The new BlackRock in-plan annuity program, the LifePath Paycheck program, has about 200,000 retirement plan saver participants.
Larry Fink, BlackRock's chairman and CEO, disclosed that number Monday in his annual letter to investors, which appears in the company's new proxy statement.
Much of the letter was about bringing private credit to the masses, along with topics such as getting rid of red tape and figuring out how to generate the electricity needed to power data centers. But Fink also talked about the role of BlackRock's LifePath target-date funds in helping people get ready to retire.
The company's LifePath Paycheck program came to life in April 2024. The program will help 401(k) plan participants move their plan assets into annuities.
The new program "gives people the option to convert 401(k) retirement savings into a steady, reliable monthly income," Fink wrote in the investor letter. "In just 12 months, LifePath Paycheck has already attracted six plan sponsor clients representing 200,000 individual retirement savers."
What it means: Fink has predicted that programs that combine target-date funds and a carefully selected menu of in-plan annuities will eventually serve as the default retirement savings arrangement for typical workers.
Skeptics have suggested that persuading workers to use any kind of annuity, including an in-plan annuity, may be tougher than promoters of that approach think.
The performance of BlackRock's program may be a test of whether combinations of target-date funds and in-plan annuities really will be the default retirement savings arrangements of the 21st century.
The backdrop: BlackRock said in January that the LifePath Paycheck program has attracted six employer plan clients with $16 billion in assets under management.
BlackRock says in its annual financial statement that its institutional active asset management business ended 2024 with $2.1 trillion in assets under management and attracted $64 billion in net inflows. The LifePath Paycheck program appears to account for 25% of the net inflows.
The new participant count implies that the participants in the LifePath Paycheck program have an average of $80,000 in their 401(k) plan accounts.
The Investment Company Institute has reported that the average 401(k) plan participant has an account balance of $70,320.
Larry Fink. Credit: Lev Radin/Shutterstock
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