FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION

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1 BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS Retirement FLEXIBILITY CHOICES COMPETITIVE COVERAGE Plan PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE PROTECTION HEALTH CARE RETIREMENT WORK/LIFE BENEFITS FLEXIBILITY CHOICES COMPETITIVE COVERAGE

2 Important Notice This Summary Plan Description (SPD) booklet, including any subsequent related Summaries of Material Modifications (SMMs), is intended to help you understand the main features of Component One (The Prudential Traditional Retirement Plan Document) and Component Three (the Prudential Cash Balance Pension Plan Document) of The Prudential Merged Retirement Plan (the Plan ) applicable to active Employees other than Agency Distribution Financial Professionals and Agency Distribution Financial Professional Associates, and to provide information regarding your benefits. This SPD booklet, including any subsequent related SMMs, constitutes the latest SPD of Component One (The Prudential Traditional Retirement Plan Document) and Component Three (the Prudential Cash Balance Pension Plan Document) of The Prudential Merged Retirement Plan. The Prudential Merged Retirement Plan also covers other classes of Employees as described in other SPD booklets that cover those specific Employee populations. This SPD booklet, including any subsequent related SMMs, is not a substitute for the official Plan Document, which governs the operation of the Plan. All terms and conditions of this Plan, including your eligibility and any benefits, will be determined pursuant to and are governed by the provisions of the Plan Document. If there is any discrepancy between the information in this SPD booklet, including any subsequent related SMMs, or in any other Prudential materials relating to this Plan and the actual Plan Document, or if there is a conflict between information discussed by anyone acting on Prudential s behalf and the actual Plan Document, the Plan Document, as interpreted by the Plan Administrator in its sole discretion, will always govern. Prudential may, in its sole discretion, modify, amend, suspend or terminate any and all of its HR policies, programs, Plans and benefits including those described in this SPD booklet, including any subsequent related SMMs, in whole or in part, at any time, without notice to or consent of any participant, employee or former employee to the extent permissible under applicable law. Nothing contained in this SPD booklet, including any subsequent related SMMs, is intended to constitute or create a contract of employment nor shall it constitute or create the right to remain associated with or in the employ of Prudential for any particular period of time. In addition, no oral or written statements made by anyone acting on Prudential s behalf are intended to create the right to remain associated with or in the employ of Prudential for any particular period of time. Employment with Prudential is employment-at-will. This means that either you or Prudential may terminate the employment relationship at any time, with or without cause or notice. Retirement Plan (Home Office and Agency Distribution Field Management) Page i

3 Retirement Plan Highlights The table beginning below summarizes the key features of the Retirement Plan and tells you where to find more details about these features in this SPD booklet. Plan Feature Description and where to find more information Page Who Can Participate in the Plan Generally, all full-time and part-time Employees and Agency Distribution Financial Professionals are eligible to participate in the Plan. 8 Who Pays the Cost of the Plan Prudential provides the Retirement Plan at no cost to you. 9 When You Become Vested What Benefit Formula Applies to You Cash Balance Formula Generally, you become Vested in your accrued benefit under the Retirement Plan if, while employed by Prudential, you complete three years of Vesting Service, reach age 65, die in active service, or begin receiving long term disability benefits under The Prudential Welfare Benefits Plan. If you were hired or re-hired on or after January 1, 2001, your benefit is calculated under the Cash Balance Formula. If you were an eligible Employee in the Retirement Plan on December 31, 2000, you were offered a choice of Retirement Plan formulas. You could have elected to have your pension benefit calculated under the Traditional Pension Formula or the Cash Balance Formula. Your Retirement Plan formula election became effective on January 1, 2002, provided you remained continuously Employed by Prudential or an Affiliate from December 31, 2000, through January 1, How benefits are determined: An account is set up in your name to which Basic Credits (2% to 14% of your Eligible Earnings based on your age and years of Cash Balance Service) and Interest Credits are allocated each month. When benefits are paid: Vested benefits can be paid on the first day of the month on or following the date your Employment with Prudential ends or you may defer payment to a later date (but no later than the first day of the month on or following your 65 th birthday). How benefits are paid: You may choose from a number of payment options, including a lump sum and different forms of annuity payments. Survivor benefits: If you die before receiving payment of your benefit, your surviving Spouse or designated Beneficiary(ies) will be eligible to receive the entire value of your Cash Balance Account. If you become disabled: If you are eligible to receive long term disability benefits from The Prudential Welfare Benefits Plan, your Cash Balance Account will continue to earn Basic Credits and Interest Credits until you receive payment of your pension benefit or are no longer eligible to receive long term disability benefits from The Prudential Welfare Benefits Plan. If you receive a distribution of your Cash Balance Account, your long term disability benefit payment will be offset for pension benefits paid from the Retirement Plan Retirement Plan (Home Office and Agency Distribution Field Management) Page ii

4 Plan Feature Description and where to find more information Page Traditional Pension Formula How and When to File a Request for a Benefit How benefits are determined: Your normal pension benefit is determined using a three step formula that takes into account your Eligible Earnings, Covered Compensation and your years of Credited Service. Generally, if you begin receiving your pension benefit before age 65, your benefit will be reduced by a percentage. When benefits are paid: Generally, after your Employment with Prudential ends, you can begin receiving your Vested pension benefit as early as the first day of the month on or following your 55 th birthday (but no later than the first day of the month on or following your 65 th birthday). How benefits are paid: In general, you may choose from a number of annuity options. 35 Survivor benefits: If you die before your pension benefit payments begin, survivor benefits depend on your marital status and Retirement-Eligibility at the time of your death. If you become disabled: You may elect to begin receiving your pension benefit as early as the first day of the month on or following your 55 th birthday (but no later than the first day of the month on or following your 65 th birthday). However, if you are eligible to receive long term disability benefits from The Prudential Welfare Benefits Plan, your long term disability benefit payment will be offset for pension benefits paid from the Retirement Plan. To commence your pension benefit, generally you or anyone entitled to a benefit must complete and file an application between 30 to 90 days before the date you want your Retirement Plan benefit to begin. Visit the Prudential Benefits Center website at or call the Prudential Benefits Center at PRU-EASY ( ) and follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefits Center Representative Retirement Plan (Home Office and Agency Distribution Field Management) Page iii

5 Inside You Will Find Retirement Plan Highlights... ii Introduction... 1 How to Contact the Prudential Benefits Center... 2 Online Access... 2 Via the Internet... 2 Via the Prudential Intranet... 2 Viewing This SPD Booklet Online... 2 Telephone Access... 2 Mail Access... 2 Terms and Conditions... 3 Accessing Retirement Plan Information Through the Prudential Benefits Center Website... 4 How to Log In and View Retirement Plan Information... 4 Using the Prudential Benefits Center Website to Plan for Your Retirement... 4 How to Name a Beneficiary... 6 How to Commence a Benefit from the Retirement Plan... 6 If You Are Retiring from Active Employment with Prudential... 6 If You Are a Former Employee or You Are Not Retiring from Active Employment with Prudential... 7 Joining the Plan... 8 Who Is Eligible... 8 Who Is Not Eligible... 8 How to Enroll... 9 Cost... 9 Vesting Vesting Service How Vesting Service Is Calculated If You Were Hired on or After January 1, If You Were Hired Before January 1, If You Were Re-hired Vesting Start Date Separation from Service Date Break-in-Service Which Retirement Plan Formula Applies to You If You Were Hired on or After January 1, If You Were Hired Before January 1, 2001, and Were Eligible for a Pension Choice Election If You Were Re-hired on or After January 1, Retirement Plan (Home Office and Agency Distribution Field Management) Page iv

6 If You Have a Benefit Under the Traditional Pension Formula and the Cash Balance Formula If You Were Hired Before June 1, Cash Balance Formula How Your Cash Balance Account Is Determined Basic Credits Interest Credits Other Cash Balance Credits and Benefits If Your Employment with Prudential and Its Affiliates Ends When You May Commence Your Cash Balance Formula Benefit If You Are Not Vested If You Are Vested How Your Payable Cash Balance Formula Benefit Will Be Determined Lump Sum Annuity Whipsaw How Your Cash Balance Formula Benefit Can Be Paid Normal Form of Payment Optional Forms of Payment Special Optional Forms of Benefit Payment Survivor Benefits If You Die Before Cash Balance Formula Payments Commence If Your Beneficiary Is Not Your Spouse If Your Beneficiary Is Your Spouse If You Die After Cash Balance Formula Payments Commence Designation of Beneficiary(ies) If You Are Single If You Are Married Additional Information About Beneficiary Designations If Your Employment with Prudential and Its Affiliates Ends and You Are Later Re-hired If You Take an Approved Leave of Absence How Your Vesting Service Is Determined During a Leave of Absence How Your Cash Balance Formula Benefit Is Determined During a Leave of Absence Basic Credits Interest Credits If You Become Disabled How Your Vesting Service Is Determined While Disabled Retirement Plan (Home Office and Agency Distribution Field Management) Page v

7 How Becoming Disabled Will Affect the Determination of Your Benefit Basic Credits Interest Credits When You May Commence Your Cash Balance Formula Benefit Traditional Pension Formula When You May Commence Your Pension Benefit If You Are Not Vested If You Are Vested Retirement Eligibility Normal Retirement Early Retirement Late Retirement Involuntary Termination If You Are Retirement-Eligible When Your Employment Ends How Your Pension Benefit Is Calculated Normal Pension Benefit Calculation Early Pension Benefit Calculation Protection of Accrued Pension Benefit Other Benefits How Your Pension Benefit Can Be Paid Normal Forms of Payment Optional Forms of Payment and Alternative Methods of Payment If You Are Not Retirement-Eligible When Your Employment Ends How Your Pension Benefit Is Calculated How Your Pension Benefit Can Be Paid Normal Forms of Payment Optional Forms of Payment and Alternative Methods of Payment Survivor Benefits If You Die Before Pension Benefit Payments Commence If You Are Single If You Are Married If You Die After Pension Benefit Payments Commence Minimum Death Benefit If You Die While Performing Qualified Military Service If Your Employment with Prudential and Its Affiliates Ends and You Are Reemployed After December 31, Retirement Plan (Home Office and Agency Distribution Field Management) Page vi

8 If You Take an Approved Leave of Absence How Your Vesting Service Is Determined During a Leave of Absence How a Leave of Absence Will Affect the Determination of Your Benefit If You Become Disabled How Your Vesting Service Is Determined While Disabled How Becoming Disabled Will Affect the Determination of Your Benefit When You May Commence Your Traditional Pension Formula Benefit Other Information About Benefits Under the Retirement Plan Payment of Small Pensions How to Request a Benefit Estimate How to File a Request to Commence a Benefit If You Are Retiring from Active Employment with Prudential If You Are a Former Employee or You Are Not Retiring from Active Employment with Prudential If Your Request for a Benefit Is Denied Federal and State Income Tax Withholding from Annuity Payments Federal Tax Withholding from Lump-Sum Payments Direct Distribution Direct Rollover to Another Employer s Tax-Qualified Plan or a Traditional IRA Direct Rollover to a Roth IRA For More Information Annual Federal and State Income Tax Reporting Internal Revenue Code Limits Maximum Compensation Maximum Benefits Top Heavy Rules Administrative Information Governing Plan Documents Plan Administration and Funding Plan Administrator Plan Sponsor Plan Basics Employer Identification Number Plan Year Funding of Plan Benefits Trustee Information Plan Amendment or Termination Retirement Plan (Home Office and Agency Distribution Field Management) Page vii

9 Assignment of Benefits Qualified Domestic Relations Orders Pension Insurance Claims and Appeals Procedures Making a Claim for a Benefit How to File a Claim for a Benefit If You Are Retiring from Active Employment with Prudential If You Are a Former Employee or You Are Not Retiring from Active Employment with Prudential What Information to Include in a Claim When to File a Claim Notice of Adverse Benefit Determination How to Appeal an Adverse Benefit Determination What Information to Include in Your Appeal Administrative Committee Consideration When You Can Expect a Response Legal Action Statement of ERISA Rights Your Rights Receive Information About Your Plan and Benefits Prudent Actions by Plan Fiduciaries Enforce Your Rights Assistance with Your Questions Service of Legal Process Benefit Adjustment Glossary Appendix A Basic Credit Percentage Table Appendix B Historical Vesting Information Appendix C Other Cash Balance Credits or Benefits Opening Account Balance Transition Credits Demutualization Credit Eligibility Retirement Plan (Home Office and Agency Distribution Field Management) Page viii

10 Vesting Calculating Demutualization Credits QSERP Benefits QSERP QSERP How the QSERPs Affect Your Cash Balance Formula Benefit Appendix D Additional Traditional Pension Formula Benefits Demutualization Credit Eligibility Vesting Calculating Demutualization Credits QSERP Benefits QSERP QSERP Determining Your Qualified Plan Traditional Pension Formula Benefit Additional Retirement Benefit Under the Retirement Plan Who Is Eligible How an Additional Retirement Benefit Is Calculated How an Additional Retirement Benefit Is Paid Survivor Benefits Individuals in Service Before June 1, For More Information Minimum Death Benefit Retirement Plan (Home Office and Agency Distribution Field Management) Page ix

11 Introduction Throughout this SPD booklet, you will see terms with first letters that are capitalized. Generally, when you see these terms, you can check the Glossary at the back for detailed definitions and how the definitions apply to the benefits described in the SPD booklet. The Prudential Merged Retirement Plan (the Plan ) is intended to help you provide for your financial security throughout your retirement years. Together with The Prudential Employee Savings Plan (PESP) and your personal savings, the Plan is intended to provide a solid foundation upon which to build your future financial security. The Plan is a defined benefit pension plan. It was first adopted in 1941, and has been amended from time to time over the years. The Plan currently has three components: Component One: The Prudential Traditional Retirement Plan Document (which will be referred to as the Traditional Pension Formula ); Component Two: the Prudential Securities Incorporated Cash Balance Pension Plan Document (which will be referred to as the PSI Plan ); and Component Three: the Prudential Cash Balance Pension Plan Document (which will be referred to as the Cash Balance Formula ). The information that appears in this booklet constitutes a Summary Plan Description (SPD) of Components One and Three of The Prudential Merged Retirement Plan, in effect as of January 1, These two components, taken together, are referred to as the Retirement Plan throughout this SPD booklet. Please note that the provisions described in this SPD booklet apply to all eligible Employees of Prudential, except Agency Distribution Sales Professionals, including: Agency Distribution Financial Professionals; and Agency Distribution Financial Professional Associates. A separate SPD booklet containing information pertaining to these groups of Employees has been prepared and is available to those Employees. In addition, there is a separate SPD booklet that describes the PSI Plan (Component Two), which is available to Employees covered by the PSI Plan. Retirement Plan (Home Office and Agency Distribution Field Management) Page 1

12 How to Contact the Prudential Benefits Center Throughout this Summary Plan Description (SPD) booklet, you will see references to the Prudential Benefits Center, which is your primary resource for information about your Retirement Plan benefits. You can reach the Prudential Benefits Center online, by telephone or by mail. Online Access Through the Prudential Benefits Center website, you can: View Retirement Plan information; Project the amount of your future Retirement Plan pension benefit; Designate your Beneficiary; Begin the process of commencing your Retirement Plan pension benefit; and Use the Contact Us link to send an directly to the Prudential Benefits Center. For more information, see the Accessing Retirement Plan Information Through the Prudential Benefits Center Website section beginning on page 4. Via the Internet Log on to to access the Prudential Benefits Center website 24 hours a day, 7 days a week. Via the Prudential Intranet Visit PRU Today, select the My Prudential tab under Most Popular, then go to the Pay & Retirement Savings tab. Then under Related Links in the right column, select LOGIN Retirement Plan (Pension) Online. Detailed instructions for using the Prudential Benefits Center website are in the Accessing Retirement Plan Information Through the Prudential Benefits Center Website section beginning on page 4. If you do not have a computer or Internet access, follow the instructions below for contacting the Prudential Benefits Center by telephone or by mail. Viewing This SPD Booklet Online This SPD booklet is available in PDF form on the Prudential Benefits Center website. Telephone Access If you have any questions about the Retirement Plan, your participation in it, or this SPD booklet, you may call PRU-EASY ( ), follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefits Center Representative. Prudential Benefits Center Representatives are available to assist you from 8 a.m. to 6 p.m., Eastern time, Monday through Friday, except on holidays. For the hearing-impaired, please contact your local relay service. Mail Access The mailing address for filing claims is: Prudential Benefits Center P.O. Box Charlotte, NC Retirement Plan (Home Office and Agency Distribution Field Management) Page 2

13 Terms and Conditions When you use the Prudential Benefits Center website at and the Prudential Interactive Voice Response (IVR) systems, you are agreeing to use them under the terms and conditions prescribed by the Company. These terms and conditions are maintained on the Prudential Benefits Center website for easy reference. Or, to obtain a copy, call the Prudential Benefits Center at PRU-EASY ( ) and follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefits Center Representative. Retirement Plan (Home Office and Agency Distribution Field Management) Page 3

14 Accessing Retirement Plan Information Through the Prudential Benefits Center Website You can access information about the Retirement Plan through the Prudential Benefits Center website 24 hours a day, 7 days a week via the Internet (at How to Log In and View Retirement Plan Information Follow these steps to view information about the Retirement Plan: Access the Prudential Benefits Center website via the Internet (at Click Begin ; On the Log In page, enter your User ID and Password in the spaces provided; and Read all of the information contained on this Log In page, then click Enter to reach the Welcome Page for the Prudential Benefits Center website; To access information about the Retirement Plan, open the Retirement Planning drop-down list, then click any of the following links: Projected Income link allows you to project your estimated pension benefit (see Using the Prudential Benefits Center Website to Plan for Your Retirement beginning on page 4); Retirement Process link allows you to begin the commencement process online; Summary Plan Description link, which provides your Retirement Plan SPD booklet as well as other benefits documents; Recent Requests link, which allows you to review requests that you recently submitted on the Prudential Benefits Center website; Beneficiaries link where you can view and/or change your Beneficiary; Review Account link, which provides you with your Cash Balance Account balance as of a current date. If you have more than one Cash Balance Account, a drop-down menu will appear on this page under the Plan heading. You will need to select each one and click Redisplay. If you want to see your Cash Balance Account balance as of a prior date, you will need to enter the prior date and click Redisplay ; Key Dates link, which outlines your retirement dates, including your earliest retirement date, earliest unreduced date, normal retirement date and earliest commencement dates under both the Traditional Pension and Cash Balance Formulas; and Future Payments link, which will indicate if you are currently receiving any benefits. For most active Employees, this link will not appear since there are no future payments on file for you. Using the Prudential Benefits Center Website to Plan for Your Retirement You can project your pension benefit on the Prudential Benefits Center website. The Pension Modeling Tool allows you to modify assumptions used to project your potential pension benefit, such as your last day of Employment, potential earnings, interest rates and Spouse or Contingent Annuitant information. To use the Pension Modeling Tool: Open the Retirement Planning drop-down list and then click the Projected Income link to access the tool; Retirement Plan (Home Office and Agency Distribution Field Management) Page 4

15 Once on the Projected Income page, you can enter assumptions to run your pension benefit projection. To view a description of most of the assumptions, move your cursor over the assumption and read a description of the assumption and any parameters you need to keep in mind when entering your own assumptions. For some entries, you also have a drop-down menu that provides you with your range of choices and for others, you need to click on the field to see the description. The following tips may help you complete the entries needed to make your projection: Last Day of Employment: If you are eligible to retire at age 55 and would like to project your potential pension benefit to begin at age 55, use the specific date fields and enter the last day of the month in which you turn age 55. If your birthday is the first day of the month, enter the last day of the previous month. For example, if your birthday is February 9, 1960, enter 2/28/2015. If your birthday is February 1, 1960, enter 1/31/2015. Please note that if you have pension benefits determined under the Traditional Pension Formula or you chose the Cash Balance Formula during the Pension Choice Election process in 2001, you must enter a date that is no earlier than the Last Day of Employment described above for retirement at age 55 in order to be considered Retirement-Eligible. Also note, if you enter age 55, the calculation will assume your last day of Employment is on your 55 th birthday, which for most individuals means that you will not be considered Retirement-Eligible; Date You Begin Receiving Benefits: If you have a pension benefit under more than one formula or plan, you may need to enter different commencement dates to see an estimate for each; Current Year Eligible Earnings Amount and Next Year Eligible Earnings Amount: The Current Year Eligible Earnings Amount and the Next Year Eligible Earnings Amount fields will default to your last calendar year s Eligible Earnings amount; If you are entering a Last Day of Employment that is in the Current Year or Next Year, you will need to enter the amount of Eligible Earnings you expect to receive by the Last Day of Employment entered; The Pension Modeling Tool WILL NOT prorate the earnings amount displayed or entered in the Current Year or Next Year (but it will prorate for following years, if applicable). This means that if you do not prorate or change your earnings to reflect your Last Day of Employment, you will not receive an accurate estimate. For example, if your annual earnings are expected to be $80,000 and you are estimating a retirement date of July 1 in the current year, you will need to modify your Current Year Eligible Earnings Amount to something closer to $40,000 to reflect that you will work for half of the year; After you have modified all applicable assumptions, click the Project Pension Benefit button to obtain your estimates; If you have a benefit under more than one pension benefit formula, you should select the dropdown menu in the Your Benefit field, select whether you want to view your payments as monthly or annual amounts and then select the Redisplay button. You will need to complete this same process for each of the formulas under which you have a benefit; and Other forms of payment may be available that are not displayed in the calculation results provided. If you would like an estimate for a form of payment not displayed, please contact the Prudential Benefits Center at PRU-EASY ( ); and Retirement Plan (Home Office and Agency Distribution Field Management) Page 5

16 To save your calculation to review it at a future date, enter a description of the calculation in the box provided at the bottom of the page, then click Save. To view your saved calculations, click View Your Saved Projections. Please note: The pension estimates provided by the Pension Modeling Tool are non-binding and are not a guarantee of your actual pension benefit. Your actual pension benefit may differ from the estimate and can only be determined after you make your election, after final data is verified and after all necessary pension calculations are completed. How to Name a Beneficiary You may use the Prudential Benefits Center website to name a Beneficiary. On the Prudential Benefits Center website (at open the Retirement Planning drop-down list; Select Beneficiaries, then scroll to the Retirement Plan and select Update Beneficiaries ; and Follow the on screen instructions. If spousal consent is required, you will need to print and complete an additional form. How to Commence a Benefit from the Retirement Plan To receive any benefit earned under the Retirement Plan, generally you or anyone entitled to a benefit must no longer be in active service with Prudential and its Affiliates. To commence your pension benefit, you must apply for it. To file a request for a benefit, an application should be completed and filed between 30 to 90 days before the date you want your Retirement Plan pension benefit to commence. If You Are Retiring from Active Employment with Prudential If you are retiring from active service, about 12 months before your expected retirement date, you can call the Prudential Benefits Center and request that a personal Retirement Counselor be assigned to you. Your dedicated Retirement Counselor will guide you through each step of the Prudential retirement process from confirming your retirement eligibility and helping you finalize your retirement date, to explaining the benefits available to you at retirement and helping you complete the necessary forms. Generally, you are not required to commence your pension benefit when you retire, if you have not yet reached your Normal Retirement Date. You can also access the Retiring from Prudential website for help with retirement planning and the retirement process. You can find information about your Prudential retirement benefits, including what happens to all your benefits when you retire, a Retirement Action Checklist to help you understand the steps in the retirement process and track your progress through those steps, as well as a Frequently Asked questions (FAQ) tool to get answers to your retirement questions. To access the Retiring from Prudential website visit PRU Today, select the My Prudential tab, then from the Pay & Retirement Savings drop-down list, select Retirement Planning at Prudential. Then click on the Retiring from Prudential link under New Retirement Planning Site and Process. You can also access the website directly from the Internet at (use your Prudential systems username and password or the passphrase retire4now ). Approximately 90 days before your official retirement date, your Retirement Counselor will prepare a Personalized Retirement Statement for you. Your statement will provide a summary of what you can expect as you retire and what actions you may need to take. You and your Retirement Counselor will review this information during a follow-up call and you ll be able to ask any questions you may have. You won t be assigned a Retirement Counselor until you re within 12 months of your expected retirement date. Before then, you can call the Prudential Benefits Center at PRU-EASY ( ) and follow the prompts for Pension and ask to speak with a retirement specialist. Retirement specialists can answer your questions and provide general retirement information. Retirement Plan (Home Office and Agency Distribution Field Management) Page 6

