Prudential Day One® IncomeFlex Target Funds

Helping you plan for retirement with guaranteed lifetime income.

Prudential Day One IncomeFlex Target Funds are offered by Prudential Retirement Insurance and Annuity Company (PRIAC).

Engineered for In-Plan Guaranteed Income

The Prudential Day One IncomeFlex Target Funds were designed to help meet your income needs by leveraging Prudential’s risk management heritage and longevity focus to create the only target date product that is specifically engineered to be delivered with Prudential IncomeFlex Target, an in-plan guaranteed income option.

The Prudential Day One IncomeFlex Target Funds are managed to specific target dates and are offered in five-year intervals. Each fund has a target date and is designed to be used by people that plan to retire on or near that date. For those who are already retired or seek current income, there is the Prudential Day One IncomeFlex Target Balanced Fund, which has the highest fixed-income exposure and is the most conservative of the Prudential Day One IncomeFlex Target Funds.

How the Income Guarantees Work

The income guarantee helps you accumulate assets and convert them into guaranteed lifetime income by tracking two key values:

Market Value

Your Market Value is a daily value that is not guaranteed and fluctuates based on fund performance. If permitted by the terms of your retirement plan, the Market Value can be passed on to your beneficiaries as a death benefit.

Income Base

Your Income Base is used to calculate guaranteed values and is set when your guarantee is activated. Like Market Value, your Income Base also increases with contributions. In addition, on each birthday, your Income Base increases to reflect any gains from fund performance. If declining markets result in negative performance, the Income Base is protected.

 

On the day you decide to Lock-In your guaranteed benefit, your Market Value and Income Base are compared (both as of the previous business day). If the Market Value is higher, the Income Base automatically adjusts upwards to match. Your Income Base is used to determine your lifetime annual withdrawal amount. Prudential Retirement guarantees that you can withdraw this amount each year for the rest of your life. Unlike your Market Value, which is available for withdrawals permitted by your plan, the amount reflected as your Income Base is never available as a withdrawal.

Even if either declining market performance or your annual guaranteed withdrawals reduce your Market Value to zero dollars, Prudential Retirement will continue to pay your lifetime annual withdrawal amount for as long as you live (and your spouse, if elected).

Guarantees are based on the claims-paying ability of the Prudential Retirement Insurance and Annuity Company (PRIAC), and are subject to certain limitations, terms and conditions.

Withdrawals or transfers (other than transfers between IncomeFlex Target Funds) proportionately reduce guaranteed values prior to locking in. After lock-in, withdrawals in excess of the lifetime annual withdrawal amount will reduce future guaranteed withdrawals proportionately and may even eliminate them entirely.

Market Gains with Downside Income Protection and Guaranteed Income For Life

  • A A participant's Income Base may rise in up markets, but it will never decline in response to market volatility.
  • B On a participant's birthday, the Market Value and Income Base are compared. If Market Value has decreased, the Income Base remains unchanged. If Market Value has increased, the Income Base is adjusted to match.
  • C Initially, a participant’s Market Value and Income Base are equal. Moving forward, both increase.
  • D Although not shown in this exhibit, after “lock in,” if Market Value exceeds the Income Base (as determined on the day before the participant’s birthday), the annual income amount is adjusted upward.
  • E Once a participant “locks in,” the participant’s lifetime annual withdrawal amount is guaranteed for as long as they live, regardless of market volatility.*

Prudential Day One IncomeFlex Target Funds Portfolio Allocations

Portfolio allocations as of 1/2/2019

Domestic Equity

58%

  • Broad Market
    16%
  • Large Cap
    28%
  • Mid Cap
    9%
  • Small Cap
    5%

International Equity

31%

  • Developed Markets
    23%
  • Emerging Markets
    8%

Fixed Income

3%

  • Core Plus
    3%

Non-Traditional

8%

  • Commodity
    3%
  • Real Estate
    5%

Domestic Equity

57%

  • Broad Market
    16%
  • Large Cap
    27%
  • Mid Cap
    9%
  • Small Cap
    5%

International Equity

29%

  • Developed Markets
    21%
  • Emerging Markets
    8%

Fixed Income

6%

  • Core Plus
    6%

Non-Traditional

8%

  • Commodity
    3%
  • Real Estate
    5%

Domestic Equity

57%

  • Broad Market
    17%
  • Large Cap
    28%
  • Mid Cap
    8%
  • Small Cap
    4%

International Equity

25%

  • Developed Markets
    19%
  • Emerging Markets
    6%

Fixed Income

10%

  • Core Bond
    2%
  • TIPS
    1%
  • Core Plus
    7%

Non-Traditional

8%

  • Commodity
    3%
  • Real Estate
    5%

Domestic Equity

56%

  • Broad Market
    17%
  • Large Cap
    29%
  • Mid Cap
    7%
  • Small Cap
    3%

International Equity

23%

  • Developed Markets
    18%
  • Emerging Markets
    5%

Fixed Income

13%

  • Core Bond
    3%
  • TIPS
    2%
  • Core Plus
    8%

Non-Traditional

8%

  • Commodity
    3%
  • Real Estate
    5%

Domestic Equity

54%

  • Broad Market
    16%
  • Large Cap
    29%
  • Mid Cap
    6%
  • Small Cap
    3%

