Empower, the nation’s second-largest retirement plan provider, announced a new program aimed at giving its 19 million plan participants access to private markets through its defined contribution retirement plans.
Empower said that it has aligned with several private investment fund managers and custodians, including Apollo, Franklin Templeton, Goldman Sachs, Neuberger Berman, PIMCO, Partners Group, and Sagard, enabling the implementation of private investments offered through these firms through collective investment trusts, known as CITs, providing limited exposure to diversified pools of private equity, private credit, and private real estate. The firm stated that this structure is designed to provide liquidity protection and reduced fee exposure.
The firm continued that the initiative is designed to provide individuals with access to a broader range of investment options, enabling them to further diversify their portfolios and potentially optimize their retirement savings.
“Empower is making a profound move on behalf of American retirement investors who should have the ability to invest in an asset class that has the potential to diversify their portfolios and offer opportunities for returns in new ways,” said Edmund F. Murphy III, Empower president and CEO. “Like any investment, we believe in the importance of advice and risk mitigation for every investor. These new opportunities offered under an advice model deliver the guardrails necessary to help an entirely new investor class access private investing.”
Key highlights of the initiative include:
- Access to private market investments: Participants will be able to invest in private equity, private credit, and private real estate funds through their workplace plans, gaining access to investment types that were previously limited to institutional investors and ultra-wealthy investors.
- Diversification for retirement portfolios: Private markets have the potential to provide returns from new investment sources compared to publicly traded equities or bonds. By offering access to private markets, Empower aims to enable retirement plan participants to further diversify their retirement portfolios, potentially altering their risk profile and offering new growth opportunities.
- Advice-based access requirement: Retirement plan participants can only access private market investments through Empower if their employers allow these investments to be made available. Employers must work with an adviser to offer these investments through a managed account platform created in conjunction with Empower. The managed account requirement is offered to match the investment against an individual’s risk tolerance and long-term financial goals, among other factors.
- Enhanced investment structure: This offer will complement existing investment choices available in the plan’s investment menu. The private investments offered through private investment managers may be accessed through CITs, a structure that provides limited exposure to pools of private equity, private credit, or private real estate, providing participants with enhanced liquidity features while helping mitigate fee exposure.
“As a leader in private markets, democratizing alternative investing is one of our firm’s biggest priorities,” said Franklin Templeton CEO Jenny Johnson. “By offering private market assets through defined contribution plans, we’re providing Americans saving for retirement the opportunity to access some of the most dynamic and growth-oriented investments available. We’re proud to partner with Empower to help clients build secure and prosperous futures, and we’re excited to be at the forefront of this transformative change in retirement planning.”
Empower said the move responds to growing interest from investors seeking to include alternative assets in retirement plans.
As of Dec. 31, 2023, Empower was recognized as the second-largest retirement services provider in the U.S. by total participants. As of March 31, 2025, Empower administers more than $1.8 trillion in assets for 19 million investors through the provision of retirement plans, advice, wealth management, and investments.
Click here to visit the AltsWire directory page.
Read the full article here
