SEC Investor Advocate to Scrutinize PE Use in Retirement Accounts for FY 2026 

The U.S. Securities and Exchange Commission’s Office of the Investor Advocate will make the rising use of private equity and other alternative investments in retirement accounts a key focus of its fiscal 2026 objectives, according to the office’s newly released report. 

The Investor Advocate flagged concerns that the expansion of private market products within defined contribution plans like 401(k)s and 403(b)s—often through target-date funds and managed accounts—could expose retail savers to new risks that they may not fully understand. While private markets can offer diversification and the potential for higher returns, the office noted that these benefits come with challenges, including reduced or unreliable disclosures, limited liquidity, and greater fraud or loss risks. 

The office will also assess whether these risks are being effectively communicated to plan participants and how they intersect with fiduciary obligations under ERISA. The review will look closely at whether investors are adequately informed about the trade-offs involved in allocating retirement savings to private assets with longer lockups and complex fee structures. 

The scrutiny of private equity in retirement plans is part of a wider investor protection agenda that includes making disclosures clearer and more accessible, testing investor comprehension, and supporting data-driven rulemaking. Additional priorities for fiscal 2026 include oversight of self-regulatory organizations’ rule proposals, analysis of China-based variable interest entities, and collaboration with the SEC’s new crypto task force.