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Benefits December 17, 2024
BlackRock Employees Among Early LifePath Paycheck Users
The asset manager has made its TDF with an annuity option the QDIA for its roughly 8,500 employees.
Reported by Alex Ortolani
BlackRock Inc. is putting its retirement-income product to the test with an important participant base: its own employees.
In April, BlackRock launched its LifePath Paycheck with six plan sponsors, while nine more were in the process of implementing it. The world’s largest asset manager’s name put weight behind an emerging defined contribution product category that offers users the option, at an advanced age, to annuitize a portion of retirement plan contributions.
On Monday, one of the architects of that product, Anne Ackerley, posted the news that BlackRock’s employees will now be using it: The target-date series will be the plan’s qualified default investment alternative and available to about 8,500 U.S. employee plan participants at the firm, a spokesperson confirmed.
“Today marks an exciting milestone for the many, many colleagues who worked to bring LifePath Paycheck to the BlackRock retirement savings plan!” Ackerley, now a senior adviser to BlackRock’s retirement business, wrote on LinkedIn. “Every worker deserves to feel more secure about their financial future, so knowing BlackRock retirement savings plan participants now have access to this retirement income solution makes me incredibly proud.”
Ackerley had been head of the retirement group at the firm, but stepped down from that role in May amid a restructuring.
Robert Crothers, head of U.S. retirement at BlackRock, chimed in as well on his LinkedIn account, writing: “Our #1 financial fear as Americans is outliving our savings. Now, BlackRock retirement savings plan participants will have more peace of mind knowing that when they retire, they’ll have access to an income stream they can count on. For life.”
The LifePath Paycheck is invested like a TDF until participants reach the age of 55, when about 10% of the balance is allocated to lifetime income investment “units” that will reach about 30% of the portfolio by age 65 if not annuitized. Starting at age 59.5, a participant will have an “annuity purchase option” window that lasts until they turn 71, during which they can purchase an annuity that creates a guaranteed paycheck in retirement.
BlackRock’s retirement savings plan had about $4.1 billion in assets and 14,416 overall participants, as of December 31, 2023, according to its most recent Form 5500 filing.