Business & Finance
Business and Finance
Business and Finance
Mon, October 25, 2010 BlackRock, SunGard to Deliver New Support for Lifetime Retirement Income within Defined Contribution Plans
NEW YORK--([ BUSINESS WIRE ])--BlackRock, Inc. (NYSE:BLK) and SunGard, a leading software and technology services provider, today announced an innovative, industry-wide solution that will support the broader use of funds generating lifetime retirement income within corporate defined contribution (DC) plans.
"The income window, which can be used by any recordkeeping firm, including Third Party Administrators and advisors using SunGarda™s Omni and Relius platforms, will provide access and the ability to trade lifetime retirement income funds through an integrated link to the SGN."
aWe are solving key operational issues that plan sponsors and recordkeepers have faced when considering the implementation of funds holding annuities for income generation,a said Chip Castille, Managing Director and head of BlackRocka™s US & Canada Defined Contribution Group.
Through the SunGard Global Network (SGN), the BlackRock-SunGard solution will create an aincome windowa for DC plan recordkeeping firms a" providing seamless integration of retirement income generating funds into a plana™s administrative and transaction processes.
aWe are proud to have the opportunity to work with BlackRock on the design and delivery of our income window solution a" a technological advancement that will help make retirement income options more readily available to DC plan participants,a said Bob Ward, Chief Operating Officer of SunGarda™s Wealth Management Business. aThe income window, which can be used by any recordkeeping firm, including Third Party Administrators and advisors using SunGarda™s Omni and Relius platforms, will provide access and the ability to trade lifetime retirement income funds through an integrated link to the SGN.a
The income window solution is among the first to meet key open architecture information-sharing standards recently developed by The SPARK Institute for annuity based, lifetime income funds in retirement plans.
Currently there are about 50 million workers nationwide participating in about 484,000 401(k) plans a" the most common type of defined contribution plan a" representing 75 percent of eligible workers. 401(k) plans now hold about $2.6 trillion in assets, or about 30 percent of all retirement assets.* Over the past 30 years since their introduction, 401(k) plans have become increasingly attuned to the emerging retirement planning needs of both employers and employees, through such innovations as automatic enrollment and investment options with asset allocations specifically linked to the employeea™s retirement time horizon.
aDefined contribution plans have become essential to the retirement and financial security of millions of Americans,a said Castille. aBoth sides of the plan equation a" asset accumulation as well as decumulation a" need further strengthening. But with more and more Americans approaching the threshold of retirement, how to generate lifelong income is an especially urgent and growing concern.a In a recent BlackRock poll of DC plan participants, more than four in 10 a" 44% a" indicated they lack confidence in generating income in retirement.
Funds with an income annuity component add to the administrative complexities and recordkeeping process of DC plans. aMany plan sponsors have found it challenging to add funds specifically designed to help employees transform their accumulated retirement assets into secure retirement income,a Castille said. aNow that barrier is being removed.a
Larry Goldbrum, General Counsel of The SPARK Institute, said: aThrough its adoption of our standards, the BlackRock-SunGard solution will help give plan sponsors throughout the DC marketplace greater comfort and confidence to implement these funds.a The SPARK Institute provides leadership in resolving critical retirement plan industry issues. Its members include a broad based cross section of retirement plan service providers and investment managers, including banks, mutual fund companies, insurance companies, third party administrators and benefits consultants.
aA steady and consistent stream of lifetime income is vital to retirement financial security,a said Robert E. Sollmann, Jr., executive vice president, Retirement Products, MetLife. aDC plans, already serving so many working Americans, are an important platform for the creation and delivery of these lifetime income streams. BlackRock and SunGard are offering critical support to plan sponsors with this solution.a
BlackRock is the industrya™s largest investment-only DC plan provider and the fourth largest U.S. DC provider overall, with $270 billion in assets under management.** BlackRocka™s menu of investment strategies for DC plans includes funds that will combine target-date fund technology with annuities, known as the LifePath® Retirement Income portfolios (formerly SponsorMatcha"). MetLife serves as the annuity provider for BlackRocka™s LifePath® Retirement Income series of funds. With some 50 professionals, BlackRocka™s dedicated DC plan practice provides investment and consultative support across the plan design and implementation spectrum, for plans of all sizes, to help employers and employees together achieve retirement security.
aBlackRock is an advocate for strong and effective DC plans,a Castille said. aSimply stated, our mission is to make it easier for plan sponsors and participants to use DC plans for financially secure retirements. Supporting the broader implementation of investments for lifetime income throughout the DC plan universe shows our mission and our commitment at work.a
About BlackRock
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At September 30, 2010, BlackRocka™s AUM was $3.446 trillion. BlackRock offers products that span the risk spectrum to meet clientsa™ needs, including active, enhanced and index strategies across markets and asset classes. Products are offered in a variety of structures including separate accounts, mutual funds, iShares (exchange traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions. Headquartered in New York City, as of September 30, 2010, the firm has approximately 8,900 employees in 26 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at [ www.blackrock.com ].
About SunGard
SunGard is one of the world's leading software and technology services companies. SunGard has more than 20,000 employees and serves 25,000 customers in 70 countries. SunGard provides software and processing solutions for financial services, higher education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue exceeding $5 billion, SunGard is ranked 380 on the Fortune 500 and is the largest privately held business software and IT services company. For more information, visit [ www.sungard.com ].
*Data from Cerulli Retirement Markets 2009, EBRI, presented in BlackRock 2020 DC Vision briefing, 6/29/10
**Source: Pensions & Investments magazine. AUM rankings as of June 30, 2010.
The strategies referred to in this publication are among various investment strategies that are, or will be, managed by BlackRock as part of its investment management and fiduciary services. Strategies may include collective investment funds maintained by BTC. Collective investment funds are available only to certain qualified employee benefit plans and governmental plans and not offered or available to the general public. Accordingly, prospectuses are not required and prices are not available in local publications. To obtain pricing information, please contact your local service representative. For ease of reference, aBlackRocka may be used to refer to BlackRock, Inc. and its affiliates, including BlackRock Institutional Trust Company, N.A. BlackRock Institutional Trust Company, N.A. (aBTCa), a national banking association operating as a limited purpose trust company, manages the collective investment products and services referred to in this presentation and provides fiduciary and trust services to various institutional investors. Funds maintained by BTC are not insured by the Federal Deposit Insurance Corporation and are not guaranteed by BlackRock, Inc. or its affiliates.
There are risks involved with investing, including possible loss of principal. Risk controls and asset allocation models do not promise any level of performance or guarantee against loss of principal. LifePath Retirement Income is not itself an insurance product. BTC is not offering insurance or promising any financial guarantee or periodic payment. Annuities are provided by one or more insurance companies. Annuity payments are subject to the claims paying ability of the issuing insurance company.
This publication is not intended to be an investment advice or recommendation or legal, accounting or tax advice. You should not rely upon this publication in evaluating the merits of investing in LifePath Retirement Income. Any investment decision with respect to LifePath Retirement Income should be made upon the information contained in any final offering document or other final offering materials relating to LifePath Retirement Income. LifePath Retirement Income is subject to the terms and conditions set forth in any such final offering document or materials (and any changes thereof).
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