Products October 27, 2011

Prudential Adds to Lifetime Income Solution

Prudential Retirement has expanded its guaranteed lifetime income solution, Prudential IncomeFlex Target, to include the investment management expertise of two target-date fund managers.
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This will allow defined contribution (DC) plans to combine Prudential IncomeFlex Target’s guaranteed minimum withdrawal benefits (GMWB), with target-date fund (TDF) 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. “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.”

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As with traditional TDFs, 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.

Compliance October 27, 2011

AT&T Settles Suit over Early Retirement Program

AT&T has agreed to cease discriminatory policies to settle an age discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), regarding employees who took an early retirement package.
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The EEOC had charged that AT&T, Inc. and a number of its subsidiaries discriminated against a class of retired AT&T workers by denying them the opportunity for reemployment solely because they retired under certain early retirement or enhanced severance programs. This practice violated the Age Discrimination in Employment Act (ADEA), the EEOC claimed.

According to the agency’s lawsuit, individuals who participated in the Voluntary Early Retirement Incentive Program (an AT&T Corp. program from 1998 to 1999, before its merger with SBC Communications from 2005 to 2007), the Enhanced Pension and Retirement Program (EPR – a pre-merger SBC program from 2000 to 2001), and the Change-in-Control Program (CIC – a pre-merger AT&T Corp. program conducted in connection with the merger) were restricted from being reemployed or engaged as contractors because they took one of these retirement packages.

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The EEOC filed suit in U.S. District Court for the Southern District of New York on August 20, 2009, after first trying to reach a pre-litigation settlement through its conciliation process. AT&T denied the allegations in the lawsuit, but agreed to change its policies related to the reemployment of retirees.

The consent decree settling the suit prohibits AT&T from maintaining any policy that excludes from reemployment employees who left AT&T under one of the early retirement plans. The decree also prohibits AT&T from requiring a different process for selecting retirees than any other former employees.

“Many former employees who took an early retirement package years ago still need work, and will now have an equal opportunity to apply for new jobs at AT&T,” said Anna M. Pohl, a trial attorney in the EEOC’s New York District Office.

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