17 If You Are a Former Employee or You Are Not Retiring from Active Employment with Prudential To commence your pension benefit, visit the Prudential Benefits Center website (at then open the Retirement Planning drop-down list and select the Retirement Process link. Click on Making Your Pension Benefit Elections to begin the commencement process online. You may complete the entire process online or call the Prudential Benefits Center for assistance from a dedicated retirement specialist. Retirement Plan (Home Office and Agency Distribution Field Management) Page 7

18 Joining the Plan Who Is Eligible All full-time and part-time Employees of The Prudential Insurance Company of America or a Participating Affiliate (together referred to as Prudential ) and Agency Distribution Financial Professionals are generally eligible to participate in Components One and Three (the Retirement Plan ) of The Prudential Merged Retirement Plan (the Plan ) beginning on their first day of Employment, except that Employees hired on or after January 1, 2001, are eligible only for Component Three (the Cash Balance Formula) and Agency Distribution Sales Professionals hired on or after January 1, 2005, begin participating on the one-year anniversary of their first day of employment. Some special conditions also apply. For example, non-resident aliens and International Employees are eligible only pursuant to special agreements. (A separate SPD booklet describes the benefits available to Agency Distribution Sales Professionals.) Who Is Not Eligible Generally, you are not eligible to participate in the Retirement Plan if you are: Included in a collective bargaining unit, unless the collective bargaining agreement specifically provides for participation in the Retirement Plan; A non-resident alien with no earned income from sources within the United States; Employed by an Affiliate that does not participate in the Retirement Plan; Deemed to be an Employee under Section 530 of the Revenue Act of 1978 (for example, state dental directors and dental consultants); An International Employee; A student intern hired or re-hired on or after June 1, 2007; A retired or former Employee, except to the extent of service prior to separation from service; An Agency Distribution Financial Professional Emeritus, Agent Emeritus, Premier Retired Representative or Retired Representative, except to the extent of service prior to entering these categories; An Agency Distribution Probationary Financial Professional hired on or after September 1, 2008, and who participates in a development program within Agency Distribution pursuant to an employment agreement for a period that is not expected to exceed 26 weeks; An independent contractor (other than an Agency Distribution Financial Professional); An individual service provider compensated through an employee leasing company, temporary employment agency or other third-party agency; An individual who would be treated as an Employee solely by reason of such individual being treated as either part of an affiliated service group or a leased employee under the Internal Revenue Code and regulations; or Any other individual who performs services for Prudential but is not treated as an Employee for federal tax purposes at the time the individual renders services. Please refer to the Plan Document for a complete listing of the classes of Employees who are ineligible to participate in the Retirement Plan. If you would like to request a Plan Document, you should write to the Plan Administrator at the address shown in the Plan Administrator section on page 52. Retirement Plan (Home Office and Agency Distribution Field Management) Page 8

19 How to Enroll All eligible Employees are enrolled automatically in the Retirement Plan. There are no enrollment forms to complete. Cost The Plan is provided by Prudential at no cost to you, and Prudential s contributions to the Plan are actuarially determined. While in the past the Plan provided for Employee contributions, these contributions are no longer required or allowed. However, any non-withdrawn Employee contributions remain in the Plan. Retirement Plan (Home Office and Agency Distribution Field Management) Page 9

20 Vesting Vesting refers to your non-forfeitable right to receive a benefit under the Retirement Plan. Once you become Vested and your Employment with Prudential or its Affiliates ends, you are entitled to receive any benefit you have earned under the Retirement Plan. Generally, you become 100% Vested in your accrued benefit under the Retirement Plan if you: Complete three years of Vesting Service while Employed by Prudential or its Affiliates; Reach age 65 while Employed by Prudential or its Affiliates; Die while Employed by Prudential or its Affiliates; Begin to receive long term disability benefits (this does not include long term disability benefits paid while on accommodation leave) under The Prudential Welfare Benefits Plan; or Were re-hired by Prudential on or after January 1, 2001, and you were Employed by Prudential or its Affiliates at any time prior to January 1, In this case, you will be Vested in all benefits you earn under the Cash Balance Formula during your new period of Employment. Please note: Special rules apply if you were hired before January 1, 2001 or if you had an accrued benefit under the Retirement Plan as of April 30, 2007, or as of December 6, See Historical Vesting Information in Appendix B on page 76 for more information. Vesting Service Vesting Service is used to determine an eligible Employee s: Non-forfeitable right to receive a benefit under the Retirement Plan; Eligibility for early retirement under the Traditional Pension Formula (or the Grandfathered Minimum Benefit provisions of the Cash Balance Formula); and Eligibility for post-retirement medical, dental, life insurance and vision benefits. In general, you receive Vesting Service for periods of Employment with Prudential or its Affiliates, and certain periods of Employment with an entity before it becomes an Affiliate (subject to the terms of the contract governing the transaction). How Vesting Service Is Calculated If You Were Hired on or After January 1, 2001 If you were hired by Prudential or its Affiliates on or after January 1, 2001, your Vesting Service is based solely on the elapsed time service crediting rules. Under the elapsed time service crediting rules, you earn Vesting Service from your vesting start date to your Separation from Service Date. Vesting Service is measured in years and days. For example, if your Separation from Service Date is September 29, 2008, and your vesting start date is April 3, 2001, your Vesting Service would be equal to seven years and 179 days (Separation from Service Date minus vesting start date). If You Were Hired Before January 1, 2001 If you were Employed by Prudential or its Affiliates before January 1, 2001, your Vesting Service equals the sum of all Vesting Service you have earned under the hours of service crediting rules in effect prior to January 1, 2001, and all Vesting Service you have earned under the elapsed time service crediting rules in effect on and after January 1, Under the hours of service crediting rules that were in effect prior to 2001, you earned one year of Vesting Service for each calendar year in which you completed at least 1,000 hours of service. For Retirement Plan (Home Office and Agency Distribution Field Management) Page 10

21 calendar years in which you completed less than 1,000 hours of service, you were credited with a partial year of Vesting Service, which was determined by dividing your hours of service by 1,000. For example, if you completed 553 hours of service in a calendar year, you were credited with.553 years of Vesting Service (553 hours of service divided by 1,000). The elapsed time service crediting rules in effect on and after January 1, 2001, are described in the If You Were Hired on or After January 1, 2001 section on page 10. If You Were Re-hired If you are a re-hired Employee, any Vesting Service you earned during your prior period of Employment will be added to the Vesting Service you earn in your subsequent period of Employment, unless your prior Vesting Service is not counted due to a Break-in-Service. (See Break-in-Service on page 12 for more information.) Vesting Start Date For purposes of determining Vesting Service, generally your vesting start date under the elapsed time service crediting rules is your original hire date, provided you do not have a Separation from Service Date. If you have a Separation from Service Date, your Vesting Start Date may be adjusted as described in the Separation From Service Date section beginning below and the Break-In-Service section on page 12. In addition, the following rules may apply in determining your vesting start date: If you are an eligible Employee who was originally hired prior to January 1, 2001, your vesting start date is determined by converting your Vesting Service earned as of December 31, 2000, under the hours of service crediting rules, to a date that will provide you with the same Vesting Service through December 31, 2000, as if the elapsed time service crediting rules had been in effect. For example, if you had earned 3.5 years of Vesting Service through December 31, 2000, your vesting start date would be equal to July 1, 1997 (that is, January 1, 2001, minus three years and six months); If you are an eligible Employee and your Employment with Prudential and its Affiliates ends (for example, you resign, are involuntarily terminated or retire) on or after January 1, 2001, and you are then re-hired within one year of the date your Employment ended, your vesting start date remains your previous vesting start date. In other words, if you are separated from Prudential and its Affiliates for less than one year, then return to active service with Prudential or its Affiliates, you will be given Vesting Service credit for the period of time between your Separation from Service Date and your re-hire date; or If you are an eligible Employee and your Employment with Prudential and its Affiliates ends on or after January 1, 2001, while you are on an unpaid leave of absence or while you are receiving long term disability benefits under The Prudential Welfare Benefits Plan, and you are then re-hired with Prudential or its Affiliates within one year of the date your period of absence began, your vesting start date is your previous vesting start date. Vesting Service credit is given for the entire period of the unpaid leave of absence or long term disability as well as the period of time you were not in active service, if the total period of time is less than one year. Separation from Service Date When calculating Vesting Service, your Separation from Service Date is generally the earlier of: The date your Employment ends due to voluntary or involuntary termination, retirement or death; or The first anniversary of your first date of absence for reasons other than voluntary or involuntary termination, retirement, or death (for example, commencement of an unpaid leave of absence, long term disability, long term disability accommodation leave or exhaustion of short term disability without either becoming eligible for long term disability or returning to active Employment). Also, if a Disabled Employee (as defined under the Disability Program) becomes eligible to receive long term disability benefits under the Disability Program, such person shall be treated as having first been absent from service for purposes of determining Vesting Service on the date he/she became eligible to receive such long term disability benefits (rather than on the date he/she was first absent from service on account of short term disability). Retirement Plan (Home Office and Agency Distribution Field Management) Page 11

22 If you return to service within 12 months of the date your period of absence began, your period of absence will be counted toward your Vesting Service. If your period of absence began during 2000 and continued after January 1, 2001, you will be treated, for purposes of determining Vesting Service, as having begun your period of absence on January 1, Break-in-Service You will incur a Break-in-Service if you are not Vested and you have five or more consecutive Break Years. If you are not Vested and a Break-in-Service occurs, your Vesting Service as of the end of the Break-in-Service is forfeited, and no service prior to the Break-in-Service, including Cash Balance Service and Credited Service, is counted for any purpose under the Retirement Plan. You will not forfeit your prior service if you are Vested in the Retirement Plan prior to the Break-in-Service. A Break Year occurs if your Employment ends and you are not reemployed by Prudential or its Affiliates within a: Consecutive 12-month period beginning on the date your Employment ends; or Consecutive 24-month period beginning on the date your Employment ends, if you are absent from work for maternity or paternity reasons. You will incur an additional Break Year for each consecutive 12-month period during which you are not reemployed by Prudential or its Affiliates. If you are reemployed by Prudential or its Affiliates, and you have not incurred a Break-in-Service, your Vesting Service is restored and all prior Break Years are disregarded. You are treated as absent from work for maternity or paternity reasons if you are not performing duties due to: Your pregnancy; The birth of your child; The placement of a child with you in connection with your adoption of the child; or The need to care for your child immediately after birth or adoption. Eligible Employees who return from a military leave of absence covered by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) within the required time frame under USERRA will not have incurred a Break-in-Service and will, therefore, not have a Separation from Service Date. In addition, these eligible Employees will receive credit for all of their prior Vesting Service, as well as credit for the entire period of the qualified military leave of absence, including eligibility, vesting and benefit accrual service for the qualifying leave. Generally, a qualified military leave of absence cannot exceed five years. (Note: To be eligible for USERRA benefits, USERRA requires that you give notice to Prudential or its Affiliates with exceptions prior to taking the leave and for you to certify on your return that the leave qualified and was for the purpose of an approved military service.) Retirement Plan (Home Office and Agency Distribution Field Management) Page 12

23 Which Retirement Plan Formula Applies to You The Retirement Plan formula that applies to you depends on when you were hired or re-hired, and whether or not you were eligible for the Pension Choice Election process. If You Were Hired on or After January 1, 2001 If you were hired on or after January 1, 2001, your benefit is automatically calculated under the Cash Balance Formula. Please see the Cash Balance Formula section beginning on page 15 for information on your Retirement Plan benefit. If You Were Hired Before January 1, 2001, and Were Eligible for a Pension Choice Election If you were an eligible Employee in the Retirement Plan on December 31, 2000, with an accrued benefit under the Traditional Pension Formula, you were offered a choice of Retirement Plan formulas. You could have chosen to have your benefit calculated under either the Traditional Pension Formula or the Cash Balance Formula. Your Retirement Plan formula election became effective on January 1, 2002, provided you remained continuously Employed by Prudential or an Affiliate from December 31, 2000, through January 1, The formula you chose impacts how your benefit is calculated. If you chose to have your benefit calculated under the Cash Balance Formula, please see the Cash Balance Formula section beginning on page 15 for information on your benefit; or If you chose to have your benefit calculated under the Traditional Pension Formula, please see the Traditional Pension Formula section beginning on page 27 for information on your benefit. In addition, you will also have a Demutualization Credit under the Cash Balance Formula. Please see Demutualization Credit in Appendix D on page 80 for information on your Demutualization Credit benefit and the If Your Employment with Prudential and Its Affiliates Ends section beginning on page 16 for information on how your Cash Balance Formula benefit can be paid. If You Were Re-hired on or After January 1, 2001 You may have a benefit under both the Cash Balance Formula and the Traditional Pension Formula if: Your Employment with Prudential and its Affiliates ended on or before December 31, 2000, you had an accrued benefit under the Traditional Pension Formula, and you are then re-hired on or after January 1, 2001; You were Employed by Prudential prior to January 1, 2001, your Employment with Prudential and its Affiliates ended after January 1, 2001, but before January 1, 2002, and you are then re-hired on or after January 1, 2001; or You made an election during the Pension Choice Election process to remain in the Traditional Pension Formula, your Employment with Prudential and its Affiliates ended after January 1, 2002, and you were then re-hired after January 1, Any benefit you earned prior to your re-hire date on or after January 1, 2001, is determined under the Traditional Pension Formula (please see the Traditional Pension Formula section beginning on page 27 for more information) and any benefit you earn during your period of reemployment beginning on or after January 1, 2001, will be determined under the Cash Balance Formula (please see the Cash Balance Formula section beginning on page 15). If You Have a Benefit Under the Traditional Pension Formula and the Cash Balance Formula You may have a benefit under both the Traditional Pension Formula and the Cash Balance Formula if: Your Employment with Prudential and its Affiliates ended on or before December 31, 2000, you have a Purchased Benefit under the Traditional Pension Formula, and you were then re-hired on or after January 1, 2001; Retirement Plan (Home Office and Agency Distribution Field Management) Page 13

24 You made an election during the Pension Choice Election process to have your benefit calculated under the Cash Balance Formula and are entitled to variable Annuity units and a fixed Annuity benefit under the Traditional Pension Formula attributable to your Credited Service before 1976; You were Employed by Prudential prior to January 1, 2001, your Employment with Prudential and its Affiliates ended after January 1, 2001, but before January 1, 2002, and you were subsequently re-hired; You made an election during the Pension Choice Election process to remain in the Traditional Pension Formula, your Employment with Prudential and its Affiliates ended after January 1, 2002, and you were subsequently re-hired; or You were Employed by Prudential prior to January 1, 2001, made an election during the Pension Choice Election process to remain covered by the Traditional Pension Formula (or were not eligible to make an election during the Pension Choice Election process), and received a Demutualization Credit in the form of a cash credit to your Cash Balance Account. (Please see Demutualization Credit in Appendix C beginning on page 78 for more information.) If you meet any of the above conditions, you will have a benefit under both the Cash Balance Formula and the Traditional Pension Formula. You will therefore need to make separate payment and Beneficiary elections for your benefits under the Cash Balance Formula and the Traditional Pension Formula. For information pertaining to your Cash Balance Formula benefit, please see the Cash Balance Formula section beginning on page 15. For information pertaining to your Traditional Pension Formula benefit, please see the Traditional Pension Formula section beginning on page 27. If You Were Hired Before June 1, 1975 If you were hired before June 1, 1975, you may have benefits under a prior version of the Retirement Plan. Please see Individuals in Service Before June 1, 1975 in Appendix D on page 86 for more information. Retirement Plan (Home Office and Agency Distribution Field Management) Page 14

25 Cash Balance Formula Your benefit is calculated under the Cash Balance Formula if you: Are an eligible Employee who was hired on or after January 1, 2001; Were previously Employed by Prudential and its Affiliates and are reemployed as an eligible Employee on or after January 1, (Please note: the Cash Balance Formula will be used only to determine the benefit you earn during your period of Employment following your date of re-hire.); or Are an eligible Employee who made a valid election of the Cash Balance Formula during the 2001 Pension Choice Election process: You were an eligible Employee for the Pension Choice Election process if you were Employed by Prudential or its Affiliates on December 31, 2000, with an accrued benefit under the Traditional Pension Formula. For your Pension Choice Election to become effective, you had to remain continuously Employed by Prudential or its Affiliates from December 31, 2000, through January 1, If your Employment with Prudential or its Affiliates ended prior to January 1, 2002, your benefit for service prior to this termination will be determined under the Traditional Pension Formula, regardless of your Pension Choice Election. (See the Traditional Pension Formula section beginning on page 27 for more information.) You may also have a benefit calculated under the Cash Balance Formula if you received a Demutualization Credit in the form of a cash credit to your Cash Balance Account. (Please see Demutualization Credit in Appendix C beginning on page 78 for more information.) How Your Cash Balance Account Is Determined If you participate in the Cash Balance Formula, a Cash Balance Account will be set up in your name. The purpose of the Cash Balance Account is to serve as a recordkeeping account, which only represents the value of your Cash Balance Formula benefit. No assets are actually held in these recordkeeping accounts. Benefits accrued under the Cash Balance Formula, along with those under the Traditional Pension Formula, are funded through a combination of trusts and group annuity contracts, which hold all the Plan s assets for investment. Each month, your Cash Balance Account will increase through the addition of Basic Credits and Interest Credits, described as follows. You may also have received a Demutualization Credit or a QSERP Benefit, as described in the following sections. Basic Credits Basic Credits will be added to your Cash Balance Account at the end of each month. The amount of Basic Credits will equal a percentage of your Eligible Earnings paid each month. The Basic Credit percentage is determined at the beginning of each year and remains constant throughout the year. The percentage is based on your projected completed years of Cash Balance Service and age as of December 31 of the current year. (Eligible Employees who transfer from a Non-Participating Affiliate will have their service at the Non-Participating Affiliate included when determining the Basic Credit percentage.) The following is an example of how this works. Assume that your birthday is February 9, 1971, and your Adjusted Service Date is May 19, Then, as of December 31, 2013: You will be 42 years old; and You would have seven years of Cash Balance Service. Retirement Plan (Home Office and Agency Distribution Field Management) Page 15

26 Therefore, based on the Basic Credit Percentage Table, your Basic Credit percentage for the 2013 Plan Year would be 5.1%. For illustration purposes, a portion of the Basic Credit Percentage Table is as follows: Basic Credit Percentage Table Age Cash Balance Service % 4.9% 5.1% 5 4.7% 5.0% 5.2% 6 4.8% 5.1% 5.3% 7 4.9% 5.1% 5.4% 8 4.9% 5.2% 5.5% Please see Appendix A beginning on page 72 for the entire Basic Credit Percentage Table. Interest Credits Interest Credits are added to your Cash Balance Account at the end of each month based on the value of your Cash Balance Account at the beginning of the month. Interest Credits are added to your account each month until you receive payment of your Cash Balance Formula benefit, even if you are no longer working for Prudential and its Affiliates. The Interest Credit percentage is based on the monthly equivalent to the Average Yield of 30-Year U.S. Treasury Securities for October (constant maturities) of the prior year. In no event will the interest rate used be less than the monthly equivalent of 4.25% per annum. The interest crediting rate for 2014 is 4.25%. Other Cash Balance Credits and Benefits Opening Account Balance and Transition Credits: If you are an eligible Employee who elected the Cash Balance Formula during the Pension Choice Election process, you have an opening account balance under the Cash Balance Formula and you were eligible to receive Transition Credits from January 1, 2002, through December 31, Demutualization Credit: Eligible participants received a Demutualization Credit made to Cash Balance Accounts created for them, as of July 31, The Demutualization Credit is a cash credit that was made in connection with the demutualization of The Prudential Insurance Company of America (the conversion from a mutual insurance company to a stock company). If you received a Demutualization Credit, you are 100% Vested in the portion of your Cash Balance Account related to your Demutualization Credit. QSERP Benefits: Certain employees previously notified by Prudential also may be eligible for the 2003 and/or 2012 QSERP benefits in this Plan that were shifted from their benefit under the non-qualified Prudential Supplemental Retirement Plan. Please see Appendix C beginning on page 77 for more information about these credits and benefits. If Your Employment with Prudential and Its Affiliates Ends When You May Commence Your Cash Balance Formula Benefit If You Are Not Vested If your Employment with Prudential and its Affiliates ends before you become Vested, you are not entitled to any benefit under the Cash Balance Formula. Retirement Plan (Home Office and Agency Distribution Field Management) Page 16

27 If You Are Vested If you are Vested in your Cash Balance Formula benefit, you will be eligible to receive payments when your Employment with Prudential and its Affiliates ends. If your Employment with Prudential and its Affiliates ends: Prior to your 65 th birthday, you may elect either to: a) Receive your Cash Balance Formula benefit as early as the first day of any month on or following the date your Employment with Prudential and its Affiliates ends (as a general rule, if you elect to receive your pension benefit as a Lump Sum, you will not be able to receive the Lump Sum until approximately three months after your Employment with Prudential and its Affiliates ends to allow for processing of your final Eligible Earnings); or b) Defer the receipt of your Cash Balance Formula benefit to a later date, but no later than the first day of the month on or following your 65 th birthday (unless your benefit falls under the Payment of Small Pensions provisions explained on page 48). After your 65 th birthday, you must commence your Cash Balance Formula benefit as of the first day of the month on or following the date your Employment with Prudential and its Affiliates ends. You must submit a written request to commence receipt of your Cash Balance Formula benefit. If your Employment with Prudential and its Affiliates ends prior to your 65 th birthday, you must commence receiving your pension benefit no later than the first day of the month on or following your 65 th birthday (your Normal Retirement Date), as described above. Under the terms of the Retirement Plan, the Company must commence your pension benefit as of your Normal Retirement Date, even though the Company may not actually make payments until a later date. In the event that you select an Annuity form of payment and the Company is not able to actually provide monthly payments until some date after your Normal Retirement Date, the Company will treat you as having begun receiving payments at your Normal Retirement Date. If this occurs, the Company will provide a make-up payment equal to your missed monthly pension benefit payments, plus interest (if the actual date payments start is three or more months after your Normal Retirement Date), and, going forward, your monthly payments will be calculated as if your payments had commenced at your Normal Retirement Date. If you elect to have your pension benefit paid as a Lump Sum, you will receive the value of your Cash Balance Account as of the actual payment date. Generally your benefit cannot commence before you receive a notice explaining your payment options (as well as other information, such as your rights and your Spouse s rights with respect to the distribution), and give your consent and your Spouse s consent (if applicable) to the distribution. However, under certain circumstances, your benefit (if paid as an Annuity) could commence retroactively, even though payments do not actually begin until a later date and even though you did not receive your notice before your benefits commence. For example, if you submit a request prior to age 55 electing to commence your pension benefit at age 55, but due to administrative delays, such as trying to resolve a data issue, the package with the notice explaining your payment options and rights is not provided to you until a later date, you will have a choice as to whether you want your pension benefit payments to commence as of the date you first requested the benefit payment to be made, or whether you want to commence your pension benefit as of the current date. If you do decide to treat your pension benefit as having commenced retroactively, you will receive a make-up payment equal to your missed monthly pension benefit payments, plus interest. To assist you in making your decision, you will be provided with non-binding estimates of your benefit at both starting dates and will be provided with an election form to choose a payment commencement date. An estimate is not a guarantee of your actual benefit and may differ from your final benefit. Your final benefit will be determined after you make your election, after final data is verified and after calculations are completed. If you elect to have your pension benefit paid as a Lump Sum, you will receive the value of your Cash Balance Account as of the actual payment date. If you did receive your notice explaining your payment options prior to your elected pension benefit commencement date, but there is a delay in beginning your Annuity payments for administrative or other reasons, the Company will treat you as having begun receiving payments retroactive to the date of your request for payment. If this occurs, the Company will provide a make-up payment equal to Retirement Plan (Home Office and Agency Distribution Field Management) Page 17

