BlackRock’s Nick Nefouse discusses the evolution of guaranteed income plans, 401(k) programs, and the future of retirement security

Washington, November 12th / PRNewswire / -- The National Institute on Retirement Security ( NIRS ) of the United States released today the 7th episode of the "American Retirement" ( Retirement in America ) podcast, titled "Making 401(k) More Like a Pension: The Future of Lifetime Retirement Income."

This episode of the program invited Nick Nefouse, who is in charge of BlackRock's global retirement solutions and also oversees LifePath, to discuss with the podcast host and Executive Director Dan Doonan how retirement plans have evolved to help Americans convert their savings into a reliable source of income during their retirement.

“American Retirement” can be listened to on the NIRS website, YouTube, and all major podcast platforms.

For decades, traditional pensions have provided workers with a predictable monthly income for life. However, as private sector employers have shifted to 401(k) plans, workers are not only increasingly responsible for saving and investing, but also have to decide how to make use of these savings throughout their retirement. This podcast conversation explores innovations in retirement plan design and how to bring some of the most valuable features of traditional pensions into today's 401(k) systems.

Doonan indicates that "saving enough money for retirement is just part of the challenge. Americans also need help to convert these savings into an income they can rely on for the rest of their lives." Nick provides an interesting perspective on how the retirement industry is rethinking 401(k) plans to address this challenge. As more and more Americans retire without traditional pensions, filling this gap will reduce financial pressures during retirement by restoring the certainty that many workers have lost over the past few decades.

The core of the discussion is BlackRock’s LifePath Paycheck ®, which is a retirement investment solution that incorporates guaranteed lifetime income streams provided by third-party insurance companies into a target-date strategy. As participants approach retirement, the strategy gradually increases the allocation to group annuity contracts. Participants have the option to convert these into a lifetime income stream while retaining their remaining savings for continued investment and access at any time. Nefouse explains that this approach aims to increase the certainty of retirement income while reducing the need for individuals to make complex investment and income planning decisions on their own.

The topics discussed in this episode of the program include:

• Making 401(k) plans more like pensions: How retirement plans have evolved from simply accumulating savings to providing workers with a stable income throughout their retirement, incorporating professional investment management and traditional pension-related features.
• How to use retirement savings. Why retirees are often reluctant to draw on their savings even though they have accumulated a considerable amount, and how predictable income can help them make spending decisions with more confidence.
• The role of employers in designing retirement plans. How workplace plans provide institutional-level investment management, fiduciary oversight, and potentially lower costs, while also highlighting the challenges employers face when adopting new retirement income solutions.
• The future of retirement investing. The potential role of private market investments, participant education, and public policy in helping retirement plans achieve better long-term outcomes.
• BlackRock’s LifePath Paycheck strategy. This strategy integrates guaranteed lifetime income into the target-date strategy, allowing a portion of the portfolio to be converted into a lifetime income stream, providing a lifelong “salary” after retirement, while allowing the remaining assets to continue to be invested and remain available for use.

“American Retirement” is a podcast launched by NIRS that explores economic, labor force, and policy issues affecting retirement security in the United States.

The National Institute on Retirement Security is a non-profit, non-partisan organization dedicated to helping shape informed policies by promoting a deeper understanding of the value of retirement security for employees, employers, and the overall economy. NIRS is located in Washington, D.C., and its members include financial services companies, employee benefit plans, industry associations, and other retirement service providers.