International Equity

19%

  • Developed Markets
    15%
  • Emerging Markets
    4%

Fixed Income

18%

  • Core Bond
    4%
  • TIPS
    5%
  • Short Term
    1%
  • Core Plus
    8%

Non-Traditional

8%

  • Commodity
    4%
  • Real Estate
    5%

Domestic Equity

51%

  • Broad Market
    16%
  • Large Cap
    29%
  • Mid Cap
    4%
  • Small Cap
    2%

International Equity

16%

  • Developed Markets
    13%
  • Emerging Markets
    3%

Fixed Income

24%

  • Core Bond
    5%
  • Short Term
    2%
  • TIPS
    8%
  • Core Plus
    9%

Non-Traditional

8%

  • Commodity
    4%
  • Real Estate
    5%

Domestic Equity

43%

  • Broad Market
    13%
  • Large Cap
    26%
  • Mid Cap
    3%
  • Small Cap
    1%

International Equity

12%

  • Developed Markets
    11%
  • Emerging Markets
    1%

Fixed Income

35%

  • Core Bond
    12%
  • Short Term
    5%
  • TIPS
    7%
  • Core Plus
    11%

Non-Traditional

10%

  • Commodity
    4%
  • Real Estate
    6%

Domestic Equity

38%

  • Broad Market
    12%
  • Large Cap
    23%
  • Mid Cap
    2%
  • Small Cap
    1%

International Equity

11%

  • Developed Markets
    10%
  • Emerging Markets
    1%

Fixed Income

40%

  • Core Bond
    8%
  • Short Term
    6%
  • TIPS
    15%
  • Core Plus
    11%

Non-Traditional

11%

  • Commodity
    5%
  • Real Estate
    6%

Domestic Equity

38%

  • Broad Market
    12%
  • Large Cap
    23%
  • Mid Cap
    2%
  • Small Cap
    1%

International Equity

11%

  • Developed Markets
    10%
  • Emerging Markets
    1%

Fixed Income

40%

  • Core Bond
    8%
  • Short Term
    6%
  • TIPS
    15%
  • Total Return Bond
    11%

Non-Traditional

11%

  • Commodity
    5%
  • Real Estate
    6%

Domestic Equity

38%

  • Broad Market
    12%
  • Large Cap
    23%
  • Mid Cap
    2%
  • Small Cap
    1%

International Equity

11%

  • Developed Markets
    10%
  • Emerging Markets
    1%

Fixed Income

40%

  • Core Bond
    8%
  • Short Term
    6%
  • TIPS
    15%
  • Core Plus
    11%

Non-Traditional

11%

  • Commodity
    5%
  • Real Estate
    6%

Domestic Equity

38%

  • Broad Market
    12%
  • Large Cap
    23%
  • Mid Cap
    2%
  • Small Cap
    1%

International Equity

11%

  • Developed Markets
    10%
  • Emerging Markets
    1%

Fixed Income

40%

  • Core Bond
    8%
  • Short Term
    6%
  • TIPS
    15%
  • Core Plus
    11%

Non-Traditional

11%

  • Commodity
    5%
  • Real Estate
    6%

Domestic Equity

38%

  • Broad Market
    12%
  • Large Cap
    23%
  • Mid Cap
    2%
  • Small Cap
    1%

International Equity

11%

  • Developed Markets
    10%
  • Emerging Markets
    1%

Fixed Income

40%

  • Core Bond
    8%
  • Short Term
    6%
  • TIPS
    15%
  • Core Plus
    11%

Non-Traditional

11%

  • Commodity
    5%
  • Real Estate
    6%

Frequently Asked Questions

How much does IncomeFlex Target cost?

In addition to investment management fees, activating the IncomeFlex Target guarantee also triggers an annual 1% guarantee fee. This fee will reduce the fund’s investment return and is reflected in the Market Value on a daily basis.

When does this fee take effect?

When the guarantee is activated.

Can money be transferred in and out of the target date funds?

Yes. But, money moved out may not be transferred back into that particular target date fund for 90 calendar days.

Can participants change their mind and cancel the IncomeFlex Target guarantee?

Yes. Participants can transfer some or all of what they’ve invested in the Day One IncomeFlex Target Funds into another investment option in the plan at any time. This will cancel guarantees, but no additional fees or charges will apply.

Is there a way to also provide income to a participant’s spouse?

Yes, married participants can elect the Spousal Benefit. This allows for the surviving spouse to continue receiving guaranteed lifetime income for the remainder of his/her life.

How much IncomeFlex Target can participants withdraw each year?

The amount will be determined at “Lock In” based on:

*Age at "Lock In" Benefit for Participant Benefit for Participant & Spouse
55-64 4.25% 3.75%
65-69 5.00% 4.50%
70+ 5.57% 5.25%

When can participants “Lock In”?

Participants can “Lock In” anytime after they turn 55, provided their Lifetime Annual Withdrawal Amount is a minimum of $250.

