Insurers Join Effort to Deliver Simplified
Access to Lifetime Income and Increased Financial Stability in
Retirement
At a time when Americans are increasingly concerned about their
long-term financial future, BlackRock is announcing a
ground-breaking solution designed to provide millions of American
workers with simplified access to lifetime income throughout their
retirement. In a major step forward, BlackRock has enlisted two
leading insurers, Equitable and Brighthouse Financial, in the
effort. Designed to be provided through employers’ defined
contribution plans, the new investment solution, called LifePath
PaycheckTM, aims to reimagine retirement by combining an innovative
investment solution that helps protect workers’ nest eggs with an
integrated digital experience for participants that leverages the
security and scale of the Microsoft Azure cloud platform.
The investment solution is a target date strategy that will
include an allocation to innovative annuity contracts, over time.
In a significant breakthrough for the industry, these annuity
contracts, to be issued by Equitable and Brighthouse Financial,1
will not limit the daily liquidity of the target date strategy and
will provide plan participants with the option to use a portion of
their plan account balance at retirement to purchase fixed
individual retirement annuities from the insurers that will provide
guaranteed lifetime income. The solution will be available to U.S.
employers to provide to their employees through their defined
contribution retirement plans.
“The recent market volatility has been difficult for employees
saving for retirement. Retirees need the tools to find financial
security, without fear of running out of money or of market losses
significantly eroding their retirement savings. For companies,
helping workers save and invest for the long term is not just the
right thing to do, it is critical for deepening the connection
between them and their employees,” said Mark McCombe, BlackRock’s
Chief Client Officer.
A new approach to decumulation and retirement
stability
The trend away from defined benefit plans and the relatively low
uptake of traditional annuities in defined contribution plans have
left too many Americans to figure out on their own how to convert
their savings into a dependable income stream – a problem made even
more difficult during times of market stress. LifePath Paycheck
seeks to offer the simplicity and lifetime income stream of a
defined benefit plan, combined with the flexibility and dynamism of
a defined contribution plan.
“We believe that choice, flexibility and lifetime retirement
income are key components in helping people secure their financial
well-being,” said Nick Lane, President, Equitable. “We are proud to
continue our track record of innovation by working with BlackRock
to provide income options to more workplace retirement plans.”
“For years, the industry has been trying to help employers
provide their employees with the option to translate their nest
eggs into guaranteed income,” said Conor Murphy, Chief Operating
Officer, Brighthouse Financial. “BlackRock’s solution is designed
to be intuitive to both the employer and employee, and Brighthouse
Financial is proud to be a part of this initiative as we continue
to help people achieve financial security.”
Now more than ever, other partners in the ecosystem, including
consultants and recordkeepers, are aligned on the critical need to
provide sustainable income through defined contribution plans.
“Our clients are looking for ways to solve the challenge of
decumulation and deliver lifetime income to their employees in a
simple and scalable way,” said Jeff Cimini, Head of Retirement
Product at Voya, a recordkeeper for defined contribution plans. “We
are excited to work with BlackRock as they bring this solution to
market.”
To complement the investment solution, BlackRock is building an
integrated digital experience that leverages the Microsoft Azure
cloud platform and helps educate participants on the features of
the solution and positive saving behaviors, such as maximizing
401(k) contributions. It will also facilitate participants’
engagement with the insurers if they elect to purchase the fixed
individual retirement annuities. The digital experience, called
MyLifePath™, is designed to integrate with an employer’s
recordkeeping platform, and will clearly explain how today’s
contributions can translate to potential retirement income,
utilizing projections based on BlackRock’s long-term market
forecasts, life expectancy and other data.
An all-hands-on-deck moment
The United States is facing a retirement crisis. Forty percent
of households approaching retirement age have zero savings, and a
quarter of American seniors could not fund two years of paid home
care, even if they liquidated all of their assets2. The COVID-19
crisis has magnified these troubling trends, underscoring the work
that must be done to provide workers and retirees long-term
stability and security.
“We see this as an all-hands-on-deck moment, requiring
collaboration across the entire retirement ecosystem, and we are
committed to doing our part,” said Anne Ackerley, Head of
BlackRock’s Retirement Group. “In our conversations with clients,
retirement security is a top priority, as it must be for all of
us.”
About BlackRock
BlackRock’s purpose is to help more and more people experience
financial well-being. As a fiduciary to investors and a leading
provider of financial technology, our clients turn to us for the
solutions they need when planning for their most important goals.
As of March 31, 2020, the firm managed approximately $6.47 trillion
in assets on behalf of investors worldwide. For additional
information on BlackRock, please visit
www.blackrock.com/corporate.
About Equitable
Equitable, a subsidiary of Equitable Holdings (NYSE: EQH), has
been one of America’s leading financial services providers since
1859. With the mission to help clients secure their financial
well-being, the company provides advice, protection and retirement
strategies to individuals, families and small businesses. Equitable
has more than 8,000 employees and financial professionals and
serves 2.8 million clients across the country. Please visit
equitable.com for more information.
Equitable is a brand reference to AXA Equitable Life Insurance
Company. Equitable Advisors is the brand name of AXA Advisors, LLC
(member FINRA, SIPC). Annuities issued by AXA Equitable Life
Insurance Company (NY, NY). All guarantees associated with
annuities are subject to the claims-paying ability of the issuing
life insurance company.
About Brighthouse Financial, Inc.
Brighthouse Financial, Inc. (Brighthouse Financial) (Nasdaq:
BHF) is on a mission to help people achieve financial security. As
one of the largest providers of annuities and life insurance in the
U.S., Brighthouse Financial specializes in products designed to
help people protect what they’ve earned and ensure it lasts. Learn
more at brighthousefinancial.com.
Brighthouse Financial® and its design are registered trademarks
of Brighthouse Financial, Inc. and/or its affiliates. Annuities
issued by, and product guarantees are solely the responsibility of,
Brighthouse Life Insurance Company, Charlotte, NC 28277 and by
Brighthouse Life Insurance Company of NY, New York, NY 10017 (in
New York only). All guarantees are subject to the claims-paying
ability and financial strength of the issuing insurance
company.
1 Participation by Equitable and Brighthouse Financial in
delivering BlackRock’s investment solution is subject to certain
approvals, including regulatory approval of their respective
annuity products. 2 GAO, “Survey of Consumer Finances,” 2016;
Health Affairs, “The Financial Burden Of Paid Home Care On Older
Adults: Oldest And Sickest Are Least Likely To Have Enough Income,”
2019
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version on businesswire.com: https://www.businesswire.com/news/home/20200527005163/en/
For more information, press only:
BlackRock Logan Koffler Email:
Logan.Koffler@BlackRock.com Phone: (347) 379-0363
Equitable Abby Aylman Cohen Email:
mediarelations@equitable.com Phone: (212) 314-2010
Brighthouse Financial Deon Roberts Email:
deon.roberts@brighthousefinancial.com Phone: (980) 949-3071 Mobile:
(504) 319-2449
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