S. Solicitor General in the related Parker-Hannifin case. In December, the Solicitor General (joined by the DOL) voiced support for a robust pleading standard that requires a “meaningful benchmark for comparison” and cannot be based on conclusory comparisons to market index composites.¹ The Solicitor General’s stance aligns with the Trump administration’s efforts to ease regulation of retirement investments and encourage the inclusion of alternative assets in 401(k) plans. While the Solicitor General’s brief was filed in a different case, it would have informed the Supreme Court’s decision to grant review in Intel, as the Court was considering both cases at the same time, and the Solicitor General had advocated that the Court take review of the issue in order to resolve the conflict among the circuits.

Implications for Future ERISA Litigation

For plan sponsors and participants, the stakes of this decision are substantial. If the Court affirms the Ninth Circuit’s approach and endorses a strict meaningful benchmark requirement, it would make it significantly more difficult for participants to pursue ERISA claims challenging investment decisions beyond the pleading stage. Plan sponsors would benefit from a higher bar for plaintiffs, particularly in defending the selection of investment strategies that incorporate alternatives where truly comparable funds may not exist. However, the petitioners argue that such a categorical rule would be “incorrect and harmful” because it “has no basis in the statute, contravenes this Court’s precedent and immunizes fiduciaries from liability where they engage in reckless investment decision-making that no other investment professional would dare employ.” The Court has previously emphasized that the inquiry into whether a fiduciary breached ERISA’s duty of prudence “will necessarily be context-specific” and that “categorical” pleading rules are “inconsistent with the context-specific inquiry that ERISA requires.” If the Court rejects a strict meaningful benchmark requirement, it could open the door to more ERISA litigation and require plan sponsors to be prepared to defend their investment selection processes more robustly at earlier stages.

Practical Next Steps for Plan Sponsors and Alternative Asset Managers

Regardless of the ultimate outcome, plan fiduciaries should take steps now to ensure their investment selection processes are well documented and defensible. As lower courts have emphasized, ERISA fiduciaries are evaluated based on “whether the individual trustees, at the time they engaged in the challenged transactions, employed the appropriate methods to investigate the merits of the investment and to structure the investment,” not based on hindsight results.² Plan sponsors may be able to limit the ability of plaintiffs to challenge investment selections by proactively utilizing a comprehensive and diligent selection process, ensuring that investment selections are premised on the economic and financial interests of participants, and fully documenting the specific rationales for investment choices. Furthermore, while the meaningful benchmark standard has been a focus of this litigation, a Ninth Circuit’s concurrence in Intel emphasized that comparative allegations are not the only way to plead an imprudence claim—plaintiffs may also make direct allegations about flawed investment methods or processes. This underscores the importance of robust fiduciary processes that can withstand scrutiny regardless of how the Supreme Court rules on ERISA pleading standards.

For alternative asset managers seeking to enter the 401(k) plan marketplace, the combination of potentially helpful guidance from the Supreme Court along with any regulatory clarifications the DOL provides in its forthcoming rulemaking could significantly affect plan sponsor perspectives on alternatives. At the same time, Congressional interest in strengthening the pleading standards for lawsuits brought under ERISA³ and the DOL’s use of amicus briefs to articulate a more plan sponsor-favorable perspective generally aligns with the Order’s directive to “prioritize actions that may curb ERISA litigation that constrains fiduciaries’ ability to apply their best judgment in offering investment opportunities to relevant plan participants.” All of these developments should help to accelerate the emerging trends in this space.

If you would like to discuss the impact of these developments on any aspect of your business, please reach out to any of the below authors or your regular Ropes & Gray advisor. 

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Upcoming Events on Alternatives in 401(k) and CITs

Join the co-leaders of Ropes & Gray’s collective investment trust (“CIT”) practice for an in-depth, interactive event exploring the expanding role of CITs in 401(k) plans. Please register for either event in Boston (Thursday, January 29, 2026 at 4 p.m.) or New York (Thursday, February 5, 2026 at 4:30 p.m.), which will feature a substantive presentation followed by a cocktail networking reception, offering attendees the opportunity to connect with peers and discuss the latest trends and strategies shaping the retirement plan landscape. The co-leaders will explore the following topics:

• The expanding role of CITs and their integration with private and registered fund offerings
• Key market developments and what they mean for asset managers
• Strategies for accessing new sources of capital within the 401(k) plan ecosystem
• Best practices for navigating challenges and maximizing opportunities