Donald Trump intends to sign an executive order permitting defined-contribution plans like 401ks to incorporate private market investments. This policy could put retirement security at risk, reminiscent of issues faced by company-sponsored pension plans. Experts anticipate the executive order may build upon a 2020 Labor Department letter suggesting inclusion of private equity options in retirement plans. Private equity involves investing in privately traded companies, usually requiring accredited investors, and is known for high fees, potential liquidity issues, and undisclosed conflicts of interest.
Private equity is an investment in a privately traded company by an accredited investor or group of investors who take on a controlling interest in the organization.
This proposed policy could be sending us down the same bumpy road that knocked the tires off of company-sponsored pension plans, dramatically increasing retirement insecurity for most American workers.
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