Episode Description:
Retirement systems are undergoing a structural shift as traditional pensions decline and individuals take on greater responsibility for financial outcomes. Longer lifespans and evolving capital markets are making retirement planning more complex and consequential.
In this episode of The Bid, Oscar Pulido speaks with Nick Nefouse, Global Head of Retirement Solutions at BlackRock. They discuss how defined contribution plans, target date funds, and regulatory changes are reshaping how individuals save, invest, and prepare for retirement.
The conversation explores how retirement is moving from a focus on accumulation to income generation, particularly during the 'retirement window.' It also highlights how global systems are converging toward similar models, and how innovation—across portfolio construction, private markets, and guaranteed income—is influencing long-term outcomes.
Key insights:
• How the shift from pensions to defined contribution plans is changing investor responsibility
• Why longevity is reshaping retirement timelines and financial planning needs
• How target date funds are simplifying access to capital markets for individuals
• What the 'retirement window' reveals about diverging investor outcomes
• Where global retirement systems are converging despite regional differences
• How income generation is becoming central to retirement portfolio design
Key moments in this episode:
00:00 Introduction to retirement trends
02:00 Shift from pensions to defined contribution plans
04:30 The role of target date funds and regulation
6:00 The retirement 'window' and investor behavior
8:00 Expanding access to retirement plans
10:00 Global retirement system comparisons
14:00 Retirement vs. wealth management convergence
16:00 Market volatility and long-term investing
18:00 The future of retirement systems and innovation
Sources: BlackRock Retirement Trends Report, 2025; Federal Reserve Bank of St. Louis, 'Pension or 401(k)? Retirement Plan Trends in the U.S. Workplace,' 2025
Keywords: retirement trends, retirement planning, defined contribution, 401k, target date funds, longevity, financial planning, investing,
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to any company or investment strategy mentioned is for illustrative purposes only and not investment advice. The views expressed by third‑party speakers are their own and do not necessarily reflect the views or positions of BlackRock, nor should they be interpreted as an endorsement by BlackRock. In the UK and non-European Economic Area countries, this is authorized and regulated by the Financial Conduct Authority. In the European Economic Area, this is authorized and regulated by the Netherlands Authority for the Financial Markets. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures.
Oscar Pulido: Over the past few decades, the retirement system has undergone a quiet but profound shift. What was once built around pensions and predictable income has increasingly moved toward individual savings and market-based outcomes. At the same time, people are living longer, markets are more complex, and the decisions investors face from how to invest to how to spend have become more consequential.
Today, the conversation is starting to move beyond how much people save to a broader question, how those savings are invested, managed, and ultimately turned into income that can last through retirement. So how is the retirement system evolving, and what should investors understand about this next phase?
Welcome to The Bid, where we break down what's happening in the markets and explore the forces changing the economy and finance. I'm Oscar Pulido.
Today, I’m joined by Nick Nefouse, global head of retirement solutions in the multi-asset strategies and solutions group at BlackRock. Together, we'll explore the key trends shaping retirement today, how the system is adapting to meet new challenges, and what it all means for investors planning for the future.
Nick, thank you so much for joining us on The Bid.
Nick Nefouse: Thanks for having me, Oscar.
Oscar Pulido: Nick, this is your first time on the Bid, but it's not the first time that we've talked about retirement, so it's good to hear from a different perspective.
Your team actually runs the portfolios that many people saving and investing for retirement use. this is the way they access the capital markets. So, I'm wondering from your perspective, when you look at the retirement landscape today and all the changes that are going on in markets, in demographics, in the way that retirement plans are structured, what are some of the key shifts that you're focused on?
Nick Nefouse: Thanks, Oscar. There's a couple of key shifts that we tend to follow. First of all is the decline of the traditional pension plan. These are the defined benefit plans, that were so prevalent probably in the middle of the last century.
About 25% of Americans have, access to a pension plan and that number continues to decline. What that's doing is it's shifting a bigger burden onto the individual. So, the individual has to make the decision on how much to save, how to invest, those types of things, and this is through a 401 plan, or 403 type plan.
The second one is that people are living longer. So, this has been, fairly challenging. It's not only that the shift has gone from the traditional pension plan to a 401 plan, but that people now spend 25, even 30 years in retirement, so we have to figure out how to make the money work better for them. So those two things combined are changing the way that we look at planning for retirement and the way that we look at, frankly, saving and investing.
