Senator Elizabeth Warren (D-MA) is once again calling on Empower CEO Ed Murphy to explain the company’s rationale, along with other queries, in expanding defined contribution (DC) plan access to private markets.
In a letter on July 11, Warren stated that Murphy’s previous response to her inquisition “failed to meaningfully explain how Empower’s efforts to invest retirement savings in private funds” would build financial security for investors.
The original inquisition letter, published on June 18, requested additional information on Empower’s plans to invest retirement savings in the private market, following the organization’s announcement on May 14. Sen. Warren’s note also asked for details regarding the firm’s partnerships with private firms, fees, and incentive structures.
In his response letter, Murphy cited findings that showed a nearly 50% decline in the number of publicly listed companies since the 1990s and additional research that suggested the global private equity market had grown to over $13 trillion, signaling an investment opportunity for early-stage growth that the company stated is not generally seen through traditional retirement plans.
Murphy also cited research from Empower, which found that Americans were supportive of 401(k) access to private markets. Some of the findings include 76% of respondents who want their employers or 401(k) providers to offer modern investment options, and 72% who believe that private market exposure could improve long-term retirement outcomes.
“These findings underscore a significant trend: Americans want more diversified tools to build long-term wealth in a market environment where the number of public investing opportunities has declined,” Murphy wrote in his response. “As public markets investing has undergone this structural change, it is our duty to adapt our offerings and provide our customers with new means of investing.”
In her note responding to Murphy, Sen. Warren again questioned whether such accessibility would financially benefit private fund companies instead of American workers and commented on the associated risks of investing in private equity funds.
Sen. Warren also further criticized Murphy for failing to respond to her initial inquiry, adding that he “did not explain why providing retirees with the option to invest their hard-earned life-savings in risky, expensive private markets benefits anyone other than private funds.”
She also asked that Murphy answer her initial questions “rather than share a survey depicting support for investment in private markets” by a new deadline of July 25. These questions include inquisitions about Empower’s decision to offer investing in private funds, whether the firm obtained legal guidance for liability factors, and its affiliations with private equity firms including Apollo, Franklin Templeton, Goldman Sachs, and others, along with other queries and sub-questions.
Sen. Warren’s response letter and a full list of her questions can be found here.
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