American Workers Crave Personalized Advice on Retirement Plan Investments; Employers Are Expected to Play An Active Role in Providing Guidance.

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Business Editors

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NEWARK, N.J.--(BUSINESS WIRE)--March 11, 2004

According to a new study by Prudential Financial, Inc. (NYSE: PRU), the majority of American workers who participate in employer-sponsored retirement programs such as 401(k)s would like advice on how to manage their plan assets, and feel their employer should provide information and guidance in support of their program's investments.

"Professional advice is key in helping to plan and save for a secure retirement," said Scott Sleyster, president of Prudential Retirement. "Also, guidance is most valuable when it addresses an individual's unique issues. Since participants have little or no access to professional guidance now, even the most basic form of personalized education could make a huge impact on how they manage their retirement savings." Notable findings from Prudential Financial's second annual study of participants in employer-sponsored retirement programs conducted in July and August 2003 include:

Professional advice is needed more than ever

-- Concerns about the economy, stock market volatility and, to

many, the recent painful experience of losing retirement

assets, have intensified workers' quest for professional

advice. Three in four agree that professional investment

advice is more important than ever. (See Figure 1)

Employers are expected to play a significant role in providing guidance

-- Three in five agree "my employer must provide information and

guidance to help me keep my retirement savings on track."

Female participants, those aged 21-34, those not

college-educated, and those with under $50,000 household

income are even more likely to expect employers to provide

such assistance. (See Figure 2)

There is an eager audience for advice on a wide range of subjects

-- Prudential's survey listed seven topics and, for each, asked

workers if they think they "definitely need," "it would be

nice to have," or they "don't really need" advice on that

subject. (See Figure 3)

-- How to grow their retirement assets at an acceptable level of

risk weighs heavily on participants' minds with 78 percent and

77 percent, respectively, finding advice on "maximizing

returns" and "minimizing chances of losing retirement money"

to be useful. Other advice considered "definitely needed" or

"nice to have" include:

-- How to make adjustments to retirement portfolio to meet

long-term goals - 74 percent;

-- How to allocate money among the options within retirement

plan - 67 percent;

-- What to do with retirement plan money when changing jobs -

58 percent;

-- What to do with retirement plan money when retiring - 55

percent;

-- How much to contribute to retirement plan - 52 percent.

Guidance and advice should address the different needs of employees at various life stages

-- 84 percent of those between ages of 21 and 34 would like to

get advice on how to maximize return, and 70 percent of this

group need advice on managing their plan assets when changing

jobs.

-- Among 35-49 year-olds, 80 percent are interested in advice

about how to adjust their portfolio, and 61 percent would like

to know more about what they should do with their money when

they retire.

-- Those with under $50,000 household income are in greater need

for all types of advice compared to those earning $75,000 or

more.

If personalized, even the most basic forms of guidance and education can be very powerful

-- Participants would embrace guidance and act on it if it can be

personalized by incorporating personal data such as age,

salary, years until retirement, contribution rate, investment

choices and risk tolerance. At least three in four plan

participants would be "very" or "somewhat" likely to take

actions based on such "planning messages" that can be offered

at the workplace. (See Figure 5)

"American workers are making a tremendous effort to save for retirement through employer programs, but the way they manage their assets can be greatly improved," said Paul Chong, executive vice president, Business Development, Prudential Retirement. "There is a lot of information about retirement saving and investing available, but it rarely motivates participants to take action. In the absence of professional investment advice, the most effective solutions are education and advisory tools that use data on age, salary, and years until retirement to address individual circumstances and needs," he concluded.

Prudential Financial's Annual Study of Retirement Plan Participants polled 1,000 Americans in July and August 2003 to explore issues critical to employer-sponsored defined contribution plans and retirement savings. The study's participants are a national representative random sample of full-time employed men and women aged 21 to 64 who currently participate in 401(k), 403(b), 457, or other types of plans offered by their employers. The margin of error is plus or minus three percentage points at the 95 percent confidence level.

Prudential Retirement, a business of Prudential Financial, delivers retirement plan solutions for public, private, and non-profit organizations. Services include state-of-the-art recordkeeping, administration, investment management, comprehensive employee investment education and communications, and trustee services. With over 75 years of retirement experience, Prudential Retirement meets the needs of 1.1 million defined contribution participants and 600,000 defined benefit annuitants, with over $70 billion in retirement account values as of December 31, 2003.

Prudential Financial companies, with approximately $432 billion in total assets under management as of December 31, 2003, serve individual and institutional customers worldwide and include The Prudential Insurance Company of America, one of the largest life insurance companies in the U.S. These companies offer a variety of products and services, including life insurance, property and casualty insurance, mutual funds, annuities, pension and retirement related services and administration, asset management, securities brokerage, banking and trust services, real estate brokerage franchises and relocation services. For more information, visit www.prudential.com.

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