The U.S. should implement a form of mandatory savings, akin to Australia's superannuation system, because Social Security, defined benefit plans and defined contribution plans aren't providing, in aggregate, a comprehensive foundation for retirement, Laurence Fink, chairman and CEO of BlackRock, said Tuesday.
“The current system is not working,” Mr. Fink said in a speech to students at New York University's Stern School of Business.
However, Mr. Fink said he didn't have a specific plan, adding that he wasn't recommending the abandoning of current retirement plans. In advocating a “full exhaustive review” of possible retirement strategies, Mr. Fink told the audience he was “just beginning the conversation.” Any mandatory retirement system would have to be phased in, he added.
“We need to acknowledge there is a crisis,” Mr. Fink said. “The solution needs to be big, urgent and a national priority.”
In addition to citing Australia's superannuation system, Mr. Fink also mentioned the new National Employment Savings Trust in the U.K. as a potential model.
Mr. Fink exhorted employers to step up their efforts to encourage greater retirement savings through more education of participants, better corporate matches and increased use of strategies such as auto enrollment.
He said the money management industry, including BlackRock, “needs to be better,” by focusing “less on short-term sales and more on investors' long-term needs.”