Elizabeth Warren pushes back on plan to get private equity into 401(k)s

[BumRushDaShow]

Source: CNN Business

Published 5:00 AM EDT, Sat July 12, 2025


CNN — A typical 401(k) plan only offers stock and bond funds that invest in publicly traded companies. But private companies — traditionally the domain of institutional and high-net-worth investors — have become a significant part of the overall investing market. Do they belong as an option in workplace retirement plans, given that they are often more expensive and less transparent than publicly traded securities?

It’s a question that’s been getting a lot of attention as the private investment industry and others seek to “democratize” access to such investments. And it’s an issue receiving pushback from some lawmakers and consumer advocates, including Sen. Elizabeth Warren, the top-ranking Democrat on the Senate Banking Committee.

Most recently, Warren sent a letter and a series of questions to Empower, one of the largest workplace retirement plan recordkeepers, probing its recently announced decision to offer plan sponsors the choice of including private equity as an investment option for their employees.

In its response to Warren earlier this week, Empower — which serves roughly 90,000 corporate, government and nonprofit employers — likened the desire to give people access to private markets to the creation of 401(k)s decades ago. “The 401(k) democratized access to the public markets in unprecedented fashion and without it, many people would have no access to investing,” Empower CEO Ed Murphy wrote. “Today, we are facing a similar moment.”

Read more: https://www.cnn.com/2025/07/12/business/elizabeth-warren-empower-private-equity-401k

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Link to Sen. Warren PRESS RELEASE - Warren Seeks Answers from Empower Retirement on Threats to Americans' 401Ks from Private Equity and Private Credit

Link to LETTER to company (Empower) (PDF) - https://www.banking.senate.gov/imo/media/doc/Warren%20letter%20to%20Empower%20on%20PE.pdf

Link to company's (Empower's) RESPONSE TO LETTER'S QUESTIONS (PDF) - https://docs.empower.com/press/elizabeth-warren-response-july-2025.pdf

(yes - the VAST majority of these so-called "sternly worded letters" actually include questions requesting info and YES, the majority of the time, the recipients will answer them - not always in full but they haven't gone off the deep end like 45's insane people and GOP members of Congress, to completely ignore the request)

[Silent Type]

1. Don't think Private Equity is worth risk. But if people voluntarily invest their own money in it, I'm OK.

[cadoman]

2. it'd be tremendously beneficial for people to be able to disconnect from 401k/IRA middlemen

And just have accounts where they wanted. Tell your employers where to put the $ when you sign on. (i.e. the account resides with the beneficiary rather than the company)

There are a lot of subpar providers with high expenses & fees, and limited offerings. Money goes in and disappears because many fail to navigate the paperwork.

Don't think that's what's being discussed here though.

[ancianita]

3. Private Equity firms do business by buying off going concerns, then stripping them of assets and selling them off.

I myself wouldn't want my 401K money to come from such predatory business practices. So I agree with Warren, that this so-called expansion of 401K 'opportunity' seems built on less transparent predatory capitalism.

[mdbl]

4. As long as it is only an option and not forced

I wouldn't invest in it either. It has been one of them major downfalls affecting our jobs, cost of living, product quality and service. It basically is just a vehicle to allow a small group to profit from a company by redirecting any worth to them while letting the business suffer or close. Not a good value to a society.

[ancianita]

5. I hear you. Fair enough as far as it goes.

But there's something to be said for not living off of the profits of the predatory equity business world. It provides a retiree with a clear conscience, along with the opportunity to invest in green sustainability IPO's.

[mdbl]

6. I agree.

And it seems as though it's one of the few weapons left in our arsenal against fascism. The problem then becomes how to convince the idiocracy to throw away all their greedy indoctrinations and help the rest of society. Instead, they buy into the bullshit they hear from oligarch media. Hell, we can't even get an effective boycott together anymore since there are just a handful of owners in industry. If only people would have listened in civics class when they discussed monopolies and anti-trust. Ok, end rant. sorry.

[GiqueCee]

8. DON'T be sorry...

... you're right.

[Bengus81]

9. Next up will be Social Security.....

[ancianita]

10. Then it can only be stolen from SS. As SS law is now, no one in the rethug party would dare make any change.

The federal courts and the SCOTUS would only go after those who stole from SS. They'd never change SS law as it is written. Even the felon & cult know it's their third rail.
https://en.wikipedia.org/wiki/Social_Security_(United_States)

[GiqueCee]

7. Private Equity...

... borrowed its business model from the Mafia. NO ONE with the brains God gave a goose should let those malevolent fucks anywhere near their 401(k)s, or any other financial instrument one might rely on for retirement; they will rob you blind, because THAT'S WHAT THEY DO.
Avoid them like the fucking plague. There is NO goodness or decency in them. None. Better you kiss a cobra; you'll have a better chance of surviving that error in judgement.