Laurence D. Fink, BlackRock chairman and CEO, believes “we're at a major crossroads” in the U.S., because “we have a real absence of savings toward retirement” in the private sector.
Mr. Fink was speaking at Pensions & Investments' Global Future of Retirement conference in New York on Tuesday.
“As companies migrated from DB to DC, obviously they rid themselves of the economic responsibility,” Mr. Fink said during a session at the conference. “But they should never assume they rid themselves of the moral responsibilities.”
He also said “the lack of participation in DC (plans) is stunning. (Participation) is still not high enough.”
Mr. Fink noted the lack of DC savings “will become the leading drag to the U.S. economy in the future,” and “be a far bigger crisis in this country than health care ever was.”
He added that he hopes retirement will become a “major component” of the next presidential election.
In addition to the crisis of savings in the U.S., Mr. Fink said money managers need to speak to regulators more. He explained that money managers have “done a good job of staying out of the news, and that is the problem.”
“Most asset managers don't want a voice. Most just want to stay out of the news and collect their fees,” he said.
Because money managers serve as fiduciaries to their clients, “we owe it to (the clients) to speak up.”
Mr. Fink also expressed his opinions about infrastructure. BlackRock today has about $6 billion in infrastructure, and he wants to have it grow to about $20 billion to $30 billion.
“It's a major component for future growth,” for the firm he said. “More importantly, I look at it as a mechanism for us to be an impact investor in countries around the world.”
He also said infrastructure is “a perfect marriage” for BlackRock's retirement and insurance company clients, since those investors “are desperate for high-yielding long-duration assets,” where “liquidity is not as important.”
After having worked with the Mexican government on infrastructure projects, BlackRock is now working with the government of India on infrastructure investments.
Mr. Fink called U.S. infrastructure “sad” and said it is “affecting the quality of life in the U.S.” He added that he thinks infrastructure investment could be an important component for creating good jobs as well.