Prudential Responds to 'Retirement Revolution' with Innovative, Patent-Pending Guaranteed-Income Product.
NEWARK, N.J. -- With American workers turning 60 at the rate of one every eight seconds, Prudential Retirement, a business of Prudential Financial (NYSE:PRU), has responded to the pending "retirement revolution" by introducing Prudential IncomeFlex(SM), a new patent-pending defined contribution plan feature that combines the security of lifetime income with the opportunity to capture market upswings and the flexibility to control fund assets.
With Prudential IncomeFlex, plan participants select from five distinct investment funds--ranging from conservative to more aggressive--and can transfer all or part of their defined contribution plan assets into their chosen fund to receive the product's benefits. Each fund has a "market value" that fluctuates with performance as the participant builds an "income base" that provides the foundation for a guaranteed lifetime paycheck.
"As America's 76 million Baby Boomers edge closer to retirement, they need to determine how best to convert their hard-earned retirement savings into a 'paycheck' that will last throughout their retirements. IncomeFlexaddresses these changing expectations and needs of Baby Boomers by offering a guaranteed lifetime income solution with exceptional flexibility and control," said John Y. Kim, president, Prudential Retirement.
Specifically, Prudential IncomeFlexdelivers:
* Guaranteed Income for Life - Prudential IncomeFlex offers a guaranteed yearly paycheck for life, even if the participant's account balance becomes depleted. Starting at age 65, participants can withdraw paychecks equal to 5% of their IncomeFlex income base. They may elect to withdraw paychecks at age 55, with paychecks equal to 4% of the income base for life. If the participant's account balance exceeds the income base due to strong investment performance, the participant's future lifetime paycheck may even increase. Participants can also opt to have their income continue for their spouse.
* Income Protection From Market Downturns - Along with protecting a participant's retirement income, Prudential IncomeFlex also guarantees that the participant's income base will continue to grow, regardless of market performance. Beginning at age 50 - and continuing to the time a lifetime paycheck amount is locked in (up to age 70) - participants are guaranteed that their income base will grow at an annualized minimum of 5%.
* The Opportunity to Capture Market Upswings - To help participants outpace inflation, Prudential IncomeFlexparticipants can take advantage of yearly performance gains, which are calculated on each participant's birthday. The income base - the basis for the guaranteed retirement paycheck once withdrawals begin - then becomes the highest of three possible values: the 5% guaranteed growth value based on net contributions; the highest birthday value; or the market value of the participant's account.
* Flexibility and Control - Prudential IncomeFlex also offers exceptional flexibility and control. Participants choose how much of their defined contribution plan assets to allocate to their Prudential IncomeFlex fund, and they can move out of the option at any time without withdrawal fees. In addition, participants can withdraw more or less than their guaranteed amount during retirement O and they can pass along any remaining market value in their account to their beneficiaries. Withdrawals in excess of the guaranteed amount will reduce future guaranteed withdrawals proportionally.
"Prudential Retirement's 2006 Workplace Report on Retirement Planning survey found that 70 percent of older workers--those between 55 and 64--would welcome an option that converts their defined contribution plan assets into a guaranteed lifetime income stream. And that's exactly what IncomeFlex provides. With traditional pensions becoming less and less a part of the retirement landscape, it addresses the Baby Boomers' need for a retirement paycheck, and it meets their desires for maintaining flexibility and control of their money," said George Castineiras, senior vice president, Retirement Income Strategies, at Prudential Retirement.
"IncomeFlexalso benefits plan sponsors by helping participants in planning wisely for the future and by delivering an investment option that can enrich their benefits package, enhance appreciation of their plan, and help attract and retain top talent."
"IncomeFlex is a 'win/win' for participants and sponsors--a key component of building and delivering a secure retirement," said Castineiras.
Prudential Retirement delivers retirement plan solutions for public, private, and non-profit organizations. Services include state-of-the-art record keeping, administrative services, investment management, comprehensive employee investment education and communications, and trustee services. With over 80 years of retirement experience, Prudential Retirement meets the needs of two million defined contribution participants and more than one million defined benefit participants and annuitants. Prudential Retirement has $142.8 billion in retirement account values as of September 30, 2006.
Prudential Financial companies, with approximately $586 billion in total assets under management as of September 30, 2006, serve individual and institutional customers worldwide and include The Prudential Insurance Company of America, one of the largest life insurance companies in the United States. These companies offer a variety of products and services, including life insurance, mutual funds, annuities, pension and retirement-related services and administration, asset management, banking and trust services, real estate brokerage franchises, relocation services and, through a joint venture, retail securities brokerage services. For more information, visit www.prudential.com.
Prudential IncomeFlex funds are separate accounts available under group variable annuity contracts issued by Prudential Retirement Insurance and Annuity Company (PRIAC). PRIAC does not provide any guarantee of the investment performance or return of contributions to those separate accounts. PRIAC's guarantee of certain withdrawals is supported by PRIAC's general account and is contingent on its claims paying ability. Guarantees are subject to certain limitations, terms, and conditions. You should consider the objectives, risks, charges, and expenses of the funds and guarantee features before purchasing this product. You should carefully review the Prudential IncomeFlex Important considerations before purchasing this product. Product availability and terms may vary by jurisdiction. Subject to regulatory approvals.
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|Date:||Dec 13, 2006|
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