Trump Wants Private Equity for 401(k)s. Voters Agreed.

The introduction of private equity in 401(k) accounts is a controversial and highly controversial initiative of the Trump administration.

A new poll suggests, however, that most upper-class Americans seem to favor the idea.

Two-thirds of registered voters support policies that expand access to private investments in retirement plans, according to a survey from BlackRock, the world’s largest asset manager.

About the same share, 64%, thinks all retirement plans should allow the same investment options, the survey found. BlackRock conducted a survey of 1,000 registered voters in January.

401(k) retirement savers get access to private stocks

In the past, the private equity investment world was dominated by wealthy investors, endowments and pension funds.

That is changing. Last summer, BlackRock announced it would offer a target-date 401(k) retirement fund that includes private equity investments, with a launch date later this year. Empower, another retirement giant, is doing the same. Some 401(k) providers are learning this idea.

In an executive order dated August 2025, President Donald Trump gave a big boost to private equity and other “alternative” investments in retirement plans.

“It is the policy of the United States that every American preparing for retirement should have access to funds that include investments in other assets,” the order said, as long as the investments increase the return on retirement investments.

What is private equity? What is another ‘different’ currency?

The executive order covers several categories of alternative investments: basically, anything other than traditional stocks and bonds, the bread and butter of traditional investments. Other investments can include private equity, real estate, cryptocurrency and direct investment in private companies.

BlackRock specializes in private equity investments. Private equity investment firms have long sought access to 401(k)s and other “defined” workplace retirement plans.

Private equity firms raise money to buy, manage and sell companies for a profit. Investors are usually wealthy individuals or institutions. The private debt market lends money to companies or individuals outside of banks and industries with fixed income.

In the past, everyday retirement savers didn’t have much access to that world. The minimum investment in a private equity fund can be in the millions, or at least hundreds of thousands, according to Investopedia. Your money may be tied up for years.

But retirees have long had access to private investments through pension plans, which have a history of investing in the private markets.

BlackRock’s goal is essentially to replicate that model for a target date 401(k) fund. Those funds offer a combination of more or less fixed assets to employees around the retirement date, with investments that grow stronger as the target date approaches.

“Target, professionally managed mutual funds, typically low-cost and diversified, should have the same ability to buy private markets as pension plans,” said Nick Nefouse, global head of retirement solutions at BlackRock.

Here are the pros and cons of private equity investing

Private equity is attractive to well-heeled investors and pension fund managers because of its potential to outperform the stock market.

Private equity has delivered an average annual return of 10.5% from 2000 to 2020, outperforming the S&P 500, Investopedia reports. Private equity is considered a higher risk, more profitable alternative than stocks.

There is a decline in private investment. Private companies face fewer regulations and reporting requirements than public companies. It can be difficult to say how much money a private company earns.

“These are private companies, and with that comes transparency,” Robert Brokamp, ​​senior adviser at the Motley Fool, told USA TODAY in 2025.

Is there room for private investments in a 401(k)?

Some prominent figures have questioned the wisdom of opening up the 401(k) industry to private investment.

In 2025, Sen. Elizabeth Warren, D-Mass., wrote a letter to the CEO of Empower about its plan to provide private funds for 401(k)s.

“Given the insecurity of investors in this industry, lack of transparency, expensive administrative costs, and unsubstantiated claims of high returns, we want information on how your company will ensure the safety of the billions of dollars of retirees they protect as they operate this program,” Warren wrote.

Empowering responded, in fact, that retirement savers deserve to be considered in the lucrative private investment market, after decades of exclusion.

Other economists have raised similar doubts. Alicia Munnell, senior adviser at the Center for Retirement Research at Boston College, criticized Trump’s order for the August 2025 issue.

“In my view, the only group that wants private equity in 401(k) plans is the private equity industry,” Munnell wrote. He added, “My opinion is that people should invest in things they understand, and private equity is not a public investment.

BlackRock’s Nefouse said the company only offers private equity investments as part of a target date fund managed by a professional manager. BlackRock’s future fund will allocate only 5% to 20% of its holdings to private investments, with the percentage decreasing as you approach retirement.

“Our mission is to improve retirement outcomes,” Nefouse said. “That’s it. That’s what we’re focused on. If adding private markets improves outcomes, we’ll do it.”

This article first appeared in USA TODAY: Trump wants private equity in 401(k)s. Voters approve.

Reporting by Daniel de Visé, USA TODAY / USA TODAY

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