Thursday, October 1, 2026
As the cost of living continues to rise across New York — from housing and energy to groceries and health care — many families and small-business owners, especially those from historically underserved communities, are being forced to make painful tradeoffs that leave little room to save for retirement.
To build a more resilient financial future, workers with 401(k) plans should have more opportunities to diversify their nest eggs. That’s why we need to ensure that private-sector employees have access to the same options long enjoyed by public-sector pension holders.
Today, that parity does not exist. While public pension systems have long been able to invest in private-market assets such as private equity, real estate and infrastructure — which can generate outsized long-term growth — the vast majority of 401(k) plans remain confined to traditional public stocks and bonds. This leaves millions of private-sector workers — including a disproportionate share of African American employees — with fewer tools to grow their retirement savings in an increasingly expensive economy.
There is some good news: the U.S. Department of Labor has taken initial steps to implement rule-making that would expand access to private-market investments, creating a path toward closing this gap. Critically, the proposal also aims to protect employers from speculative lawsuits for offering employees more options to invest.
A clear majority of voters favor allowing access to these assets, according to a recent poll by the Council for a Safe & Secure Retirement. Support is broad and bipartisan, with 62 percent of Black voters, 69 percent of Hispanic voters, and majorities of both working-class and middle-class voters — no matter whom they voted for in the last election — backing the inclusion of private markets and more diverse investment options in 401(k) plans.
For decades, public pension plans have enjoyed access to these investments, while those working for Main Street businesses missed out. In fact, infrastructure made up a total of $9.1 billion of New York City pension plans in 2025, and generated an impressive 11.9 percent return on investment. Private-sector workers of every stripe should be allowed the same retirement opportunities as public-sector workers.
Beyond New York, private assets have been outperforming public stocks for years. From 2002 to 2022, the average annual returns for private-equity investments were estimated to be 14.75 percent, compared with 9.25 percent for the S&P 500 and 8.84 percent for the Dow Jones Industrial Average.
Private investment also helps drive capital to minority-owned businesses. Earlier this year, the New York City Employees’ Retirement System reported a total of $26.5 billion allocated to minority- and women-owned investment managers, representing 14.6 percent of the fund’s U.S.-based actively managed assets. These allocations not only expand opportunities for diverse firms, but also demonstrate that investing with minority, women and emerging managers can deliver competitive returns, with private-market portfolios outperforming public-market equivalents by roughly 7 percent.
New York’s pension funds illustrate how private markets can generate wealth while promoting inclusion. This model can and should be emulated with 401(k) plans by enabling them to offer private-market investments for private-sector employees.
Unlocking these investments for private-sector workers can also strengthen local economies, build wealth and create a cycle of opportunity and prosperity. A whopping 85 percent of private-equity-backed businesses are small companies. By investing in private-equity funds that support local entrepreneurs, retirees won’t just enhance their returns; they can nurture economic growth in their own communities.
By moving forward with formal rule-making to clarify how private-market investments can be included in 401(k) plans, the Labor Department can provide plan fiduciaries with the certainty needed to diversify investment options and help our historically underserved communities grow long-term wealth. Acting decisively would ensure that retirement security and inclusive investing aren’t just goals for public funds, but for private-sector workers as well.
All of our communities deserve the same opportunity to invest and build a more secure future.
Phil Andrews is president of the Long Island African American Chamber of Commerce and founding president of the New York City Minority Small Business Chamber of Commerce.
