BlackRock Builds Investment Solution That Provides a Paycheck Throughout Retirement

Insurers Join Effort to Deliver Simplified Access to Lifetime Income and Increased Financial Stability in Retirement

NEW YORK--(BUSINESS WIRE)--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 Paycheck^TM, 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