Hewitt to Offer Prudential's IncomeFlex Target Solution
Under the terms of the agreement, Hewitt will provide multi-channel, fully integrated access to IFX Target, a leading in-plan retirement solution that delivers guaranteed lifetime income, downside income protection, and growth potential for individuals with assets in target-date or life-cycle funds. The IFX Target offer will be part of Hewitt's comprehensive suite of administration solutions, which includes robust participant services, consultative support, open investment architecture and fee transparency specifically designed for mid- to large-sized organizations.
"As the largest independent record-keeper of 401k plans and a leader in retirement consulting and research, Hewitt's understanding of participant behavior and what it takes to provide a successful retirement positions them to effectively design a delivery platform for products like IFX Target," said Christine Marcks, president, Prudential Retirement, a business of Prudential Financial Inc. (NYSE: PRU). "As a result, we are very excited to be working side-by-side with a market leader as well-regarded as Hewitt to expand our product's availability and to meet a growing market demand for guaranteed, lifelong retirement income solutions."
"With Hewitt's expertise in creating participant solutions and their vast client base, which comprises many of the nation's largest corporations, we believe this partnership will help dramatically increase the number of individuals who can seamlessly convert their retirement savings into a guaranteed income stream," Marcks said.
"Serving many of this country's largest retirement plans allows us the unique opportunity to provide access to a variety of innovative, leading-edge solutions -- like IFX Target -- that have the potential to improve retirement income adequacy for millions of Americans," Alison Borland, Hewitt's Retirement Outsourcing Strategy Leader. "Hewitt research shows that the median rate of return for 401k participants was negative 28 percent in 2008, with more than half (56 percent) of workers over 60 years of age losing more than 20 percent of their savings. Our objective is to provide tools to employees that can reduce the risks of significant market declines shortly before retirement. IFX Target is one solution designed to accomplish that objective."
"Furthermore, adding IFX Target to our suite of solutions will support our clients in their efforts to offer employees institutionally priced, tailored solutions that reflect the diversity of needs and preferences within plan populations. It is an important step for us as we seek ways to help employees continue to benefit from their 401k plans throughout retirement and have understandable, affordable access to lifetime income," Borland concluded.
Prudential's IncomeFlex® TargetSM product provides a guaranteed stream of lifetime income for participants, control over their assets, the potential to capture market growth, and protection from market downturns. Unlike other retirement-income products, such as traditional annuities, IncomeFlex does not require annuitization to receive guaranteed income. The fee for the IncomeFlex benefit is in addition to investment management charges, and withdrawals in excess of guaranteed withdrawal amounts reduce future guaranteed withdrawals proportionately. Guarantees are based on the claims paying ability of the issuing company.
About Hewitt Associates
Hewitt Associates (NYSE: HEW) provides leading organizations around the world with expert human resources consulting and outsourcing solutions to help them anticipate and solve their most complex benefits, talent and related financial challenges. Hewitt consults with companies to design and implement a wide range of human resources, retirement, investment management, health management, compensation, and talent management strategies. As a leading outsourcing provider, Hewitt administers health care, retirement, payroll, and other HR programs to millions of employees, their families and retirees. With a history of exceptional client service since 1940, Hewitt has offices in 33 countries and employs approximately 23,000 associates who are helping make the world a better place to work. For more information, please visit www.hewitt.com.
About Prudential Retirement
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 nearly 86 years of retirement experience, Prudential Retirement helps meet the needs of nearly 3.6 million participants and annuitants. Prudential Retirement has $150.2 billion in retirement account values as of December 31, 2008. For more information, please visit www.news.prudential.com.
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