28 your missed monthly pension benefit payments. Because you received your notice before the date your benefits are treated as having commenced, you will only receive interest on these make-up payments if your payments are delayed for three or more months. If you elect to have your pension benefit paid as a Lump Sum, you will receive the value of your Cash Balance Account as of the actual payment date. If your Employment with Prudential and its Affiliates ends and you elect to defer your payments to a later date (no later than the first day of the month on or following your 65 th birthday), your Cash Balance Account will continue to earn Interest Credits (as described in the Interest Credits section on page 16) until you receive payment of your Cash Balance Formula benefit, but not Basic Credits. Please note that once your Cash Balance Formula benefit commences, your commencement and form of benefit payment elections are irrevocable and cannot be changed. How Your Payable Cash Balance Formula Benefit Will Be Determined If you are Vested in your Cash Balance Formula benefit, you may choose how you would like to receive your Cash Balance Formula benefit (unless your benefit falls under the Payment of Small Pensions provision explained on page 48). You may choose either a Lump Sum or an Annuity as described in How Your Cash Balance Formula Benefit Can Be Paid beginning on page 20. Lump Sum Effective for distributions on or after January 1, 2013, your Cash Balance Formula benefit payable as a lump sum will be the greater of (1) and (2), and, if applicable, (3) and (4): (1) Your Cash Balance Account at the time of distribution; (2) Your Pre-2013 Cash Balance Account adjusted for Whipsaw (described on page 20) at the time of distribution; (3) If applicable, the actuarial present value of your Grandfathered Minimum Benefit plus your Wear-Away Protection amount at the time of distribution; or (4) If applicable, the actuarial present value of your Grandfathered Minimum Benefit plus your Pre-2013 Wear-Away Protection amount adjusted for Whipsaw (described on page 20) at the time of distribution. Items (3) and (4) may apply to you only if you elected the Cash Balance Formula during the Pension Choice Election process. Example Let us assume that you: Are 55 years old; Are married and your Spouse is 55 years old; Were in service prior to January 1, 2001, and elected the Cash Balance Formula in the Pension Choice Election process (and thus have a Grandfathered Minimum Benefit); End your Employment on July 1, 2014; Are Retirement-Eligible (and thus have a Subsidized Grandfathered Minimum Benefit if an annuity form of payment is elected); and Commence your pension benefit on July 1, Let us also assume that your Cash Balance Formula benefit had the following calculated values: (1) Your Cash Balance Account on July 1, 2014, was $147,630; (2) Your Pre-2013 Cash Balance Account adjusted for Whipsaw on July 1, 2014, was $143,120; Retirement Plan (Home Office and Agency Distribution Field Management) Page 18

29 (3) The actuarial present value of your Grandfathered Minimum Benefit plus your Wear-Away Protection amount on July 1, 2014, was $203,900; and (4) The actuarial present value of your Grandfathered Minimum Benefit plus your Pre-2013 Wear-Away Protection amount adjusted for Whipsaw on July 1, 2014, was $197,740. Your lump sum benefit payable on July 1, 2014, would be the greatest of the four values above; specifically, $203,900 (the actuarial present value of your Grandfathered Minimum Benefit plus your Wear-Away Protection amount). Annuity Effective for distributions on or after January 1, 2013, your Cash Balance Formula benefit payable as an annuity will be the greater of (1) and (2), and, if applicable, (3) and (4): (1) Your Cash Balance Account converted to an annuity at the time of distribution; (2) Your Pre-2013 Cash Balance Account adjusted for Whipsaw (described on page 20) at the time of distribution, converted to an annuity; (3) If applicable, your Grandfathered Minimum Benefit or Subsidized Grandfathered Minimum Benefit, whichever applies, plus your Wear-Away Protection amount converted to an annuity; or (4) If applicable, your Grandfathered Minimum Benefit or Subsidized Grandfathered Minimum Benefit, whichever applies, plus your Pre-2013 Wear-Away Protection amount adjusted for Whipsaw (described on page 20) at the time of distribution, converted to an annuity. Items (3) and (4) may apply to you only if you elected the Cash Balance Formula during the Pension Choice Election process. If your Cash Balance Account has a value greater than the actuarial value of the Grandfathered Minimum Benefit (or Subsidized Grandfathered Minimum Benefit, if applicable) plus your Wear-Away Protection, or the actuarial value of the Grandfathered Minimum Benefit (or Subsidized Grandfathered Minimum Benefit, if applicable) plus your Pre-2013 Wear-Away Protection adjusted for Whipsaw, you will receive an additional Annuity, based on the value of the excess. This additional benefit may be payable under the any of the Annuity forms of payment that are available under the Cash Balance Formula (please see How Your Cash Balance Formula Benefit Can Be Paid beginning on page 23 for information regarding the forms of payment available under the Cash Balance Formula). Example Continuing the example from above, let us assume that your Cash Balance Formula benefit had the following calculated annuity values for a 50% Joint and Survivor Annuity: (1) Your Cash Balance Account converted to an annuity on July 1, 2014, was $ per month payable over your lifetime; (2) Your Pre-2013 Cash Balance Account adjusted for Whipsaw converted to an annuity on July 1, 2014, was $ per month payable over your lifetime; (3) Your Subsidized Grandfathered Minimum Benefit plus your Wear-Away Protection amount converted to an annuity on July 1, 2014, was $1, per month payable to your age 65 and $1, per month payable thereafter; and (4) Your Subsidized Grandfathered Minimum Benefit plus your Pre-2013 Wear-Away Protection amount adjusted for Whipsaw converted to an annuity on July 1, 2014, was $1, per month payable to your age 65 and $1, per month payable thereafter. Your 50% Joint and Survivor Annuity payable beginning on July 1, 2014, would be the greatest of the four values above; specifically, $1, per month payable to your age 65 and $1, per month payable thereafter (your Subsidized Grandfathered Minimum Benefit plus your Wear-Away Protection amount converted to an annuity). If you were to die first, your surviving Spouse would receive 50% of Retirement Plan (Home Office and Agency Distribution Field Management) Page 19

30 your benefit for the remainder of her lifetime; specifically, $ per month payable until you would have been age 65 and $ per month payable thereafter. Whipsaw The Whipsaw calculation is a special interest-rate driven calculation that may result in your Cash Balance Formula payable benefit being larger than your Cash Balance Account. It may apply only if you had a Cash Balance Account on or before December 31, The Whipsaw calculation described below will be used in determining your payable pension benefit if, at the time you commence your pension benefit: You are under age 65; and The applicable 30-Year U.S. Treasury rate (the Average Yield of 30-Year U.S. Treasury Securities for October (constant maturities) of the prior year) is less than 4.25% (the Plan s minimum interest crediting rate). Under the Whipsaw calculation, either the Pre-2013 Cash Balance Account or the Pre-2013 Wear- Away Protection amount, as applicable, will be adjusted as follows: Project the applicable amount to age 65 using the interest crediting rate in effect for the calendar year of the distribution (4.25% for 2014); then Discount that amount to the distribution date using the applicable 30-Year U.S. Treasury rate (3.68% for 2014). To understand how the Whipsaw calculation may apply to your benefit, visit the Whipsaw modeling tool, available on the Prudential Benefits Center website (at How Your Cash Balance Formula Benefit Can Be Paid If you are Vested in your Cash Balance Formula benefit, you may choose how you would like to receive your Cash Balance Formula benefit (unless your benefit falls under the Payment of Small Pensions provision explained on page 48). There are normal forms of payment, as well as optional forms of payment. The normal and optional forms of payment that are available to you will depend on whether you are single or married as of the date you commence your Cash Balance Formula benefit. If you are married on the date your pension benefit commences, you must obtain your Spouse s written, notarized consent of the form of payment of your Cash Balance Formula benefit. Please note that once your Cash Balance Formula benefit commences, your form of payment election is irrevocable and cannot be changed. Normal Form of Payment Your normal form of payment depends on your marital status as of the date your Cash Balance Formula benefit commences, as follows: If You Are Single Single Life Annuity: This form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, no further pension benefit is payable. If You Are Married 50% Qualified Joint and Survivor Annuity: This form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 50% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your monthly pension benefit payments have already commenced, your monthly pension benefit will not be recalculated. Once you commence your Cash Balance Formula benefit, Retirement Plan (Home Office and Agency Distribution Field Management) Page 20

31 your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 50% Qualified Joint and Survivor Annuity is not available if you are not married on your commencement date. Optional Forms of Payment You may choose any of the following optional forms of payment, subject to the conditions applicable to each as described below. However, if you are married on the date your pension benefit commences, you must obtain your Spouse s written, notarized consent. The following applies to all options: You must make the form of payment election before the date as of which your benefit payments commence; Any form of payment election becomes irrevocable on the date as of which your benefit payments commence; and Each optional form of payment is, in general, Actuarially Equivalent to the Single Life Annuity form of payment. Lump Sum: This optional form of payment provides a single sum distribution. You may elect to have the qualified portion of your Lump Sum rolled over directly to another tax-qualified plan (such as PESP or another employer s tax-qualified plan [including a governmental 457(b) plan that agrees to separately account for such amounts]), a traditional Individual Retirement Account (IRA) (excluding a SIMPLE IRA or a Coverdell Education Savings Account [formerly known as an Education IRA]), or a Roth IRA. Alternatively, you may have the Lump Sum paid to you directly, less applicable tax withholding. (For information about taxes, refer to the Federal Tax Withholding from Lump-Sum Payments section beginning on page 50.) If you elect the Lump Sum payment option, no further pension benefit is payable. 75% Qualified Optional Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 75% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 75% Qualified Optional Joint and Survivor Annuity is not available if you are not married on your commencement date. 100% Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 100% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly Retirement Plan (Home Office and Agency Distribution Field Management) Page 21

32 pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 100% Joint and Survivor Annuity is not available if you are not married on your commencement date. 50% Contingent Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 50% of the monthly pension benefit you were receiving will continue to be paid to your designated surviving Contingent Annuitant for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your designated Contingent Annuitant. All payments will end when both you and your Contingent Annuitant die. The 50% Contingent Annuity payment form differs from the 50% Qualified Joint and Survivor Annuity because you may designate anyone as your Contingent Annuitant, not just your Spouse. If your Contingent Annuitant dies before your pension benefit commences, your election will be canceled without affecting the amount of your monthly pension benefit, and you may choose another form of payment. However, if your Contingent Annuitant dies after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate a new Contingent Annuitant to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Contingent Annuitant cannot be changed for any reason. Single Life Annuity: This optional form of payment is available to married participants and provides a monthly pension benefit that is payable for your lifetime. Upon your death, no further pension benefit is payable. Special Optional Forms of Benefit Payment If you elected the Cash Balance Formula during the Pension Choice Election process, have an opening account balance under the Cash Balance Formula, are considered Retirement-Eligible when your Employment with Prudential and its Affiliates ends, and you elect to receive your Cash Balance Formula benefit as an Annuity on the first day of the month on or following your 55 th birthday, the portion of your benefit equal to your Grandfathered Minimum Benefit (or Subsidized Grandfathered Minimum Benefit, if applicable) may be payable under the same forms of payment that are available to Retirement-Eligible participants under the Traditional Pension Formula (please see How Your Pension Benefit Can Be Paid beginning on page 35 for information regarding the forms of payment available to Retirement-Eligible participants under the Traditional Pension Formula). Any additional amounts payable under the Cash Balance Formula will be payable under any of the Annuity forms of payment that are available under the Cash Balance Formula (please see How Your Cash Balance Formula Benefit Can Be Paid beginning on page 20 for information regarding the forms of payment available under the Cash Balance Formula). Please note: If you elect a Lump Sum under the Cash Balance Formula, your entire benefit will be paid as a Lump Sum and you will be foregoing the value of any subsidies that may apply to the portion of your Cash Balance Formula pension benefit accrued prior to January 1, Please note: IRS Circular 230 disclosure: Neither Prudential nor its representatives are authorized to provide tax or legal advice or financial advice on behalf of the Plan. Any tax information provided is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. You are encouraged to consult with your tax, financial and/or legal advisors for advice regarding your particular situation. Retirement Plan (Home Office and Agency Distribution Field Management) Page 22

33 Survivor Benefits If You Die Before Cash Balance Formula Payments Commence If you die before your Cash Balance Formula benefit payments commence, your surviving Spouse or designated Beneficiary(ies) will receive the entire value of your Cash Balance Account. This benefit can be paid as a Single Life Annuity or as a Lump Sum. If Your Beneficiary Is Not Your Spouse If your Beneficiary(ies) is not your Spouse and elects to receive the death benefit in the form of a Single Life Annuity, payments must commence no later than December 31 of the calendar year following the calendar year of your death. If your Beneficiary(ies) is not your Spouse and elects to receive the death benefit in the form of a Lump Sum, the distribution must occur no later than December 31 of the calendar year in which the fifth anniversary of your death occurs. In either case, the Cash Balance Account will continue to earn Interest Credits until your Beneficiary(ies) receives a payment of the Cash Balance Formula benefit. Your non-spouse Beneficiary(ies) will have the option of rolling over a lump-sum distribution from the Cash Balance Formula into a special type of IRA called an inherited IRA (either traditional or Roth). An inherited IRA cannot contain other contributions or rollovers and timing of distributions from the inherited IRA must follow IRS minimum required distribution rules for non-spouse Beneficiaries, similar to those described in the first two paragraphs of this section. Alternatively, your Beneficiary(ies) can have the lump-sum distribution paid to him/her directly. (For information about taxes, refer to the Federal Tax Withholding from Lump-Sum Payments section beginning on page 50.) Once your Beneficiary(ies) receives a lump-sum distribution from the Cash Balance Formula, no further benefits are payable. If Your Beneficiary Is Your Spouse If your Beneficiary is your Spouse and elects to receive the death benefit in the form of a Single Life Annuity, payments must commence by the later of: December 31 of the calendar year following the calendar year of your death; or The date you would have reached your Normal Retirement Date (the first day of the month on or following your 65 th birthday). If your Beneficiary is your Spouse and elects to receive the death benefit in the form of a Lump Sum, the distribution must occur by the later of: December 31 of the calendar year in which the fifth anniversary of your death occurs; or The date you would have reached your Normal Retirement Date (the first day of the month on or following your 65 th birthday). In either case, the Cash Balance Account will continue to earn Interest Credits until your Spouse receives a payment of the Cash Balance Formula benefit. Your Spouse will have the option of rolling over a lump-sum distribution from the Cash Balance Formula into another tax-qualified plan (such as PESP or another employer s tax-qualified plan [including a governmental 457(b) plan that agrees to separately account for such amounts]), a traditional IRA (excluding a SIMPLE IRA or a Coverdell Education Savings Account [formerly known as an Education IRA]) or a Roth IRA. Alternatively, your Spouse can have the lump-sum distribution paid to him/her directly. (For information about taxes, refer to the Federal Tax Withholding from Lump-Sum Payments section beginning on page 50.) Once your Spouse receives a lump-sum distribution from the Cash Balance Formula, no further benefits are payable. Retirement Plan (Home Office and Agency Distribution Field Management) Page 23

34 If You Die After Cash Balance Formula Payments Commence If you die after your payments commence under the Cash Balance Formula, your surviving Spouse or designated Beneficiary(ies) will receive a death benefit only if the form of payment you elected provided for such benefit. For example, if you elected to receive your benefit in the form of a 50% Qualified Joint and Survivor Annuity, upon your death, 50% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. If you elected to receive your benefit in the form of a lump-sum payment, no death benefit will be payable to your surviving Spouse or designated Beneficiary(ies). Designation of Beneficiary(ies) You may use the Prudential Benefits Center website at to name a Beneficiary. Simply open the Retirement Planning drop-down list, select Beneficiaries, then scroll to Retirement Plan, select Update Beneficiaries and follow the on-screen instructions. If spousal consent is required, you will need to print and complete an additional form. If You Are Single Your Beneficiary(ies) will be the person(s) you so designate, according to the rules and procedures of the Cash Balance Formula. If you die without having named a Beneficiary, or if all your Beneficiaries die before you, your Beneficiary automatically will be your estate. If You Are Married Your Beneficiary automatically will be your Spouse if you have not yet reached January 1 of the year of your 35 th birthday. If you have reached January 1 of the year of your 35 th birthday, your Beneficiary automatically will be your Spouse, unless you designate a different Beneficiary(ies) in accordance with the rules and procedures of the Cash Balance Formula and the following requirements: Your Spouse must provide his/her written, notarized consent; Once your Spouse provides his/her written, notarized consent to a Beneficiary designation, your Spouse may not revoke his/her consent with respect to that designation; and You may change your Beneficiary designation only prior to the date your benefit under the Cash Balance Formula commences and only if your Spouse provides his/her written, notarized consent to the change. The Plan Administrator will provide you with a written explanation of the death benefit by the later of: The period beginning with the first day of the Plan Year of your 32 nd birthday and ending with the close of the Plan Year preceding the Plan Year of your 35 th birthday; or Within one year of your becoming a participant in the Plan. In the event your Employment with Prudential ends prior to your 35 th birthday, notice will be provided within one year of the date your Employment with Prudential and its Affiliates ends. If you die without having named a Beneficiary, or all of your Beneficiaries, including your Spouse, die before you, your Beneficiary automatically will be your estate. Additional Information About Beneficiary Designations In certain rare and extraordinary circumstances, where you are unable to name a Beneficiary, but you have provided another writing that clearly states your intent to designate or change your Beneficiary, the Plan Administrator will follow your instructions. Note that if a participant is killed by a person who would otherwise receive a benefit under the Retirement Plan as a Beneficiary of the participant, the Retirement Plan may, depending on the law of the state, territory, or other governmental subdivision in which such participant resided immediately prior to his/her death, redirect the benefit to another person. For instance, if such law provides that the person responsible for the death of the participant is treated as predeceasing the participant, then the Administrative Committee or its delegate, provided that it has knowledge of these circumstances, Retirement Plan (Home Office and Agency Distribution Field Management) Page 24

35 will seek to pay a contingent Beneficiary(ies) or, if none is named, the participant s estate. In some cases, there may be no benefit payable. If Your Employment with Prudential and Its Affiliates Ends and You Are Later Re-hired If your Employment with Prudential and its Affiliates ends, you receive your Cash Balance Formula benefit as a Lump Sum and you are then re-hired by Prudential at a later date: A new Cash Balance Account will be established for you upon your reemployment. Any benefit you earn after your reemployment date will be tracked by your new Cash Balance Account. In addition, any prior elections you made with respect to the form of payment or Beneficiary(ies) of your previous Cash Balance Formula benefit will not apply to your new Cash Balance Formula benefit. However, your prior service will be used to determine your Basic Credit percentage and Vesting Service. If your Employment with Prudential and its Affiliates ends, you start to receive your Cash Balance Formula benefit as an Annuity and you are then re-hired by Prudential: Your monthly pension benefit payments will continue and a new Cash Balance Account will be established for you upon your reemployment. Any benefit you earn after your reemployment date will be tracked by your new Cash Balance Account. In addition, any prior elections you made with respect to the form of payment or Beneficiary(ies) of your previous Cash Balance Formula benefit will not apply to your new Cash Balance Formula benefit. However, your prior service will be used to determine your Basic Credit percentage and Vesting Service. If your Employment with Prudential and its Affiliates ends, you do not receive any payment of your Cash Balance Formula benefit and you are re-hired by Prudential: Any benefit you earn upon your reemployment will be added to your existing Cash Balance Account. Any prior elections you made with regard to your Beneficiary(ies) will remain in effect. If you were Vested when your prior Employment ended, your prior service will be used to determine your Basic Credit percentage and Vesting Service. If you were not Vested when your prior Employment ended and you incurred a Break-in-Service before your re-hire, your prior non-vested Cash Balance Formula benefit will be forfeited and your prior service will not be used to determine your Basic Credit percentage and Vesting Service. If you had a prior non-vested benefit and you are re-hired before you incur a Break-in-Service, any benefit in your existing Cash Balance Account will be restored and will include Interest Credits from your Separation from Service Date through your date of re-hire. Your prior service will be used to determine your Basic Credit percentage and Vesting Service. If You Take an Approved Leave of Absence How Your Vesting Service Is Determined During a Leave of Absence During a paid leave of absence, your Vesting Service will continue. During an unpaid leave of absence, Vesting Service will continue, up through your Separation from Service Date. See Separation from Service Date beginning on page 11 for more information. Special rules apply to Employees who are on a military leave of absence covered by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). See Break-in-Service on page 12 for more information. How Your Cash Balance Formula Benefit Is Determined During a Leave of Absence Basic Credits During a paid leave of absence, Basic Credits will continue to be added to your Cash Balance Account on a monthly basis. Retirement Plan (Home Office and Agency Distribution Field Management) Page 25

36 During an unpaid leave of absence, Basic Credits will not be added to your Cash Balance Account. If you return to work, your Basic Credits will resume once you begin to receive Eligible Earnings. If you are on a military leave of absence covered by USERRA, upon your return to work, Basic Credits will be added to your account for the entire period of your USERRA qualified military leave of absence (generally, up to five years). Your Eligible Earnings used to determine your Basic Credits for this period will be determined in accordance with the rules established under USERRA. Interest Credits During a paid leave of absence, an unpaid leave of absence and a military leave of absence covered by USERRA, Interest Credits will continue to be added to your Cash Balance Account on a monthly basis. If You Become Disabled If you become disabled and are eligible to receive long term disability benefits under The Prudential Welfare Benefits Plan, the following will apply. How Your Vesting Service Is Determined While Disabled You will become 100% Vested in your Cash Balance Formula benefit on the date you begin to receive long term disability benefits (this does not include long term disability benefits paid while on accommodation leave) under The Prudential Welfare Benefits Plan. In addition, your Vesting Service will continue through your Separation from Service Date. See Separation from Service Date beginning on page 11 for more information. How Becoming Disabled Will Affect the Determination of Your Benefit Basic Credits Basic Credits will continue to be added to your Cash Balance Account on a monthly basis, based on your Eligible Earnings, up through the earlier of: 1) The date you commence your Cash Balance Formula benefit; 2) The first day of the month on or following your 65 th birthday; or 3) The date you are no longer eligible to receive long term disability benefits under The Prudential Welfare Benefits Plan. For purposes of determining your Basic Credit percentage, you will be deemed to earn Cash Balance Service for the period when your disability benefits are payable. While you are on long term disability, your Eligible Earnings will be assumed to be the same pay that was used to calculate your disability benefits. (See the Disability Program SPD booklet for more information.) Interest Credits Interest Credits will continue to be added to your Cash Balance Account until you commence payment of your Cash Balance Formula benefit. When You May Commence Your Cash Balance Formula Benefit You may elect to commence your Cash Balance Formula benefit while you are eligible to receive long term disability benefits (provided you are not on an accommodation leave). However, commencing your Cash Balance Formula benefit will reduce your long term disability benefit payment. (See the Disability Program SPD booklet for more information.) You may elect to defer payment of your Cash Balance Formula benefit to a later date (but in no event later than the first day of the month on or following your 65 th birthday). If you elect to defer payment, your Cash Balance Account will continue to earn Basic Credits and Interest Credits as described beginning on page 25. Retirement Plan (Home Office and Agency Distribution Field Management) Page 26

37 Traditional Pension Formula This section applies only to those Employees: Who participated in the Retirement Plan prior to January 1, 2001, and either: Elected the Traditional Pension Formula during the 2001 Pension Choice Election process; or Made no election (thereby defaulting to the Traditional Pension Formula) during the 2001 Pension Choice Election process; OR Who elected the Cash Balance Formula during the 2001 Pension Choice Election process and to whom the 1965 Plan benefit formula is applicable for Credited Service before 1976; OR Who were reemployed on or after January 1, 2001, and retained a Purchased Benefit under the Traditional Pension Formula based on their prior period of Employment with Prudential. If your Employment with Prudential and its Affiliates ends and you are reemployed, you will become a participant in the Retirement Plan and any benefit you earn during your new period of Employment will be determined under the Cash Balance Formula. (Please see the Cash Balance Formula section beginning on page 15 for information regarding the Cash Balance Formula.) When You May Commence Your Pension Benefit If You Are Not Vested If your Employment with Prudential and its Affiliates ends before you become Vested in your pension benefit under the Traditional Pension Formula, you are not entitled to any benefit under the Traditional Pension Formula. If You Are Vested Once you become Vested in your Traditional Pension Formula benefit and your Employment with Prudential and its Affiliates ends, you may commence your pension benefit on the first day of any month on or following your 55 th birthday. If your Employment with Prudential and its Affiliates ends prior to your 65 th birthday, you must commence receiving your pension benefit no later than when you are eligible for an unreduced pension benefit (generally at your Normal Retirement Date - the first day of the month on or following your 65 th birthday). If you are still in active service after your Normal Retirement Date, you may not commence your pension benefit while you are active. Your pension benefit must commence on the first day of the month on or following the date your Employment with Prudential and its Affiliates ends (your Late Retirement Date). Under the terms of the Retirement Plan, the Company must commence your pension benefit as of the date you are first eligible for an unreduced pension benefit, your Normal Retirement Date, or Late Retirement Date as applicable, even though the Company may not actually make payments until a later date. In the event the Company is not able to actually provide monthly payments until some date after the date you must commence your pension benefit, the Company will treat you as having begun receiving payments on that date. If this occurs, the Company will provide a make-up payment equal to your missed monthly pension benefit payments, plus interest (if the actual date payments start is three or more months after the date you must commence your pension benefit), and, going forward, your monthly payments will be calculated as if your payments had commenced on the date you were required to commence. Retirement Plan (Home Office and Agency Distribution Field Management) Page 27

