Carta hits the Hill to expand retirement options for employees

Carta hits the Hill to expand retirement options for employees

Author:

The Carta Policy Team

Published date:

April 21, 2026

Carta meets with top regulators on the Hill to advocate for equity-based 401(k) contributions. In addition, the SEC and CFTC propose Form PF changes as private credit faces new scrutiny.

Topline

Carta hits Capitol Hill in push to expand retirement options for employees

Carta CEO Henry Ward made the rounds in Washington, DC last week, meeting with SEC Chairman Paul Atkins, Acting Labor Secretary Keith Sonderling, House Financial Services Chairman French Hill, and other senior policymakers to discuss the evolving policy landscape for private capital. We discussed fundraising trends, employment, and productivity across startups and funds, and why the INVEST Act is critical to expanding access to capital for founders and fund managers in emerging ecosystems.

But Carta’s core message: Now is the time to modernize the retirement infrastructure to enable employees to contribute equity compensation to their 401(k)s.

Background: The U.S. retirement system was built for a cash-wage economy, but that model no longer holds for a growing share of the workforce. At private, growth-stage companies, employees often receive a meaningful portion of their compensation in equity, sometimes rivaling or exceeding base salary. Yet there is no mechanism to contribute that already-earned, already-taxed, and already-owned equity into a tax-advantaged retirement account.

This creates a structural mismatch: Employees can contribute cash to a 401(k)—a long-duration account designed for long-term savings—but not their most valuable long-term asset. Private company equity is inherently long-duration, too. Employees typically can’t monetize it until an IPO, acquisition, or company-sponsored liquidity event—often years after the grant has vested. As companies stay private longer, more employee wealth is being created outside the public markets, while the retirement system remains tied to older assumptions.

Our proposal: Allow employees to contribute vested, exercised employee equity directly into their 401(k), subject to standard contribution limits. The income would be taxed at vest or exercise, so that any future appreciation, including liquidity event gains inside the retirement account, would be tax-free, consistent with how Roth accounts are designed to work.

Why it matters: Equity is how startups compete with large employers on pay. But without a retirement savings pathway, employees bear the illiquidity risk and miss out on the tax-advantaged growth that cash-compensated workers take for granted. This is a parity problem. Private company employees spend years building wealth outside the retirement system entirely. This proposal closes that gap without opening retirement accounts to new products or additional risk. It simply lets employees put compensation they already own into the savings vehicle best suited to hold it.

And for employees at earlier stages in their careers who may not have the ability to contribute cash, it would allow them to start saving for their future.

What’s next: Engagement is only the beginning. We will continue to build the case and pursue regulatory relief to modernize the retirement rules to reflect the modern economy.

In the meantime, we’d love to hear your thoughts on this idea. Reach out to policy@carta.com.

SEC and CFTC propose sweeping Form PF rollback

The SEC and CFTC proposed the most significant rollback of Form PF reporting requirements since the form was created under Dodd-Frank. Here are some notable highlights for private fund RIAs:

Why it matters: Form PF has become a meaningful compliance burden, especially for smaller private fund advisers that lack scaled legal and operations teams. The threshold increase would take nearly half of current filers out of the regime while preserving most of the asset-level visibility regulators say they need. For larger PE managers, eliminating Section 6 would remove a sensitive quarterly disclosure requirement around fund lifecycle events, including continuation vehicles, at a moment when the secondary market is increasingly being used as a standard liquidity tool rather than a signal of distress. But the proposal is not simply deregulatory. By pairing broad relief with targeted questions on private credit, the agencies are signaling a shift away from one-size-fits-all reporting and toward a framework more tailored to where they believe risk may actually be building.

What’s next: There is a 60-day comment period following publication in the Federal Register. In the meantime, the October 1, 2026, compliance date for the existing 2024 amendments remains, though these proposals would likely supersede most of them with a separate 12-month transition window.

Treasury requests data from private credit firms

The Treasury Department has begun formally requesting detailed information from private credit firms regarding business models, recent performance, and relationships with banks and insurance companies. The outreach builds on months of closed-door meetings and now moves into structured data collection, with a particular focus on liquidity management practices and how firms are thinking about the DOL’s proposal to expand 401(k) access to alternative assets.

Why it matters: The ~$2T private credit market is navigating its first real stress test, with rising defaults in certain sectors, refinancing pressure, and growing tension between long-duration assets and periodic liquidity promises in retail-oriented vehicles. U.S. financial regulators have been clear that private credit does not currently pose systemic risk, framing recent dislocations as market events rather than stability concerns. But as the market moves closer to retail and retirement channels, regulators are aiming to build a clearer picture of how private credit behaves under stress, and whether existing structures can absorb losses without broader spillovers.

Expect Treasury to expand engagement with domestic and international insurance regulators as it assesses where risk ultimately resides in the system. The Fed is also pressing major U.S. banks for details about their exposure to private credit, while the SEC has requested comment on enhanced private credit reporting as part of its Form PF proposal.

Net/net: Retailization remains a priority, but it will likely come with a heavier emphasis on guardrails related to liquidity, valuation, and disclosure.

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Author: The Carta Policy Team aims to connect the policymaking community and venture ecosystem to build an ownership economy and advance policies that support private companies, their employees, and their investors.