The Supreme Court appears to be leaning toward a ruling that could smooth private equity's path into Americans' 401(k) retirement accounts.

The nation's highest court on Tuesday heard arguments in a case, Anderson v. Intel, over when an employee can sue an employer for putting risky or unwise investments into the company retirement plan.

The plaintiff, a former Intel employee, accused the company of violating its fiduciary duty by including private equity and hedge funds in its defined-contribution retirement plan, and alleged these investments performed worse than standard equity funds would have.

Tuesday's Supreme Court debate hinged on whether a plaintiff needs to show underperformance versus an appropriate benchmark for a suit to survive a motion to dismiss. Several members of the court appeared to endorse the U.S. Appeals Court ruling last year dismissing the lawsuit.

Justices Samuel Alito, Ketanji Brown Jackson and Elena Kagan were among the justices who expressed puzzlement at aspects of the plaintiff's argument. Some justices also rejected the idea that underperformance alone gives 401(k) plan participants grounds to sue.

"Whether a particular strategy is reasonable or not cannot be judged based on how that strategy performed in one particular instance," said Justice Alito.

Several court members suggested that alleging damages without a benchmark was like comparing "apples and oranges." Kagan said the lower court's dismissal of the suit seemed like "a pretty reasonable decision."

The court has no set date to issue its ruling but typically does so in June or July.

That decision could be crucial for Wall Street's efforts to put alternative assets such as private equity and hedge funds into defined-contribution retirement plans. Private-fund managers have for years sought to get access to a portion of the $15 trillion held in defined-contribution retirement accounts such as the 401(k).

Adding alternative investments to these accounts is legal, but virtually no companies do so. Lawyers say the main impediment is the threat of class-action lawsuits against employers who offer them.

A Supreme Court ruling in favor of the plaintiff could make it easier to bring class-action lawsuits against employers for offering alternative investments in 401(k) plans. A judgment for the defendants could tighten the standards for bringing such suits.

Wall Street industry groups have lined up on Intel's side. Lobbying groups for the private-equity and hedge-fund industries were among the business groups that asked the court to affirm the appeals court's ruling tossing the suit.

The American Investment Council, the largest trade group for private equity, said in a July amicus brief that the threat of "nuisance suits" prevents companies from offering "new or unique" approaches to 401(k)s, and asked the Supreme Court to uphold the lower court's dismissal.

The Trump administration -- which has prioritized opening 401(k) accounts to alternative assets -- also supported the lower court's decision. Aimee Brown, an assistant to the solicitor general of the Justice Department, argued Tuesday that the underperformance of Intel's funds "doesn't suggest that Intel's fiduciaries were imprudent."

Others have urged the court in the opposite direction. Nonprofits AARP, the Pension Rights Center and Better Markets said that the appeals court ruling magnifies "workers' inability to protect themselves from such imprudent investment choices" as private equity, and that upholding the ruling would make it virtually impossible to bring a case against an irresponsible retirement-plan manager.