Compliance June 26, 2025

Senator Warren Wants Information About Empower’s Push Into Private Equity for 401(k) Plans

Democratic Senator Elizabeth Warren wrote to the company’s CEO, Edmund Murphy III, outlining concerns about the asset class and demanding details of the firm’s plans.

Reported by

Senator Elizabeth Warren, D-Massachusetts, requested answers from Empower Retirement LLC about plans the company announced to offer private equity investments to participants in its 401(k) plans.

In a June 18 letter addressed to Empower’s CEO, Edmund Murphy III, Warren outlined significant concerns about risks and the lack of oversight of private investments and questioned if the move serves the best interests of retirement savers. The letter included 13 specific questions, to which Warren requested answers by July 7.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Empower, which manages retirement accounts for nearly 19 million Americans, announced in May that it would begin offering access to alternative investments—including private equity and private credit—through the retirement plans it recordkeeps. But Warren, the ranking Democrat on the Senate Committee on Banking, said the investments are too risky to add in 401(k) plans.

“While you claim that this move will ‘help clients build secure and prosperous futures,’ there are many reasons to believe that the 19 million workers whose retirement funds you safekeep will be more at risk as a result of this partnership,” Warren stated.

Empower spokesman Stephen Gawlik acknowledged that the company received Warren’s letter and that it will respond to her.

In addition, Gawlik said via email about the plan to provide access to private markets for defined contribution plan investors, “this initiative is designed to provide individuals with access to a broader range of investment options, enabling them to further diversify their investment portfolios. Investment decisions will be made by plan fiduciaries following a prudent process as outlined in the law (ERISA). Empower believes in the importance of advice and risk mitigation for every investor. These new opportunities are offered under an advice model for plan participants and deliver the guardrails necessary to help an entirely new investor class access private investing.”

Warren also raised concerns about the firms with which Empower is partnering, including Apollo Global Management, Franklin Templeton, Goldman Sachs and others—all of which have faced enforcement actions and fines from federal regulators over the years for investor protection violations, according to the letter.

She also pointed to a recent Moody’s report that questioned the integrity and transparency of private funds targeting individual investors and noted that even major institutional investors like Yale University have begun offloading private equity holdings amid disappointing returns and market uncertainty.

Yale’s reported $6 billion sale of a portion of its private equity portfolio on the secondary market came as Republicans are targeting private universities’ endowment funds and threatened federal grants funding, which experts said indicated affected institutions would seek to access liquidity in their portfolios.

In May, a Yale spokesperson told CIO, a sister publication of PLANSPONSOR, “We remain committed to private equity investments as a major part of our investment program and continue to make new commitments to funds raised by our current investment managers. In addition, we continue to actively seek new relationships with private equity firms in the endowment.”

Warren’s letter asked a series of 13 detailed questions, requesting that Empower disclose how it evaluated the risks and benefits of offering private equity, the extent of its legal liability, its partnerships with asset managers and how it will protect investors moving forward.

“During a crisis or even momentary panic in the broader markets, private credit is more likely to experience liquidity freezes, inability to perform price discovery on their underlying assets, and lines of credit being terminated as traditional banks flock to safety,” Warren stated.

Products & Services June 25, 2025

Despite Fintech Advances, Users Remain Reluctant to Try New Products

A Nationwide survey also found that annuity sellers want a simplified suitability process and better digital tools for accepting and managing applications.

Reported by

Financial professionals who sell annuities are reluctant to change their software and financial technology systems or look for more options, according to a recent Nationwide survey.

The three most common types of software and fintech platforms used are planning software (73%), customer relationship management platforms (62%) and performance reporting software (56%), according to the survey conducted online by the Nationwide Mutual Insurance Co. and Zeldis Research.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Respondents said they mostly get access to these programs through their firms or third-party providers, according to the survey. More than half of those surveyed said CRM and specialized planning tools come from third parties, while compliance, forms management and fee billing platforms were the three most likely to be proprietary.

Despite significant fintech development, only 30% of survey respondents said they were extremely or very open to new software or fintech platforms; 45% said they were somewhat open, and 25% said they were only a little open or not at all open to changing platforms.

Even with the uptick in technology platforms usage, according to the survey summary, gaps remain in tasks those platforms do not adequately address. Financial professionals were asked what types of solutions would improve the annuity sales process for themselves and their customers. The three most common responses were a simplified suitability process (61%), accepting new business applications digitally (49%) and online capabilities to track pending business applications (38%).

Nationwide Aligning Business Structure

Craig Hawley, president of Nationwide Annuity, said in a statement that gaps in platform solutions that support the sale of annuities are an issue the industry is actively addressing and that “it’s one of the reasons Nationwide is configuring and integrating a new policy administration system” for its annuity business.

This new system will enable the company to improve both digital business tools and processes, as well as prioritizing simplicity and allowing a “more efficient experience” for its partners, according to Hawley.

Hawley also noted that financial professionals may not know that industry groups, including the Insured Retirement Institute, are working to shape and define the annuity industry’s digital standards. That lock of knowledge leads them to feel their concerns are not being addressed, according to Hawley. This belief was evident in the results of the survey, with two-thirds of respondents claiming they are “only somewhat or a little open to exploring new or additional Fintech platforms.”

By looking for and leveraging more digital tools, Hawley said financial professionals will be able to stand out and “create a more efficient and personalized” experience for their customers.

«