If you've ever wondered why your 401(k) doesn't invest in the same fancy stuff that pension funds and endowments do — private credit, infrastructure, that sort of thing — the answer has mostly been: the plumbing doesn't allow it. But that plumbing is slowly being rebuilt.

PGIM, the $1.4 trillion investment arm of Prudential Financial (PRU), just rolled out its first private credit collective investment trust (CIT) designed specifically for defined contribution retirement plans — the technical term for 401(k)s and their cousins. The fund will live inside professionally managed retirement solutions like target-date funds and stable-value funds, as well as other multi-manager structures.

The official name is a mouthful: the PGIM Investment Grade Private Credit Fund of the Prudential Trust Company Alternative Investments Collective Trust. But the idea is simple: give retirement savers a piece of the private credit market, which has historically been the playground of institutional investors.

Prudential Trust Company will serve as trustee and manager, while PGIM's multi-sector credit team will act as subadviser. PGIM manages $264 billion in private credit assets and sources deals through a global network covering direct, agented, sponsored and non-sponsored channels.

“DC plan sponsors are increasingly looking for ways to diversify beyond traditional fixed income, but the structures available to them haven't always kept pace with the opportunity set,” said John Vibert, head of credit at PGIM.

Sara Shean, head of Institutional DC at PGIM, added: “Private markets have long played an important role in institutional portfolios, but access within DC plans has historically been limited. This new collective investment trust reflects PGIM's continued focus on expanding access to private credit through structures that align with the nuanced needs of DC plans while seeking to deliver attractive risk-adjusted outcomes for retirement savers.”

PGIM already subadvises $57 billion in assets across more than 55 CITs on the Prudential Trust Company and Great Gray trustee platforms. The firm says this launch is just the first in a series of private markets offerings tailored for DC plans.

The timing is no coincidence. The Department of Labor (DOL) issued a proposed regulation earlier this year that would allow retirement plans to include investments in alternative assets — specifically cryptocurrencies and private markets. The executive summary of the proposal states: “The overarching goal of the proposed regulation is to alleviate certain regulatory burdens and litigation risk that interfere with the ability of American workers to achieve, through their retirement accounts, the competitive returns and asset diversification necessary to secure a dignified and comfortable retirement.”

The public comment period on the proposed rule ends on June 1. After that, the DOL will incorporate feedback into a final rule, expected by late 2026, with phased implementation for plan sponsors beginning next year.

So if you've been feeling left out of the private credit boom, your 401(k) may soon be getting a seat at the table.