Neon "Open" sign in a window, symbolizing access to private markets in defined contribution plans.

Unlocking retirement plan potential benefits with private markets

Discover how integrating private equity and credit into retirement plans can boost savings, and learn about the benefits of private markets, including better risk-adjusted returns, diversification and inflation protection.
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The power of private markets in DC plans

A sea change is underway in the U.S. as retirement providers, financial institutions and policymakers focus on strengthening participant’s retirement savings. Read our latest thinking on why we believe more people should have the option to access private assets in their defined contribution (DC) plans.

  • A target date strategy option with private market access could boost returns and stability
  • A purpose-built solution could address questions around fees, liquidity and transparency
  • We expect private assets will continue to outperform public assets over the coming decade
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Increase50
The increase in bps we estimate private assets can achieve each year over the life of the strategy1
Increase15
Approximate % private markets can increase a participants 401(k) account balance over 40 years2
$23
Estimated private market growth in trillions by 2029 – over a two-thirds increase3
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Asset allocation for state and local pensions

Public Plans Database, accessible online at: https://publicplansdata.org/quick-facts/national/#investments. Other alternatives include private equity, other, hedge fund, and misc. alternatives. Weights to these asset classes in 2001 were 3.51%, 0.08%, 0.36%, and 0.35%, respectively. Weights in 2011 were 8.60%, 0.10%, 3.76%, 1.05%. Weights in 2023 were 14.02%, 0.05%, 6.36%, and 1.86%.

Leveling the playing field for DC plans

Defined benefit (DB) plans lead the way

Faced with muted public market expectations, state and local DB plans have embraced private markets to help meet long-term risk and return targets.

Private market allocations have grown 4X

Over the past 20 years, DB plans have steadily increased their average allocation to private assets from 4% to 22%.4

Charting a path for DC plans

Thanks to product innovation, better education and focus on the regulatory landscape, DC plans may be well-positioned to follow suit.

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Pensions have long held private assets as a core part of their portfolios, helping them outperform 401(k)s.2 (BlackRock, Alternative investments in target date funds, (2025). We believe defined contribution – or DC - plans deserve the same opportunity.

So how can DC participants gain access to private markets and how much more money could savers see in their accounts over the long-term?

How private markets could improve retirement outcomes

Private markets encompass a broad range of asset classes, including private equity, private credit, infrastructure and real estate - all of which are not traded on public exchanges. These investments offer potential for higher returns than public assets along with greater risk and come with less liquidity and a longer lock-in period.

So how can the average saver gain access? By integrating private assets into target date strategies, we estimate this move could help a participant see about a 15% boost in their 401(k) account over 40 years.1 (Source: BlackRock)

We know there are questions around liquidity, fees and transparency. With the right approach, we believe including private assets within a target date solution can offer a host of potential benefits for retirement savers: better risk-adjusted returns, diversification, stable cash flows and inflation protection.

This approach would make small but growing allocations to private assets when investors are younger and then decrease them as workers near retirement.

The bottom line is: Helping people achieve better retirement outcomes is our core business. The choice to include private assets in retirement plans helps bring the full power of capital markets to all investors.

This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities, funds or strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The opinions expressed are as of August 1, 2024 and are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risk, including possible loss of principal.

In the U.S., this material is intended for public distribution.

© 2025 BlackRock, Inc. or its affiliates. All Rights Reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its affiliates. All other trademarks are those of their respective owners.

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How private markets could improve retirement outcomes

How can retirement savers access private markets? BlackRock’s Global Head of Retirement Solutions Nick Nefouse explains.

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PRIVATE MARKETS

BlackRock deepens push into private investments for the masses

Read the Wall Street Journal’s article on BlackRock’s approach to integrating private market assets into 401(k)s and how we’re providing a custom glidepath to Great Grey Trust Company that strategically allocates across public and private markets.

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