New York-based BlackRock today announced a new retirement income-oriented investment solution in partnership with annuity providers Equitable and Brighthouse Financial.
LifePath Paycheck is a target-date strategy that incorporates an allocation to annuity contracts. It will be made available to U.S. employers to provide to workers via defined contribution retirement plans, the company said.
“The recent market volatility has been difficult for employees saving for retirement,” Mark McCombe, BlackRock’s chief client officer, said in a prepared statement. “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.”
The annuity contracts will not limit the daily liquidity of the target-date strategy. Instead, retirement plan participants will have the option to use a portion of their account balance at retirement to purchase fixed individual retirement annuities from Brighthouse Financial and Equitable.
The idea behind LifePath Paycheck, according to BlackRock’s announcement, is to offer some of the simplicity and security of increasingly rare defined benefit plans to defined contribution plan participants.
LifePath Paycheck is also an attempt to address the low level of average savings among Americans nearing retirement age.
BlackRock has also partnered with Microsoft to create MyLifePath, a digital experience for plan participants, using Microsoft’s Azure cloud platform to provide certain financial wellness and educational services integrated with employers’ recordkeeping platforms.
MyLifePath will teach participants about positive saving behaviors as well as inform them of the LifePath Paycheck solution and facilitate engagement with BlackRock’s insurance provider partners and illustrate to them how savings and contributions can translate to potential retirement income, the company said.