The Growing Case for Alternatives in Retirement Saving: NAPA 401(k) Summit

A growing push to include alternative investments like private equity, private real estate, private credit and cryptocurrency in 401(k) plans could transform retirement outcomes for millions of Americans—if plan sponsors move quickly to adapt.

At the “Alternative Realities: is the Time Ripe for Alternative Investments in DC Plans?” session during the NAPA 401(k) Summit in Las Vegas, experts detailed that structural innovations and shifting regulatory attitudes are making alternatives more accessible and urged advisors to seize the opportunity.

“This administration is much more open to bringing alternatives into the everyday investor’s life,” said Jennifer Doss, Defined Contribution Practice Leader at CAPTRUST and session moderator. “It’s important that we get up to speed now.”

The Department of Labor is expected to issue further guidance in the next few years, and panelists emphasized that plan sponsors who prepare early will be best positioned to improve participant outcomes.

“DC participants deserve the same opportunity that institutional investors have had for decades,” said Michelle Rappa, Managing Director at Neuberger Berman. “For many Americans, their 401(k) is their only pool of retirement savings.”

From Wall Street to Main Street

Private equity, credit, and real estate have long played a role in defined benefit plans, endowments and high-net-worth portfolios. But DC plans have lagged due to structural hurdles, including liquidity, valuation frequency, and recordkeeping constraints.

That’s changing. “The private markets industry developed semi-liquid evergreen structures specifically to fit into DC plans,” said Steve Ulian, Managing Director of Defined Contribution and Retirement at Apollo Global Management. “Your dollar goes in and is immediately invested.”

These new vehicles can be placed inside collective investment trusts (CITs) and managed account platforms, making them compatible with target-date funds and other professionally managed solutions.

Private real estate, for example, has already broken through. “We’ve traded daily-valued private real estate products on the NSCC for nearly 20 years,” said Shean. “And today, it’s included in seven off-the-shelf target date funds.”

Panelists noted that private market solutions now come with third-party valuations and clearer liquidity mechanisms—key barriers in the past.

“Ten years ago, everyone was chasing the lowest fees possible,” said Shean. “Now there’s a rationalization happening: what can we do to get better outcomes?”

Reframing the Fee Conversation

Fee sensitivity remains a common objection, especially for plan sponsors focused on low-cost QDIAs. But panelists argued that a smarter conversation is needed—one that weighs fees against long-term value.

“You can absolutely build a target date fund with a private market sleeve and stay within a 20- to 40-basis-point fee budget,” said Ulian. “It depends on how the portfolio is constructed and what asset classes you include.”

Rappa shared results from a recent study using Georgetown University’s modeling framework. Adding just a 10% private equity allocation to a target-date fund improved participant outcomes across all market scenarios—without increasing risk.

“In the 10th percentile scenario—the worst-case outcome—the portfolio with private equity still outperformed,” she said. “You’re not taking on more risk. You’re capturing the illiquidity premium.”

Crypto’s Rise in Retirement Planning

Even cryptocurrency, once viewed as too volatile for retirement accounts, is gaining a foothold.

“Bitcoin is one of the most liquid globally traded assets, with $15 to $30 billion in daily spot volume,” said Steve Humenik, Global Head of Capital Markets & Head of Clearing at Crypto.com. “We now have institutional-grade custody, spot ETFs, and derivatives that have been trading since 2017.”

The demographic shift is driving demand. “Our user base is young, tech-savvy professionals,” Humenik said. “They’ve grown up with crypto and want it in their retirement portfolios.”

The panel agreed that education and thoughtful packaging—such as wrapping alternatives inside managed accounts or target-date strategies—will be key to driving mainstream adoption.

What’s Next?

Panelists believe the tipping point is here. “There’s less than 1% of the $10 trillion DC market in alternatives today,” said Shean. “There’s only one way to go, and that’s up.”

International models suggest what may be ahead. “In Australia’s DC system, 15 to 20% of assets are in private markets,” said Ulian. “In the UK, the government has actively encouraged DC plans to include private market exposure. Why not here?”

As structures evolve and fiduciaries grow more comfortable, adoption may accelerate. “Plan sponsors no longer need to wonder whether the plumbing works—it does,” said Doss. “Now it’s about deciding when to get started.”