Media spotlight: Coverage examines risks of private equity in 401(k)s

As the Department of Labor moves closer to finalizing new rules on private equity and other alternative investments in 401(k) retirement plans, recent media coverage has highlighted growing questions about performance, fees, transparency, and fiduciary risk. In reporting across outlets, journalists have cited research and warnings from the Private Equity Stakeholder Project as they examine whether private equity belongs in retirement plans for everyday workers.

Pensions & Investments

Pensions & Investmentshighlighted growing scrutiny of efforts to expand private equity access in 401(k) plans as the Department of Labor prepares to release new guidance. The coverage focused on whether private equity investments are appropriate for defined contribution plans, given concerns around performance, fees, and fiduciary responsibility.

The outlet cited PESP research finding that private equity “evergreen” funds marketed to everyday investors have lagged public stock market returns while charging significantly higher fees. Pensions & Investments also noted that public pension funds are reassessing private equity exposure amid weaker performance and liquidity concerns, reinforcing the disconnect between institutional investor behavior and the push to expand private equity access for individual savers.

“PESP opposes any safe harbor that would weaken fiduciary protections for retirement savers,” said Matt Parr, communications director at the Private Equity Stakeholder Project. “At a minimum, the Department of Labor should hold private equity to the same disclosure and transparency standards expected in public markets, including clear reporting on what funds are investing in, the fees and expenses retirement savers are paying, the amount of debt funds are using, and how these investments are actually performing compared with stocks.”

The Wall Street Journal

In its private equity newsletter,The Wall Street Journal examined the performance of private equity evergreen funds as policymakers consider changes to retirement plan rules. The newsletter reported that only one of the 15 large evergreen funds analyzed by PESP outperformed a broad public equity benchmark, while the median fund delivered substantially lower returns.

The Journal referenced PESP’s analysis to underscore concerns that private equity products being pitched to individual retirement savers may not deliver the superior returns often promised by the industry, adding performance data to the broader debate over whether such investments belong in 401(k) plans.

Bloomberg Law

Bloomberg Lawexamined the Department of Labor’s pending rule through the lens of fiduciary liability and industry efforts to secure safe harbor protections for private equity investments in 401(k) plans. While the coverage was not focused exclusively on PESP’s research brief, it addressed many of the same issues raised by PESP, including transparency, accountability, and risk.

The article cited warnings from PESP that broad safe harbors could weaken fiduciary standards and shield private equity firms from scrutiny.

PESP executive director Jim Baker warned that providing safe harbor protections for private equity could insulate firms from accountability while shifting more risk onto workers saving for retirement.

401(k) Specialist

Coverage in 401(k) Specialist focused on what the Department of Labor’s forthcoming rule could mean for employers, plan sponsors, and fiduciaries responsible for selecting investment options in defined contribution plans. The outlet examined the growing push from private equity firms to gain access to 401(k)s and the regulatory changes that could make that easier.

The story referenced PESP’s research on private equity performance and fees as part of a broader discussion about whether plan sponsors can adequately evaluate complex private equity products.

“Private equity firms are pitching these products as opportunities for everyday workers, but the data suggests that some of these funds have lagged the stock market while charging fees that can significantly erode retirement savings over time,” said Jim Baker, executive director of PESP.

Ohio Capital Journal

Regional coverage in the Ohio Capital Journal connected the national debate over private equity in 401(k)s with trends among public pension funds. The outlet reported that several Ohio pension systems have reduced their private equity allocations, citing performance concerns, high fees, and liquidity risks, even as the Trump administration pushes to expand private equity access for individual retirement savers.

The article referenced PESP’s analysis and warnings to highlight the contradiction between institutional investors pulling back from private equity and policymakers considering changes that could steer everyday workers’ retirement savings into the same asset class.

Looking ahead

As the Department of Labor prepares to finalize its rule, the coverage reflects heightened scrutiny of efforts to expand private equity access in 401(k) plans. With performance lagging, fees remaining high, and public pension funds pulling back, questions about whether private equity belongs in retirement plans for everyday workers continue to grow.