BlackRock adds annuities to 401 (k) plans



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  • Annuities are optionally added to the company’s target date retirement offerings in 401 (k) plans.
  • The new LifePath Paycheck product integrates annuity contracts issued by Equitable and Brighthouse Financial.
  • Once plan members turn 59 and a half, they can also purchase their own fixed annuity to provide income for life.

BlackRock, the world’s largest asset manager with more than $ 9 trillion in assets, is embarking on annuities.

The company has a new target date retirement product for 401 (k) plans that will provide workers with a lifelong flow of payments. Called the LifePath Paycheck solution, it incorporates annuity contracts issued by Equitable and Brighthouse Financial, according to BlackRock.

Once participants reach the age of 59 and a half, they will have the option of purchasing a fixed individual retirement annuity to provide a guaranteed income stream for life. Participants will be able to use 30% of their 401 (k) balance in the product, according to a Wall Street Journal report.

Five employers have already signed up for the new product, including the Tennessee Valley Authority, which has about $ 7.5 billion in target-date investments in its retirement plans.

BlackRock expects more than 120,000 US-based 401 (k) plan members will be able to access the annuity option starting in 2022, when the plan’s initial adoptions are expected.


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