The defined contribution (DC) market now holds over $12.2 trillion in assets鈥攁nd interest is growing in bringing private market opportunities into this space. Private market assets are increasingly viewed as favorable for DC plan allocations because they can offer diversification benefits, potential for higher returns and access to asset classes not typically available in public markets. Regulatory shifts led by the White House and the Department of Labor (DOL) are accelerating momentum. The critical question: how should private market managers and retirement plan sponsors prepare?
Regulatory Winds of Change
On August 7, 2025, the White House released a letter calling for wider access to alternative investments in retirement plans, signaling a policy push to 鈥渄emocratize鈥� private markets. Shortly thereafter, the DOL rescinded its 2021 supplemental private equity statement, effectively removing a prior layer of caution that had deterred many plan sponsors.
Now, the industry anticipates new 鈥渟afe harbor鈥� guidance, which could offer fiduciary protection for sponsors incorporating private assets. And with a 180-day countdown to clearer rulemaking, the timeline for action is tight.
How Private Markets Can Fit Today
The operational infrastructure currently exists to include Private Investment Options in DC plan today. There is nothing mechanically limiting immediate selection or adoption on a platform. These include 鈥�40 Act interval and tender offer funds, Collective Investment Trusts (CITs) and managed account overlays. However, stand-alone private funds pose significant risks, such as illiquidity, erratic valuation and long-hold periods, with no established DC guidelines for selection. Without clear guardrails, plan sponsors, consultants and fiduciary advisors (3(21)/3(28)) could face undue exposure, which is why stand-alone private funds are not commonly selected today.
Therefore, the expected most prudent path today is to embed private exposures within asset allocation funds (multi鈥恆sset or fund of funds) or via managed account solutions tailored to individual participant risk profiles.
Key Risks to Address
- Liquidity Risk鈥�Participants may need to access funds quickly for job changes, rollovers, divorce or hardship, which conflicts with the long-term nature of private strategies.
- Fiduciary & Litigation Risk鈥�Any selection process must meet a standard of prudence. Absent regulatory clarity, sponsors are vulnerable to challenge if due diligence is weak.
- Operational & Transparency Risk鈥�Plan sponsors will demand rigorous reporting: frequent NAVs, auditability, clear liquidity terms and operational transparency matched to public alternatives.
Safe Harbor: What to Expect
A safe harbor is an official framework that offers legal protection to plan sponsors who comply with defined standards. Under new guidance, sponsors acting within the safe harbor may be shielded from certain fiduciary claims.
Anticipated safe harbor elements could define:
- Acceptable fund structures (e.g., interval, evergreen, tender offer, CIT wrappers)
- Transparency standards (NAV frequency, valuation methodology)
- Reporting and disclosure obligations
- Selection and oversight criteria for the private managers
Once in place, these safe harbor rules could turn theoretical access into practical adoption.
Likely Adoption Pathways
Given the challenges inherent in private investments, asset allocation funds and managed accounts are expected to drive inclusion in DC plans. Private managers seeking early entry should focus on:
- Semi-liquid fund structures: evergreen, interval, tender鈥恛ffer, CITs
- Frequent NAV transparency (daily or periodic)
- Robust reporting systems for plan sponsors and participants
These features align with plan governance requirements and help position funds for institutional DC inclusion.
天美传媒: Partnering for Evolution
天美传媒 is positioned to support managers and sponsors as they navigate this transition. We offer expertise in fund structuring and operations, with guidance and execution across semi-liquid and hybrid wrappers. Our systems are built for high-frequency NAVs, auditability and participant-level disclosures to ensure transparency and reporting readiness. We also provide compliance alignment tools for DOL/SEC expectations and can assist with education and engagement through content, advisor training and participant messaging. With the operational capabilities required for private markets sponsors to integrate into managed accounts and allocation funds, 天美传媒 can help you prepare now for the direction the industry is heading. From private fund administration and transfer agency to reporting, distribution and liquidity, 天美传媒 provides the backbone for the next generation of retirement investing.
Final Thoughts
The coming months will be pivotal. Regulatory clarity is expected, but those who begin aligning now will gain an edge. The future favors firms that proactively address operational, fiduciary and structural readiness.
For private market managers and plan sponsors alike, this is not just a regulatory shift鈥攊t鈥檚 a strategic opportunity. 天美传媒 is here to help you build the infrastructure, processes and governance necessary to lead in this evolving DC landscape. Contact us to learn more.
