BlackRock Inc. Chief Executive Officer Laurence D. Fink, wholast year said he would invest 100 percent of his personal wealthin equities, said pension funds won't meet their liabilities unlessthey put more money in stocks.

“I do believe most plans that I know have underinvested inequities,” Fink said today at the National Association of StateTreasurers Issues Conference in New York. In a low-interest-rateenvironment, increasing stock holdings is the only way for pensionfunds to meet their obligations, he said.

The Standard & Poor's 500 Index has surged 26 percent thisyear, challenging 2003 for the biggest annual gain in the last 15years, as the Federal Reserve refrained from reducing its monthlybond purchases. Central-bank policy makers have been scrutinizingdata to determine whether the economy is robust enough to withstanda reduction in their support.

Pension funds have to focus on the longer-term view and can'tlook at quarterly or yearly returns when allocating money toassets, Fink said. Since March 9, 2009, when the stock marketclosed at its lowest after the financial crisis, the S&P 500has advanced 165 percent.

“I truly believe the experience we've just witnessed over thelast several years explains more than ever why you have to have anoutcome-oriented investment process,” Fink said, referring to thestock market rally.

Fink co-founded BlackRock in 1988 and built it into the world'slargest money manager, with about $4.1 trillion in assets.

The equity market may decline as much as 12 percent afterrallying this year, which would be a “buying opportunity,” Finksaid. Emerging-market stocks also represent good value, since theyhaven't increased like U.S. stocks, according to Fink.

Fink has said in the past he's bullish on the U.S. over thelonger term, citing a strong banking system, an improving housingmarket, and the nation's large supply of natural gas.

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