The U.S. Securities and Exchange Commission published remarks by Commissioner Mark T. Uyeda arguing that 401(k) and other defined contribution retirement portfolios should be able to include private investments to improve diversification, rather than defaulting to zero exposure. He framed broader access as contingent on clearer regulatory alignment between the SEC and the U.S. Department of Labor (DOL) under the Employee Retirement Income Security Act (ERISA), alongside changes to the ERISA litigation environment that he said discourages plan fiduciaries from considering private assets. Uyeda cited growing public-market concentration, including data that the top 10 companies in the S&P 500 account for nearly 40% of the index’s market capitalization, as strengthening the case for expanding the investment universe beyond public equities and fixed income. He pointed to potential diversification and risk-adjusted return benefits of private equity, private credit, venture capital, infrastructure, real estate and other private-market exposures, while noting practical challenges such as illiquidity, infrequent valuations, fee transparency, conflicts of interest and custody safeguards that would require fiduciary oversight and appropriate guardrails. The speech referenced the DOL’s 2020 information letter on private equity in defined contribution plans, subsequent 2021 supplemental guidance discouraging consideration of private equity, and the DOL’s August 2025 rescission of that supplemental statement, as well as President Trump’s August 2025 executive order on democratizing access to alternative investments for 401(k) investors. No SEC rulemaking or specific implementation timetable was announced; the remarks instead called for coordinated SEC-DOL work over the coming years and for ERISA litigation reforms modeled on elements of the Private Securities Litigation Reform Act to raise pleading standards for fiduciary-breach claims tied to private investment allocations.
U.S. Securities & Exchange Commission2025-11-20
U.S. Securities and Exchange Commission Commissioner Uyeda calls for opening 401(k) plans to private markets
SEC Commissioner Mark T. Uyeda advocated for including private investments in 401(k) and defined contribution portfolios to enhance diversification, contingent on SEC and U.S. Department of Labor regulatory alignment under ERISA. He highlighted private-market benefits and the need for fiduciary oversight and guardrails, calling for coordinated SEC-DOL efforts and ERISA litigation reforms. No specific SEC rulemaking or timetable was announced.