The Appeal of—and Concerns About—Private Markets in DC Plans

Eric Henon

As the U.S. Department of Labor and other regulators hash out a new framework on alternative investments for fiduciaries, how do retirement plan advisers view the inclusion of private market assets in defined contribution plans? The Retirement Advisor Council surveyed 69 members from November 7 through December 6, 2025, and they expressed growing awareness of and interest in—as well as continuing caution of—alternative investments.

When identifying the types of plans most suited to include private markets, plan adviser respondents clearly held that one size clearly does not fit all.

Private Equity Is the Biggest Draw

Among alternative asset classes, private equity was of greatest interest, with 67% of respondents saying they would be interested in evaluating it for retirement plans. Roughly half of respondents were interested in private market debt (53%) and private real estate (47%). There was less interest in digital assets (41%), commodities (30%) and infrastructure investments (20%).

Overwhelmingly, responding advisers expected private market assets to be introduced to DC plans through professionally managed, multi-asset products, such as managed accounts (75%), off-the-shelf target-date funds (60%) or custom asset allocation funds (60%). In very sharp contrast, only 5% said they anticipated private market investments as a core menu option.

Liquidity Is the Greatest Concern

When asked what plan sponsors or advisers should take into consideration as they explore potential use of private market assets, liquidity was of paramount importance, cited by 42%, followed by cost/fees (26%), risk (22%), transparency or valuation (15%), and participant education or communication (14%).

Respondents said the clearest ways to determine how suitable private market investments might be for a given retirement plan were the degree of investment knowledge and sophistication of the plan participants. Accordingly, they identified the most suitable candidates among DC plans as larger plans with more stable participant bases, well-established investment committees, strong governance frameworks and participants with high levels of financial literacy.

At the other extreme, respondents identified plans for which private assets are seen as least suitable as smaller, resource-constrained plans with high turnover and limited financial literacy among participants.

Learning More

Despite their interest, most advisers surveyed claimed to have only a working-level understanding of private assets. Asked who they would rely on for help on private market products, the most common responses were their firm’s investment team or chief investment officers (54%), their team’s investment analyst (20%) and an investment manager (10%).

Respondents had strong interest in learning more, potentially through webinars, conferences and white papers that translate institutional investing concepts into DC-appropriate frameworks. Overall, 56% of respondents said they were either “very interested in learning more” (42%) or “extremely interested and eager to engage” (14%). Another one-third said they are somewhat interested, and only 12% reported being neutral or uninterested in learning about private investments.

6 Steps to Move Forward

Advisers said they expect plan sponsor inquiries to increase modestly once the DOL issues safe harbor guidance. While such guidance would provide regulatory clarity, respondents said it would not lead to widespread adoption, as many concerns still need to be addressed.

The RAC recommended six practical steps for plan advisers and fiduciaries to consider as private market assets continue toward increased adoption:

• Focus on education to close internal gaps in knowledge;
• Consider including private market assets within managed solutions, not as core, stand-alone menu options;
• Enhance transparency related to liquidity, fees and valuation of assets;
• Strengthen plan governance through updates of investment policy statements and ongoing investment committee education;
• Monitor regulatory developments, such as DOL safe harbor guidance and potential SEC and IRS rules, and align internal processes and compliance early; and
• Prepare to improve plan participant education and awareness of the role of private market assets within a diversified portfolio.

Private markets represent an evolutionary—not revolutionary—development in defined contribution investing. For well-governed plans with appropriate scale, private markets may incrementally expand opportunity sets and diversify sources of return. Success, however, will depend far more on governance discipline and education than on regulatory changes alone.

Eric Henon is the founder of the Retirement Advisor Council and the consulting firm EACH Enterprise. He has more than 25 years of experience in retirement plans, financial wellness and Human Capital Management / Payroll services.