Private assets in 401(k) plans draw rising interest from savers

More than half of Americans participating in workplace retirement plans say they would invest in private assets if given the chance – a share that has grown sharply over the past two years and is now reshaping how asset managers, plan sponsors, and advisors think about defined contribution plan design.

According to the Schroders 2026 U.S. Retirement Survey, 52 percent of participants in 401(k), 403(b), and 457 plans say they would invest in private equity and private debt if their employer plan provided access.

That is up from 45 percent in 2025 and 36 percent in 2024, according to the survey, which was conducted by research firm 8 Acre Perspective among 1,500 U.S. investors ages 30 to 79, including 615 workplace retirement plan participants, between March 20 and April 15, 2026.

The findings arrive at a pivotal moment for the defined contribution industry. In March 2026, the Department of Labor proposed a regulation that would establish a set of “safe harbors” for plan fiduciaries to use when selecting alternative investment options – a move hailed by many in the industry as a critical step toward bringing private markets into the retirement mainstream.

The case for inclusion 

The survey found that 78 percent of plan participants believe private assets can improve 401(k) portfolios through diversification, while 77 percent say they offer a pathway to greater investment returns.

Perhaps most telling of the growing momentum: 42 percent of participants now expect private assets to be available in their retirement plan within the next five years, up from 30 percent in 2025.

Crucially for plan sponsors weighing the business case, the data suggests private asset access could do more than shift how participants invest — it could change how much they save. Among the 52 percent who said they would invest in private assets if offered, 81 percent said they would increase their overall contribution rate as a result, up from 77 percent in 2025.

“As private asset education has become more widely available, awareness of the asset classes’ performance, diversification potential, and resilience has grown among retirement savers seeking to build portfolios that can withstand the test of time and multiple market cycles,” Deb Boyden, Head of U.S. Defined Contribution at Schroders, in New York, told InvestmentNews.

Among those who say they would allocate to private assets, intentions are measured rather than aggressive. Nearly half (49 percent) would put less than 10 percent of their retirement savings into private markets; 39 percent would allocate between 10 and 15 percent; and just 7 percent would go beyond 15 percent. Five percent said they were unsure.

Participant enthusiasm meets a knowledge gap

Despite the rising interest, the survey surfaces a persistent challenge for the industry: most retirement savers still do not fully understand what private assets are.

Just 23 percent of plan participants consider themselves very knowledgeable about private assets, though that figure is nearly double the 12 percent who said so in 2025. Another 40 percent describe themselves as somewhat knowledgeable, while 26 percent say they are not too knowledgeable and 11 percent say they are not knowledgeable at all.

Deloitte has warned that retail investors may not fully understand the risks attached to private assets, including limited liquidity, lower transparency, and valuations that have not been stress-tested through a sustained downturn.

Boyden acknowledged that rising demand places a clear responsibility on the industry. “Increased demand for private assets among plan participants puts the responsibility on plan sponsors and asset managers to make sure retirement savers fully understand what the asset class is and how it fits into a long-term retirement savings strategy,” she said.

For advisors working with plan sponsors, that educational gap may represent a meaningful opportunity and an obligation.

A July 2025 poll of 237 advisors by Empower found that 68 percent already use private market assets in high-net-worth or wealth-advised accounts, and 58 percent of those familiar with private markets said they would recommend them in defined contribution plans – a figure that rose to 75 percent among those also serving pension or defined benefit plans.

Structure and professional oversight will shape rollout

Even as participant interest builds, Boyden was quick to draw a line between individual enthusiasm and how private assets would actually be delivered within defined contribution plans.

“When private assets are offered by defined-contribution plans, they will likely be included in professionally managed solutions, such as managed accounts or multi-asset solutions,” she said. “This framework ensures that professional portfolio managers, not participants, will choose the specific allocations to privates.”

That structural point matters in light of growing debate among advisors about fiduciary obligations when introducing alternative investments into retirement menus. The DOL’s proposed safe harbor framework, issued in March 2026, is designed to give plan fiduciaries greater clarity on that question.

Boyden also pointed to Schroders’ evolving position in the defined contribution space as context for the firm’s investment in this research.

“The investment industry understands that when offering access to private markets, the strategies need to be tailored to the needs of DC plan sponsors and their participants,” she said. “Schroders’ venture with Apollo, as well as Schroders’ recent combination with Nuveen, greatly expand the resources our firm has to help meet these DC-specific needs.”

Deloitte estimates that private capital allocations within 401(k) and 403(b) plans could reach 6 percent of total plan assets by 2030, translating to more than $1 trillion – a projection that underscores just how much is riding on whether the industry can close the education gap before the assets begin to flow.

Advisors and plan consultants navigating this landscape may also want to review how the private equity fee debate is shaping 401(k) product development as well as what Cerulli and DCALTA found when they challenged long-held myths about private markets in defined contribution plans.