Oscar Pulido: Talk a little bit more about this shift from defined benefit to define contribution. Define benefit, I think we, we use the word pension and I think that means that people tended to receive something after they retired and they didn't have to worry about it much. Somebody else was worrying about that for them. But I think now with defined contribution, the onus is more on the individual. So, talk more about what does that mean in practice and why is this becoming more important now?
Nick Nefouse: Yeah, you're exactly right. So defined benefit was a defined benefit when you get to retirement. These were fixed and, they worked for the most part well in the United States, over probably 50 years, because of a lot of pressure they put on the corporate balance sheets, they, we started moving away from those. And when we moved away from those, you're exactly right. We just shifted the dollars from defined benefit into defined contribution.
Most Americans have access to a 401 plan or a 401 type plan. Number is about 80%, is the latest tracking that we've seen, and that puts the onus on the individual. So, in a defined benefit plan, the company would, make the allocations, would make the savings, contributions in the defined benefit plan, and then you would get the actual income in retirement.
But in a 401 plan, you have to do it on your own. And this has been the real break. one big thing that has happened though, in 2006, there was the Pension Protection Act. This really institutionalized the 401 plan. So, it created things like auto enrollment, auto escalation. That's when you join a firm, you're automatically enrolled into a 401 plan, and it will increase the savings rate every year that you're working in the firm.
The other thing is, it gave us the QDIA - the qualified default investment alternative. We know this as a target date fund. That's what I do here, is I look after the target date funds. And what that did is it professionalized the asset allocation, the diversification, and it really took the guesswork out of investing for individual investors who, who stayed in the target date funds.
Oscar Pulido: So, basically what you're saying is that there were changes in the regulatory landscape about 20 years ago that helped the individual who all of a sudden felt that increased responsibility of saving and investing for retirement. Nick, your team has also looked at a number of other trends that are going on in the retirement landscape, and one of those is how individuals engage with their retirement plan. Talk a little bit about that and what's changing in terms of the way participants or those investors engage with their defined contribution plan.
Nick Nefouse: Yeah, so engagement's a big deal. when we are accumulating assets in our 401 plans, we take a lot of the choice and a lot of the decision making out of it. We did that, purposefully. We wanted to have, a lot of the decisions we knew were good decisions. Start off with higher growth assets when you're younger, begin diversifying into more protection as you're getting closer to retirement. Those are things we wanted to do for the individual.
What's happening now though, as you get closer to that point of retirement, we have to start reengaging with people because retirement is a much wider outcome than would be savings, in your accumulation years. we refer to this period as the retirement window. So, people will begin retiring around the age of 55 and then you see most people leaving around 70, but it becomes very personal. It becomes very challenging for a lot of people. So, we need to engage with them differently on those years as opposed to somebody in their 20s where you're really saying, own more equities and save more money. Somebody that's in their 50s, you've got a much different, a much different conversation to have.
Oscar Pulido: You're basically saying that early on in an investing life cycle, people have more commonalities. Everybody has a long-term time horizon, and therefore everybody should be taking more risk, but as they get older, the paths become a little bit more individualized.
Nick Nefouse: Yeah, that's exactly right. So, Oscar, we look at this in about the age of 55 to about the age of 70, we refer to that as the retirement window. The reason why we call that the retirement window is this is when we find lots of dispersion happening across individuals. Some people will work longer, some people can't work longer.
So, you tend to have a higher dispersion, frankly, of outcomes than what we saw when we were younger. When you're younger, it's really about maximizing growth and, maximizing savings because you have a lot of time to make up for any problems.
Oscar Pulido: Another trend that you've talked about and that your team have observed is that there are more workers entering the system, which I think sounds like a good thing in terms of more people being able to save for retirement. These include more small business owners that have access to retirement plans. So, what's driving that expansion and does greater access translate into better outcomes?
Nick Nefouse: So, the biggest driver that we have seen has really been, some call it light legislative, driving. So, you have some states that are requiring, individuals, this is in the US.
Some states are requiring individual firms to have different types of retirement plans. So, you're seeing this access open up, that's going to drive a lot more innovation. It's going to drive a lot more people into those types of plans. to the second question, yes, you're seeing better outcomes.
