GAO Urges Labor Department to Issue Guidance on Private Equity in 401(k) Plans

The U.S. Government Accountability Office said the Department of Labor has not yet issued specific guidance to help 401(k) plan sponsors and participants understand private equity, an asset type GAO said is expected to grow among 401(k) investment options. In a report publicly released Nov. 10, 2026, GAO made three recommendations to the department's Employee Benefits Security Administration. GAO recommended that the agency collect data on the total amount of 401(k) plan assets invested in private equity, provide guidance to plan sponsors on key aspects of private equity such as its liquidity, valuation and regulation, and provide guidance to participants on how private equity differs from public market investments. According to GAO, the Labor Department neither agreed nor disagreed with the recommendations. GAO said its review of selected research papers found no consensus on how private equity performs compared with publicly traded equity. Some papers found private equity funds outperformed publicly traded equity during the periods studied, while others found they underperformed after accounting for risk or fees, which GAO said can be higher for private equity. GAO also said there is no consensus on how to benchmark private equity performance. GAO said little is known about how much private equity is currently used in 401(k) plans. Plan sponsor and industry representatives told GAO that sponsors need education on private equity, while consumer groups said participants should understand aspects such as its illiquidity.

Source: U.S. Government Accountability Office.

Originally published by True News: https://truenews.bagleyenterprises.net/stories/949