THINK TANK
An Occasional Series How to Give Financial
panies with more than $100 million are not publicly listed. They operate entirely outside the
Security to All Retirees Private equity outperforms the average 401(k) by almost 90%, yet private sector workers are locked out.
reach of a 401(k). The growth happening in those businesses — the innovation, the job creation, the wealth creation — fl ows not to American workers saving for retirement, but to institutional inves- tors and the few, wealthy accredited investors. This is the fundamental inequality
at the heart of retirement policy. Public pension funds — the retirement vehicles for government employees — have long invested in private markets. Today, 89% of public pension funds
hold private equity, with roughly 14% of their total assets allocated to pri- vate equity, according to the American Investment Council pension survey. Private sector workers saving
through 401(k)s are largely locked out, restricted by regulations written for a diff erent era and a diff erent market.
THE SOLUTION: BROADEN THE RULES GOVERNING 401(K) PLANS
by carrie sheffield
THE ISSUE: RETIREMENT SECURITY IS A DEFINING CHALLENGE OF OUR TIME
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illions of Americans work for decades, faithfully saving from every paycheck into
401(k)s. Unfortunately, the system includes gaps in investment access, costing workers tens of thousands of dollars — if not more — in lost retire- ment income. Private equity outperforms the
average 401(k) by almost 90%. Pri- vate equity is an asset class that public pension funds and wealthy investors use to beat returns avail-
42 NEWSMAX | MAY 2026
able to everyday Americans. President Donald Trump wants
to change this by expanding 401(k) investment options to include private markets. It’s an overdue reform.
HOW WE GOT HERE Over the past 30 years, the number of publicly traded companies decreased nearly by half. That means the universe of invest-
ments available inside a traditional 401(k) — largely limited to stocks list- ed on public exchanges — is shrink- ing, just as the demand for retirement savings grows. Meanwhile, more than 80% of com-
for private equity, private credit, real estate, and infrastructure within ordi- nary workers’ 401(k) accounts — stan- dard practice for large, institutional public pension investors for decades. The question is not whether these
T
assets belong in retirement portfolios. The evidence is overwhelming that they do. The question is why working Amer-
icans were excluded for so long. The fi nancial case for reform is compelling. Data from the American Investment Council covering 2013 to 2023 show private equity delivered an average annual return of 15%, com- pared to 10% for public equities and just 8% for the average 401(k). Private real estate also returned
10%, while bonds lagged at just 2%. That gap in returns, compounded
rump issued an executive order for the Department of Labor to review these regu- lations, opening the door
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