38 Generally your benefit cannot commence before you receive a notice explaining your payment options (as well as other information, such as your rights and your Spouse s rights with respect to the distribution) and give your consent and your Spouse s consent (if applicable) to the distribution. However, under certain circumstances, your benefit could commence retroactively, even though payments do not actually begin until a later date. For example, if you submit a request prior to age 55 electing to commence your pension benefit at age 55, but due to administrative delays, such as trying to resolve a data issue, the package with the notice explaining your payment options and rights is not provided to you until a later date, you will have a choice as to whether you want your pension benefit payments to commence as of the date you first requested the benefit payment to be made, or whether you want to commence your pension benefit as of the current date. If you do decide to treat your pension benefit as having commenced retroactively, you will receive a make-up payment equal to your missed monthly pension benefit payments, plus interest. To assist you in making your decision, you will be provided with non-binding estimates of your benefit at both starting dates and will be provided with an election form to choose a payment commencement date. An estimate is not a guarantee of your actual benefit and may differ from your final benefit. Your final benefit will be determined after you make your election, after final data is verified and after calculations are completed. Please note that once your Traditional Pension Formula benefit commences, your commencement and form of benefit payment elections are irrevocable and cannot be changed. Whenever you commence your monthly pension benefit under the Retirement Plan, you generally must complete and submit the appropriate election form(s) days before you want your Retirement Plan benefit to commence. To begin the commencement process, access the Prudential Benefits Center website via the Internet at or call PRU-EASY ( ), follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefits Center Representative. See the How to Commence a Benefit from the Retirement Plan section beginning on page 6 for more information. Retirement Eligibility Becoming Retirement-Eligible under the Traditional Pension Formula is determined as described beginning below under the subheadings Normal Retirement, Early Retirement, and Late Retirement. (Note: You will also be considered Retirement-Eligible if you satisfy the requirements under the Traditional Pension Formula applicable only to Employees who are involuntarily terminated, as described in the Involuntary Termination section beginning on page 29.) Please note: If you are not Retirement-Eligible under the Traditional Pension Formula when your Employment with Prudential and its Affiliates ends, based on the information detailed beginning below, please see If You Are Not Retirement-Eligible When Your Employment Ends beginning on page 40 for information pertaining to your Traditional Pension Formula benefit. Normal Retirement Your Normal Retirement Date is the first day of the month on or following your 65 th birthday. For example, if you turn age 65 on November 1, your Normal Retirement Date is November 1. If you turn age 65 later in the month, your Normal Retirement Date is the first day of the following month. For example, if you turn age 65 on November 2, your Normal Retirement Date is December 1. If you elect to commence your pension benefit on your Normal Retirement Date, you will receive the full, unreduced pension benefit, and your benefit will be determined using the Normal Pension Benefit Calculation described beginning on page 30. Early Retirement If your Employment with Prudential and its Affiliates ends on or after the first day of the month on or following your 55 th birthday and you have at least 10 years of Vesting Service, you are eligible for early retirement. If you take early retirement, you may elect to commence your pension benefit on the first day of any month on or before when you are eligible for an unreduced pension benefit (generally at your Normal Retirement Date). Retirement Plan (Home Office and Agency Distribution Field Management) Page 28

39 Under certain circumstances, if your Employment ends as the result of an involuntary termination when you are at least age 50, and you have completed at least 20 years of Continuous Service (including service with certain Affiliates that do not participate in the Retirement Plan), you may be eligible for early retirement. (See Involuntary Termination beginning on page 29 of this section for more information.) However, the earliest date you may elect to commence your pension benefit is the first day of the month on or following your 55 th birthday. If you commence your pension benefit before when you are eligible for an unreduced pension benefit, your monthly payment amounts may be reduced to take into account that payments will be made to you over a longer period of time and will be determined using the Early Pension Benefit Calculation described beginning on page 32. Late Retirement You are not required to end your Employment with Prudential and its Affiliates when you reach your Normal Retirement Date. If you continue to work after your Normal Retirement Date, you will continue to accrue a pension benefit, using your additional years of Continuous Service and Credited Service, until your Employment with Prudential and its Affiliates ends. Your pension benefit will generally commence on the first day of the month on or following the date your Employment with Prudential and its Affiliates ends (your Late Retirement Date). In addition, for periods of Employment on or after January 1, 2001, if you remain Employed with Prudential and its Affiliates after your Normal Retirement Date, your pension benefit will be actuarially increased, if necessary, to ensure that it is at least the Actuarial Equivalent of the amount of your pension benefit that would have been payable had you commenced benefit payments on your Normal Retirement Date. However, if you reached age 70½ prior to 2000, you are required to receive minimum distribution payments under the Retirement Plan while you are Employed with Prudential or its Affiliates. These payments generally must commence by April 1 of the calendar year immediately following the calendar year in which you reach age 70½ and will be adjusted annually, if necessary, to reflect any additional pension benefit accruals. If you reach age 70½ during or after 2001, you will not receive minimum distribution payments, and instead your pension benefit will be actuarially increased further, if necessary, to ensure that it is at least the Actuarial Equivalent of the amount that would have been payable to you had you commenced payment of your pension benefit on January 1 of the calendar year following the calendar year in which you attained age 70½. Involuntary Termination You may be Retirement-Eligible under the Traditional Pension Formula if you are involuntarily terminated and you: Are at least age 50; Have completed 20 years of Continuous Service (including service with certain Affiliates that do not participate in the Retirement Plan); and Are not Dismissed for Cause by Prudential or its Affiliates; AND Do not voluntarily terminate service (unless such voluntary termination was under or as a result of a workforce reduction or other similar program approved by the Company s senior personnel officer or was the result of a request for resignation); or Do not terminate from Employment as a result of exhausting your short term disability benefits or the end of a long term disability accommodation leave. Retirement Plan (Home Office and Agency Distribution Field Management) Page 29

40 You are also considered Retirement-Eligible if you die and are at least age 50 with 20 years of Continuous Service (including service with certain Affiliates that do not participate in the Retirement Plan). If you meet the above requirements, you (or your Spouse or Beneficiary) may commence receiving payment of your pension benefit as early as the first day of the month on or following your 55 th birthday. This benefit is referred to as the 50/20 pension benefit. If your Employment with Prudential and its Affiliates ends as a result of an involuntary termination that qualifies you for scheduled benefits under the Prudential Severance Plan, you will be considered, solely for the purposes of determining whether you are Retirement-Eligible, to have two years of additional age and eighteen months of additional service. This additional age and service will not, however, otherwise increase the amount of your pension benefit. If your Employment with Prudential and its Affiliates ends as a result of an involuntary termination that qualifies you for benefits under the Prudential Severance Plan, other than scheduled benefits, you will be considered, solely for the purposes of determining whether you are Retirement-Eligible, to have the period of severance included as additional age and additional service. This additional age and service will not, however, otherwise increase the amount of your pension benefit. If You Are Retirement-Eligible When Your Employment Ends The sections How Your Pension Benefit Is Calculated and How Your Pension Benefit Can Be Paid describe the pension benefits available to you if you are Retirement-Eligible when your Employment with Prudential and its Affiliates ends. (See Retirement Eligibility beginning on page 28 for more information.) If you are not Retirement-Eligible when your Employment ends, see If You Are Not Retirement-Eligible When Your Employment Ends beginning on page 40 for more information. How Your Pension Benefit Is Calculated Normal Pension Benefit Calculation The formula used to calculate your normal pension benefit under the Traditional Pension Formula is as follows: 1.35% of Average Eligible Earnings up to Covered Compensation Plus 2.00% of Average Eligible Earnings in excess of Covered Compensation Multiplied by Up to 25 years of Credited Service PLUS.75% of Average Eligible Earnings up to Covered Compensation Plus 1.00% of Average Eligible Earnings in excess of Covered Compensation Multiplied by Up to the next 13 years of Credited Service PLUS 1.00% of Average Eligible Earnings Multiplied by Any additional years of Credited Service in excess of 38 years Retirement Plan (Home Office and Agency Distribution Field Management) Page 30

41 Below is an example to show you how it works. Example Let us assume that you: Are 65 years old; End your Employment on January 10, 2013; Commence your pension benefit on February 1, 2013; Have 35 years of Credited Service; Have Average Eligible Earnings of $80,000; and Have Covered Compensation of $69,900. Your normal pension benefit is calculated as follows:.0135 x $69,900 = $ Plus.02 x $10,100 = $ multiplied by 25 PLUS.0075 x $69,900 = $ Plus.01 x $10,100 = $ multiplied by 10 PLUS.01 x $80,000 = $800 multiplied by Which results in: ($ $202.00) x 25 = $28, PLUS ($ $101.00) x 10 = $6, PLUS $800 x 0 = $0 EQUALS $34, (your annual normal pension benefit). In this example, your annual normal pension benefit would be $34, if paid as a Life Annuity. Your monthly normal pension benefit would be equal to 1/12 of this amount, or $2, Retirement Plan (Home Office and Agency Distribution Field Management) Page 31

42 Early Pension Benefit Calculation If your Employment with Prudential and its Affiliates ends after you become eligible for early retirement, you may elect to commence your pension benefit, but not before the first day of the month on or following your 55 th birthday. However, it may be reduced by an Early Pension Factor to reflect the fact that you will be receiving the pension benefit over a longer period of time. This reduction is based on your exact age when you start receiving your pension benefit and your number of years of Credited Service. You may elect to defer the receipt of your pension benefit, if any, to a later date, but no later when you are eligible for an unreduced pension benefit (generally at your Normal Retirement Date). If you elect to commence your pension benefit on your Normal Retirement Date, it will not be reduced for early payment. For illustration purposes only, the following chart illustrates the approximate percentage (Early Pension Factor) that will be applied to the formula calculation if you commence your pension benefit early, at the exact age shown: Percent Applied at Early Retirement (Early Pension Factor) Years of Credited Service Exact Age at Commencement 30 years or more 29 years 28 years 27 years 26 years 25 years 24 years 23 years 22 years or less % 100% 100% 100% 100% 100% 100% 100% 100% % 96% 96% 96% 96% 96% 96% 96% 96% % 93 1/3% 92% 92% 92% 92% 92% 92% 92% % 93 1/3% 88% 88% 88% 88% 88% 88% 88% % 93 1/3% 86 2/3% 84% 84% 84% 84% 84% 84% % 93 1/3% 86 2/3% 80% 80% 80% 80% 80% 80% /3% 93 1/3% 86 2/3% 80% 74% 74% 74% 74% 74% /3% 86 2/3% 86 2/3% 80% 73 1/3% 68% 68% 68% 68% 57 80% 80% 80% 80% 73 1/3% 66 2/3% 62% 62% 62% /3% 73 1/3% 73 1/3% 73 1/3% 73 1/3% 66 2/3% 60% 56% 56% /3% 66 2/3% 66 2/3% 66 2/3% 66 2/3% 66 2/3% 60% 53 1/3% 50% Note: The chart reflects the Retirement Plan s 60/30 rule which means that individuals eligible for early retirement can receive a full, unreduced pension benefit if payments begin on or after their 60/30 date. To apply the 60/30 rule, your 60/30 date is determined. Your 60/30 date is equal to the first day of the month on or following both your 60 th birthday and the date you would complete 30 years of Credited Service. If you are eligible for early retirement but do not reach your 60/30 date before your employment with Prudential and its Affiliates ends, you will continue to earn additional years toward your 60/30 date after your employment ends until the date you elect to commence your pension benefit. For example, if you retire at age 55 with 25 years of service, and you delay the start of your pension payments for five years (until the date you would have reached age 60 and completed 30 years of service had you remained employed with Prudential or an Affiliate), you will be eligible for an unreduced pension benefit. If you elect to commence your pension benefit before your 60/30 date, you will receive a reduced benefit, but the reduction may be less than the reduction that generally applies to individuals eligible for early retirement who elect to commence their pension benefit before their 65 th birthday, depending upon how far the commencement date precedes your 60/30 date. Retirement Plan (Home Office and Agency Distribution Field Management) Page 32

43 Your early pension benefit is calculated in two parts. The first part is the pension benefit you would receive until the first day of the month on or following your 65 th birthday, payable as a Life Annuity. This part is calculated using the following formula: 2.00% of Average Eligible Earnings multiplied by Up to 25 years of Credited Service PLUS 1.00% of Average Eligible Earnings multiplied by Years of Credited Service in excess of 25 years Once these calculations are completed, the result is multiplied by the appropriate Early Pension Factor, based on your Credited Service and your age at commencement. The second part is the pension benefit you would receive beginning on the first day of the month on or following your 65 th birthday, payable as a Life Annuity. This is calculated by determining your normal pension benefit (see Normal Pension Benefit Calculation beginning on page 30) and multiplying that amount by your Early Pension Factor. Below is an example to show you how these pension benefit amounts are calculated. Example Let us assume you: Are 57 years old; End your Employment on April 19, 2013; Commence your pension benefit on May 1, 2013; Have 35 years of Credited Service; Have Average Eligible Earnings of $59,000; Have Covered Compensation of $89,652; and Have an Early Pension Factor of 80%. The first part is the pension benefit you would receive until the first day of the month on or following your 65 th birthday, payable as a Life Annuity, and is calculated using the following formula:.02 x $59,000 = $1,180 multiplied by 25 PLUS.01 x $59,000 = $590 multiplied by Which results in: $1,180 x 25 = $29, Retirement Plan (Home Office and Agency Distribution Field Management) Page 33

44 PLUS $590 x 10 = $5,900 EQUALS $35,400 (your unadjusted annual early pension benefit). To determine the amount of your annual early pension benefit payable until the first day of the month on or following your 65 th birthday, your unadjusted annual early pension benefit is multiplied by your Early Pension Factor, as follows: $35,400 MULTIPLIED BY.80 EQUALS $28,320 (your annual early pension benefit). In this example, your annual early pension benefit, payable until the first day of the month on or following your 65 th birthday, would be $28,320, payable as a Life Annuity. Your monthly early pension benefit would be 1/12 of this amount or $2,360. The second part is the pension benefit you would receive starting on the first day of the month on or following your 65 th birthday, payable as a Life Annuity, and is calculated using the following formula:.0135 x $59,000 = $ Plus.02 x $0 = $0 multiplied by 25 PLUS.0075 x $59,000 = $ Plus.01 x $0 = $0 multiplied by 10 PLUS.01 x $59,000 = $590 multiplied by 0 Which results in: ($ $0) x 25 = $19, PLUS ($ $0) x 10 = $4,425 PLUS $590 x 0 = $0 EQUALS $24, (your unadjusted annual normal pension benefit). Retirement Plan (Home Office and Agency Distribution Field Management) Page 34

45 To determine the amount of your annual normal pension benefit payable from the first day of the month on or following your 65 th birthday, your unadjusted annual normal pension benefit is multiplied by your Early Pension Factor as follows: $24, MULTIPLIED BY.80 EQUALS $19,470 (your annual normal pension benefit). In this example, your annual normal pension benefit, payable from the first day of the month on or following your 65 th birthday, would be $19,470, payable as a Life Annuity. Your monthly normal pension benefit would be 1/12 of this amount, or $1, Looking back, you see that you would receive a monthly early pension benefit of $2,360 (if paid as a Life Annuity) until your 65 th birthday and then a monthly normal pension benefit of $1, (if paid as a Life Annuity) from the first day of the month on or following your 65 th birthday. Protection of Accrued Pension Benefit The Retirement Plan is designed so that your accrued pension benefit: At the beginning of the year will not be less than it was at the beginning of any previous year; At the date your Employment with Prudential and its Affiliates ends will not be less than it was at the beginning of that year; and After your Normal Retirement Date will not be less than the current actuarial value of your accrued pension benefit on your 65 th birthday. Other Benefits Demutualization Credit: In addition to your Traditional Pension Formula benefit, you also may have a Cash Balance Account if you received a Demutualization Credit as of July 31, 2002, in connection with the demutualization of The Prudential Insurance Company of America (the conversion from a mutual insurance company to a stock company). This is true even for participants who elected the Traditional Pension Formula during the Pension Choice Election process. QSERP Benefits: Certain employees previously notified by Prudential also may be eligible for the 2003 and/or 2012 QSERP benefits in this Plan that were shifted from their benefit under the non-qualified Prudential Supplemental Retirement Plan. Additional Retirement Benefit: The Additional Retirement Benefit is an additional benefit that may be paid under the Retirement Plan to certain participants who were involuntary separated and who were notified in writing by January 1, 2001, of their eligibility for this benefit. Individuals in Service Before June 1, 1975: If you were first hired before June 1, 1975, and you elected during 1975 to have your pension benefit for service through 1975 based on the terms of the 1965 Plan benefit formula in the pre-1976 version of the Plan, and your pension benefit for service after 1975 based on the terms of the current Plan, your pension credits for service after 1975 will be calculated differently from the calculation described in the preceding sections. Please see Appendix D beginning on page 80 for more information about these benefits. How Your Pension Benefit Can Be Paid If you are Retirement-Eligible and your Employment with Prudential and its Affiliates ends, you may choose how you would like to receive your pension benefit (unless your benefit falls under the Payment of Small Pensions provision explained on page 48). Retirement Plan (Home Office and Agency Distribution Field Management) Page 35

46 There are normal forms of payment, as well as optional forms of payment and alternative methods of payment. The normal and optional forms of payment that are available to you will depend on whether you are single or married as of the date you commence your pension benefit. If you are married on the date your pension benefit commences, you must obtain your Spouse s written, notarized consent of the form of payment of your Traditional Pension Formula benefit. Please note that once your pension benefit commences, your commencement date and form of payment election are irrevocable and cannot be changed. Normal Forms of Payment Your normal form of payment depends on your marital status as of the date your pension benefit commences, as follows: If You Are Single Life Annuity and 15-Year Period Certain: This form of payment provides a monthly pension benefit to you for your lifetime with a guarantee of 15 years of monthly payments. If you die after receiving 15 years of monthly pension benefit payments, all payments stop at your death. If you die before receiving 15 years of monthly pension benefit payments, the remainder of the guaranteed payments will be made to your Beneficiary(ies) or your estate. There is no cost for providing this additional benefit, if any, to your Beneficiary(ies). This means that your monthly pension benefit amount will not be reduced to provide this additional benefit. Instead of the remaining installments, your Beneficiary(ies) may arrange to have a single lump sum paid upon your death. This amount will be the Actuarial Equivalent of the remaining installments. Under the Life Annuity and 15-Year Period Certain, your Beneficiary(ies) may be changed at any time. If You Are Married 50% Qualified Joint and Survivor Annuity: This form of payment provides a monthly pension benefit payable to you for your lifetime. Upon your death, 50% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. There is no cost for providing this additional benefit to your surviving Spouse. This means that your monthly pension benefit will not be reduced to provide this additional benefit. If this is the only form of payment that you choose for your Traditional Pension Formula benefit, all payments will end when both you and your spouse die. If your Spouse dies before you and your pension benefit payments have already commenced, your monthly pension benefit will not be recalculated. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 50% Qualified Joint and Survivor Annuity is not available if you are not married on your commencement date. If you want to commence your monthly pension benefit under any other form of payment, you must obtain your Spouse s written, notarized consent to waive the 50% Qualified Joint and Survivor Annuity. Married participants who waive the 50% Qualified Joint and Survivor Annuity are eligible for the Life Annuity and 15-Year Period Certain at no cost (see above). If you are married and you wish to name a non-spouse Beneficiary(ies) under the Life Annuity and 15-Year Period Certain Option, you must obtain your Spouse s written, notarized consent. Optional Forms of Payment and Alternative Methods of Payment If you are Retirement-Eligible, you may elect an optional form of payment and/or an alternative method of payment, subject to the conditions applicable to each as described below. If you are married on the date your monthly pension benefit payments commence, you will need your Spouse s written, notarized consent to elect a specific optional and/or alternative form of payment or a specific Beneficiary(ies) as described below. Retirement Plan (Home Office and Agency Distribution Field Management) Page 36

47 With respect to both optional forms of payment and alternative methods of payment: You must make the form of payment election before the date as of which your monthly pension benefit payments commence; Any form of payment election becomes irrevocable on the date as of which your monthly pension benefit payments commence; and Each optional form of payment and alternative method of payment is, in general, Actuarially Equivalent to the Life Annuity form of payment. Optional Forms of Payment You may elect only one optional form of payment. 75% Qualified Optional Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 75% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. There is no cost for providing the first 50% of this additional benefit to your surviving Spouse. As a result, your monthly pension benefit will be reduced, but only to reflect the cost of providing a Joint and Survivor Annuity percentage in excess of 50%. If this is the only form of payment that you choose for your Traditional Pension Formula pension benefit, all payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 75% Qualified Optional Joint and Survivor Annuity is not available if you are not married on your commencement date. 100% Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 100% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. There is no cost for providing the first 50% of this additional benefit to your surviving Spouse. As a result, your monthly pension benefit will be reduced, but only to reflect the cost of providing a Joint and Survivor Annuity percentage in excess of 50%. If this is the only form of payment that you choose for your Traditional Pension Formula pension benefit, all payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 100% Joint and Survivor Annuity is not available if you are not married on your commencement date. Period Certain Option: This optional form of payment provides a monthly pension benefit payable to you for your lifetime with a guaranteed minimum number of payments. You may choose either 120 payments (10-Year Period Certain) or 180 payments (15-Year Period Certain) of your monthly pension benefit to be continued to your designated Beneficiary(ies). Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your designated Beneficiary(ies). If you die before receiving the minimum number of payments, the remaining Retirement Plan (Home Office and Agency Distribution Field Management) Page 37

48 guaranteed monthly pension benefit payments will continue to your designated Beneficiary(ies). If you have no named Beneficiary(ies) when you die, any remaining payments will be paid to your estate. Instead of receiving the remaining monthly pension benefit payments, your Beneficiary(ies) may elect to have a lump-sum distribution paid upon your death. This lump-sum distribution amount will equal the Actuarial Equivalent of the remaining number of installments. As stated under Normal Forms of Payment on page 36, the Retirement Plan provides for a Life Annuity and 15-Year Period Certain to participants who elect the Life Annuity form of payment, whether they are unmarried participants or married participants who waive the 50% Qualified Joint and Survivor Annuity. This benefit is provided at no cost to you; that is, the monthly pension payment is not actuarially reduced to account for the guaranteed period. If you are married on the date your monthly pension benefit commences, you may elect the 10- or 15-Year Period Certain Option without waiving the 50% Qualified Joint and Survivor Annuity. If you make this election, only the portion of your monthly pension benefit paid to you will be reduced to account for the cost of the 10- or 15-Year Period Certain feature. Your surviving Spouse s portion of the monthly pension benefit will not be affected. The guaranteed payment may be reduced so that monthly pension benefit payments under this optional form of payment will not be greater than the Actuarial Equivalent of monthly pension benefit payments under the 50% Qualified Joint and Survivor Annuity, as required by the terms of the Retirement Plan. Contingent Annuity Option: This optional form of payment provides a reduced monthly pension benefit payable to you for your lifetime, and then a continuing monthly pension benefit payable for the lifetime of your designated surviving Contingent Annuitant after your death. This option cannot be elected if your monthly pension benefit is payable as a Life Annuity and 15-Year Period Certain or if you elect the Period Certain Option. The monthly pension benefit payable to your Contingent Annuitant can equal 100% or some lesser percentage of your reduced lifetime monthly pension benefit. There is a cost associated with this election, which is reflected in a reduced monthly pension benefit payable to you and your designated Contingent Annuitant. The higher the percentage to be continued to your designated Contingent Annuitant, the lower the amount of your monthly pension benefit. After your death, the designated percentage will continue to your designated surviving Contingent Annuitant for the remainder of his/her lifetime. You can designate anyone as your Contingent Annuitant. If this is the only form of payment that you chose for your Traditional Pension Formula pension benefit, all payments will end when both you and your Contingent Annuitant die. If you are married, you may elect a Contingent Annuitant other than your Spouse for the Contingent Annuity Option and retain the 50% Qualified Joint and Survivor Annuity for your Spouse. In that event, there is a cost associated with this election, which is reflected in a reduced monthly pension benefit payable to you and your designated Contingent Annuitant. The amount that may be continued to your designated non-spouse Contingent Annuitant may be reduced so that payments under this optional form of payment will not be greater than the Actuarial Equivalent of payments under the 50% Qualified Joint and Survivor Annuity form. You can waive the 50% Qualified Joint and Survivor Annuity in order to continue a greater percentage to your designated Contingent Annuitant (with spousal consent). In this case, you will be foregoing the value of the subsidized 50% Qualified Joint and Survivor Annuity. If you are not married on the date your monthly pension benefits commence and elect this form of payment, you will be foregoing the value of the 15-year guarantee period under the Life Annuity and 15-Year Period Certain. If your Contingent Annuitant dies before your pension benefit commences, your election will be canceled without affecting the amount of your monthly pension benefit, and you may choose another form of payment. However, if your Contingent Annuitant dies after your pension benefit commences, you will continue to receive the lower amount for your lifetime. Once you commence your monthly pension benefit, your designated Contingent Annuitant cannot be changed for any reason. Retirement Plan (Home Office and Agency Distribution Field Management) Page 38

