GAO

GAO Report on 401 k Plan Investments, DOL Can Take Steps to Prepare for Expected Private Equity Growth

The Government Accountability Office reviewed research papers analyzing private equity investment fund performance. The review found no consensus on how private equity performs compared to publicly traded equity. The GAO also found that plan sponsors and participants need guidance on aspects like private equity valuation and illiquidity.

DOL Lacks Private Equity Guidance

Plan sponsors need education on private equity. This education should cover how its valuation differs from traditional investments like mutual funds. Participants also need to understand aspects of private equity, such as its illiquidity. The Department of Labor is authorized to provide guidance to promote retirement security. GAO found that the DOL has not issued specific guidance for these groups. The agency has not issued guidance to plan sponsors on liquidity and valuation differences. The agency also has not issued a fact sheet for participants.

Why GAO Looked Into It

GAO reviewed 401(k) plan investments in private equity. This review addressed the extent of private equity use in 401(k) plans and how that use is communicated to plan sponsors and participants. GAO examined research on private equity investment performance compared to publicly traded equity benchmarks. The GAO also examined how private equity investment information is communicated to plan sponsors and participants.

What GAO Recommends

GAO made 3 recommendations to Employee Benefits Security Administration:

  • The Assistant Secretary of the Employee Benefits Security Administration should collect data on the total amount of 401(k) plan assets invested in private equity, through all designated investment alternatives’ underlying assets.
  • The Assistant Secretary of the Employee Benefits Security Administration should provide guidance for retirement plan sponsors to help them understand the key aspects of private equity.
  • The Assistant Secretary of the Employee Benefits Security Administration should provide guidance for participants that highlights key differences between private equity and public market investments, such as differences in liquidity, valuation, and other factors that may inform their ability to compare investment products available in their retirement plans.

The full report, 401(k) Plan Investments: DOL Can Take Steps to Prepare for Expected Private Equity Growth, is on GAO’s site, publicly released Nov 10, 2026.