Welcome to the latest edition of This Week in Pensions!
We have gathered the best stories about pensions and retirement security from the previous week. This is the news you need to know in the fight for a secure retirement.
Tim Hill: It’s Time to Start a Discussion About Private Equity in Retirement Plans
Writing on behalf of the International Association of Fire Fighters (IAFF) for the Voice for Public Pensions, National Conference on Public Employee Retirement Systems, Tim Hill of the IAFF Pension Resources Department argues that it’s time for an open, informed conversation about the role of private equity in public retirement systems. Hill notes that while private equity investments can help diversify pension portfolios, they must be designed with strong safeguards, labor-conscious oversight, and transparency to ensure workers’ retirement security is never put at risk.
Senators Warn Against Expanding Private Equity and Crypto in 401(k)s
This week, U.S. Senators Elizabeth Warren, Bernie Sanders, Ron Wyden, Dick. Durbin, Jeff Merkley, Chris. Murphy and Tina Smith sent a letter to Secretary Chavez-DeRemer, urging caution regarding the allowance of individuals to invest their 401(k) retirement savings in unregulated markets, such as crypto. The letter to the U.S. Department of Labor and the SEC opposes a recent executive order that could make it easier for 401(k) plans to invest in private equity and cryptocurrencies. The senators warn that the change could expose workers’ savings to high fees, opaque investments, and greater risk, and they’ve requested detailed explanations on how fiduciary protections will be enforced.
Private Equity Faces Growing Pressure
A series of new reports suggests that private equity’s decade-long boom may be losing steam — a shift with significant implications for public pension systems that invest billions in the asset class.
According to the Federal Reserve, many private equity–backed companies took on high levels of debt when interest rates were near zero. Now, with borrowing costs more than doubling since 2021, those firms face mounting refinancing challenges. Analysts at Wellington Management note that the average leverage for buyout funds peaked around seven times earnings, leaving many portfolio companies struggling to service debt.
At the same time, cash distributions to investors have fallen sharply. Bain & Company’s Mid-Year Private Equity Report 2025 found that exits through sales and IPOs have slowed to their weakest pace in more than a decade, forcing funds to hold assets longer and return less cash to investors. A Ropes & Gray market recap confirms that “distributions to limited partners are at their lowest five-year level since the financial crisis.”
S&P Global data tells a similar story: total private-equity exits fell to a two-year low in early 2025, continuing a trend that began in 2023. Without steady exits, private-equity managers face a tougher time raising new funds.
Oregon Reconsiders Its Exposure to Private Equity
The Oregon State Treasury announced it will scale back the share of its $97 billion Public Employees Retirement Fund allocated to private equity. Treasurer Elizabeth Steiner said the move is part of a broader effort to reduce risk and improve transparency after questions from stakeholders about high fees and opaque performance metrics. Oregon had long been among the nation’s largest public investors in private equity.
CalPERS: Musk Proposed Compensation Package Excessive…“by many orders of magnitude”
According to Investing.com, CalPERS has announced its plan to formally oppose a proposal to provide a massive corporate windfall to Tesla executives, including the world’s richest man, Elon Musk.
“CalPERS’ longstanding practice when evaluating executive pay is to measure proposed compensation against performance and industry norms,” Drew Hambly, CalPERS’ Global Public Equity Investment Director, told Investing.com. “The CEO pay package proposed by Tesla is larger than pay packages for CEOs in comparable companies by many orders of magnitude. It would also further concentrate power in a single shareholder. CalPERS is voting against.”
Be sure to check back next Friday for the latest news in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.