NEW YORK--(BUSINESS WIRE)--
BlackRock, Inc. (BLK) Chairman and Chief Executive Officer Laurence D. Fink today called on government and business leaders to recognize that Americans are woefully unprepared for increasing longevity, and said policymakers should make resolving the resulting retirement funding crisis a national priority.
In a speech to students and faculty at New York University Stern School of Business, Mr. Fink noted the great progress made in achieving longer lifespans but added that this blessing is severely straining resources for governments and individual investors worldwide, and also may be restricting job opportunities for younger people as older people remain in the workforce longer. Click here to view a webcast of Mr. Finks remarks.
Longevity is the defining challenge of our age, said Mr. Fink, who noted that one in four Americans age 65 today is expected to live until the age of 90. He said the traditional mix of retirement funding from Social Security, pensions and personal savings was in the grip of a systemic crisis that is threatening not only retirement systems but also our economic futures.
Because of its far-reaching effects, a solution needs to be as big and urgent a national priority as anything we have faced in recent years. The longer we wait to act, the bigger the problem will become, Mr. Fink said.
To help meet this challenge, Mr. Fink called for a comprehensive solution that, in addition to Social Security, includes some form of mandatory retirement savings, similar to Australias superannuation system or the new National Employment Savings Trust in the UK. Calling for the gradual introduction of such a provision, Mr. Fink said, It would relieve the crisis of financing longevity that will be a drag on our economy and job creation for years to come if we dont deal with it soon.
Mr. Fink also said that corporate America has a moral obligation to help employees prepare for retirement and urged more employers to offer retirement plans, provide matching funds, auto-enroll all employees and educate employees on the absolute necessity of maxing out their plans. He said that BlackRock and other asset managers needed to do a better job of helping prepare savers for retirement. That means much less of a focus on short-term sales and products and more on investors long-term needs, Mr. Fink said.
Mr. Fink spoke as BlackRock published its latest Investor Pulse Survey Investing in a Low-Yield Environment which found that while more than half of respondents fear they will outlive their savings, some 73 percent are more concerned about keeping their savings safe than generating the returns they will need to fund retirements that are now lasting up to three decades or more.
Were not going to change human behavior, but we need to find ways to influence it. Investors dont take a long-term view. They are too concerned about all the noise out there, all the ups and downs in the markets, Mr. Fink said, citing behavioral studies on risk aversion among individual savers.
That noise and the concern people have about outliving their savings are ironically driving investors to investments they perceive to be safer, like traditional bonds, Mr. Fink said. But they should do just the opposite, taking advantage of their longer investment horizon to keep their money working for them.
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BlackRock CEO Declares Longevity “Defining Challenge of Our Age”