Alternatives in workplace retirement savings plans?

Schroders recently surveyed 2,000 US investors to gain insight into their appetite for alternative investments in workplace retirement savings plans. The survey reveals solid interest in private assets despite a significant knowledge gap.

• More than one-third of investors (36%) participating in a 401k, 403b or 457 workplace retirement savings plan would invest in private equity and private debt investments if their plan provided access to these assets.
• Among those who expressed interest in private investments, most would take a measured approach with their retirement plan allocations:

• 52% would allocate less than 10% to private assets
• 34% would commit between 10-15%
• 8% would invest more than 15%
• 6% are unsure how much they would allocate to private assets

• Despite the growing prominence of alternative investments in recent years, half of all plan participants (51%) surveyed don’t understand the benefits of adding alternatives to their retirement portfolio, and 64% say alternative investments sound risky. 
• This knowledge gap among plan participants isn’t limited to alternatives, as 52% of participants report they don’t know how to manage risk in their retirement portfolio, and 59% wish they received more guidance from their employer on how to invest their workplace retirement plan assets.

Private Assets in 401k Plans?

Featured coverage of Schroders US Retirement Survey

Deb Boyden, Head of US Defined Contribution

Deb.Boyden@Schroders.com