Why This CEO Won’t Let Private Funds Near His Company’s 401(k)

[Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.]

The decision to exclude private-market investment funds, such as private equity and private credit, from a company’s 401(k) plan reflects skepticism about the growing enthusiasm for these assets. Frank Sullivan, CEO of RPM International, questions the assumption that strategies favored by wealthy and institutional investors are appropriate for employee retirement accounts. The belief that following “smart money” leads to better outcomes is challenged, particularly since many investors entered private markets late and have not consistently achieved superior returns.

Private funds differ in significant ways from the traditional public-market investments typically offered in 401(k) plans. They are often illiquid, difficult to value on a regular basis, and carry higher fees and complex restrictions. These features conflict with the structure of 401(k) plans, which depend on transparency, frequent pricing, and the ability for participants to move their money as circumstances change.

Fiduciary responsibility is another major concern. Employers and plan sponsors face potential legal exposure if complex or opaque investments underperform or limit employee access to retirement savings. Without clear regulatory protections under ERISA, many corporate leaders are hesitant to be early adopters of private assets in defined-contribution plans.

The decision also fits within a broader debate over whether private markets should play a role in employee retirement plans. While policymakers and industry advocates continue to explore expanding access to these investments, others emphasize the need to protect workers from unnecessary risk. The exclusion of private funds reflects a preference for simplicity, transparency, and risk management over the promise of higher but less certain returns.

For more information see Jason Zweig “Why This CEO Won’t Let Private Funds Near His Company’s 401(k),” The Wall Street Journal, January 16, 2026.