I think a lot of this is just giving people access to retirement plans. That's going to drive better outcomes over time. We can start to save, earlier and more often. What you find in the US specifically is about half of the people are working for large organizations. Those tend to have 401 s, but the other half are working for startups or smaller businesses that may not have, a 401k or a 401 type plan.
So, you have some state plans that are stepping in. A couple of states have done this, effectively, and then you have some state legislators that are, legislating that, plans of all sizes have to, or companies of all sizes have to have, a plan.
Oscar Pulido: It's interesting because now this is, you've talked about the regulatory impact that can, affect this space. You mentioned the Pension Protection Act in 2006 was an initial piece of legislation that created some structure for individuals who wanted to save for retirement. And I think in the US more recently, the SECURE 2.0 Act would be the level of, or would be the example of the regulation that has changed that brought about some of this structure as well in terms of retirement plans.
Is that the right way to think about it, the regulatory impact actually helping the end investor?
Nick Nefouse: Yeah, in the US, and we'll talk a little about non-US here in a second, the US is very strict with their governance structure through ERISA. So what we're always looking for in the industry is some sort of a nod to the legislative changes.
So you've seen SECURE 1.0, SECURE 2.0, and then now you've seen just in the last couple of weeks, the recent, DOL letter, Department of Labor letter that is providing even more insight, o- of how to structure these plans because again, whether we like it or not, in the US, the 401 plan is a, is a heavily regulated area.
Non-US, it's interesting too, Oscar, you're seeing a lot of legislative changes, places like Australia, United Kingdom. They're moving to this area of more defined contribution. They're accepting that the defi- defined contribution is going to be the primary plan. And when I think of the world, we do a lot of work, outside of the US.
I think of the world really broken up into three areas. You have the, the old Anglo-Saxon countries, and these are the countries that moved first to move away from the defined benefit plan. So that's, US, UK, Canada and Australia to name the big four. And then you have a lot of, Western Europe that stayed with the DB plan, but now they're gradually moving away from the DB plan, not like we did in the US where we just gave up on it and then, moved to defined contribution.
What they're doing and what we're doing with them is we're beginning to integrate the defined benefit plans into more of a DC construct. And then finally, I would look at the global south. We do a lot of work, with some of these countries, and what they're looking at is they're looking at the DB experience and the DC experience.
So defined benefit, define contribution experience of the Anglo-Saxon countries as well as Western Europe, and they're trying to come up with what is the best system. Latin America has some extremely interesting, innovations happening as well as some parts of Southeast Asia.
Oscar Pulido: So, interestingly, we've been talking about the US in particular, and we've used terminology like the 401 plan, the 403 plan, some of the legislation you mentioned was very US specific, but what you've also just said is that some of the h- higher level trends, that move from a pension to a defined contribution plan, these are actually happening on a global scale as well.
Nick Nefouse: Yeah. So, take the UK, for example, they have what are called the master trusts, and then in Australia, you have superannuation. Combine that with the 401 plan and within the 401 plan, you have a target date fund. All three of those, so target date fund, master trust, and superannuation, they're all using life cycle modeling to help develop the best outcome in a defined contribution market. Now, I know there's a lot of words there, Oscar, but what they're all doing is the individuals on the hook.
In the end, that's who's going to own their outcome, but it's being professionally managed during accumulation. That's what the key, interesting point is across all three of those markets. And then Canada is doing something closer to the US, like target date funds.
Oscar Pulido: Nick, we often think about retirement planning and wealth management separately, but it feels like the lines are blurring between the two and perhaps retirement is really not in its own silo anymore.
So how are you seeing the overlap between retirement planning and wealth management?
Nick Nefouse: You're seeing a blurring of the line, Oscar. the US system is a relatively fragmented system. So, if you think from birth, we're now going to have to start contemplating Trump accounts, 529s, which are savings accounts for college, education, HSAs, health savings accounts, those are for health savings, emergency savings is important.
Then we get to our IRAs, our 401s. So, you have a myriad of systems here, and I think what we're trying to figure out is how do we improve savings across all of these? Advisors are often critical in doing this. I think of it as the next dollar problem. Where do you put that next dollar to improve outcomes?
The second point that I make is I think a lot of times we think about this as only for wealthy people. What the 401 has really done is it's democratized capital markets for everybody. So I think of the way that most Americans, about 50 or 60% of Americans are going to access capital markets.
