About a week ago, Prudential released preliminary survey results indicating that when shopping for retirement plans, consumers between the ages of 18 and 36 were more interested than those over age 45 in guaranteed income features. The company is leveraging these results with additional features, including security, to certain plans offered by Prudential Retirement.

The carrier is expanding the investment management alternatives for its guaranteed lifetime income solution, Prudential IncomeFlex Target, to include the expertise of two date fund managers. This allows defined contribution plans to combine Prudential IncomeFlex Target’s guaranteed minimum withdrawal benefits (GMWB), with target date fund offerings from T. Rowe Price and Vanguard.

“Nine out of ten participants in defined contribution retirement plans seek guaranteed income they can’t outlive,” said Christine Marcks, president, Prudential Retirement. “Recent market volatility has heightened demand for guaranteed income solutions, and we are thrilled to combine the investment management experience of these asset managers with the guaranteed lifetime income offering from Prudential.”

Prudential hopes to reassure customers that, as with traditional target date funds, these offerings adjust their asset mix by lessening equity exposure and increasing exposure to fixed income type investments as they approach the target retirement date. Ten years before the target date of the selected fund, the GMWB is automatically activated, guaranteeing a lifetime income amount for plan participants. Upon activation, an additional one-percent guarantee fee will be charged. Guarantees are based on the claims-paying ability of the insurance company.

“These new IncomeFlex funds offer investors the combined benefits of target date strategies along with two key forms of income protection - income protection during market downturns and guaranteed lifetime income in retirement,” said Srinivas Reddy, senior vice president of Institutional Income. “We believe that partnering with leading asset managers and making these guarantees available with target date funds will extend our ability to help Americans work toward a more secure retirement.”

-- This article first appeared on Insurance Networking News.



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