Key Takeaways
- • The defined contribution industry has fundamentally shifted from debating whether to include private assets in DC plans to determining which asset classes are best suited for integration within professionally managed solutions, according to panelists at the September 16, 2026 PLANSPONSOR Roadmap session.
- • Private equity emerged as the consensus preferred vehicle for delivering private assets into DC plans, with all surveyed providers, asset managers, recordkeepers, and trustees identified it as a "good vehicle or delivery mechanism," according to preliminary results from the Defined Contribution Institutional Investment Association's 13 in-depth stakeholder interviews.
- • Real estate, infrastructure, and private credit were identified as other priority private asset classes for DC plan implementation, reflecting broadening appetite for alternative investments beyond traditional public equities and bonds.
- • The Department of Labor's proposed rule on investment selection is catalyzing DC plan sponsor adoption by providing regulatory guidance and a potential safe harbor against fiduciary liability claims under ERISA, addressing a previously significant barrier to private asset allocation.
Summary
The defined contribution plan industry has moved decisively past the foundational question of whether private assets belong in DC plans, with the discussion now centered on optimal implementation strategies and asset class selection. This evolution was underscored during the September 16, 2026 PLANSPONSOR Roadmap session titled "Private Markets in DC Plans," where industry panelists examined stakeholder preferences for private asset integration and the regulatory framework increasingly supporting such allocations.
Marianne Sullivan, senior adviser of research at the Defined Contribution Institutional Investment Association, presented preliminary findings from 13 in-depth interviews with institutional stakeholders including providers, asset managers, recordkeepers, and trustees. The research revealed unanimous agreement that private equity represents the optimal delivery mechanism for incorporating private assets into DC plans. Beyond private equity, respondents identified real estate, infrastructure, and private credit as asset classes well-suited for DC plan implementation, signaling a multi-dimensional approach to alternative asset diversification within defined contribution frameworks.
The regulatory environment has emerged as a critical enabler of this shift. While private market assets have never been explicitly prohibited under the Employee Retirement Income Security Act, adoption remained minimal until the Department of Labor's proposed rule on investment selection provided plan sponsors with explicit guidance and a regulatory safe harbor. This safe harbor protection substantially reduces litigation risk for sponsors making private asset allocation decisions, removing a significant fiduciary compliance barrier that previously constrained implementation. The combination of clearer regulatory guidance and reduced legal exposure has effectively unlocked institutional appetite for private asset solutions within DC plans, transforming what was previously a compliance concern into a straightforward asset allocation decision.
Marianne Sullivan, senior adviser of research at the Defined Contribution Institutional Investment Association, presented preliminary findings from 13 in-depth interviews with institutional stakeholders including providers, asset managers, recordkeepers, and trustees. The research revealed unanimous agreement that private equity represents the optimal delivery mechanism for incorporating private assets into DC plans. Beyond private equity, respondents identified real estate, infrastructure, and private credit as asset classes well-suited for DC plan implementation, signaling a multi-dimensional approach to alternative asset diversification within defined contribution frameworks.
The regulatory environment has emerged as a critical enabler of this shift. While private market assets have never been explicitly prohibited under the Employee Retirement Income Security Act, adoption remained minimal until the Department of Labor's proposed rule on investment selection provided plan sponsors with explicit guidance and a regulatory safe harbor. This safe harbor protection substantially reduces litigation risk for sponsors making private asset allocation decisions, removing a significant fiduciary compliance barrier that previously constrained implementation. The combination of clearer regulatory guidance and reduced legal exposure has effectively unlocked institutional appetite for private asset solutions within DC plans, transforming what was previously a compliance concern into a straightforward asset allocation decision.
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