Private Equity’s Potential to Help 401(k) Participants with Maura Reilly Kennedy and Michelle Rappa

Even with regulatory barriers to including alternative assets such as private equity in defined contribution plans being removed by the Trump administration, many advisors, plan sponsors and fiduciaries are understandably hesitant to jump in.

To get a better idea of what private equity investments can bring to the table, we speak with Maura Reilly Kennedy and Michelle Rappa of investment manager Neuberger Berman, a pair of highly accomplished subject matter experts when it comes to private equity and its defined contribution investment capabilities.

Reilly Kennedy and Rappa talk through some innovative structures seeking to make these investments more accessible and practical for retirement savers.

Key Insights

Regulatory Shift Opens Door to Alternatives
A new executive order and the rollback of prior DOL guidance mark a major policy shift, signaling broader access to private equity in 401(k) plans. This regulatory momentum is encouraging plan sponsors to seriously consider alternative investments.

Private Equity in 401(k)s Boosts Outcomes
Neuberger Berman’s research shows that adding just a 10% private equity allocation to a target-date fund can improve returns, reduce risk, and increase monthly retirement income by as much as 19%, offering meaningful impact on participant outcomes.

Industry Innovation Addresses Past Hurdles
Innovative structures like evergreen funds and DC-friendly wrappers (e.g., CITs) are solving challenges like illiquidity, fees, and complexity—making private markets more accessible and practical for defined contribution plans.