rudential Financial Inc., Newark, N.J., is helping its 20,000 U.S. employees manage their retirement plans during these volatile economic times.

    Combining innovative vehicles to help guarantee retirement income and dynamic communication, the company has been able to successfully manage its $5.3 billion defined contribution plan.

    It has embraced all of the latest features, including automatic enrollment and automatic increases in deferrals, according to Sharon Taylor, Prudential Financial executive vice president of human resources.

    New participant accounts are invested in a balanced fund as the qualified default investment from the outset for diversification. The company also provides a match of 100% of employee contributions up to 4% of pay, with 2% placed in company stock. The plan offers 18 investment options.

    Ms. Taylor said Pru's approach is proactive, not paternalistic.

    "Few employees rebel against or opt out of automatic increase or enrollment," Ms Taylor said. "We've taken it to the streets in terms of educating our employees on these programs and features and shown them these are convenience features. We couple these features with annual road shows and other types of educational forums."

    A new program, IncomeFlex, guarantees retirement income for employees 50 and older.

    "This is a special program, a cutting-edge new offering," Ms. Taylor said. "Participants have guaranteed income withdrawal benefits of 4% or 5% of a locked-in starting withdrawal balance that is theirs to receive for the rest of their life—whether or not their market account depletes itself."

    Unlike an annuity, IncomeFlex allows participants to take advantage of equity market upturns and downturns, as participants can choose at their birthday each year the highest of either current market value of investments, highest birthday value or the guaranteed income of 5% per year as the income base.

    "Over time of participation we track account balances on their birthday, market values and guaranteed appreciation of the account. So at the point in time the person is ready to lock in and begin to draw benefits, the person will receive the highest of any of those three amounts. This protects the employees against longevity risk, even if the market account value is depleted."

    For example, for an employee who has selected the guaranteed income option has $300,000 in his account, if it goes down in value or runs out, Prudential will continue to pay his annual withdrawal amount each year. If the market value of the fund increases, at the employee's birthday he can increase his guaranteed withdrawals.

    As an additional feature and at additional cost, the employee at withdrawal can elect to have his spouse continue to receive guaranteed income should the spouse outlive the employee.

    Another option within IncomeFlex is automatic rebalancing, based on personal risk tolerance and the number of years until retirement.

    "Since we're in the retirement business, we want our employees to have the best products and features," she said.

    The program is still being rolled out to participants. So far, 300 have enrolled.

    In recent weeks, as the equity markets have been extremely volatile, Ms. Taylor said interest in IncomeFlex has increased.

    "These times are unprecedented; in my lifetime we have not seen this kind of market volatility," Ms. Taylor said.

John D'Antona Jr. is a reporter for Pensions & Investments.  To comment, e-mail editors@workforce.com.