It's through a target date fund. These are not the wealthiest Americans. These are middle class Americans that are saving every two weeks out of their paycheck and then compounding that over time. So, I think as wealth accumulates, I think the advisor becomes more important in this. And this is where you get this, this crossover between the institutionalization of the DC plan, define contribution, as well as the financial advisor.
Oscar Pulido: And it doesn't hurt that markets have done pretty well and- people have been allocated in a way that has allowed them to benefit from that.
Nick Nefouse: Yeah, and I think you're also seeing, Oscar, that even in down markets, now we haven't seen a very long down market. I think you and I have been doing this just about the same amount of time.
So, thankfully, we haven't seen a period like we saw the double recessions in, 2000 through 2002 and then again in 08. We haven't seen a market like that. But the way these funds have designed, are designed, the target date funds specifically now, they're diversified. They rebalance regularly. So even in a period where you see the COVID drawdown or we saw the drawdown around, tariffs, last year, even earlier this year with, some of the geopolitical issues, we've been able to recover quickly and be able to maintain confidence.
Oscar Pulido: And I think part of the guidance that you probably give investors is when you go through some of those drawdowns, you have to remember that you are saving for a long-term goal and therefore to stick with the plan and therefore benefit from the benefits of long-term compounding.
Nick Nefouse: Yeah. And this is always challenging. So, we talked about this earlier, that as you don't engage with an individual enough during accumulation, when there's a market shock, it becomes more problematic. So, if you go back, we'd have to go back to, for a really big drawdown. I think we're talking 2020, COVID, when we saw a really big quarterly drawdown.
people are not conditioned to see those types of shocks. So, it does give me a little bit of concern, but for the younger investors who are, who tend to be more exposed to growth assets, because they're saving so much, this can often watered down any sort of effect of a drawdown by the time they're actually going to look at their account.
Oscar Pulido: So, Nick, again, you have a very broad perspective on the retirement landscape, not just in the US. you mentioned some of the trends that are going on globally. When you step back and look across all these shifts from what's happening in the regulatory environment to the design of portfolios, the access that more investors have to retirement plans, are we moving towards a system that is providing more certainty for investors or what still needs to improve?
Nick Nefouse: In the US, we have this phrase that we like to use as we're trying to build these individualized pension plans. So, the defined benefit plan that we talked about earlier on, those are, those days are going to be over with in the US.
As I said earlier, about 25% of Americans have access to a pension plan. What we can do within the 401 constructs, specifically within the target date fund, is we can start to include more of the asset classes and more of the building blocks that are available in traditional pension plans. These are things like private markets and guaranteed income.
And we've done exceptionally well in the target date fund is we've institutionalized accumulation. And what we now need to do is bridge this with the actual spending phase. So, incorporating in private markets where appropriate, incorporating in guaranteed income helps you on this end-to-end solution.
And frankly, a 401k plan becoming an individualized pension plan, for a worker I think is going to be Very important. And what that doesn't do is it doesn't take away from our primary goal, which is to provide better retirement outcomes. We're only going to use the new asset building blocks if they're going to provide the better outcome.
And I think this is often missed, today where people want to talk a lot about private markets. Private markets are great in as far as they improve the outcome for the individual.
Oscar Pulido: Well, Nick, I started off by saying this is your first time on The Bid, but it's certainly not the first time that you and I have talked. We've known each other for a long time, over 20 years. When we first started talking, we were not talking about retirement, but time has passed and we both have to think about it. I did a little research, and if I understand correctly, when you retire, you want to teach history and coach lacrosse. Is that still the individual path that you want to take?
Nick Nefouse: I think that is the individual path. So, after a rough weekend of lacrosse games, I don't know if I want to do that right now, but it was, yes, I do, love history and, I do coach two of my son's lacrosse teams.
It just goes to show everybody's, retirement is going to look a little bit different, but hopefully with some of the things that you've talked about, there'll be some more certainty and better outcomes for more individuals. Nick, thank you for sharing all your perspective on the retirement landscape, globally, and thank you for doing it here on the bid.
Nick Nefouse: Thanks, Oscar.
Oscar Pulido: Thanks for listening to this episode of The Bid. Up next, BlackRock COO, Rob Goldstein, joins me to talk about tokenization and what a shift in market infrastructure means for investors. And make sure to subscribe to the bid wherever you get your podcasts.
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