BlackRock’s Fink Flags U.S. Retirement Crisis

In addition, he announced BlackRock in April will offer a lifetime-income option in 14 retirement plans covering 500,000 employees.

By Manya Saini

BlackRock CEO Larry Fink on March 26 urged the government and the private sector to ensure Americans have enough money to retire and said the world’s largest asset manager would launch a product next month to address the issue.

The “LifePath Paycheck” will go live in April, with 14 retirement plan sponsors aiming to make it available for 500,000 employees as defined contribution plans. Company materials say the product will represent “a new asset class called lifetime income, which provides participants with the option to purchase a lifetime income stream in retirement — payable by insurers selected by BlackRock.”

“America needs an organized, high-level effort to ensure that future generations can live out their final years with dignity,” Fink said in his annual letter to investors.

BlackRock, which had over $10 trillion in total assets under management at the end of last year, oversees the largest retirement funds in the U.S.

Fink said data from the U.S. Census Bureau’s survey of consumer finances in 2022 showed nearly half of Americans aged 55 to 65 reported not having a single dollar saved in personal retirement accounts.

“Put simply, the shift from defined benefit to defined contribution has been, for most people, a shift from financial certainty to financial uncertainty,” he added.

Fink also addressed climate transition as a major economic trend with a focus on “energy security” and said net-zero remains a top investment priority for most BlackRock clients.

Climate awareness and investor interest in sustainable business practices have surged in recent years, forcing money managers to factor in environmental, social, and governance (ESG) policies as impact-investing gains momentum.

“I started writing about the transition in 2020. Since then, the issue has become more contentious in the U.S,” he said.

BlackRock’s ESG policies continue to be a topic of discord, particularly in Republican states.

Earlier this month, a Texas school fund terminated its contract with BlackRock to manage around $8.5 billion of state money, accusing the company of boycotting fossil fuel energy producers. BlackRock had urged the fund’s administrator to reconsider.

This article was provided by Reuters. Rethinking65 contributed to this article.

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