Products July 11, 2007

Prudential Launches New In-Plan Lifetime Income Option

Through an arrangement with Morningstar Associates, LLC, Prudential Retirement has created an in-plan asset allocation option that provides a guaranteed withdrawal benefit.

Reported by

Rebecca Moore

According to a Prudential product announcement, the IncomeFlex withdrawal benefit solution is integrated with the asset-allocation models that Morningstar currently creates for participants who chose Prudential’s GoalMaker program. With the addition of IncomeFlex to a plan, in addition to GoalMaker target-based portfolios, participants will have:

A guaranteed withdrawal benefit upon retirement,
Upside income potential and downside income protection,
Asset control and flexibility, including the ability to cancel at any time without a fee, and
An optimal spousal benefit without the need for annuitization.

“The integration of IncomeFlex into our GoalMaker program creates a legitimate lifetime solution,” said Jim Mallozzi, senior vice president, Prudential Retirement, in the announcement. “It offers unbiased asset-allocation modeling during the accumulation and distribution phases of retirement planning, complete with a guaranteed income stream once a participant leaves the workforce.’

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For more information, go to www.prudential.com.

Compliance July 11, 2007

SEC Reveals $37M Columbia Market Timing Distribution

The Securities and Exchange Commission (SEC) on Wednesday announced a $37 million payout to more than 300,000 investors who were harmed by Columbia Funds’ fraudulent mutual fund market timing between 1998 and 2003.

Reported by

Fred Schneyer

An SEC news release said the payment is the first in a series of disbursements from the Fair Fund that will distribute a total of approximately $140 million to more than 600,000 affected Columbia Funds account holders.

The fund resulted from a commission enforcement action charging unlawful conduct by Columbia Management Advisors, Inc. (the adviser to the Columbia Funds) and by Columbia Funds Distributor, Inc. (the Fund’s underwriter and distributor) by allowing undisclosed market timing in the funds, the announcement said.

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In 2005, the commission brought and settled public administrative and cease-and-desist proceedings against Columbia Management Advisors and Columbia Funds Distributor, which consented to a commission order charging anti-fraud violations without admitting or denying the commission’s findings. The commission ordered Columbia to pay $70 million in disgorgement and $70 million in penalties for distribution through the Fair Fund.

The commission anticipates that approximately four additional distributions from the Fair Fund will be made to Columbia Funds account holders to complete the distribution process.

Investors can obtain additional information about the distribution process, including a copy of the Distribution Plan, by visiting http://www.columbiafairfund.com or by calling the Administrator of the Distribution Plan at (800) 410-5361.