Prudential Expands Investment Management for Lifetime Income Solution

October 27, 2011 ( - Prudential Retirement has expanded the investment management alternatives for its guaranteed lifetime income solution, Prudential IncomeFlex Target, to include the investment management expertise of two leading target date fund managers. 

This will allow 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. These options are available in addition to Prudential Retirement’s EasyPath funds and Goalmaker with IncomeFlex Target offerings.

“Nine out of 10 participants in defined contribution retirement plans seek guaranteed income they can’t outlive,” said Christine Marcks, President, Prudential Retirement, in a press release. “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.”

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.