NEWARK, N.J., August 06, 2012 - Embedding in-plan guaranteed retirement income options in defined contribution (DC) plans is a key solution to improve DC plan participants’ overall retirement preparedness and provide a source of lifetime retirement income, as well as help reduce pressure on employers that want employees to retire on time and enjoy a more secure and satisfactory retirement, according to Better Participant Outcomes Through In-Plan Guaranteed Retirement Income, a new white paper from Prudential Retirement. Prudential Retirement is a business unit of Prudential Financial, Inc. (NYSE:PRU).
“Americans lack confidence in their retirement readiness. In fact, three out of five participants studied say they are behind schedule in meeting their retirement goals,” says Christine Marcks, President, Prudential Retirement. “Plan sponsors are also concerned that their participants are not securely preparing to retire. Not only do they want participants to have a reliable source of lifetime retirement income, they also don’t want them to worry about protecting the money they currently have from future market volatility.”
Better Participant Outcomes Through In-Plan Guaranteed Retirement Income, based on research data from a 2011 Prudential Retirement Plan Participant Survey and an analysis of its 2011 Book of Business, found that American workers are concerned about a variety of retirement risks, including market volatility, longevity, investment performance, healthcare costs, inflation and the uncertainty of Social Security.
The white paper notes that more than half of those polled said investing in in-plan guaranteed retirement income options helps make them more prone to better weather market volatility. It also found that in-plan guaranteed retirement income options made participants feel more prepared for retirement and helped produce better retirement outcomes. The research supporting the white paper also demonstrates that many of those who already invest in an in-plan guaranteed retirement income option believe this is a good option as part of a default investment for employees, provided they can opt-out if they choose.
“Better Participant Outcomes Through In-Plan Guaranteed Retirement Income also found that plan participants with in-plan guaranteed retirement income options were better diversified and contributed 38 percent more to their 401(k) plan than participants not invested in a guaranteed income option,” added Jamie Kalamarides, senior vice president, Institutional Investment Solutions, Prudential Retirement. “As a result, many of their retirement outcomes improved due to better long-term investing behavior which allowed them to derive the benefits and retire on time.”
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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 85 years of retirement experience, Prudential Retirement helps meet the needs of over 3.6 million participants and annuitants. Prudential Retirement has $244.8 billion in retirement account values as of June 30, 2012. Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, or its affiliates.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit http://www.news.prudential.com/