Can a participant withdraw more in one year than their lifetime annual withdrawal amount?

Yes. However, excess withdrawals will reduce a participant’s lifetime annual withdrawal amounts in subsequent years. Note: If a participant’s Market Value falls to zero dollars due to excess withdrawals, the lifetime annual income amount will no longer be received.

Can the Day One IncomeFlex Target Funds be used as a qualified default investment alternative?

Yes.

What happens to the IncomeFlex guarantee if a participant leaves the Plan?

Participants may be able to transfer or roll over their IncomeFlex guarantee into an individual retirement account that invests in a variable annuity contract available through Prudential Retirement. This contract may have substantially different fees, investments, and provisions affecting the guarantees. If a participant rolls any portion of their IncomeFlex Market Value into anything other than a specific Prudential-issued variable annuity, all Prudential IncomeFlex guarantees will immediately cease.

What if an IncomeFlex participant passes away?

If permitted by the terms of the retirement plan, any remaining Market Value can be passed on to beneficiaries as a death benefit.

Guarantees are based on the claims-paying ability of the Prudential Retirement Insurance and Annuity Company (PRIAC), and are subject to certain limitations, terms and conditions.

Withdrawals or transfers (other than transfers between IncomeFlex Target Funds) proportionately reduce guaranteed values prior to Locking-In. After Lock-In, withdrawals in excess of the Lifetime Annual Withdrawal Amount will reduce future guaranteed withdrawals proportionately and may even eliminate them entirely.

The target date is the approximate date when investors plan to retire and may begin withdrawing their money. The asset allocation of the target date funds will become more conservative until the date which is ten years prior to the target date by lessening the equity exposure and increasing the exposure in fixed income investments. The principal value of an investment in a target date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate retirement income.

A target-date fund should not be selected solely based on age or retirement date. Before investing, participants should carefully consider the fund's investment objectives, risks, charges and expenses, as well as their age, anticipated retirement date, risk tolerance, other investments owned, and planned withdrawals.

The stated asset allocation may be subject to change. It is possible to lose money in a target date fund, including losses near and following retirement. Investments in the Funds are not deposits or obligations of any bank and are not insured or guaranteed by any governmental agency or instrumentality.

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. Clients seeking information regarding their particular investment needs should contact a financial professional.

The target date is the approximate date when investors plan to retire and may begin withdrawing their money. The asset allocation of the target-date funds will become more conservative as the target date approaches and for 10 years after the target date by lessening the equity exposure and increasing the exposure in fixed income investments. The principal value of an investment in a target-date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate retirement income.

A target-date fund should not be selected solely based on age or retirement date. Before investing, participants should carefully consider the fund’s investment objectives, risks, charges, and expenses, as well as their age, anticipated retirement date, risk tolerance, other investments owned, and planned withdrawals.

The stated asset allocation may be subject to change. It is possible to lose money in a target-date fund, including losses near and following retirement. Investments in the Funds are not deposits or obligations of any bank and are not insured or guaranteed by any governmental agency or instrumentality.

The Prudential Day One® target-date funds may be offered as: (i) insurance company separate accounts available under group variable annuity contracts issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, a Prudential Financial company, and (ii) registered mutual funds offered through Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company. PRIAC is solely responsible for its own contractual obligations and financial condition.

The Prudential Day One® IncomeFlex Target® Funds were designed for use with Prudential IncomeFlex Target, an in-plan guaranteed retirement income product, and are available as insurance company separate accounts under group variable annuity contracts issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT. PRIAC does not guarantee the investment performance or return on contributions to those separate accounts. PRIAC is solely responsible for its financial condition and contractual obligations. Availability and terms may vary by jurisdiction, subject to regulatory approvals. Guarantees are based on claims-paying ability of the insurance company and are subject to certain limitations, terms and conditions. Annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force.

Contract form #GA-2020-TGWB4-0805.

For more information, participants should access the participant service center or call 1-877-778-2100 for a copy of the Prudential IncomeFlex Target® Important Considerations before investing. PRIAC is a Prudential Financial company.

Please note that the Prudential Day One® IncomeFlex Target® Date Funds follow a different glidepath than the Day One Funds.

The Day One Funds, as insurance company separate accounts, are investment vehicles available only to qualified retirement plans, such as 401(k) plans and government plans, and their participants. Unlike mutual funds, the Day One Funds, as insurance company separate accounts, are exempt from Securities and Exchange Commission registration under both the Securities Act of 1933 and the Investment Company Act of 1940, but are subject to oversight by insurance regulators. Therefore, investors are generally not entitled to the protections of the federal securities laws.

FOR MUTUAL FUNDS: CONSIDER A FUND’S INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE PROSPECTUS AND SUMMARY PROSPECTUS CONTAIN THIS AND OTHER INFORMATION ABOUT THE FUND. CONTACT YOUR FINANCIAL PROFESSIONAL OR CALL (877) 275-9786 FOR A PROSPECTUS AND SUMMARY PROSPECTUS. READ THEM CAREFULLY BEFORE INVESTING.

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