A new Empower survey has made some waves in the retirement plan industry. According to their July 2025 survey, a striking 68% of advisors already use private market investments—things like private equity, private credit, and private real estate, mostly in high-net-worth or wealth-advised accounts. More surprising is that 58% of those advisors would recommend private markets within retirement plans. Among advisors with pension or defined benefit experience, that number jumps to 75%. Overall, 43% of advisors are open to the idea.
On its face, this looks like momentum. Edmund F. Murphy III, Empower’s CEO, framed it as aligning the U.S. defined contribution system with the global investing universe, where private markets are hardly niche. The survey points to diversification (62%), higher return potential (48%), and lower correlation to public markets (48%) as the perceived benefits. The challenges—liquidity (68%), fees (48%), and complexity (33%)—are exactly the reasons I’ve always been skeptical about shoehorning private equity into 401(k)s.
I’ve been around this business long enough to know that plan participants already struggle with traditional investments. Too many chase performance, too many cash out at the wrong time, and too many don’t diversify properly. Adding illiquid and opaque private investments to that mix is like handing matches to someone who already leaves the stove on. The professionals in pension funds may have the sophistication and governance structure to handle private markets, but average 401(k) participants and their plan committees? That’s another story.
The survey also shows that 66% of advisors would be more inclined to recommend private markets if ERISA and the Department of Labor provided greater regulatory clarity. Translation: advisors want the legal cover before they stick their necks out. And that’s fair. Plan sponsors live under the constant threat of fiduciary liability, and the risk of litigation grows exponentially when you add complexity.
Empower isn’t just floating ideas—they’ve already moved. Back in May 2025, they launched a program offering access to private investments through seven major asset managers via collective investment trusts (CITs). The structure is designed to address liquidity and fees while offering limited exposure. It’s a landmark initiative, and if it succeeds, it could change the shape of the retirement plan investment menu.
But here’s the thing: private markets are not a magic wand. Yes, they offer diversification and potential returns, but they also come with higher fees, opaque pricing, and limited liquidity. Defined benefit plans can absorb those risks because they pool assets and make decisions centrally. Defined contribution plans, by their very nature, push decisions down to individuals. And when individuals make bad investment decisions, they pay the price, not the plan.
To me, the jury is still out. Private markets may have a place in retirement plans, but that place needs to be small, carefully monitored, and overseen by fiduciaries who truly understand what they’re buying. Without that, private equity in a 401(k) isn’t diversification—it’s a liability waiting to happen.
As with most things in this business, good intentions are never enough. The road to litigation is paved with them.
