Prudential Completes Nation’s First Pension Buy-In Transaction

Prudential Retirement announced the completion of the nation's first pension buy-in transaction. Hickory Springs Manufacturing Company signed on as Prudential's inaugural client, heralding the entry of this type of product in the United States marketplace. The Hickory, N.C.-based manufacturer selected Prudential's Portfolio Protected Buy-in to complete a $75 million pension risk transfer transaction. The Portfolio Protected Buy-in is a single premium, separate account solution that helps plan sponsors meet their pension obligations and create retirement security for more Americans. Prudential Retirement is a business unit of Prudential Financial, Inc. (NYSE: PRU). "With the help of our advisor BCG Terminal Funding Company, we selected Prudential Retirement because of its flexibility in structuring a solution that we feel will help us fulfill our fiduciary obligations and enhance our employees' retirement security," said Steve Ellis , Chief Financial Officer of Hickory Springs. "We were impressed with the Prudential Retirement team's expertise and continued focus on our business needs."

Prudential's Portfolio Protected Buy-in, the company's newest addition to its range of pension risk transfer products, is a separate account solution that combines the strength of Prudential's guarantee with a separate account portfolio to provide additional security. The product is specifically designed for defined benefit plan sponsors who seek to transfer risk while preserving plan funded status. Portfolio Protected Buy-in does not trigger settlement accounting or accelerate pension contributions.

"Prudential is pleased to be the first company to bring a pension buy-in to employers in the U.S. We are also honored to be Hickory Springs' provider of choice," said Phil Waldeck , senior vice president and head of Prudential Retirement's Pension & Structured Solutions business.

"Prudential's Portfolio Protected Buy-in will help Hickory Springs reduce its pension plan risk and fulfill its fiduciary obligations," Waldeck continued. "This transaction underscores Prudential's ability to deliver flexible, innovative solutions that combine our core strengths in retirement, insurance and asset management."

The Portfolio Protected Buy-in mitigates plan sponsors' pension plan risks by serving as a plan asset that effectively and simply matches assets to liabilities.

"The financial crisis of 2008-2009 has had a profound and lasting impact on many employers that offer traditional pension plans," said Glenn O'Brien , Managing Director of Prudential Retirement's Pension & Structured Solutions business. "Fortunately, Prudential has a long history of offering risk management and risk transfer strategies that help address plan sponsors' pension obligations. This transaction affirms Prudential's position as a preferred provider of institutional retirement products and solutions for plan sponsors, advisors and consultants."

"BCG is proud to execute the first pension buy-in transaction in the United States on behalf of Hickory Springs," said Michael Devlin , Principal, BCG Terminal Funding Company. "Our client recognizes that its pension plan is an important benefit to its employees, but the risks associated with pension plans have become a serious concern over the years. With the help of the 'buy-in' strategy, and Prudential's commitment to adapt to the pension market's needs, a product is now available to manage interest rate, market, and mortality risk and help our client continue to provide a valuable benefit for its employees."

Hickory Springs Manufacturing Company's corporate headquarters is located in Hickory, North Carolina. The international company was founded in 1944 as a producer of furniture springs. Since then, Hickory Springs has grown into one of the nation's largest integrated manufacturers to the furniture and bedding industries with more than 50 operating facilities in 16 states and China. In addition to its core furniture and bedding markets, Hickory Springs serves a growing range of customers in the transportation, healthcare, government, packaging, construction and consumer products industries.

BCG Terminal Funding Company, http://www.bcgtermfund.com, is one of the largest terminal funding consulting firms in the nation. Founded in 1983, BCG specializes in working with plan sponsors who are seeking strategies to de-risk or terminate their defined benefit pension plan. BCG has consulted on over 2000 pension plans and has a wide range of services for companies who sponsor defined benefit plans including satisfying DOL Interpretative Bulletin 95-1, plan termination liability analysis, and plan liability settlements.

The Portfolio Protected Pension Buy-in is issued by The Prudential Insurance Company of America (PICA), Newark, NJ. Guarantees are contingent on PICA's claims paying ability. 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 experience, Prudential Retirement helps meet the needs of nearly 3.7 million participants and annuitants. Prudential Retirement has $214.9 billion in retirement account values as of March 31, 2011.

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $859 billion of assets under management as of March 31, 2011, 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, investment management, and real estate services. 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/