BlackRock clumsily reverse-engineers retirement
BLK•BlackRock unveiled customizable target-date 401(k) funds that can include annuities and private assets. The framework also lets employers choose index-based, actively managed or whole-portfolio strategies.
1. Retirement fund options
BlackRock unveiled a framework allowing employers to tailor target-date funds to their workforces, with choices including index-based or actively managed strategies and whole-portfolio approaches. Its LifePath Paycheck option lets workers use some savings to buy an annuity at retirement.
2. Annuities and private assets
The framework would let employees use part of their account balance to buy lifetime income while keeping the rest invested elsewhere. The article argues that annuities can protect against outliving savings, but questions whether private assets are a good fit for individual retirement accounts, noting that the Cambridge Associates Private Equity Index returned around 9% annually after fees over the five years through March, versus 12% for the S&P 500.
3. Simplicity concerns
The article says pension-like regularity at low cost could improve on conventional 401(k) plans, but argues that asking workers to navigate more investment choices may undermine the simplicity they need in retirement.




