The Supreme Court heard arguments this week in a case that could determine whether your employer keeps offering private equity and hedge funds in your 401(k) — or pulls them entirely to avoid legal trouble.
The case stems from a 2019 lawsuit by a former Intel employee who claims the company’s retirement plan lost money by investing in underperforming private funds. Legal experts say the justices’ decision could make employers so nervous about similar lawsuits that they abandon alternative investments altogether, even if those investments might help workers build bigger nest eggs.
Employers Frozen While Awaiting Court Decision
Companies across America have put 401(k) changes on hold while they wait to see how the Supreme Court rules, according to Elizabeth Hopkins, an ERISA attorney who worked as a senior trial attorney at the Labor Department. She filed a brief in the case on behalf of former top DOL officials.
“I think companies want to know what’s going to happen with the proposal and what’s going to happen with the Supreme Court case before they go rushing in to change their investment strategies,” Hopkins said.
The uncertainty comes as the Labor Department is also finalizing new rules on alternative investments in retirement accounts. Many plan sponsors are waiting for both the court ruling and the federal regulations before making any moves.
Why Private Investments Matter for Retirement
Private equity and hedge funds typically aren’t available to regular investors. Getting access through a 401(k) could let workers invest in the same type of assets that have made billions for wealthy families and university endowments.
But the Intel lawsuit claims these investments can underperform traditional stocks and bonds while charging higher fees. If the Supreme Court sides with the Intel employee, employers may decide the legal risk isn’t worth it — even if some workers would benefit from the additional options.
The asset management industry is already preparing new private investment products for 401(k) plans, betting that employers will want to offer them once the legal and regulatory landscape clears. But right now, most companies are sitting tight, unwilling to risk becoming the next defendant in a costly retirement plan lawsuit.
Key Points
- Supreme Court heard arguments in lawsuit claiming Intel’s 401(k) lost money on private investments
- Employers waiting for ruling before adding or removing alternative funds from retirement plans
- Decision could determine whether workers get access to private equity through workplace accounts
https://www.cnbc.com/2026/10/10/supreme-court-case-401k-private-funds-intel.html – October 10, 2026
