June 20, 2025

Warren Seeks Answers from Empower Retirement on Threats to Americans' 401Ks from Private Equity and Private Credit

“While you claim that this partnership … will ‘help clients build secure and prosperous futures,’ there are many reasons to believe that the 19 million workers whose retirement funds you safekeep will be more at risk as a result” of their exposure to private equity and private credit.

Text of Letter (PDF)

Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Empower Retirement CEO Edmund F. Murphy III, seeking answers about the company’s recently announced program that seeks to push retirement savers contribution plans into private equity and private credit, and the threats that these investments pose to Americans’ retirement savings. 

“Pensions’ investments in private equity have been dubbed a “Wall Street time bomb.” Even institutional investors admit their uncertainty as to whether private equity’s 'very thin outperformance is worth the risk of opaque and illiquid investments whose actual value is often impossible to determine — investments that could crater when the money is most needed'” wrote Senator Warren. 

Ranking Member Warren continued: “More alarmingly, many of the companies that you are partnering with have been involved in enforcement actions taken by the SEC and other regulatory agencies. Franklin Templeton Investments, through its subsidiaries, has had at least 21 violations due to failing to meet investor protection standards and its duty as a benefits plan administrator that all resulted in fines by the SEC and the Department of Labor.”

The senator also laid out concerns with the funds’ expansion into private credit: “During a crisis or even momentary panic in the broader markets, private credit is more likely to experience liquidity freezes, inability to perform price discovery on their underlying assets, and lines of credit being terminated as traditional banks flock to safety.”

Senator Warren continued: “Now, market volatility, the risk of inflation, and general economic uncertainty stemming from President Trump’s on-again, off-again tariffs have further exacerbated the risks of investing in the private markets. Private equity funds are finding it increasingly difficult to sell their assets to payout investors or honor redemptions.”

Ranking Member Warren asked Empower to respond to a series of questions about the company’s partnerships with private equity firms — including providing details about how the company will continue to maintain high investor protection standards — by Monday, July 7.

###