Skip to main content

Newsroom

June 23, 2020

DOL’s Pandemic Pretext for Private Equity Investments by 401K Retirees

The Department of Labor’s decision to open up 401Ks to include investments in private equity is “just the latest example of this Administration’s DOL putting retirees’ best interests last,” says Better Markets’ President and CEO Dennis Kelleher.

Kelleher says the DOL is using the pandemic as a pretext to open high-risk, high-fees and high-leverage predatory private equity investments to retirees.  

“The last thing the Department of Labor should be doing is enabling or encouraging retiree money to be diverted from transparent public markets with significant disclosure and investor protections to high-risk, dark private markets with little disclosure and few investor protections,” says Kelleher. “To use the pandemic as a pretext for this irresponsible action is adding insult to injury.”

In a statement, the DOL said that private equity’s entry into retirement savings was needed to “remove” barriers to economic recovery. However, Kelleher notes that private equity investments are some of the riskiest in the private markets, and performance and returns have often been poor at best.  (See this Financial Times article for the latest study showing this: “Private Equity Barons Grow Rich on $230 billion of Performance Fees.”)

“While couched in innocuous rhetoric of ‘leveling the playing field’ and ‘choice’ for Main Street investors, these investments are simply not where hardworking Americans saving for retirement should be putting their nest eggs,” Kelleher says. Read more here.

Consumer Protection
Share

MEDIA REQUESTS

For media inquiries, please contact us at
press@bettermarkets.org or 202-618-6433.

Contact Us

For media inquiries, please contact press@bettermarkets.org or 202-618-6433.

To sign up for our email newsletter, please visit this page.

Name(Required)
This field is for validation purposes and should be left unchanged.

Sign Up — Stay Informed With Our Monthly Newsletter

This field is for validation purposes and should be left unchanged.

For media inquiries,

please contact press@bettermarkets.org or 202-618-6433.

Donate

Help us fight for the public interest in our financial markets, protecting Main Street from Wall Street and avoiding another costly financial collapse and economic crisis, by making a donation today.

Donate Today