BlackRock has not said much about a relatively new program that adds annuitization options to 401(k) plans, but the company still seems to like the program.
Larry Fink, the asset manager's chairman and chief executive officer, mentioned the program Thursday when he talked to securities analyzes about the company's earnings for the fourth quarter of 2025.
BlackRock began developing the LifePath Paycheck annuity option program in 2018, announced in 2020 that Equitable and Brighthouse would provide the annuitization options, and opened for sales in April 2024.
"It's been the fastest-growing lifetime income target date strategy in the defined contribution market," Fink told the analysts. "We believe it will be the default retirement investment strategy."
Fink and BlackRock did not provide new participant counts or asset totals.
BlackRock as a whole reported $1.2 billion in net income for the quarter on $7 billion in assets and $14 trillion in assets under management, compared with $1.7 billion in net income on $5.7 billion in revenue and $12 trillion in AUM for the fourth quarter of 2024.
A retirement plan annuitization option can convert some or all of the assets in a worker's account into a stream of lifetime income.
What it means: More clients may come to retail advisors and agents with in-plan annuities available through their employer-sponsored retirement plans, or, possibly, already in action.
That could help offer many clients access to a minimum level of post-retirement income, but it could complicate finances for clients who need cash to handle emergencies or basic needs, are locked into use of in-plan annuitization options with high costs or weak returns, or end up without adequate retirement portfolio diversification.
The LifePath Paycheck program: In early 2025, BlackRock said the program had attracted six employer plans with about 200,000 participants and $16 billion in assets, and that all BlackRock LifePath target-date funds had about $500 billion in assets under management.
A target-date fund allocates assets based on the participants' expected retirement dates.
Private market assets: The best possible default retirement program for workers is a target-date fund program that includes an in-plan lifetime income option and combines use of publicly traded and private market assets, Fink said.
"Guaranteed income and private markets are not two separate conversations," Fink said. "BlackRock can bring it all together. Our vision is not just for incremental addition of private markets. It's the design of an optimal target date solution."
BlackRock expects to launch a LifePath target date fund with private assets later this year, Fink said.
BlackRock offers the Aladdin portfolio management system and the Preqin private markets data service.
The Aladdin and Preqin businesses should benefit from increased use of private market assets by insurance companies, pension funds and, eventually, 401(k) plans, Fink said.
If the U.S. Labor Department lets 401(k) plans and other defined contribution retirement plans use private assets, "we're still going to have to live under some prudent ruling, maybe still a fiduciary ruling of some sort," Fink said.
Any defined contribution plan that adds private assets to the options "is going to have to validate and authenticate the risk that is being implied when they add private markets," Fink said. "The need to have comprehensive risk tools to understand the risk associated with adding private markets to what has been an all-public market portfolio is imperative."
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