49 Alternative Methods of Payment You may elect the Level Income Option or the Variable Annuity Option. However, only the portion of your monthly pension benefit not converted under the Variable Annuity Option may be paid under the Level Income Option. These alternative methods of payment are based on your benefit after applying adjustments to reflect any optional form of payment you may have elected. Payments to your Beneficiary(ies) will be based on your benefit, ignoring any alternative method of payment you may have elected. In addition, with the Level Income Option and the Variable Annuity Option, you may elect to have a Contingent Annuity Option also payable on any portion of your lifetime pension benefit. Level Income Option: You may elect this option only if you commence your monthly pension benefit before age 62. This form of payment provides you with approximately the same total monthly payment over the course of your retirement from your pension and your estimated Social Security retirement benefits combined. You will receive a larger monthly pension benefit before your 62 nd birthday and a smaller monthly pension benefit after your 62 nd birthday. Under this alternative method of payment, the Plan Administrator estimates (based on your Social Security earnings while an Employee of Prudential) the pension benefit it is anticipated you will receive from Social Security when you reach age 62. You should remember that if you elect this method of payment and do not start receiving Social Security retirement benefits at age 62, your monthly pension benefit payments will still be the smaller amount payable, as if you had begun to receive the anticipated Social Security retirement benefits. When you die, the survivor death benefit will be paid as if this option were not in effect; that is, if you have elected this option in combination with a Joint and Survivor Annuity, a Contingent Annuity, or Life Annuity and 15-Year Period Certain form of payment, the survivor death benefit associated with that form of payment will still be in effect. Variable Annuity Option: You may convert all or a portion of your lifetime monthly pension benefit to a variable annuity under the Variable Annuity Option (VAO) form of payment. The VAO provides participants with monthly pension benefits that vary in relation to the performance of the underlying investment options available under the Variable Income Annuity (VIA) product after reflecting a 3.5% assumed investment return. You may elect to invest your VAO benefit among the investment options available. If you do not make a timely and valid investment allocation election, your VAO benefit will be invested in the Core Equity Account, the default investment option. Participants are allowed to reallocate (or transfer) among the available investment options once each calendar month. A transfer among investment options will not affect the variable annuity payment immediately after the transfer occurs; the effect of the transfer will first be seen in the second monthly variable annuity payment following the date of the transfer. You are encouraged to consult your own financial planner to determine if the VAO is appropriate for you, considering a variety of factors including your own personal financial circumstances at retirement. Please be aware that the values of the underlying investment options for the VAO are unpredictable. As a result, electing the VAO form of payment involves risk and your lifetime monthly pension payments could increase or decrease each month. By design, the VAO payment form is not intended to provide you with a guaranteed, fixed monthly pension payment stream during your retirement. Keep in mind that your election of the VAO means that you will be assuming the investment risk for the portion of your pension benefit paid under that option. Specifically, if the annual rate of return on the underlying investment options is less than 3.5%, then your monthly pension benefit paid to you will decrease. If you elect the VAO, the part of your monthly pension benefit to which this form of payment applies will be reduced to reflect the additional actuarial cost of providing the VAO. Due to the complexity of this option, there may be a delay (typically one to two months) in the payment of your first monthly variable annuity pension payment. You may elect to have the portion of your monthly pension benefit accrued before July 1, 1996, converted to the VAO over a period of five years or all at once. The portion accrued on or after July 1, 1996, may be converted only at one time. The reduction (i.e., cost to you) for the five-year conversion is greater than the reduction for a one-time conversion. Retirement Plan (Home Office and Agency Distribution Field Management) Page 39

50 You can elect the VAO with the 50% Qualified Joint and Survivor Annuity or with other Joint and Survivor Annuity or Contingent Annuity forms of payment that are available to you. Payments after your death to a Beneficiary under a Joint and Survivor Annuity or Contingent Annuity form of payment will not be affected by the election of the Variable Annuity Option form of payment. This means that any remaining monthly pension benefit payments made to your surviving Spouse or surviving Contingent Annuitant under a Joint and Survivor Annuity or Contingent Annuity form of payment will be made on a fixed-dollar basis, as if you had not elected the VAO form of payment. You may not elect both the VAO and a form of payment with a 10- or 15-Year Period Certain. This means that if you are not married at the time your monthly pension benefit commences and you elect the VAO, the Life Annuity and 15-Year Period Certain will not apply to any portion of your pension benefit (fixed or variable). In this case, you will be foregoing the value of the 15-year guarantee period under the Life Annuity and 15-Year Period Certain. As a result, the fixed dollar portion of your monthly pension benefit will be payable as an annuity over your lifetime and not as a Life Annuity and 15-Year Period Certain. Also, only the portion of your monthly pension benefit not converted to the VAO may be paid under the Level Income Option. All variable annuity benefits under the Retirement Plan, including the VAO and the investment options available under the Variable Income Annuity (VIA) product, are obligations solely of Prudential, and not those of the Retirement Plan, immediately upon implementation of the election. Neither Prudential nor the Retirement Plan guarantees investment results or, therefore, the stability of the variable amount of your Annuity. Please contact the Prudential Benefits Center at PRU-EASY ( ) to obtain a copy of the VIA Brochure, which will provide you with more information about the VAO and the available investment options. Please note: IRS Circular 230 disclosure: Neither Prudential nor its representatives are authorized to provide tax or legal advice or financial advice on behalf of the Plan. Any tax information provided is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. You are encouraged to consult with your tax, financial and/or legal advisors for advice regarding your particular situation. If You Are Not Retirement-Eligible When Your Employment Ends The sections How Your Pension Benefit Is Calculated and How Your Pension Benefit Can Be Paid beginning below describe the pension benefit available to you if you are Vested, but not Retirement-Eligible when your Employment with Prudential and its Affiliates ends. How Your Pension Benefit Is Calculated Your pension benefit will be calculated using the same formula described in Normal Pension Benefit Calculation beginning on page 30 and is subject to the Other Benefits provisions and Protection of Accrued Pension Benefit described on page 35. If the actuarial present value of your total Vested pension benefit under the Plan is $1,000 or less, it will be paid out automatically as a single lump sum. If the actuarial present value of your total Vested pension benefit under the Plan exceeds $1,000, but is not more than $5,000, it will be automatically rolled over to an IRA designated by the Plan. (See Payment of Small Pensions on page 48 for more information.) If the actuarial present value of your total Vested pension benefit under the Plan is over $5,000, this pension benefit is payable starting on the first day of the month on or following your 65 th birthday (your Normal Retirement Date). Alternatively, you may elect to commence your pension benefit on the first day of the month on or following your 55 th birthday, or any first day of the month thereafter, but in no event later than your Normal Retirement Date. However, if you elect to commence your pension benefit before your Normal Retirement Date, it will be reduced to reflect the fact that you will be Retirement Plan (Home Office and Agency Distribution Field Management) Page 40

51 receiving the pension benefit over a longer period of time. This reduction is based on your exact age when you start receiving your pension benefit. The table below illustrates the approximate percentage (Early Pension Factor) that will be applied to the formula calculation of your normal pension benefit if you commence your pension benefit early, at the exact age shown: Percent Applied at Early Commencement (Early Pension Factor) Exact Age at Commencement Percent Example % 64 89% 63 81% 62 73% 61 66% 60 60% 59 55% 58 50% 57 46% 56 42% 55 39% Let us assume you: Are 47 years old when your employment ends on February 1, 2013; Have 17 years of Credited Service; Have Average Eligible Earnings of $59,000; Have Covered Compensation of $105,444; and Choose to commence your pension payments at age 57, which results in an Early Pension Factor of 46% x $59,000 = $ Plus.02 x $0 = $0 multiplied by 17 PLUS.0075 x $59,000 = $ Plus.01 x $0 = $0 multiplied by 0 Retirement Plan (Home Office and Agency Distribution Field Management) Page 41

52 PLUS.01 x $59,000 = $590 multiplied by Which results in: ($ $0) x 17 = $13, PLUS ($ $0) x 0 = $0 PLUS $590 x 0 = $0 EQUALS $13, (your unadjusted annual normal pension benefit). To determine the amount of your early commencement pension benefit payable for your lifetime, your unadjusted annual normal pension benefit is multiplied by your Early Pension Factor, as follows: $13, MULTIPLIED BY.46 EQUALS $6, (your annual early commencement pension benefit). In this example, your annual early commencement pension benefit payable for your lifetime would be $6,228.63, payable as a Life Annuity. Your monthly pension benefit would be 1/12 of this amount, or $ How Your Pension Benefit Can Be Paid You may choose how you would like to receive your pension benefit (unless your benefit falls under the Payment of Small Pensions provision explained on page 48). There are normal forms of payment, as well as optional forms of payment. The normal and optional forms of payment that are available to you will depend on whether you are single or married as of the date you commence your pension benefit. Please note that once your monthly pension benefit commences, your commencement date and form of payment election are irrevocable and cannot be changed. Normal Forms of Payment Your normal form of payment depends on your marital status as of the date your monthly pension benefit commences, as follows. If You Are Single Life Annuity: This form of payment provides a monthly pension benefit payment to you for your lifetime. Upon your death, no further pension benefit is payable. If You Are Married 0 50% Qualified Joint and Survivor Annuity: This form of payment provides a monthly pension benefit payment to you for your lifetime. Upon your death, 50% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. Retirement Plan (Home Office and Agency Distribution Field Management) Page 42

53 If your Spouse dies before you and your monthly pension benefit payments have already commenced, your monthly pension benefit will not be recalculated. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 50% Qualified Joint and Survivor Annuity is not available if you are not married on your commencement date. If you want to commence your pension benefit under any other form of payment (including the Life Annuity described on page 42), you must obtain your Spouse s written, notarized consent to waive the 50% Qualified Joint and Survivor Annuity. Optional Forms of Payment and Alternative Methods of Payment Optional Forms of Payment If you are single: There are no optional forms of payment available to you. Your pension benefit is payable as a Life Annuity only. If you are married: You may elect an optional form of payment, subject to the conditions described below. You will need your Spouse s written notarized consent to elect a specific optional form of payment as follows: You must make the form of payment election before the date as of which your monthly pension benefit payments commence; Any form of payment election becomes irrevocable on the date as of which your monthly pension benefit payments commence; and Each optional form of payment is, in general, Actuarially Equivalent to the Life Annuity form of payment. 75% Qualified Optional Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 75% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and your pension benefit will be paid as a Life Annuity. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefits after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 75% Qualified Optional Joint and Survivor Annuity is not available if you are not married on your commencement date. 100% Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 100% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and your pension benefit will be paid as a Life Annuity. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason Retirement Plan (Home Office and Agency Distribution Field Management) Page 43

54 (including divorce or remarriage). The 100% Joint and Survivor Annuity is not available if you are not married on your commencement date. Alternative Methods of Payment There are no alternative methods of payment available. Survivor Benefits If You Die Before Pension Benefit Payments Commence Your surviving Spouse or Beneficiary(ies) may be entitled to a survivor benefit if you die after you become Vested in the Retirement Plan but before your pension benefit payments commence, regardless of your Employment status. The amount and type of survivor benefits depend on your marital status at the time of your death and the elections you make. In certain rare and extraordinary circumstances, where you are unable to designate a Beneficiary(ies) under the procedures defined by the Retirement Plan, but you have provided another writing that clearly states your intent to designate or change your Beneficiary, the Plan Administrator will follow your instructions. Note that if a participant is killed by a person who would otherwise receive a benefit under this Retirement Plan as a Beneficiary of the participant, the Retirement Plan may, depending on the law of the state, territory, or other governmental subdivision in which such participant resided immediately prior to his/her death, redirect the benefit to another person. For instance, if such law provides that the person responsible for the death of the participant is treated as predeceasing the participant, then the Administrative Committee or its delegate, provided that it has knowledge of these circumstances, will seek to pay a contingent Beneficiary(ies) or, if none is named, the participant s estate. In some cases, there may be no benefit payable. If You Are Single If you are not married when you die and (i) you are not yet Retirement-Eligible and (ii) do not meet the 50/20 age and service requirements specified in the Involuntary Termination section beginning on page 29, no survivor benefit is payable under the Traditional Pension Formula. However, if you die after you have become Retirement-Eligible, a survivor benefit in the form of a 15-Year Period Certain Option will be paid to your named Beneficiary(ies). (See Optional Forms of Payment beginning on page 37 for a description of how the 15-Year Period Certain Option benefit is determined and paid.) If You Are Married If you die before the date as of which your pension benefit payments commence, a 50% Qualified Pre-Retirement Survivor Annuity will be paid to your Spouse as follows: If you are not yet Retirement-Eligible at the time of your death: One-half of the amount of the 50% Qualified Joint and Survivor Annuity you would have received if your Employment with Prudential or its Affiliates had ended the day you died, you survived until the earliest possible date you could commence your pension benefit, and you died the following day. If you are Retirement-Eligible at the time of your death: Unless the 50% Qualified Pre-Retirement Survivor Annuity was waived by you and your Spouse (see Optional Forms of Payment on page 45), one-half of the amount of the 50% Qualified Joint and Survivor Annuity you would have received if you had chosen to commence your pension benefit on the day before you died. To be eligible for the 50% Qualified Pre-Retirement Survivor Annuity, your Spouse must have been legally married to you for at least one year before your death. Your surviving Spouse may elect to commence survivor benefits the first day of any month on or following your 55 th birthday (for purposes of survivor benefits, your earliest commencement date). Such benefits will be reduced to reflect early commencement of payments if your surviving Spouse elects to receive payment of the 50% Qualified Pre-Retirement Survivor Annuity prior to the first day of the month on or following your 65 th birthday. Retirement Plan (Home Office and Agency Distribution Field Management) Page 44

55 Your surviving Spouse must elect to commence benefits no later than the first day of the month on or following when you would be eligible to receive an unreduced pension benefit (generally at your 65 th birthday) or the first day of the month following your date of death, if later. Optional Forms of Payment At any time after you become Retirement-Eligible or meet the 50/20 age and service requirements specified in the Involuntary Termination section beginning on page 29, you may choose to have your survivor benefit paid according to a 15-Year Period Certain Option, although you and your Spouse must waive the 50% Qualified Pre-Retirement Survivor Annuity to elect this option. Under the 15-Year Period Certain Option, monthly payments would be made to your Beneficiary(ies) starting on the first day of the month following your death and continuing for a period of 15 years. The amount would be the same as would have been payable if you had retired and chosen to receive your pension benefit starting on the day you died. (This form of payment is provided at no cost to you.) Unless you have specified otherwise, your Beneficiary(ies) may choose to receive a single lump-sum payment of the Actuarial Equivalent of the 15-Year Period Certain Option survivor benefit to which he/she is entitled. You may revoke the 15-Year Period Certain Option at any time before the date you commence pension benefit payments. If you are married, you will then automatically be covered by the 50% Qualified Pre-Retirement Survivor Annuity. You may change your designated Beneficiary(ies) under the 15-Year Period Certain Option at any time. Your Spouse s written, notarized consent is required. If You Die After Pension Benefit Payments Commence If you die after you have begun to receive payment of the pension benefit you accrued under the Retirement Plan, any survivor benefit payable will be determined according to the provisions of the payment option you elected. Minimum Death Benefit If you were first hired before June 1, 1975, a death benefit based on certain amounts you accrued under the Plan before 1970 may be payable to your Beneficiary. Please see Minimum Death Benefit in Appendix D beginning on page 86 for more information. If You Die While Performing Qualified Military Service If you die while absent from employment performing qualified military service in the uniformed services of the United States as described in the Uniform Services Employment and Reemployment Act of 1994 (USERRA), your Beneficiary will be entitled to the benefit that would have been provided had you returned to work the day before your death and subsequently died. If Your Employment with Prudential and Its Affiliates Ends and You Are Reemployed After December 31, 2000 If your Employment with Prudential and its Affiliates ends, you start to receive your Traditional Pension Formula benefit as an Annuity and you are then re-hired by Prudential: Your monthly pension benefit payments will continue to be paid in the same form of payment and in the same dollar amount. Any additional benefit accrued for the new period of service will be determined under the Cash Balance Formula. Any prior elections you made with respect to the form of payment or Beneficiary designation of your monthly pension benefit will not apply to your new Cash Balance Formula benefit. Your prior Credited Service will be used to determine your Basic Credit percentage and Vesting Service. The monthly pension benefit (attributable to the prior period of service) that continues to be paid will not be adjusted or recalculated to include the additional benefit accrued (based on your new period of service) when you subsequently end your Employment with Prudential and its Affiliates. Your additional benefit Retirement Plan (Home Office and Agency Distribution Field Management) Page 45

56 accrued from your date of reemployment will be payable under the available forms of payment under the Cash Balance Formula. If your Employment with Prudential and its Affiliates ends, you do not receive any payment of your Traditional Pension Formula benefit and you are then re-hired by Prudential: Any additional benefit accrued for the new period of service will be determined under the Cash Balance Formula. While Employed, you may not elect to commence your Retirement Plan benefits. If you were Vested when your prior Employment ended, your prior Credited Service will be used to determine your Basic Credit percentage and Vesting Service. If you were not Vested when your prior Employment ended and you incurred a Break-in-Service before your re-hire, your prior non-vested Traditional Pension Formula benefit will be forfeited and your prior Credited Service will not be used to determine your Basic Credit percentage or Vesting Service. You will, however, automatically be Vested in all future benefit accruals under the Cash Balance Formula upon your re-hire. If you had a prior non-vested benefit and you are re-hired before you incur a Break-in-Service, your prior non-vested Traditional Pension Formula benefit will be restored and your prior Credited Service will be used to determine your Basic Credit percentage and Vesting Service. You also will become Vested automatically in all benefit accruals under the Traditional Pension Formula and the Cash Balance Formula upon your re-hire. Please see Cash Balance Formula beginning on page 15 for information on your Cash Balance Formula benefit. Please note: If you were Retirement-Eligible as a result of the 50/20 provision and you are reemployed, you will continue to be treated as Retirement-Eligible when your subsequent Employment with Prudential and its Affiliates ends. For example, if your Employment with Prudential and its Affiliates ended at age 50 and you met the requirements for the 50/20 provision, you were reemployed at age 52 and then ended your Employment at age 54, you would still be considered Retirement-Eligible under the Traditional Pension Formula. You cannot, however, elect to commence receipt of your monthly pension benefit while Employed. If You Take an Approved Leave of Absence How Your Vesting Service Is Determined During a Leave of Absence During a paid leave of absence, your Vesting Service will continue. During an unpaid leave of absence, Vesting Service will continue up through your Separation from Service Date. See Separation from Service Date beginning on page 11 for more information. Special rules apply to Employees who are on a qualified military leave of absence covered by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). See Break-in-Service on page 12 for more information. How a Leave of Absence Will Affect the Determination of Your Benefit During a paid leave of absence, Credited Service will continue for the entire period of your leave of absence. In addition, the Eligible Earnings you receive during your paid leave of absence will be included when determining benefit accruals. During an unpaid leave of absence, Credited Service (for the purposes of determining benefit accruals) will continue up through the first anniversary of the date your unpaid leave of absence began. If you are on a leave of absence covered by USERRA, upon your return to work, you will receive Credited Service for the entire period of your USERRA qualified military leave of absence. In addition, for the purposes of determining benefit accruals, you will be credited with Eligible Earnings for the entire period of your USERRA leave of absence. Your Eligible Earnings amount for this period will be Retirement Plan (Home Office and Agency Distribution Field Management) Page 46

57 determined in accordance with the rules established under USERRA. Generally, a qualified military leave of absence cannot exceed five years. If You Become Disabled If you become disabled and are eligible to receive long term disability benefits under The Prudential Welfare Benefits Plan, the following will apply: How Your Vesting Service Is Determined While Disabled Your Vesting Service will continue up through your Separation from Service Date. See Separation from Service Date beginning on page 11 for more information. How Becoming Disabled Will Affect the Determination of Your Benefit While you are receiving long term disability benefits under The Prudential Welfare Benefits Plan, Credited Service (for the purposes of determining benefit accruals) will continue up through the earliest of: 1) The first anniversary of the date your long term disability benefits began; 2) The date you elect to commence your Traditional Pension Formula benefit; or 3) The date you are no longer eligible to receive long term disability benefits under The Prudential Welfare Benefits Plan. If you are Retirement-Eligible when you become disabled and begin to receive long term disability benefits, please see If You Are Retirement-Eligible When Your Employment Ends beginning on page 30 for information regarding the pension benefit available to you. If you are not Retirement-Eligible when you become disabled and begin to receive long term disability benefits, please see If You Are Not Retirement-Eligible When Your Employment Ends beginning on page 40 for information regarding the pension benefit available to you. When You May Commence Your Traditional Pension Formula Benefit You may elect to commence your Traditional Pension Formula benefit while you are eligible to receive long term disability benefits, provided you are also eligible to commence your Traditional Pension Formula benefit. However, commencing your Traditional Pension Formula benefit will reduce your long term disability benefit payment. (See the Disability Program SPD booklet for more information.) You must start to receive your Traditional Pension Formula benefit once you become eligible for an unreduced pension benefit (generally at your Normal Retirement Date). You will be considered Retirement-Eligible only if you become disabled and begin to receive long term disability benefits on or following the first day of the month on or following your 55 th birthday and have 10 years of Vesting Service as of your Separation from Service Date. Whether you are Retirement-Eligible under the Retirement Plan is governed solely by the terms of the Retirement Plan. (See Retirement Eligibility beginning on page 28 for information on Retirement-Eligible requirements.) Any Traditional Pension Formula benefit payment you receive will reduce your disability benefit payment. (See the Disability Program SPD booklet for more information.) Retirement Plan (Home Office and Agency Distribution Field Management) Page 47

58 Other Information About Benefits Under the Retirement Plan Payment of Small Pensions After your Employment with Prudential and its Affiliates ends, if the lump-sum actuarial present value of your total Vested pension benefit under the Plan (including any Additional Retirement Benefit): Is $1,000 or less at any time, the actuarial value of your pension benefit will be paid to you in cash in a single lump sum (which can be rolled over into another plan, a traditional IRA or a Roth IRA, at your election, if it is at least $200 see below) in lieu of any future Annuity, regardless of whether your benefit was determined by the Cash Balance Formula or the Traditional Pension Formula; or Exceeds $1,000, but is not more than $5,000, the actuarial value of your pension benefit will automatically be rolled over to an IRA designated by the Plan unless you elect to receive it in cash or to have it rolled over to another plan, a traditional IRA or a Roth IRA. If this action is taken, you will receive a written explanation describing the Plan s automatic rollover procedures, the nature of the investment product in which your distribution will be invested, and how the fees and expenses will be allocated. No lump-sum distribution or rollover will be made to you under these small pension provisions if your pension benefits are determined under the Cash Balance Formula (other than for the Demutualization Credit) and you are receiving long term disability benefits under The Prudential Welfare Benefits Plan. After this lump-sum payment or rollover is made, any non-vested accrued benefit you may have will be forfeited. Provided the lump-sum distribution is at least $200, you may choose to have all or part of this lump sum directly rolled over into another tax-qualified retirement plan (such as PESP or another employer s tax-qualified plan [including a governmental 457(b) plan that agrees to separately account for such amounts]), a traditional IRA (excluding a SIMPLE IRA or a Coverdell Education Savings Account [formerly known as an Education IRA]) or a Roth IRA. The portion of your pension benefit that is directly rolled over to another employer s tax-qualified plan or to an IRA will be exempt from mandatory 20% federal income tax withholding rules that otherwise would apply to lump-sum distributions under the Retirement Plan. Before the lump sum distribution or rollover is paid, you will receive more information about how to elect a direct rollover. If your benefit is not rolled over (either by default or upon your election, as described above), the Plan Administrator is required to withhold 20% of the lump-sum distribution for federal income tax purposes, and you may be subject to a 10% federal early distribution tax unless you meet an exception. (No taxes are withheld if the amounts are rolled over, unless you elect to have voluntary withholding on a direct rollover to a Roth IRA.) For information about taxes, refer to the Federal Tax Withholding from Lump-Sum Payments section beginning on page 50. Under the Traditional Pension Formula, if you are later re-hired by Prudential before you incur a Break-in-Service, you have the right to restore any forfeited, non-vested, accrued benefit by repaying to the Retirement Plan the full amount of the lump sum that was distributed to you or rolled over, plus interest, within five years of the date of your re-hire. Under the Cash Balance Formula, if you are later re-hired before you incur a Break-in-Service as described above, any non-vested, accrued benefit that was forfeited will be restored automatically to you without repayment of the lump sum or rollover. Please note: IRS Circular 230 disclosure: Neither Prudential nor its representatives are authorized to provide tax or legal advice or financial advice on behalf of the Plan. Any tax information provided is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. You are encouraged to consult with your tax, financial and/or legal advisors for advice regarding your particular situation. Retirement Plan (Home Office and Agency Distribution Field Management) Page 48

