BlackRock's Larry Fink warns of the looming retirement crisis, unveils “LifePath Paycheck”

BlackRock CEO Larry Fink on Tuesday urged the government and private sector to ensure Americans have enough money for retirement, and said the world's largest asset manager would launch a product next month to address the issue.

LifePath Paycheck will launch in April, with 14 retirement plan sponsors aiming to make it available to 500,000 employees as defined contribution plans.

“America needs an organized, high-level effort to ensure that future generations are able to live out their final years in dignity,” Fink said in his annual letter to investors.

BlackRock, which had more than $10 trillion in total assets under management at the end of last year, oversees the largest pension funds in the United States.

Data from the Census Bureau's Survey of Consumer Finances in 2022 showed that nearly half of Americans ages 55 to 65 reported not saving a single dollar in personal retirement accounts, Fink said.

“Simply put, for most people, the shift from defined benefit to defined contribution was a shift from financial certainty to financial uncertainty,” he added.

Fink also addressed the climate transition as a key economic trend with a focus on “energy security” and said net zero remains a top investment priority for most BlackRock clients.

Climate awareness and investor interest in sustainable business practices have risen in recent years, forcing money managers to consider environmental, social and governance (ESG) policies as impact investing gains momentum.

“I started writing about the transition in 2020,” he said. “Since then, the issue has become more controversial in the United States.”

BlackRock's environmental, social, and governance (ESG) policies remain a topic of contention, especially in Republican states.

Earlier this month, the Texas School Fund ended its contract with BlackRock to manage about $8.5 billion in state funds, accusing the company of boycotting fossil fuel energy producers. BlackRock urged the fund manager to reconsider.