2026 trends report—alts in retirement plans
Window shopping: No alts impulse buys for DC plans
Defined contribution plan sponsors want more info, education about alternative assets in retirement plans.
Time to read: 2 minutes
JANUARY 6, 2026—Employers hear the buzz surrounding “alternative” investments. But as fund shops ready a slate of new products, a September 2025 TIAA survey of 300 nonprofit plan sponsors suggests limited enthusiasm for actually adding them to their retirement plans.
The catch-all term alternatives refers to asset classes other than traditional stocks and bonds and includes private equity, private credit, real estate, hedge funds, infrastructure, and even cryptocurrencies. Investors typically use alts to seek more diversification, less volatility, and higher returns. In exchange, they typically accept higher fees, less transparency, and lower liquidity.
While 83% of plan sponsors say they’re interested in alts,1 they still want a lot more clarity around how alts would fit into existing investment lineups, how best to communicate about adding them, and whether the risks outweigh the rewards to employees and the organization.2
Nonprofits interested in alts, but waiting
A growing number of alternative asset managers have announced new products designed for the $13 trillion defined contribution (DC) market, which scarcely dedicates any investment menu space to alts currently. Their push gained momentum after an August 2025 White House executive order encouraged including them on plan menus.3
A cross-section of health care and higher education plan sponsors reveal nuanced, risk-averse stances toward adding alts to DC plans. “I am—and we are—very, very conservative,” says one health care employer. “Our retirement plan consultant advisor has discussed that topic numerous times with the plan committee. And every single time it gets shut down.” Others in health care say there is little advantage in being an early adopter of untested products. “I don’t see our committee adding alternative investments until there’s higher adoption among comparable plan sponsors,” another health care employer says.
Additionally, some sponsors say they worry that adding alternatives to their menus raises litigation risk. “Avoiding lawsuits is going to be a big part of the decision,” says one Ivy League plan sponsor. “I’d be reticent to enter that market until a structure is developed to [help me] perform a fiduciary role comfortably.”
Alternatives already in retirement plans
Conversations about alts and DC plans aren’t going away, and demand from nonprofit sponsors will likely increase over time with the right guardrails in place. At the same time, rather than seek new alternative asset products, plan sponsors may be satisfied knowing alternatives have long been part of the
Source: 2025 TIAA Plan Sponsor Listening Tour
Next article
Nonprofits leaning into growth strategies
Higher education and health care employers are facing economic reckonings. They told TIAA in a recent survey that growth is the ticket to their future sustainability.
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1 2025 TIAA Plan Sponsor Listening Tour.
2 Ibid.
3 Americans held $13 trillion in all employer-based defined-contribution retirement plans on June 30, 2025, of which $9.3 trillion was held in 401(k) plans, according to the Investment Company Institute as of September 18, 2025.
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