59 How to Request a Benefit Estimate You can project your retirement income on the Prudential Benefits Center website. The Pension Modeling Tool will allow you to calculate a non-binding estimate of your pension benefit payable at a certain date, based on your data on file and assumptions you must enter. To make projections, visit the Prudential Benefits Center website (at then open the Retirement Planning drop-down list and then select the Projected Income link. See the Using the Prudential Benefits Center Website to Plan for Your Retirement section beginning on page 4 for more information. Alternatively, you can obtain an estimate of your total pension benefit payable by contacting the Prudential Benefits Center at PRU-EASY ( ) and following the prompts for Pension, and following the instructions to speak to a Prudential Benefits Center Representative. Please note: An estimate is non-binding, is not a guarantee of your actual benefit and may differ from your final benefit. Your final benefit will be determined after you make your election, after final data is verified and after calculations are completed. How to File a Request to Commence a Benefit To receive any benefit earned under the Retirement Plan, generally you or anyone entitled to a benefit must no longer be in active service and you must apply for it. To commence your pension benefit, an application should be completed and filed between 30 to 90 days before the date you want your Retirement Plan benefit to commence. If You Are Retiring from Active Employment with Prudential If you are retiring from active service, about 12 months before your expected retirement date, you can call the Prudential Benefits Center and request that a personal Retirement Counselor be assigned to you. Your dedicated Retirement Counselor will guide you through each step of the Prudential retirement process from confirming your retirement eligibility and helping you finalize your retirement date, to explaining the benefits available to you at retirement and helping you complete the necessary forms. Generally, you are not required to commence your pension benefit when you retire. You can also access the Retiring from Prudential website for help with retirement planning and the retirement process. You can find information about your Prudential retirement benefits, including what happens to all your benefits when you retire, a Retirement Action Checklist to help you understand the steps in the retirement process and track your progress through those steps, as well as a Frequently Asked questions (FAQ) tool to get answers to your retirement questions. To access the Retiring from Prudential website visit PRU Today, select the My Prudential tab, then from the Pay & Retirement Savings drop-down list, select Retirement Planning at Prudential. Then click on the Retiring from Prudential link under New Retirement Planning Site and Process. You can also access the website directly from the Internet at (use your Prudential systems username and password or the passphrase retire4now ). Approximately 90 days before your official retirement date, your Retirement Counselor will prepare a Personalized Retirement Statement for you. Your statement will provide a summary of what you can expect as you retire and what actions you may need to take. You and your Retirement Counselor will review this information during a follow-up call and you ll be able to ask any questions you may have. You won t be assigned a Retirement Counselor until you re within 12 months of your expected retirement date. Before then, you can call the Prudential Benefits Center at PRU-EASY ( ) and follow the prompts for Pension and ask to speak with a retirement specialist. Retirement specialists can answer your questions and provide general retirement information. If You Are a Former Employee or You Are Not Retiring from Active Employment with Prudential To commence your pension benefit, visit the Prudential Benefits Center website (at then open the Retirement Planning drop-down list and select the Retirement Process link. Click on Making Your Pension Benefit Elections to begin the process Retirement Plan (Home Office and Agency Distribution Field Management) Page 49

60 online. You may complete the entire process online or call the Prudential Benefits Center for assistance from a dedicated retirement specialist. You can also write to: Prudential Benefits Center P.O. Box Charlotte, NC Fax: (Outside the United States, use ) If Your Request for a Benefit Is Denied If a claim is denied, it will be considered an Adverse Benefit Determination. There are specific procedures to be followed if you (or your Beneficiary(ies)) decide(s) to file an appeal of the Adverse Benefit Determination. (See Claims and Appeals Procedures beginning on page 55 for more information.) Federal and State Income Tax Withholding from Annuity Payments If you choose to have your benefit paid in the form of a monthly Annuity, federal income tax withholding is required from your monthly pension benefit payments. However, if you elect in writing to have no tax withheld, or you claim sufficient exemptions to make withholding unnecessary, no tax will be withheld. Generally, the withholding of tax from monthly pension benefits will follow the rules for the withholding of tax from wages. The amounts withheld will change if the monthly amount of your pension changes or if the tax rates change. If you reside in a state in which Retirement Plan benefit payments are subject to mandatory state income tax withholding, state income tax will be withheld from your monthly pension benefit payments if federal income tax is withheld. If you reside in a state in which Retirement Plan benefit payments are not subject to mandatory income tax withholding, your monthly pension benefit payments may still be subject to state income tax. Please contact your state government taxation department for more information. If you reside in a state that has voluntary state income tax withholding rules, state income tax will not be withheld from your monthly pension benefit payments unless you complete a state income tax form, electing to have state income tax withheld. Federal Tax Withholding from Lump-Sum Payments If you choose to have your benefit paid in the form of a single lump sum, your payment may be subject to federal income tax withholding depending on how you elect to have your lump sum paid, as indicated beginning below. Please note: IRS Circular 230 disclosure: Neither Prudential nor its representatives are authorized to provide tax or legal advice or financial advice on behalf of the Plan. Any tax information provided is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. You are encouraged to consult with your tax, financial and/or legal advisors for advice regarding your particular situation. Direct Distribution If you choose to have your lump sum paid directly to you, federal tax withholding in the amount of 20% is required to be withheld automatically from your payment. If you are under age 59½, you may also be subject to a 10% federal early distribution tax, unless you meet an exception. The 10% federal early distribution tax is not withheld from your distribution; you must pay it at the time you file your federal income tax return. Direct Rollover to Another Employer s Tax-Qualified Plan or a Traditional IRA If you choose to have some or all of your lump-sum payment directly rolled over from the Retirement Plan to another tax-qualified retirement plan (such as PESP or another employer s tax-qualified plan [including a governmental 457(b) plan that agrees to separately account for such amounts]) or a Retirement Plan (Home Office and Agency Distribution Field Management) Page 50

61 traditional IRA (excluding a SIMPLE IRA or a Coverdell Education Savings Account [formerly known as an Education IRA]), that portion of your distribution is not subject to current tax and there will be no federal tax withheld from it. Direct Rollover to a Roth IRA If you directly roll over some or all of your lump-sum payment from the Retirement Plan to a Roth IRA, that part of your distribution will be taxable to you in the year in which your Retirement Plan distribution is paid, as if the distribution were not rolled over. Your rolled-over distribution is not subject to 20% withholding or the 10% federal early distribution tax. However, you may request voluntary withholding on this direct rollover to a Roth IRA. For More Information You will receive more information about rollovers and taxation of distributions when you apply to begin the commencement process. Please note: Withholding is a method of paying taxes. It does not change the amount of taxes that you must pay. Whether or not you are subject to the 20% mandatory federal income tax withholding or you elect voluntary withholding for a rollover to a Roth IRA, you may still be responsible for payment of estimated taxes. Additionally, you may incur penalties under the tax laws if your withholding and estimated tax payments are not sufficient. Annual Federal and State Income Tax Reporting On or before the January 31 following the calendar year in which you receive a Retirement Plan payment, you will receive a Form 1099-R for the purpose of reporting and filing your federal and state income tax returns. Form 1099-R is used to report total and partial payments from the Retirement Plan. Any federal or state income tax withheld from your payment(s) will also be reflected on Form 1099-R. Internal Revenue Code Limits The Prudential Merged Retirement Plan is intended to qualify under and satisfy all of the applicable requirements of the Internal Revenue Code. The Internal Revenue Code sets several limits that could reduce the benefit you otherwise would be eligible to receive under this Plan. Maximum Compensation The Internal Revenue Code limits the annual amount of Eligible Earnings that can be used to determine a benefit. Beginning in 2014 and for years after that, the limit is $260,000, as adjusted by the IRS for increases in the cost of living. This limit may increase periodically, although not necessarily every year. In addition, any compensation that is deferred and that would be considered Eligible Earnings is excluded under the Plan. Maximum Benefits The Internal Revenue Code places maximums on the annual benefit that can be provided by The Prudential Merged Retirement Plan. For Employees who have reached age 65 and retired in 2014 or years after 2014, this limit is $210,000, as adjusted by the IRS for increases in the cost of living. This limit is adjusted for ages above and below age 65. This limit may increase periodically, although not necessarily every year. Top Heavy Rules Under the Internal Revenue Code, The Prudential Merged Retirement Plan may be defined as top heavy if more than 60% of all benefits under the Plan have been allocated to certain key associates (for example, certain officers). The Plan is not top heavy at this time and is not expected to become top heavy. However, if the Plan should become top heavy in the future, certain rules would take effect. Rules that apply during Plan Years in which the Plan is top heavy (for example, certain rates of benefit accrual and vesting) are in the Plan Document. You will be notified if these rules are in effect during any Plan Year. Retirement Plan (Home Office and Agency Distribution Field Management) Page 51

62 Administrative Information This SPD booklet is intended to describe the specific provisions of the Retirement Plan. In addition to knowing these provisions, you need to be aware of important administrative details, including what steps you may take if you believe that a claim has been wrongfully denied. You also need to know about your legal rights as a participant in this Plan, which constitutes an employee benefit plan under the Employee Retirement Income Security Act of 1974, as amended (ERISA). Governing Plan Documents This booklet constitutes the Summary Plan Description of benefits of the previously stated classes of participants and Beneficiaries under The Prudential Traditional Retirement Plan Document and the Prudential Cash Balance Pension Plan Document (these two components are together referred to as the Retirement Plan ), which are two of the three components of The Prudential Merged Retirement Plan (the Plan ), as restated January 1, 2011, and amended through December 31, Terms and phrases used in this SPD booklet are intended to have the meanings ascribed to them in the Plan Documents. If there are legal rules that require changes not yet written into the Plan Document, the Plan Document will be interpreted by the Plan Administrator as including those legal rules. Plan Administration and Funding Plan Administrator The Plan Administrator for the Retirement Plan is the Administrative Committee (which is responsible for administering matters under the Retirement Plan). The address for the Plan Administrator is: Administrative Committee The Prudential Insurance Company of America Employee Benefits Department 751 Broad Street, 18 th Floor Newark, NJ Telephone: The Administrative Committee has the power to delegate its respective fiduciary or other responsibilities to other individuals or organizations by notifying them as to the duties and responsibilities delegated. Any such delegate shall be empowered with the same discretion and authority as granted to the Administrative Committee under the terms of the Retirement Plan. Each person to whom responsibilities are so delegated shall serve at the pleasure of the Administrative Committee and, if a full-time Employee, without payment by the Retirement Plan of additional compensation for such services. Any such person may resign by delivering a written resignation to the Administrative Committee. Vacancies created by resignation, death or other cause may be filled by the Administrative Committee or the assigned responsibilities may be reassumed or re-delegated by the Administrative Committee. Plan Sponsor The sponsor for the Retirement Plan described in this SPD booklet is: The Prudential Insurance Company of America 751 Broad Street, 18 th Floor Newark, NJ Telephone: A complete list of participating employers may be obtained by participants and Beneficiaries upon written request to the Plan Administrator, and is available for examination, without charge, by participants and Beneficiaries at the Plan Administrator s office. You may make a written request to the Plan Administrator for information as to whether a particular employer participates in the Retirement Plan and, if so, the employer s address. Retirement Plan (Home Office and Agency Distribution Field Management) Page 52

63 Plan Basics Plan Name Plan Number Type of Plan Plan Administrator The Prudential Merged Retirement Plan 003 Defined Benefit Pension and Cash Balance Administrative Committee If you would like to request a Plan Document, you should write to the Plan Administrator. If you have questions about any of the information in this SPD booklet, please call PRU-EASY ( ), follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefit Center Representative. Prudential Benefit Center Representatives are available to assist you between 8 a.m. and 6 p.m., Eastern time, Monday through Friday, except on holidays. For the hearing-impaired, please contact your local relay service. Employer Identification Number The Company s employer identification number assigned by the Internal Revenue Service is Plan Year The Plan Year is the 12-month period used for maintaining the Plan s financial records. The official Plan Year for this Plan is January 1 through December 31 of each calendar year. Funding of Plan Benefits The Prudential Merged Retirement Plan is funded by employer contributions only (although in the past, Employee contributions were permitted). Plan funding is held in a combination of insurance contracts and trusts. Trustee Information The Retirement Plan is a defined benefit pension plan under ERISA. This means that any benefit for which you may be eligible is based on a specific formula described in the Plan Document. Assets of the Retirement Plan are held in trust and under group annuity contracts issued by The Prudential Insurance Company of America. The Trustee for the Retirement Plan is: Prudential Trust Company 30 Scranton Office Park Scranton, PA Telephone: Plan Amendment or Termination The Company has reserved the right, subject to applicable law, to amend, modify, suspend, or terminate the Retirement Plan, including but not limited to the benefits discussed in this Summary Plan Description, in whole or in part. Any such action would be taken in writing and maintained with the records of the Retirement Plan. Plan amendment, modification, suspension, or termination may be made for any reason, and at any time. Such amendments may be retroactive if necessary to meet statutory requirements or for any other appropriate reason. If the Retirement Plan is terminated, you will become fully Vested in your accrued benefits under the Retirement Plan to that point, to the extent that they are funded. Upon full termination of the Retirement Plan, assets will be distributed (for example, among participants and Beneficiaries) in accordance with the Retirement Plan s provisions and with applicable law. None of the Retirement Plan s assets can revert to the Company or any Affiliate until the Retirement Plan s liabilities have been satisfied. The Plan Document describes the procedure for amending or terminating the Retirement Plan and who may make amendments. Retirement Plan (Home Office and Agency Distribution Field Management) Page 53

64 Assignment of Benefits The Retirement Plan summarized in this SPD booklet is used exclusively to provide benefits to you and, in some cases, to your eligible dependents (including survivors, if you die). Neither you nor the Company can generally assign, transfer or attach your benefits or use them for collateral. Qualified Domestic Relations Orders Federal law generally prohibits assignment or attachment of your benefits under the Retirement Plan, except in the case of a Qualified Domestic Relations Order (QDRO). A domestic relations order, or DRO, is a state court order issued in connection with a divorce, separation or family support proceeding that orders the Retirement Plan to pay benefits to your Spouse, former Spouse, child or other dependent (each called an Alternate Payee). The Plan Administrator or its delegate must obey these DROs once they become Qualified (to the extent the QDRO contains certain required information and does not require the payment of a benefit not allowed under the Retirement Plan) and has no discretion in these matters. Participants and Beneficiaries may obtain from the Plan Administrator or its delegate, without charge, a copy of the Retirement Plan s procedures for submission of a DRO and its certification by the Plan Administrator as a QDRO. The Plan Administrator has delegated its authority to administer QDROs to Ceridian. Pursuant to these QDROs, the Plan Administrator or its delegate may be required to make payments from your Vested accrued benefit under the Retirement Plan while you are still working. These payments could even exhaust the total value of your benefits under this Retirement Plan. The Plan Administrator has no discretion in these matters. Pension Insurance Your pension benefits under the Retirement Plan are insured by the Pension Benefit Guaranty Corporation (PBGC), a federal insurance agency. If the Retirement Plan terminates without enough money to pay all benefits, the PBGC will step in to pay pension benefits up to a certain limit. Most people receive all of the pension benefits they would have received under their plan, but some people may lose certain benefits. The PBGC guarantee generally covers: Normal and early pension benefits; Disability benefits if you become disabled before the Retirement Plan terminates; and Certain benefits for your survivors. The PBGC guarantee generally does not cover: Benefits greater than the maximum guaranteed amount set by law for the year in which the Retirement Plan terminates; Some or all benefit increases and new benefits based on Retirement Plan provisions that have been in place for fewer than five years at the time the Retirement Plan terminates; Benefits that are not Vested because you have not worked long enough for Prudential and its Affiliates; Benefits for which you have not met all of the requirements at the time the Retirement Plan terminates; Certain early-retirement payments (such as supplemental benefits that stop when you become eligible for Social Security) that result in an early-retirement monthly benefit greater than your monthly benefit at the Retirement Plan s Normal Retirement Age; and Non-pension benefits, such as health insurance, life insurance, certain death benefits, vacation pay and severance pay. Retirement Plan (Home Office and Agency Distribution Field Management) Page 54

65 Even if certain of your benefits are not guaranteed, you still may receive some of those benefits from the PBGC depending on how much money the Retirement Plan has and how much the PBGC collects from employers. For more information about the PBGC and the benefits it guarantees, ask your Plan Administrator or contact the PBGC at Pension Benefit Guaranty Corporation, P.O. Box , Alexandria, VA 22315, or call (toll free). TTY/TDD users may call the federal relay service toll-free at and ask to be connected to More information about the PBGC s pension insurance program is available through the PBGC s website on the Internet (at Claims and Appeals Procedures You must follow the claims and appeals procedures outlined below before taking action in any other forum regarding a claim under the Retirement Plan. Claim forms, if any, may be obtained on the Prudential Benefits Center website or by calling PRU-EASY ( ), following the prompts for Pension, and following the instructions to speak to a Prudential Benefits Center Representative. These forms should be completed and filed according to the time restrictions that apply to the Retirement Plan. The Plan Administrator or its delegate shall treat any writing that is identified as a claim for benefits as a claim under the claims and appeals procedures, and may treat any other writing or communication received by the Plan Administrator or its delegate as a claim under these procedures, even if the writing or communication is not identified as a claim for benefits. If it is not identified as a claim for benefits or is in fact some other claim under the Retirement Plan, the same terms and time periods for claims and appeals of benefits outlined below apply to those claims as well. The Plan Administrator or its delegate shall provide you with a notice acknowledging its receipt of a communication that the Plan Administrator or its delegate considers a claim for benefits. If you do not receive such acknowledgement within 60 days after making a claim, you should contact the Plan Administrator or its delegate to determine that the claim has been received and identified as a claim for benefits. The Prudential Benefits Center is the Claims Administrator and the Administrative Committee is the Claims Fiduciary. A claim shall be considered approved only if approval is communicated to you in writing. If you do not receive a response to any claim within the applicable time period, you may proceed with an appeal under the procedures described below. Making a Claim for a Benefit When you apply for or request a benefit in any manner, this will constitute a claim. The information below will tell you exactly how to file for a benefit under the Retirement Plan. There are times when a telephone call to a Prudential Benefits Center Representative at PRU-EASY ( ) questioning why you are not covered or how to apply for a benefit can constitute a claim. Claims may also include a determination automatically submitted on your behalf by the Prudential Benefits Center when you receive a benefit, even if you have not filled out a form. Prudential Benefits Center Representatives can always give you more information on how to request or apply for a benefit. How to File a Claim for a Benefit To receive any benefit earned under the Retirement Plan, generally you or anyone entitled to a benefit must no longer be in active service with Prudential and its Affiliates. To commence your pension benefit, you must apply for it. To file a request for a benefit, an application should be completed and filed between 30 to 90 days before the date you want your Retirement Plan pension benefit to commence. If You Are Retiring from Active Employment with Prudential If you are retiring from active service, about 12 months before your expected retirement date, you can call the Prudential Benefits Center and request that a personal Retirement Counselor be assigned to you. Your dedicated Retirement Counselor will guide you through each step of the Prudential retirement process from confirming your retirement eligibility and helping you finalize your Retirement Plan (Home Office and Agency Distribution Field Management) Page 55

66 retirement date, to explaining the benefits available to you at retirement and helping you complete the necessary forms. Generally, you are not required to commence your pension benefit when you retire, if you have not yet reached your Normal Retirement Date. If You Are a Former Employee or You Are Not Retiring from Active Employment with Prudential If you are a former Employee or you are not retiring directly from active service, visit the Prudential Benefits Center website (at then open the Retirement Planning drop-down list and select the Retirement Process link. Click on Making Your Pension Benefit Elections to begin the process online. You may complete the entire process online or call the Prudential Benefits Center for assistance from a dedicated retirement specialist. You can also write to: Prudential Benefits Center P.O. Box Charlotte, NC Fax: (Outside the United States, use ) What Information to Include in a Claim Your claim should state your name, address, the specific basis for your claim and any additional materials you wish to present. This information may automatically have been provided by the Prudential Benefits Center. If a form is provided for your claim, you should complete all requested information and signatures on the form. Note that claims can often be filed online or by telephone. For more information, call PRU-EASY ( ), follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefits Center Representative. Benefits under an ERISA-governed plan will be paid only if the Plan Administrator decides in its sole discretion that the claimant is entitled to them. When to File a Claim The best time to file a claim for benefits is as soon as possible after the circumstances creating the claim take place (for example, at the time your request for a benefit is denied, which is considered an Adverse Benefit Determination). An Adverse Benefit Determination is any denial, reduction, or termination of a benefit, or a failure to provide or make a payment. You have the right to appeal any Adverse Benefit Determination under the procedures described below. In the event that you decide to bring legal action after completing all of the claims and appeals procedures outlined below, you should note that any suit or legal action initiated by you will be subject to a two-year limitation period measured from the date your claim arose (note that this two-year limitation period will be tolled [that is, stopped] during the review and appeal of your claim under these procedures). A claim will be presumed to have arisen when you have actual or constructive notice of the events giving rise to your claim. Notice of Adverse Benefit Determination Usually you will receive a notice from the Claims Administrator if your claim for a benefit is given an Adverse Benefit Determination. This form/notice will usually tell you the reason for the Adverse Benefit Determination. As part of the Adverse Benefit Determination process, you are entitled to the following information within 90 days from the date your claim was received: The specific reason(s) for the Adverse Benefit Determination; References to the specific Retirement Plan provisions on which the Adverse Benefit Determination is based; A description of any additional material or information needed to complete or support your claim, and an explanation of why it is needed; and Retirement Plan (Home Office and Agency Distribution Field Management) Page 56

67 An explanation of how you can appeal the Adverse Benefit Determination or a copy of the Retirement Plan s claims review procedure and a statement of your right to bring a civil action under ERISA after you complete all mandatory appeals under the Plan. In some instances, special circumstances may require a period of up to 90 additional days to review your claim. If so, you will be notified, prior to the expiration of the initial 90-day period, of the reasons for the extension and the day by which the Plan expects to render a decision; however, in no case will the extension exceed 180 days from the date your claim was received. How to Appeal an Adverse Benefit Determination If you have followed the above procedures and you have received an Adverse Benefit Determination, you have the right to appeal the decision. You or your authorized representative must request a review of the Adverse Benefit Determination by the Administrative Committee, who is the Claims Fiduciary, or its delegate within 60 days after you receive a notification of an Adverse Benefit Determination. Your request must be made in writing to: Administrative Committee The Prudential Insurance Company of America Employee Benefits Department 751 Broad Street, 18 th Floor Newark, NJ What Information to Include in Your Appeal Your request, which must be in writing, must state specifically the reasons why you are requesting review of your denied claim and should include all relevant facts. You also may request in writing that copies of the Plan Documents and other documents relevant to your claim be made available, free of charge, for your review. Administrative Committee Consideration The Administrative Committee will appoint one or more persons who will conduct a full and fair review of the appeal, which will include your right: To present a written statement of facts, comments, documents, records and other information relating to your claim for a benefit; To be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to your claim for a benefit; To a review that takes into account all comments, documents, records and other information submitted by you or your authorized representative relating to your claim, without regard to whether such information was submitted or considered in the initial benefit determination; and To receive a prompt written decision, written in a manner calculated to be understood by you, and clearly setting forth the following: Specific reasons for the decision containing references to the specific Retirement Plan provisions on which the decision is based; A statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to your claim for a benefit; and A statement of any voluntary appeal procedures offered under the Retirement Plan and your right to obtain information about such procedures and a statement of your right to bring an action under Section 502(a) of ERISA. Retirement Plan (Home Office and Agency Distribution Field Management) Page 57

