2Elizabeth Warren Grills Retirement Giant Empower Over Private Equity In 401(…

Sen. Elizabeth Warren (D-Mass.) has challenged the decision of Empower, a major retirement plan provider, to offer private equity as an investment option in workplace retirement plans.

What Happened: Warren had previously sent a letter to Empower questioning its recent decision to allow plan sponsors to include private equity investments for their employees.

Empower, which serves around 90,000 employers, has justified its move by likening it to the introduction of 401(k) plans decades ago. CEO Ed Murphy highlighted the importance of making private markets more accessible, pointing to the increasing flow of capital into private companies and the estimated $13 trillion held in global private equity assets, CNN reported.

Warren, however, was not convinced. She expressed concerns about the lack of transparency and high costs associated with private equity investments. She also raised doubts about Empower’s capacity to safeguard plan participants and the financial system from the structural risks inherent in private markets.

“Your response did not meaningfully address how you would shield plan participants, and our financial system, from the structural risks inherent in private markets. Ultimately, you did not explain why providing retirees with the option to invest their hard-earned life-savings in risky, expensive private markets benefits anyone other than private funds.”

In her letter to Empower on Saturday, Warren expressed concerns about the company’s partnerships with private firms, its fee structures, and its incentives. She asked the company to respond to her detailed questions by Friday, July 25, 2025.

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Why It Matters: Traditionally, private companies have been the investment territory of institutional and high-net-worth investors. But as these companies play an increasingly important role in the broader investment landscape, there are growing calls to democratize access to such opportunities.

Earlier in May, it was reported that President Donald Trump was considering a new executive order that would push U.S. agencies to let private equity firms tap into the country’s huge 401(k) savings pool, which is worth almost $9 trillion. Trump’s team was drafting an order that would direct regulators like the Labor Department, Treasury, and SEC to assess allowing 401(k) plans to invest in private capital markets, according to the Financial Times.

Warren’s recent move to challenge Empower’s decision aligns with her previous stance on the matter and adds to the ongoing debate about the inclusion of private equity in retirement plans.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.