Prudential Retirement white paper: Stable value a safer and more secure investment option post financial crisis
NEWARK, N.J.--(BUSINESS WIRE)-- Prudential Retirement, a business unit of Prudential Financial, Inc. (NYS: PRU) , today released a new white paper, "Assessing Stable Value After 2008: Performing as Designed."
"Stable value as an asset class performed as it was designed to do during the financial crisis," said Michael L. Davis, senior vice president and head of Stable Value, Prudential Retirement. "This paper explores how the changes in the stable value industry have made the asset class a safer and more secure investment option, and underscores its important role as a cornerstone of the retirement strategy for millions of plan participants."
The white paper highlights a number of steps that have been taken to increase the security of the asset class, including a more thorough and accurate risk assessment for the asset class and more conservative investment guidelines making stable value more resistant to future market dislocations.
The white paper notes that stable value has continued to generate strong relative performance and deliver guaranteed yields comparable to intermediate-term bond funds, but with low volatility comparable to that of money market funds. With strong plan participant demand, between 2007 and 2012, savings entrusted to stable value rose from $416 billion to $645.5 billion.
Davis, who joined Prudential in November 2012 from the U.S. Department of Labor's Employee Benefit Security Administration, notes the stable value marketplace in 2013 differs from the one that existed in 2008.
"The provider landscape has changed and while these changes may have been disruptive in the short term, they are now heralding a return to the conservative investment strategies, risk parameters and performance goals that characterized the asset class when it debuted four decades ago."
As of Dec. 31, 2012, Prudential Retirement has $106.9 billion in stable value retirement account values. Guarantees are based on the claims-paying ability of the issuing insurance company and are subject to certain limitations, terms and conditions.
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 expertise, Prudential Retirement helps meet the needs of over 3.6 million participants and annuitants. Prudential Retirement has $289.8 billion in retirement account values as of December 31, 2012. Insurance products are issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, or The Prudential Insurance Company of America (PICA), Newark, NJ. Both are Prudential Financial companies. Each company is solely responsible for its financial condition and contractual obligations.
Prudential Financial, Inc. (NYS: PRU) , a financial services leader with approximately $1.060 trillion of assets under management as of December 31, 2012, 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/.
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