Two things are converging on your 401(k) menu this fall, and the retirement industry is watching both. Neither has finished yet, which is exactly why the details are worth understanding before the marketing arrives.
On March 30, 2026, the Department of Labor proposed a process-based safe harbor for ERISA fiduciaries choosing the investment options on a participant-directed plan menu. Comments closed June 1, and a final rule is on DOL's regulatory agenda for late 2026. On October 6, 2026, the Supreme Court is scheduled to hear Anderson v. Intel Corp. Investment Policy Committee (No. 25-498) — a case about whether a participant suing over an underperforming fund must plead a "meaningful benchmark" to get past a motion to dismiss. The Intel case involves custom target-date funds that routed substantial assets into hedge funds and private equity.
Together, they determine how easily alternatives land in 401(k) plans, and what recourse you have afterward.
What the Proposal Actually Grants
The safe harbor is procedural, not substantive. A fiduciary who "objectively, thoroughly, and analytically" considers six factors earns a presumption that the duty of prudence was satisfied, and significant deference from a court. The six factors:
| Factor | What the fiduciary must weigh |
|---|---|
| Performance | Risk-adjusted expected return, net of fees |
| Fees | Reasonableness versus comparable options — not lowest cost |
| Liquidity | Enough to support participant transactions and plan operations |
| Valuation | Timely, accurate, independent pricing |
| Benchmark | A meaningful comparator for risk-adjusted returns |
| Complexity | Whether the fiduciary understands it, and hires help if not |
Notably, the proposal sets no allocation cap, no liquidity percentage floor, and no limit on the share of plan assets that may sit in alternatives. It also states plainly that fiduciaries need not select the cheapest option or chase the highest return, and it supports a 10-year lookback rather than short-term results.
The Carve-Out That Matters Most
The safe harbor covers selection only. The proposal expressly does not extend to a fiduciary's ongoing obligation to monitor an investment after it joins the menu — DOL says it will address monitoring separately.
That gap is the point. Selection is a single decision made before you ever own the fund. Monitoring is where a fund drifts, where fees compound, where a private-market valuation stops matching reality — and historically where most ERISA liability lives. The safe harbor also does not cover the duty of loyalty, the prohibited transaction rules, or curation of the menu as a whole.
DOL's stated motivation is litigation pressure: more than 500 ERISA lawsuits since 2016 and over $1 billion in settlements since 2020. Currently only about 4% of DC plans offer alternatives, holding roughly 0.1% of DC plan assets.
Practical Takeaways
- Check your target-date fund, not just the menu. The likeliest delivery vehicle is an alternatives sleeve inside a TDF or managed account — a default you may already hold without choosing it.
- Read the fee disclosure for layering. DOL's favorable example describes managers who internalize underlying fees into a single flat asset-based fee. Stacked fees are the alternative.
- Ask how the fund is valued and how often. Private assets don't have closing prices. Valuation cadence drives what your balance actually means.
- Treat "no liquidity floor" literally. Reduced liquidity is permitted if the fiduciary judged the tradeoff worthwhile. That judgment was theirs, not yours.
- Nothing is final. Neither the rule nor the Intel decision has landed. Don't let a sales pitch describe either as settled law.
Sources: U.S. Department of Labor / EBSA proposed rule (March 30, 2026); Morgan Lewis; Latham & Watkins; Gibson Dunn; Alston & Bird; SCOTUSblog (Anderson v. Intel, No. 25-498); NAPA-Net.