Key Takeaways
- • Panelists at the Nov. 10 Defined Contribution Alternatives Summit, hosted by the Investment Company Institute and the Defined Contribution Alternatives Association, said fiduciary litigation fears and limited participant demand are the main barriers to 401(k) plan sponsors adding private market assets.
- • The Department of Labor has forwarded its final rule on alternatives in 401(k) plans to the White House, and Ropes & Gray partner Joshua Lichtenstein expects the rule plus the pending Supreme Court decision in Anderson v. Intel to reduce plan sponsor litigation risk.
- • The Supreme Court heard oral arguments in Anderson v. Intel on Oct. 6, and no ruling date has been announced; the case will determine whether ERISA plaintiffs must identify "meaningful benchmarks" when alleging imprudent investments.
- • Panelists said private equity, private credit, real estate and infrastructure are the asset classes most likely to be adopted, with crypto largely absent from plan sponsor interest.
- • A 2026 Natixis Investment Managers survey found private equity made up 31% of institutional alternative allocations, versus 17% for private credit, 16% for real estate and 2% for crypto.
Summary
The Department of Labor has forwarded its final rule on implementing alternatives in 401(k) plans to the White House, prompting employers who have avoided private market assets over fiduciary concerns to reassess how such investments could function within their plans, according to Pensions & Investments. The discussion took place at a Nov. 10 session of the Defined Contribution Alternatives Summit, hosted by the Investment Company Institute and the Defined Contribution Alternatives Association, which examined the legal considerations involved.
Panelists said litigation under the Employee Retirement Income Security Act of 1974 is deterring plan sponsors. Erica Rozow, partner at Simpson Thacher & Bartlett, pointed to the ongoing Supreme Court case Anderson v. Intel, which will determine whether plaintiffs must identify "meaningful benchmarks" when alleging imprudent investments. The Supreme Court heard oral arguments on Oct. 6, and there is no indication of when a ruling will be issued. Ropes & Gray partner Joshua Lichtenstein predicted that the DOL rule and the expected Intel outcome would make it harder for plaintiff firms to extract settlements, allowing cases to be dismissed earlier and at lower cost. Panelists projected the DOL final rule could be published during the holiday season, in January or in February.
Rozow identified minimal participant demand as a key constraint, noting that most plan sponsors will not move forward without employee requests. "We have the supply—we just need the demand," she said. Lichtenstein said interest so far has come mainly from smaller plan sponsors whose decision-makers have invested personally in private markets, while larger 401(k) sponsors have been slow to adopt alternatives.
On asset selection, Rozow said managers are steering away from volatile options such as cryptocurrency and toward infrastructure, private credit, real estate and private equity, with private equity having the longest track record. Lichtenstein said he is seeing mostly private equity, private credit, private real estate and private infrastructure, and no push toward digital currency. The panel cited a 2026 Natixis Investment Managers Institutional Outlook survey showing private equity at 31% of institutional alternative allocations, compared with 17% for private credit, 16% for real estate and 2% for crypto. A Preqin survey cited in Bain & Company's 2026 Global Private Equity Report found 64% of limited partners cited diversification and 61% cited high risk-adjusted returns as reasons for investing in private equity.
Panelists said litigation under the Employee Retirement Income Security Act of 1974 is deterring plan sponsors. Erica Rozow, partner at Simpson Thacher & Bartlett, pointed to the ongoing Supreme Court case Anderson v. Intel, which will determine whether plaintiffs must identify "meaningful benchmarks" when alleging imprudent investments. The Supreme Court heard oral arguments on Oct. 6, and there is no indication of when a ruling will be issued. Ropes & Gray partner Joshua Lichtenstein predicted that the DOL rule and the expected Intel outcome would make it harder for plaintiff firms to extract settlements, allowing cases to be dismissed earlier and at lower cost. Panelists projected the DOL final rule could be published during the holiday season, in January or in February.
Rozow identified minimal participant demand as a key constraint, noting that most plan sponsors will not move forward without employee requests. "We have the supply—we just need the demand," she said. Lichtenstein said interest so far has come mainly from smaller plan sponsors whose decision-makers have invested personally in private markets, while larger 401(k) sponsors have been slow to adopt alternatives.
On asset selection, Rozow said managers are steering away from volatile options such as cryptocurrency and toward infrastructure, private credit, real estate and private equity, with private equity having the longest track record. Lichtenstein said he is seeing mostly private equity, private credit, private real estate and private infrastructure, and no push toward digital currency. The panel cited a 2026 Natixis Investment Managers Institutional Outlook survey showing private equity at 31% of institutional alternative allocations, compared with 17% for private credit, 16% for real estate and 2% for crypto. A Preqin survey cited in Bain & Company's 2026 Global Private Equity Report found 64% of limited partners cited diversification and 61% cited high risk-adjusted returns as reasons for investing in private equity.
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