Private Equity in 401(k)s Isn’t as Smart as It Seems: Editorial

Should regular Americans be allowed to put more of their retirement savings into private investments long reserved for the wealthy? The White House is seriously considering the proposal, at the behest of some of the country’s largest financial firms. This has never been a good idea.

The pitch sounds compelling. Accredited investors — professionals and relatively well-off individuals — have entrusted trillions of dollars to private capital funds, which purport to generate superior returns by locking up money for multiyear periods in assets ranging from infrastructure to business loans. American workers with more than $12 trillion in retirement accounts such ...