The introduction of private equity into 401(k) accounts is a controversial and much-debated initiative of the Trump administration.
A new survey suggests, however, that most rank-and-file Americans seem to like 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.
Roughly the same share, 64%, think all retirement plans should allow the same investment options, the survey found. BlackRock surveyed 1,000 registered voters in January.
401(k) retirement savers are gaining access to private equity
In the past, the private investment world has been populated mostly by wealthy investors, endowments and pension funds.
That is changing. Last summer, BlackRock announced it would offer a 401(k) target-date retirement fund that includes private investments, with a launch date later this year. Empower, another retirement giant, made a similar move. Other 401(k) providers are studying the idea.
In an August 2025 executive order, 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 alternative assets,” the order said, provided the investments enhance returns on retirement investments.
What is private equity? What’s an ‘alternative’ investment?
The executive order covered several categories of alternative investments: basically, anything other than traditional stocks and bonds, the bread and butter of traditional investing. Alternative investments can include private equity, real estate, cryptocurrency and direct investment in private companies.
BlackRock’s focus is on private investments. Firms that invest in private assets have been pushing to gain access to 401(k)s and other “defined contribution” workplace retirement plans.
Private equity firms raise money to buy, manage and sell companies for profit. Investors are typically wealthy individuals or institutions. The private credit marketplace loans money to companies or individuals outside the banking and fixed-income industries.
In the past, everyday retirement savers haven’t had much access to that world. The minimum investment in a private equity fund might be in the millions, or at least the hundreds of thousands, according to Investopedia. Your money might be tied up for years.
But retirees have long had access to private investments through pension plans, which have a history of investing in private markets.
BlackRock’s goal is essentially to replicate that model in a 401(k) target-date fund. Those funds offer a mix of more or less conservative assets to workers according to retirement date, with increasingly conservative investments as the target date nears.
“Target date funds, which are professionally managed, generally 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 investments
Private equity is attractive to well-heeled investors and pension fund managers because of its potential to outperform the stock market.
Private equity yielded average annual returns of 10.5% from 2000 through 2020, outdistancing the S&P 500, Investopedia reports. Private equity is considered a high-risk, high-return alternative to stocks.
There are steep downsides to private investment. Private companies face fewer regulations and reporting requirements than public ones. It can be hard to divine how much money a private company earns.
“These are private companies, and with that comes less transparency,” Robert Brokamp, a senior advisor at The Motley Fool, told USA TODAY in 2025.
Is there room for private investments in a 401(k)?
Some prominent voices have questioned the wisdom of opening up the 401(k) industry to private investment.
In 2025, Sen. Elizabeth Warren, D-Mass., penned a letter to the CEO of Empower about its plan to offer private investments in 401(k)s.
“Given the sector’s weak investor protections, its lack of transparency, expensive management fees, and unsubstantiated claims of high returns, we are seeking information on how your company will ensure the safety of the billions of dollars of retirement savings it safeguards as it implements this program,” Warren wrote.
Empower responded, essentially, that retirement savers deserve a crack at the lucrative private investment market, after decades of exclusion.
Some economists have raised similar doubts. Alicia Munnell, senior advisor at the Center for Retirement Research at Boston College, critiqued Trump’s executive order in an August 2025 essay.
“As far as I can see, the only party pushing for private equity in 401(k) plans is the private-equity industry,” Munnell wrote. She added, “My view is that people should invest in stuff they understand, and private equity is not a transparent investment.”
Nefouse of BlackRock said the company is introducing private investments only as a component of a target-date fund overseen by a professional manager. The forthcoming BlackRock fund will allocate only 5% to 20% of its holdings to private investments, with the percentage dropping as you approach retirement.
“Our job is improving 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 originally appeared on USA TODAY: Trump wants private equity in 401(k)s. Voters approve.
Reporting by Daniel de Visé, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
