Private Market Investments in Defined Contribution Plans

This report presents findings from a survey conducted by Empower regarding the perspectives of plan sponsors on incorporating private market investments into defined contribution plans. The survey involved 205 private-sector 401(k)/403(b) benefits administrators in the U.S. and highlights that 99% of U.S. companies are privately held. The report outlines that a significant majority of plan sponsors (98%) have a high to moderate understanding of private market investments, with 54% anticipating participant enthusiasm for these options. Key drivers for adoption include talent retention, return potential, and portfolio diversification. The report also discusses the essential role of advisors and consultants in evaluating and implementing these investments, with 72% of plan sponsors already engaging them. Challenges such as complexity and the need for regulatory guidance are noted, with 96% of plan sponsors likely to add private market investments if such guidance is clarified. The findings aim to inform stakeholders about the current landscape and considerations surrounding private market investments.