68 When You Can Expect a Response Normally, you will receive a written notice of the final decision on your appeal from the Plan Administrator or its delegate, within 60 days of the date you request a review of your claim. However, if the Plan Administrator determines that an extension of review time (up to an additional 60 days) is necessary due to special circumstances (such as if a hearing is requested and granted), you will be notified in writing of the reasons for the delay prior to the expiration of the initial 60-day period and the date you may expect the final decision. In the event an extension is necessary due to your failure to submit necessary information, the Plan s time frame for making a benefit determination on review is tolled (that is, stopped) from the date the Plan Administrator sends you the extension notification until the date you respond to the request for additional information. You will be told if multiple levels of review are available, but all reviews must be complete when this time frame expires. The ultimate decision of the Plan Administrator shall be final and binding. Benefits under the Retirement Plan will be paid only if the Plan Administrator decides, in its sole discretion, that you are entitled to them. Legal Action All the facts and circumstances of your case will be thoroughly reviewed. If you have completed all of the claims and appeals procedures (see Claims and Appeals Procedures beginning on page 55) and your appeal is given an Adverse Benefit Determination, you have the right to bring legal action if you believe the adverse determination is incorrect and was decided in an arbitrary and capricious manner. Any suit or legal action initiated by you must be brought by the earlier of (i) one year following a final decision on your claim for benefits, including any appeal, or (ii) two years measured from the date your claim arose (except that this two-year limitation period will be suspended during the review and appeal of a claim under the Plan s claims and appeals procedures and except to the extent any policy or contract of an insurer provides a longer period of time to institute any suit or legal action). This time period for bringing a suit or legal action applies in all forums. Statement of ERISA Rights Your Rights As a participant in the Retirement Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (ERISA). ERISA provides that all ERISA-governed plan participants shall be entitled to: Receive Information About Your Plan and Benefits Examine, without charge, at the Plan Administrator s office and at other specified locations, such as work sites, all documents governing the Retirement Plan, including insurance contracts and a copy of the latest annual report (Form 5500 Series) filed by the Retirement Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration. Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Retirement Plan, including insurance contracts and copies of the latest annual report (Form 5500 Series) and the updated Summary Plan Description. The administrator may make a reasonable charge for the copies. Receive a summary of the Retirement Plan s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of the Plan s annual funding notice. Obtain a statement telling you whether you have a right to receive a pension at normal retirement age (age 65) and if so, what your benefits would be at normal retirement age if you stop working under the Retirement Plan now. If you do not have a right to a pension, the statement will tell you how many more years you have to work to get a right to a pension. The Retirement Plan must provide this statement to all active employees with a Vested benefit at least once every three years or annually, upon written request. Alternatively, the Plan may send a notice once a year explaining that a statement is available and how it can be obtained. All other participants and beneficiaries may Retirement Plan (Home Office and Agency Distribution Field Management) Page 58

69 obtain a statement once a year upon written request. The Retirement Plan must provide the statement free of charge. Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your Retirement Plan, called fiduciaries of the Retirement Plan, have a duty to do so prudently and in the interests of all Retirement Plan participants and Beneficiaries. No one, including your employer, your union or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a pension benefit or exercising your rights under ERISA. Enforce Your Rights If your claim for a pension benefit is denied or ignored, in whole or in part, you have the right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. Under ERISA, there are steps you can take to enforce the above rights. For instance: If you request a copy of the Plan Documents or the latest annual report from the Plan Administrator and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for a benefit that is denied or ignored, in whole or in part, you may file suit in a state or federal court after you complete (or if your claim is ignored, have attempted to complete) all of the claims and appeals procedures. (See Claims and Appeals Procedures beginning on page 55.) If you disagree with the Retirement Plan s decision or lack thereof concerning the qualified status of a domestic relations order, you may file suit in federal court after you complete (or if your claim is ignored, have attempted to complete) all of the claims and appeals procedures. (See Claims and Appeals Procedures beginning on page 55. See Assignment of Benefits on page 54 for more information about QDROs.) If it should happen that Retirement Plan fiduciaries misuse the Retirement Plan s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court after you complete (or if your claim is ignored, have attempted to complete) all of the claims and appeals procedures. (See Claims and Appeals Procedures beginning on page 55.) The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees if, for example, it finds your claim is frivolous. Assistance with Your Questions If you have any questions about the Retirement Plan, you should contact the Prudential Benefits Center at EASY-PRU ( ). If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or contact: Retirement Plan (Home Office and Agency Distribution Field Management) Page 59

70 Division of Technical Assistance and Inquiries Employee Benefits Security Administration U.S. Department of Labor 200 Constitution Avenue, N.W. Washington, DC EBSA ( ) You may also obtain certain publications about your rights and responsibilities under ERISA by calling Service of Legal Process Most questions about the Retirement Plan can be resolved by calling PRU-EASY ( ), following the prompts for Pension, and following the instructions to speak to a Prudential Benefits Center Representative, or by completing the claims and appeals process. (See Claims and Appeals Procedures beginning on page 55 for more information.) However, if, after you complete all of the claims and appeals procedures described in the Retirement Plan, you feel you need to take legal action to resolve a question governing your benefits or your claim, you may contact the agent for service of legal process in a timely manner at the following address: The Prudential Insurance Company of America Vice President for Employee Benefits Employee Benefits Department 751 Broad Street, 18 th Floor Newark, NJ Telephone: Under The Prudential Merged Retirement Plan, any suit or legal action initiated by a claimant must be brought by the claimant by the earlier of (i) one year following a final decision on your claim for benefits, including any appeal, or (ii) two years measured from the date your claim arose (except that this two-year limitation period will be suspended during the review and appeal of a claim under the Plan s claims and appeals procedures and except to the extent any policy or contract of an insurer provides a longer period of time to institute any suit or legal action). This time period for bringing a suit or legal action applies in all forums. Benefit Adjustment Once your benefit commences under the Retirement Plan, the Plan Administrator reserves the right to adjust your benefit payment amount to accurately reflect your entitlement under the Retirement Plan if information later becomes available that would have changed the original calculation of your benefit. In addition, an additional payment representing interest on increased payments may be paid. Retirement Plan (Home Office and Agency Distribution Field Management) Page 60

71 Glossary In this section, you will find definitions for some of the terms used in this SPD booklet. If you need more help understanding a certain term, call the Prudential Benefits Center at PRU-EASY ( ) and follow the prompts for Pension. Actuarial Equivalent Actuarial Equivalent means a benefit of equal value, using an interest rate and mortality table specified in the Retirement Plan. For example, your Cash Balance Account could be paid as a Lump Sum or converted to a Single Life Annuity or 50% Qualified Joint and Survivor Annuity using the specified factors. Adjusted Service Date Your Adjusted Service Date is the date you were first Employed (or reemployed if you had a Break-in-Service) by Prudential or its Affiliates. This date is also adjusted to reflect any period in which you were not affiliated with Prudential or its Affiliates. Adverse Benefit Determination An Adverse Benefit Determination is any denial, reduction, or termination of a benefit, or a failure to provide or make a payment. You have the right to appeal any Adverse Benefit Determination under the claims and appeals procedures described in this SPD booklet. Agency Distribution Financial Professional An Agency Distribution Financial Professional is a full-time life insurance salesman as defined under Internal Revenue Code Section 3121(d)(3)(B) and the regulations prescribed thereunder, including an associate under any of the following contracts: Senior Life Representative, Statutory Agent Agreement or Career Special Agent. Agency Distribution Financial Professional Associate An Agency Distribution Financial Professional Associate is a common law Employee participating in a two-year development program within Agency Distribution. Agency Distribution Sales Professionals Employees and full-time life insurance salespeople who are independent contractors, but who are considered employees under the Internal Revenue Code (generally referred to as Agency Distribution Financial Professionals), who are: Agency Distribution Financial Professionals; or Agency Distribution Financial Professional Associates. Affiliated Company/Affiliate Affiliated Company means any corporation that is a member of a controlled group of corporations, which includes the Company, any trade or business that is under common control with the Company, any organization included in the same affiliated service group as the Company and any other entity required to be aggregated with the Company pursuant to regulations set forth under Section 414(o) of the Internal Revenue Code. Any such entity shall be treated as an Affiliated Company only for the period while it is a member of the controlled group or considered to be in such common control group. Alternate Payee Any Spouse, former Spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable to such participant under The Prudential Merged Retirement Plan. Retirement Plan (Home Office and Agency Distribution Field Management) Page 61

72 Annuity An Annuity is a series of monthly benefits distributed to participants under the Retirement Plan. Average Eligible Earnings Under the Traditional Pension Formula, in general, Average Eligible Earnings are the average of your Eligible Earnings during your seven to nine final years (the averaging period ) of receiving Eligible Earnings. For 2014, the averaging period began January 1, The averaging period will be updated by two years every January 1 of an even-numbered year (e.g., 2016, 2018, etc.). Two years worth of your lowest Eligible Earnings in the averaging period are ignored in determining your Average Eligible Earnings. If you have fewer than seven years of Eligible Earnings in the averaging period, special rules apply. If you have fewer than: Seven years, but at least five years of Eligible Earnings in the averaging period, the five highest years of Eligible Earnings are counted; Five years of Eligible Earnings, but at least three years of Eligible Earnings in the averaging period, all years of Eligible Earnings are counted; or Three years of Eligible Earnings in the averaging period, all years of Eligible Earnings are counted and may also include Eligible Earnings earned prior to the averaging period. Average Yield of 30-Year U.S. Treasury Securities This is the average of the Average Yield of 30-Year U.S. Treasury Securities (constant maturities) for each day in the month during which the markets are open. This average yield is calculated by the Federal Reserve Board for each month and published monthly. Base Pay Base Pay, as applicable for the Additional Retirement Benefit, is your base salary, including shift differential, if any, as of the date your Employment ends. For Employees paid on an hourly basis, Base Pay is your hourly Eligible Earnings rate plus shift differential, if any, as of the date your Employment ends, multiplied by the number of hours worked in the two calendar quarters preceding the full calendar quarter prior to notification of termination multiplied by two. For Field Management Employees only: Base Pay is your Eligible Earnings in the four calendar quarters preceding the full calendar quarter prior to notification of termination. Basic Credits Under the Cash Balance Formula, Basic Credits will be added to your Cash Balance Account at the end of each month. The amount of Basic Credits will equal a percentage of your Eligible Earnings paid each month. The Basic Credit percentage is determined at the beginning of each year and remains constant throughout the year. The percentage is based on your projected completed years of Cash Balance Service and age as of December 31 of the current year. Your Basic Credit amount will generally increase each year as your Cash Balance Service and age increase. Beneficiary/Beneficiaries Your Beneficiary(ies) is the person(s) or legal entity you name under procedures prescribed by the Retirement Plan to receive benefits that are payable if you die while covered under the Retirement Plan, or who will receive those benefits automatically under the terms of the Retirement Plan. You may make different Beneficiary designations for benefits under the Cash Balance Formula and the Traditional Pension Formula. Retirement Plan (Home Office and Agency Distribution Field Management) Page 62

73 Benefit Accrual Start Date Under the Traditional Pension Formula, the Benefit Accrual Start Date is the date used to determine your Credited Service. It is your Adjusted Service Date adjusted for non-benefit accrual periods, such as: Service with a Non-Participating Affiliate; Prior service for which you received a lump-sum cash out of your accrued benefit; and Any other time non-benefit accrual periods apply. This date is valued only for eligible Employees who have non-benefit accrual periods, as stated above. Otherwise, the Adjusted Service Date is used to determine your Credited Service. Break-in-Service You will incur a Break-in-Service if you are not Vested and you have five or more consecutive Break Years. If you are not Vested and a Break-in-Service occurs, your Vesting Service as of the end of the Break Year is forfeited, and all service, including Cash Balance Service and Credited Service prior to the Break-in-Service, is not counted for any purpose. If you are reemployed by Prudential or its Affiliates, and you have not incurred a Break-in-Service, your Vesting Service is restored and all prior Break Years are disregarded. The Break-in-Service rule does not apply if you are already Vested in the Retirement Plan. However, if you are not yet Vested and you incur a Break-in-Service, your prior service will not be counted for Vesting purposes. Break Year A Break Year occurs if your Employment ends and you are not reemployed by Prudential or its Affiliates within a: Consecutive 12-month period beginning on the date your Employment ends; or Consecutive 24-month period beginning on the date your Employment ends if you are absent from work for maternity or paternity reasons. You will incur an additional Break Year for each consecutive 12-month period during which you are not reemployed by Prudential or its Affiliates. Cash Balance Account Under the Cash Balance Formula, a Cash Balance Account will be set up in your name to track the value of your Cash Balance Formula benefits. Cash Balance Formula The Cash Balance Formula is a method of determining Retirement Plan benefits for certain participants, as described beginning on page 15. Cash Balance Service In general, you earn one month of Cash Balance Service for each completed month, as measured from your Adjusted Service Date, in which you are: In active service; On an approved leave of absence; Working at a Non-Participating Affiliate; In foreign service; or Retirement Plan (Home Office and Agency Distribution Field Management) Page 63

74 Receiving long term disability benefits under The Prudential Welfare Benefits Plan (until you take payment of your Cash Balance Formula benefit). Cash Balance Service will not accrue after your termination date. Claims Administrator The entity designated to handle the requests for payment of benefits under the Plan. In some instances, this entity may also be designated to handle appeals for denied benefits. The Claims Administrator for the Retirement Plan is the Prudential Benefits Center. The Administrative Committee is the Claims Fiduciary. Claims Fiduciary The Fiduciary for all actions involving the payment of benefits under an ERISA plan. The Administrative Committee is the Claims Fiduciary for the Retirement Plan. Company The Company is The Prudential Insurance Company of America. Contingent Annuitant Your Contingent Annuitant is the person(s) you name under procedures prescribed by the Retirement Plan to receive a benefit under the Contingent Annuity Option that is payable upon your death. Continuous Service Your Continuous Service on any date of determination is generally the period from your Adjusted Service Date to the date of determination. However, if you first earned a day of Credited Service after the first day of the month on or following your 65 th birthday, the starting point for determining Continuous Service is the later of the day you first earned a day of Credited Service or January 1, Covered Compensation Your Covered Compensation amount is a component of the calculation of your accrued benefit under the Traditional Pension Formula. It is the 35-year average of the Social Security Taxable Wage Bases ending with the year in which you reach (or will reach) Social Security full retirement age. Social Security full retirement age is between ages 65 and 67, depending on the year in which you were born. Credited Service In general, you earn one month of Credited Service for each completed month, as measured from your Adjusted Service Date or Benefit Accrual Start Date, as applicable, in which you are: In active service; or On an approved leave of absence (may be limited to 12 months). Demutualization Credit Demutualization Credit refers to the cash credit made to the Cash Balance Account of each eligible participant as of July 31, 2002, in connection with the demutualization of The Prudential Insurance Company of America (the conversion from a mutual insurance company to a stock company). Because the Retirement Plan was an eligible contract holder of The Prudential Insurance Company of America at the time of the demutualization, the Retirement Plan received shares of Prudential Financial, Inc. Common Stock, the value of which was then distributed to all eligible participants in the Retirement Plan. Please see the Demutualization Credits section in Appendix C beginning on page 78 for more information about eligibility for the Demutualization Credit and how Demutualization Credits were calculated. Dismissed for Cause You will be considered Dismissed for Cause if Prudential or one of its Affiliates ends your Employment due to a disciplinary action. Retirement Plan (Home Office and Agency Distribution Field Management) Page 64

75 Cause means the following (as determined by the Company in its sole discretion): dishonesty, fraud or misrepresentation; inability to obtain or retain appropriate licenses; violation of any rule or regulation of any regulatory agency or self-regulatory agency; violation of any policy or rule of the Company or any Affiliated Company; commission of a crime; or any act or omission detrimental to the conduct of the business of the Company or any Affiliated Company. Early Pension Factor Under the Traditional Pension Formula, the Early Pension Factor is the factor that is applied to your unadjusted annual normal pension benefit and your unadjusted annual early pension benefit if you elect to commence your monthly pension benefit payments before your 65 th birthday. Eligible Earnings Your Eligible Earnings generally include base salary, overtime pay, disability benefits paid under the Short Term Disability Program, certain Employee incentive compensation, certain commissions, certain non-retail sales professional sales bonuses and certain agency distribution sales bonuses. Your Eligible Earnings will include all or a portion of your severance payment under certain of the Company s severance plans if your pension benefit is determined under the Cash Balance Formula or if your pension benefit is determined under the Traditional Pension Formula and you are Retirement-Eligible. Beginning April 1, 2013, if you are Retirement-Eligible, your Eligible Earnings will include any payment you receive for Paid Time Off ( PTO ) days and PTO allotments when your Employment ends. Employee Generally, any person who is categorized as an employee on the books and records of the Company or any Affiliate, or is compensated as an Agency Distribution Financial Professional by Prudential or its Affiliates will be considered an Employee for the purposes of this Plan. The term Employee never includes any individual who is associated with Prudential or any Affiliate as: An Agency Distribution Financial Professional Emeritus, Agent Emeritus, Premier Retired Representative or Retired Representative; An independent contractor (other than an Agency Distribution Financial Professional); An individual service provider compensated through an employee leasing company, temporary employment agency or other third-party agency; An individual who would be treated as an employee solely by reason of such individual being treated as either part of an affiliated service group or a leased employee under the Internal Revenue Code and regulations; or Any other individual who performs services for Prudential or an Affiliate but is not treated as an Employee for federal tax purposes at the time the individual renders services. Please refer to the Plan document for a complete listing of the classes of Employees who are ineligible to participate in the Retirement Plan. See also Who Is Not Eligible on page 8 of this SPD booklet. Employment/employment, Employed/employed These terms reference the period of time a person has a relationship to Prudential as an Employee. For any person, other than an Agency Distribution Financial Professional, it is the period of time he/she is categorized as an Employee on the books of the Company or an Affiliate. For an Agency Distribution Financial Professional, it is the period of time he/she performs services for the Company. ERISA ERISA is the Employee Retirement Income Security Act of 1974, as amended, which is the federal statute governing private pension and welfare plans. Retirement Plan (Home Office and Agency Distribution Field Management) Page 65

76 Fiduciary One who exercises any discretionary control on behalf of an ERISA plan and its participants in the management or disposition of Plan assets, and/or who exercises any discretionary authority or responsibility for Plan administration, and/or one who renders investment advice for a fee with respect to ERISA plan assets. Grandfathered Minimum Benefit The frozen accrued benefit as of January 1, 2002, that would have been paid to a participant as a Single Life Annuity under the Traditional Pension Formula at the participant s Normal Retirement Date, or, if later, the participant s age as of January 1, The Grandfathered Minimum Benefit excludes any benefits not included in the Cash Balance Formula opening account balance. Individual Retirement Account or Annuity (IRA) An IRA is a personal, tax-sheltered savings vehicle, generally used to save for retirement (excluding a SIMPLE IRA or a Coverdell Education Savings Account [formerly known as an Education IRA]). You should consult with a tax advisor to see how federal tax laws affect the various forms of IRAs. International Employee An employee or retiree who is not or was not an Employee of a Participating Employer operating in the United States of America and is or was compensated for services rendered for an Affiliate in currency other than currency of the United States of America and paid from a payroll system other than that used by a Participating Employer to pay Employees in the United States of America. Interest Credits Under the Cash Balance Formula, Interest Credits are added to your Cash Balance Account by Prudential and are in addition to Basic Credits and Transition Credits (if applicable). Interest Credits are added at the end of the month based on the beginning of the month value of your Cash Balance Account (regardless of your Employment or eligibility status) until you commence payment of your Cash Balance Formula benefit. The Interest Credit percentage is based on the monthly equivalent to the Average Yield of 30-Year U.S. Treasury Securities for October (constant maturities) of the prior year. In no event will the interest rate used be less than the monthly equivalent of 4.25% per annum. Internal Revenue Code The Internal Revenue Code of 1986, as amended, is the federal statute governing taxes and certain benefit plans and programs. Non-Participating Affiliate As of January 1, 2014, Non-Participating Affiliates include: Jennison Associates; Mullin TBG; and Foreign (non-united States) subsidiaries. Normal Retirement Date The first day of the month on or following your 65 th birthday. Participating Affiliate/Company The Company and any Affiliate of the Company that participates in the Retirement Plan with the consent (or deemed consent) of the Company. Pension Choice Election During 2001, each eligible Employee of Prudential and its Affiliates was given an opportunity to choose how future benefit accruals would be determined under the Retirement Plan. During this Retirement Plan (Home Office and Agency Distribution Field Management) Page 66

77 Pension Choice Election process, Employees chose between the Cash Balance Formula, described beginning on page 15, and the Traditional Pension Formula, described beginning on page 27. Plan Administrator Generally, the Plan Administrator is the entity that has overall responsibility for administration of the Plan, including interpreting the Plan Documents, establishing procedures, recordkeeping and filing all necessary reports regarding the Plan or program and publishing and distributing communication materials. The Plan Administrator for the Retirement Plan is the Administrative Committee or its delegate. Plan Documents The Plan Documents are the legal written documents describing all the benefits and limitations pertaining to the Retirement Plan. Plan Sponsor The Plan Sponsor is the employer establishing a benefit plan or program for its eligible participants and/or Beneficiaries The Prudential Insurance Company of America is the Plan Sponsor for the Retirement Plan. Plan Trustee The Plan Trustee is the person or entity that holds title to and administers the assets of the Retirement Plan for the benefit of its participants. The Plan Trustee is listed on page 53 of this SPD booklet. Plan Year The Plan Year is the period used for all plan administration accounting and reporting described here. The Plan Year for the Retirement Plan is the calendar year beginning each January 1 and ending the following December 31. Pre-2013 Cash Balance Account This is the value of the portion of your Cash Balance Account that you had as of January 1, 2013, with Interest Credits to the date of commencement. Pre-2013 Wear-Away Protection This is the value of the portion of your Cash Balance Account from Basic Credits, Transition Credits, Demutualization Credit, and QSERP Benefits (each as applicable) and Interest Credits on these amounts (i.e., the portion of your Cash Balance Account other than your Opening Account Balance and Interest Credits on that amount) that you had as of January 1, 2013, with Interest Credits to the date of commencement. See Appendix C beginning on page 77for more information on Transition Credits, Demutualization Credit, QSERP Benefits and Opening Account Balance. Prudential Prudential is The Prudential Insurance Company of America and its Participating Affiliates. The Prudential Merged Retirement Plan (the Plan ) The Prudential Merged Retirement Plan is a defined benefit pension plan. It was first adopted in 1941, and has been amended over the years. The Prudential Merged Retirement Plan consists of The Prudential Traditional Retirement Plan Document Component One (referred to as the Traditional Pension Formula ), the Prudential Securities Incorporated Cash Balance Pension Plan Document Component Two (the PSI Plan ), and the Prudential Cash Balance Pension Plan Document Component Three (referred to as the Cash Balance Formula ). The Prudential Welfare Benefits Plan An Employee benefits plan established by the Company to provide various health and welfare benefits for participants. Benefits provided under The Prudential Welfare Benefits Plan include Medical, Dental, Vision, Disability, Life Insurance, Long Term Care and the Group Legal Program. Retirement Plan (Home Office and Agency Distribution Field Management) Page 67

78 Purchased/Annuitized Benefits Generally, through December 31, 2001, benefits were purchased under a group annuity contract as of December 31 of the year in which an Employee ended his/her Employment with Prudential or an Affiliate. Purchasing benefits means that the liability for providing a participant s benefit earned under the Traditional Pension Formula becomes an irrevocable obligation of The Prudential Insurance Company of America under a group annuity contract. The Purchased Benefit is fully guaranteed by The Prudential Insurance Company of America (the Insurance Company ) in its role as a regulated insurance carrier. This means that the Insurance Company, not The Prudential Merged Retirement Plan, is responsible for paying these benefits and guarantees that payments will be made. The Prudential Merged Retirement Plan may purchase an Annuity, in the Employee s name, that will pay the Traditional Pension Formula benefit for the Employee, once pension benefit payments commence. As provided for under the terms of the Plan, a Purchased Benefit was not eligible to be converted to the Cash Balance Formula during the Pension Choice Election process. As of the date your pension benefit becomes guaranteed under the group annuity contract, it is considered Purchased or Annuitized, and you are no longer considered a participant in The Prudential Merged Retirement Plan with regard to that benefit. As part of this process, an Annuity certificate that outlines the terms of your pension benefit and that is a formal, written guarantee of your pension benefit from the Insurance Company is issued to you in the calendar year following the date your Employment with Prudential and its Affiliates ended. This process whereby your pension benefit is Annuitized is explained in regulations issued by the Department of Labor [29 CFR Section (d)(2)(ii)], pursuant to the Employee Retirement Income Security Act of 1974, as amended (ERISA). Qualified Domestic Relations Order (QDRO) A QDRO is a court order issued in connection with a state domestic relations law, which orders the Plan to pay benefits to your Spouse, former Spouse, child or other dependent, and which meets certain requirements, as determined by the Plan Administrator. The Plan Administrator has delegated its authority to administer QDROs to Ceridian. Retirement-Eligible If your pension benefit is determined under the Traditional Pension Formula, you are considered Retirement-Eligible under the Retirement Plan if your Employment ends on or after: The first day of the month on or following your 65 th birthday; or The first day of the month on or following your 55 th birthday and completion of at least 10 years of Vesting Service; or You became eligible under the 50/20 provision (see the Involuntary Termination section beginning on page 29 for information on the 50/20 provision). If your pension benefit is determined under the Cash Balance Formula, you are considered Retirement-Eligible under the Retirement Plan if, when your Employment ends: You have ten or more years of Vesting Service and have attained the first day of the month coinciding with or next following your 55 th birthday; You elected the Cash Balance Formula during the Pension Choice Election process and are Retirement-Eligible under the terms of the Traditional Pension Formula, as described above; or You have a separate Traditional Pension Formula pension benefit from a prior period of service with Prudential and its Affiliates and are Retirement-Eligible under the terms of the Traditional Pension Formula, as described above. Retirement Plan (Home Office and Agency Distribution Field Management) Page 68

