The Department of Labor would examine rules affecting more than 90 million Americans in employer-sponsored defined contribution plans, potentially allowing private equity, private credit, real estate and infrastructure investments.
Supporters say traditional 401(k)s are constrained by a shrinking public market, while cited data show private equity returned 15% annually from 2013 to 2023 versus 8% for the average 401(k).
The move aims to address fiduciary and litigation concerns that critics say have limited innovation, amid debate over transparency, risk and whether broader access could improve long-term retirement security.
With private credit defaults rising, is it wise to open 401(k)s to these riskier, less-transparent assets?
Can 401(k) plans handle illiquid private assets without creating 'valuation chaos' and trapping savers' emergency funds?