On November 20, 2025, Securities and Exchange Commission (“SEC”) Commissioner Mark Uyeda delivered remarks at the ICI Retail Alternatives and Closed-End Funds Conference outlining what he characterized as a “diversification deficit” within today’s 401(k) system. The Commissioner asserted that most retirement savers lack access to private market investments that might improve their long-term outcomes. He suggested that the existing regulatory framework needs a significant overhaul as the U.S. retirement system has moved away from traditional defined-benefit pensions toward defined-contribution (“DC”) plans in which individuals bear responsibility for their investment choices.
Commissioner Uyeda explained that expanding 401(k) plan access to private equity, private credit, real estate and other private-market strategies could strengthen portfolio diversification. Retirement investors would be well-positioned to benefit because private-market returns are often less correlated with public equities and usually include an illiquidity premium. He warned that excluding private investments is not a neutral or necessarily protective stance, so doing so may limit participants’ ability to build more resilient portfolios.
At the same time, Commissioner Uyeda acknowledged the challenges inherent in incorporating private assets into DC plans. These include valuation complexities, limited liquidity and the need for enhanced fiduciary oversight. However, instead of excluding private assets, he argued for enhanced governance, strengthened valuation practices and clear disclosures tailored to the structure of private funds within diversified retirement vehicles. As we have previously blogged, on August 7, 2025, the White House issued an executive order calling for interagency coordination to evaluate whether regulatory changes are appropriate in order to expand access to alternative assets in retirement plan vehicles. Commissioner Uyeda also emphasized the importance of regulatory coordination, calling on the SEC and the Department of Labor to align their approaches to facilitate responsible private-market access in 401(k) plans. He framed this as a modernization effort that respects fiduciary duties while updating retirement-plan design to reflect how institutional investors already manage long-term assets. He concluded by stating that ordinary retirement savers should not be systematically denied exposure to asset classes that have contributed meaningfully to institutional portfolio performance over the past decade. Access his complete remarks here.