79 Retirement Plan Retirement Plan refers to the Traditional Pension Formula and the Cash Balance Formula components of The Prudential Merged Retirement Plan, which is a defined benefit pension plan that provides benefits to eligible Employees. Separation from Service Date Your Separation from Service Date is generally the earlier of: The date your Employment ends due to voluntary or involuntary termination, retirement, or death; or The first anniversary of your first date of absence for other than voluntary or involuntary termination, retirement or death (for example, commencement of unpaid leave of absence, long term disability, or long term disability accommodation leave, or exhaustion of short term disability without either becoming eligible for long term disability or returning to active Employment). Also, if a Disabled Employee (as defined under the Disability Program) becomes eligible to receive long term disability benefits under the Disability Program, such person shall be treated as having first been absent from service for purposes of determining Vesting Service on the date he/she became eligible to receive such long term disability benefits (rather than on the date he/she was first absent from service on account of short term disability). Spouse The person to whom a participant is legally married on the date the participant commences his benefit or on his Annuity starting date or, if earlier, the date of the participant s death. The term Spouse shall also include an individual to whom a participant was previously married to the extent so required under the terms of a Qualified Domestic Relations Order. Spouse, whether capitalized or lowercase, shall mean the person to whom a participant is legally married (whether the same or opposite sex) under the laws of any U.S. or foreign jurisdiction having the authority to sanction marriages. Subsidized Grandfathered Minimum Benefit The Subsidized Grandfathered Minimum Benefit equals a participant s Grandfathered Minimum Benefit plus any (a) early retirement subsidies under the Traditional Pension Formula and/or (b) temporary pension which relates to the Grandfathered Minimum Benefit that the participant would have been entitled to under the Traditional Pension Formula as of the participant s benefit commencement date, if the participant s benefit commencement date is prior to his/her Normal Retirement Date. Traditional Pension Formula The Traditional Pension Formula is a method of determining Retirement Plan benefits for certain participants, as described beginning on page 27. Transition Credits Under the Cash Balance Formula, Transition Credits were added to your Cash Balance Account at the end of each month from January 1, 2002, through December 31, These credits were in addition to your Basic Credits and Interest Credits and were only offered to Employees who were eligible for the Pension Choice Election process. The amount of Transition Credits equaled 2.5% of your Eligible Earnings paid each month from January 1, 2002, through December 31, Please see Transition Credits in Appendix C beginning on page 77 for more information. Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) Eligible Employees who return from a military leave of absence covered by the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) within the required time frame under USERRA, will not have incurred a Break-in-Service and will, therefore, not have a Separation from Service Date. In addition, these eligible Employees will receive credit for all of their prior Vesting Service, as well as credit for the entire period of the qualified military leave of absence, including eligibility, vesting and benefit accrual service for the qualifying leave. Generally, a qualified military leave of absence cannot exceed five years. If you die while absent from employment performing Retirement Plan (Home Office and Agency Distribution Field Management) Page 69

80 qualified military service, your Beneficiary will be entitled to the benefit that would have been provided had you returned to work the day before your death and subsequently died. (Note: USERRA requires that you give notice to Prudential or its Affiliates with exceptions prior to taking the leave and certifications by the returning person that the leave qualified and was coextensive with the approved military service.) Vested Being Vested means you have a non-forfeitable right to receive an accrued benefit under the Retirement Plan. Effective January 1, 2008, Employees hired on or after January 1, 2001, will become fully Vested in their Retirement Plan benefits once they complete three years of Vesting Service (prior to January 1, 2008, Employees hired on or after January 1, 2001, were required to complete five years of Vesting Service); begin to receive long term disability benefits (this does not include long term disability benefits paid while on accommodation leave) under The Prudential Welfare Benefits Plan; reach age 65 while Employed by Prudential and its Affiliates, or die while Employed by Prudential or its Affiliates, whichever is sooner. All Employees are also 100% Vested in the portion of their Cash Balance Account related to any Demutualization Credit received. If you were an eligible Employee in the Retirement Plan on both December 31, 2000, and January 1, 2001, you became 100% Vested in your accrued benefit under the Retirement Plan. This also means that you are 100% Vested in any future benefits earned on or after January 1, 2001, under either the Traditional Pension Formula or the Cash Balance Formula. If you were Employed by Prudential and its Affiliates and you were a Retirement Plan participant or Beneficiary with an accrued benefit under the Retirement Plan as of April 30, 2007, you will be 100% Vested in your accrued benefit as of that date and any future benefits earned after April 30, Any Retirement Plan participant whose Employment with Prudential and its Affiliates ended between May 1, 2006 and April 30, 2007 (or his/her Beneficiary), will be 100% Vested in his/her accrued benefit under the Plan. If you were Employed by Prudential and its Affiliates and you were a Retirement Plan participant or Beneficiary with an accrued benefit under the Retirement Plan as of December 6, 2013, you will be 100% Vested in your accrued benefit as of that date and any future benefits earned after December 6, Any Retirement Plan participant whose Employment with Prudential and its Affiliates ended between December 7, 2012 and December 6, 2013 (or his/her Beneficiary), will be 100% Vested in his/her accrued benefit under the Plan. Vesting Service Vesting Service is generally used to determine whether you are Vested and if you are Retirement-Eligible. Service Before 1976 If you were first hired before January 1, 1976, you were credited on January 1, 1976, with Vesting Service equal to the Continuous Service you had earned up until that time. Service After 1975 and Before 2001 Starting January 1, 1976, your Vesting Service for a Plan Year is equal to your Hours of Service (up to a maximum of 1,000) during the year, divided by 1,000. You earn 45 Hours of Service for each week you work. For example, if you have 1,800 Hours of Service during 2000, you would earn one year of Vesting Service the 1,000 maximum Hours of Service divided by 1,000. If you have 553 Hours of Service, you would earn.553 years of Vesting Service 553 Hours of Service divided by 1,000. Retirement Plan (Home Office and Agency Distribution Field Management) Page 70

81 In addition, for purposes of determining Vesting Service, Hours of Service include: Periods of Employment with Prudential Affiliates that do not participate in the Retirement Plan; Periods of non-employment under a workforce reduction or other similar programs approved by the Company s senior personnel officer; In general, periods of Employment with entities before they become Company Affiliates; and Certain other periods relating to severance and related benefits (if you are Retirement-Eligible or could be Retirement-Eligible by counting such periods). Service After 2000 You receive credit for Vesting Service beginning on the later of January 1, 2001, and your first day of Employment with Prudential and ending on the earlier of your Separation from Service Date with Prudential or the date you commence pension benefits under the Plan. If you return to active service with Prudential within one year of the first day of absence for any reason, your period of absence will be counted toward your Vesting Service. In addition, for purposes of determining Vesting Service, Vesting Service will include: Periods of Employment with Prudential Affiliates that do not participate in the Retirement Plan; Periods of non-employment under a workforce reduction or other similar programs approved by the Company s senior personnel officer; In general, periods of Employment with entities before they become Company Affiliates; and Certain other periods relating to severance and related benefits (if you are Retirement-Eligible or could be Retirement-Eligible by counting such periods and have a benefit determined under the Traditional Pension Formula or you have a benefit under the Cash Balance Formula and elected the Cash Balance Formula during the Pension Choice Election process). Wear-Away Protection This is the value of the Cash Balance Formula s Basic Credits, Transition Credits (if applicable) and Interest Credits from January 1, 2002, to the date of commencement. Whipsaw Whipsaw refers to a special interest-rate driven calculation that may result in your Cash Balance Formula payable benefit being larger than your Cash Balance Account. It may apply only if you had a Cash Balance Account on or before December 31, The Whipsaw calculation described below will be used in determining your payable pension benefit if, at the time you commence your pension benefit: You are under age 65; and The applicable 30-Year U.S. Treasury rate (the Average Yield of 30-Year U.S. Treasury Securities for October (constant maturities) of the prior year) is less than 4.25% (the Plan s minimum interest crediting rate). Under the Whipsaw calculation, either the Pre-2013 Cash Balance Account or the Pre-2013 Wear-Away Protection amount, as applicable, will be adjusted as follows: Project the applicable amount to age 65 using the interest crediting rate in effect for the calendar year of the distribution (4.25% for 2014); then Discount that amount to the distribution date using the applicable 30-Year U.S. Treasury rate (3.68% for 2014). Retirement Plan (Home Office and Agency Distribution Field Management) Page 71

82 Appendix A Basic Credit Percentage Table The Basic Credit Percentage Table that begins below and continues through page 75 is intended to illustrate how Basic Credits are determined under the Cash Balance Formula. Your percentage is based on your age and service and will increase each year as your age and service increase. The percentage will be determined at the beginning of each year, and will remain constant for the entire year. To determine your Basic Credit percentage for a year, add one to your completed age and completed years of service (in whole numbers) as of December 31 of the previous calendar year. Find the resulting age and years of service (in whole numbers) on the Basic Credit Percentage Table. For example, if you are age 41 and have 6 years of service as of December 31, 2013, your age and completed years of service used to determine your Basic Credit percentage under the Cash Balance Formula during 2014 will be age 42 and 7 years of service. Your Basic Credit percentage for 2014 will be 5.1%. Completed Years of Age at End of Year % 2.0% 2.0% 2.0% 2.0% 2.1% 2.2% 2.3% 2.4% 2.5% 2.6% 2.7% 2.8% 2.9% 1 2.0% 2.0% 2.0% 2.1% 2.2% 2.3% 2.4% 2.5% 2.6% 2.7% 2.8% 2.9% 3.0% Completed Years of Service at End of Year 2 2.0% 2.0% 2.1% 2.2% 2.3% 2.4% 2.5% 2.6% 2.7% 2.8% 2.9% 3.0% 3 2.1% 2.2% 2.3% 2.4% 2.5% 2.6% 2.7% 2.8% 2.9% 3.0% 3.1% 4 2.3% 2.4% 2.5% 2.6% 2.7% 2.8% 2.9% 3.0% 3.1% 3.2% 5 2.4% 2.5% 2.6% 2.7% 2.8% 2.9% 3.0% 3.1% 3.2% 6 2.6% 2.7% 2.8% 2.9% 3.0% 3.1% 3.2% 3.3% 7 2.8% 2.9% 3.0% 3.1% 3.2% 3.3% 3.4% 8 2.9% 3.0% 3.1% 3.2% 3.3% 3.4% 9 3.1% 3.2% 3.3% 3.4% 3.5% % 3.4% 3.5% 3.6% % 3.5% 3.6% % 3.7% % Retirement Plan (Home Office and Agency Distribution Field Management) Page 72

83 Completed Years of Age at End of Year Completed Years of Service at End of Year % 3.1% 3.2% 3.3% 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% 4.2% 4.4% 4.7% 1 3.1% 3.2% 3.3% 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% 4.1% 4.3% 4.6% 4.8% 2 3.1% 3.2% 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% 4.1% 4.2% 4.5% 4.7% 4.9% 3 3.2% 3.3% 3.4% 3.5% 3.6% 3.8% 3.9% 4.0% 4.1% 4.2% 4.3% 4.6% 4.8% 5.0% 4 3.3% 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.1% 4.2% 4.3% 4.4% 4.7% 4.9% 5.1% 5 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% 4.1% 4.3% 4.4% 4.5% 4.7% 5.0% 5.2% 6 3.4% 3.5% 3.6% 3.7% 3.8% 3.9% 4.1% 4.2% 4.3% 4.4% 4.6% 4.8% 5.1% 5.3% 7 3.5% 3.6% 3.7% 3.8% 3.9% 4.0% 4.1% 4.2% 4.4% 4.5% 4.6% 4.9% 5.1% 5.4% 8 3.5% 3.6% 3.8% 3.9% 4.0% 4.1% 4.2% 4.3% 4.4% 4.5% 4.7% 4.9% 5.2% 5.5% 9 3.6% 3.7% 3.8% 3.9% 4.0% 4.1% 4.2% 4.4% 4.5% 4.6% 4.7% 5.0% 5.3% 5.5% % 3.8% 3.9% 4.0% 4.1% 4.2% 4.3% 4.4% 4.5% 4.6% 4.8% 5.0% 5.3% 5.6% % 3.8% 3.9% 4.0% 4.1% 4.3% 4.4% 4.5% 4.6% 4.7% 4.8% 5.0% 5.3% 5.6% % 3.9% 4.0% 4.1% 4.2% 4.3% 4.4% 4.5% 4.7% 4.8% 4.9% 5.1% 5.3% 5.6% % 3.9% 4.0% 4.1% 4.3% 4.4% 4.5% 4.6% 4.7% 4.8% 4.9% 5.2% 5.4% 5.6% % 4.0% 4.1% 4.2% 4.3% 4.4% 4.5% 4.7% 4.8% 4.9% 5.0% 5.2% 5.5% 5.7% % 4.2% 4.3% 4.4% 4.5% 4.6% 4.7% 4.8% 4.9% 5.1% 5.3% 5.5% 5.8% % 4.3% 4.4% 4.5% 4.6% 4.8% 4.9% 5.0% 5.1% 5.3% 5.6% 5.8% % 4.5% 4.6% 4.7% 4.8% 4.9% 5.0% 5.2% 5.4% 5.6% 5.9% % 4.7% 4.8% 4.9% 5.0% 5.1% 5.2% 5.4% 5.7% 5.9% % 4.8% 4.9% 5.0% 5.1% 5.3% 5.5% 5.7% 6.0% % 5.0% 5.1% 5.2% 5.3% 5.5% 5.8% 6.0% % 5.2% 5.3% 5.4% 5.6% 5.8% 6.1% % 5.3% 5.4% 5.7% 5.9% 6.1% % 5.5% 5.8% 6.0% 6.2% % 5.9% 6.1% 6.3% % 6.2% 6.4% % 6.6% % Retirement Plan (Home Office and Agency Distribution Field Management) Page 73

84 Completed Years of Age at End of Year Completed Years of Service at End of Year % 5.1% 5.3% 5.5% 5.8% 6.0% 6.2% 6.4% 6.6% 6.9% 7.1% 7.3% 7.6% 8.0% 1 5.0% 5.3% 5.5% 5.7% 6.0% 6.2% 6.4% 6.6% 6.9% 7.2% 7.4% 7.7% 8.0% 8.4% 2 5.2% 5.4% 5.7% 5.9% 6.1% 6.4% 6.6% 6.9% 7.1% 7.4% 7.7% 7.9% 8.3% 8.7% 3 5.3% 5.5% 5.8% 6.0% 6.3% 6.5% 6.8% 7.0% 7.3% 7.5% 7.9% 8.2% 8.6% 9.0% 4 5.4% 5.6% 5.9% 6.2% 6.4% 6.7% 6.9% 7.2% 7.5% 7.7% 8.0% 8.3% 8.8% 9.3% 5 5.5% 5.7% 6.0% 6.3% 6.5% 6.8% 7.1% 7.3% 7.6% 7.9% 8.2% 8.4% 8.9% 9.4% 6 5.6% 5.8% 6.1% 6.4% 6.6% 6.9% 7.2% 7.5% 7.8% 8.0% 8.3% 8.6% 9.0% 9.5% 7 5.7% 5.9% 6.2% 6.4% 6.7% 7.0% 7.3% 7.6% 7.9% 8.2% 8.4% 8.7% 9.1% 9.5% 8 5.7% 6.0% 6.2% 6.5% 6.8% 7.1% 7.4% 7.7% 8.0% 8.3% 8.6% 8.9% 9.3% 9.7% 9 5.8% 6.0% 6.3% 6.6% 6.8% 7.1% 7.4% 7.7% 8.0% 8.3% 8.7% 9.0% 9.4% 9.8% % 6.1% 6.4% 6.6% 6.9% 7.2% 7.5% 7.8% 8.1% 8.4% 8.7% 9.1% 9.5% 9.9% % 6.1% 6.4% 6.7% 7.0% 7.2% 7.5% 7.8% 8.1% 8.5% 8.8% 9.1% 9.6% 10.0% % 6.2% 6.5% 6.7% 7.0% 7.3% 7.6% 7.9% 8.1% 8.5% 8.8% 9.2% 9.6% 10.1% % 6.2% 6.5% 6.8% 7.1% 7.3% 7.6% 7.9% 8.2% 8.5% 8.8% 9.2% 9.6% 10.1% % 6.2% 6.5% 6.8% 7.1% 7.4% 7.7% 8.0% 8.3% 8.5% 8.8% 9.2% 9.7% 10.1% % 6.2% 6.5% 6.8% 7.1% 7.4% 7.7% 8.0% 8.3% 8.6% 8.9% 9.2% 9.7% 10.1% % 6.3% 6.5% 6.8% 7.1% 7.4% 7.7% 8.0% 8.3% 8.6% 8.9% 9.2% 9.7% 10.1% % 6.3% 6.6% 6.8% 7.1% 7.4% 7.7% 8.0% 8.3% 8.6% 9.0% 9.3% 9.7% 10.1% % 6.4% 6.6% 6.9% 7.1% 7.4% 7.7% 8.0% 8.4% 8.7% 9.0% 9.3% 9.7% 10.1% % 6.4% 6.7% 6.9% 7.2% 7.4% 7.7% 8.0% 8.4% 8.7% 9.0% 9.3% 9.7% 10.1% % 6.5% 6.7% 7.0% 7.2% 7.5% 7.7% 8.0% 8.4% 8.7% 9.0% 9.3% 9.7% 10.2% % 6.5% 6.8% 7.0% 7.3% 7.5% 7.8% 8.0% 8.4% 8.7% 9.0% 9.3% 9.7% 10.2% % 6.6% 6.8% 7.1% 7.3% 7.6% 7.8% 8.0% 8.4% 8.7% 9.0% 9.3% 9.7% 10.2% % 6.7% 6.9% 7.2% 7.4% 7.7% 7.9% 8.1% 8.4% 8.7% 9.0% 9.3% 9.8% 10.2% % 6.8% 7.0% 7.3% 7.5% 7.8% 8.0% 8.2% 8.5% 8.7% 9.0% 9.3% 9.8% 10.2% % 6.9% 7.1% 7.4% 7.6% 7.9% 8.1% 8.3% 8.6% 8.8% 9.1% 9.3% 9.8% 10.2% % 7.0% 7.2% 7.5% 7.7% 7.9% 8.2% 8.4% 8.7% 8.9% 9.2% 9.4% 9.8% 10.2% % 7.1% 7.3% 7.5% 7.8% 8.0% 8.3% 8.5% 8.8% 9.0% 9.3% 9.5% 9.9% 10.2% % 7.2% 7.4% 7.7% 7.9% 8.1% 8.4% 8.6% 8.9% 9.1% 9.4% 9.6% 10.0% 10.3% % 7.6% 7.8% 8.0% 8.2% 8.5% 8.7% 9.0% 9.2% 9.5% 9.7% 10.1% 10.4% % 7.9% 8.1% 8.3% 8.6% 8.8% 9.1% 9.3% 9.6% 9.8% 10.2% 10.5% % 8.2% 8.4% 8.7% 8.9% 9.1% 9.4% 9.6% 9.9% 10.3% 10.6% % 8.6% 8.8% 9.0% 9.2% 9.5% 9.7% 10.0% 10.3% 10.7% % 8.9% 9.1% 9.3% 9.6% 9.8% 10.1% 10.4% 10.8% % 9.2% 9.5% 9.7% 9.9% 10.1% 10.5% 10.9% % 9.6% 9.8% 10.0% 10.2% 10.6% 11.0% % 9.9% 10.1% 10.3% 10.7% 11.0% % 10.2% 10.5% 10.8% 11.1% % 10.6% 10.9% 11.2% % 11.0% 11.3% % 11.5% Retirement Plan (Home Office and Agency Distribution Field Management) Page 74

85 Completed Years of Age at End of Year Completed Years of Service at End of Year % 8.6% 9.0% 9.3% 9.6% 9.9% 10.3% 10.6% 10.9% 11.3% 11.6% 11.9% 12.3% 12.7% 1 8.7% 9.1% 9.5% 9.8% 10.2% 10.6% 10.9% 11.3% 11.7% 12.0% 12.4% 12.7% 13.1% 13.5% 2 9.1% 9.5% 9.9% 10.3% 10.7% 11.1% 11.5% 11.9% 12.3% 12.7% 13.1% 13.5% 13.9% 14.0% 3 9.5% 9.9% 10.3% 10.7% 11.2% 11.6% 12.0% 12.5% 12.9% 13.3% 13.8% 14.0% 14.0% 14.0% 4 9.7% 10.2% 10.6% 11.1% 11.6% 12.0% 12.5% 13.0% 13.4% 13.9% 14.0% 14.0% 14.0% 14.0% 5 9.9% 10.4% 10.9% 11.4% 11.9% 12.4% 12.9% 13.4% 13.9% 14.0% 14.0% 14.0% 14.0% 14.0% % 10.6% 11.1% 11.6% 12.1% 12.7% 13.2% 13.7% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 10.7% 11.2% 11.8% 12.3% 12.9% 13.5% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 10.7% 11.3% 11.9% 12.5% 13.1% 13.7% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 10.7% 11.3% 11.9% 12.5% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 10.8% 11.3% 11.9% 12.5% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 10.9% 11.3% 11.9% 12.5% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.0% 11.4% 11.9% 12.5% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.0% 11.5% 11.9% 12.5% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.5% 12.0% 12.5% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.5% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.1% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.2% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.2% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.2% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.2% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.2% 11.6% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.3% 11.7% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.4% 11.8% 12.1% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.5% 11.9% 12.2% 12.6% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.6% 12.0% 12.3% 12.7% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.7% 12.1% 12.4% 12.8% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.8% 12.1% 12.5% 12.9% 13.2% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.8% 12.2% 12.6% 13.0% 13.3% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 11.9% 12.3% 12.7% 13.0% 13.4% 13.8% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 12.0% 12.4% 12.7% 13.1% 13.5% 13.9% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% % 12.1% 12.5% 12.8% 13.2% 13.6% 13.9% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% 14.0% Retirement Plan (Home Office and Agency Distribution Field Management) Page 75

86 Appendix B Historical Vesting Information In addition to the requirements described in the Vesting section beginning on page 10, you become 100% Vested in your accrued benefit under the Retirement Plan if you: Were Employed by Prudential or its Affiliates on both December 31, 2000, and January 1, 2001; or Were Employed by Prudential and its Affiliates and you were a Retirement Plan participant or Beneficiary with an accrued benefit under the Retirement Plan as of April 30, 2007; or Were a Retirement Plan participant whose Employment with Prudential and its Affiliates ended between May 1, 2006 and April 30, 2007 (or his/her Beneficiary); or Were Employed by Prudential and its Affiliates and you were a Retirement Plan participant or Beneficiary with an accrued benefit under the Retirement Plan as of December 6, 2013; or Were a Retirement Plan participant whose Employment with Prudential and its Affiliates ended between December 7, 2012 and December 6, 2013 (or his/her Beneficiary). You are also 100% Vested in the portion of your Cash Balance Account related to any Demutualization Credit you may have received. Please see Demutualization Credit beginning on page 78 of Appendix C. Before January 1, 2008, eligible Employees were required to complete at least five years of Vesting Service to become Vested. Retirement Plan (Home Office and Agency Distribution Field Management) Page 76

87 Appendix C Other Cash Balance Credits or Benefits This appendix contains more detailed information about Cash Balance Formula credits and benefits that were available to certain Employees who were participating in the Plan during certain periods before January 1, Opening Account Balance You have an opening account balance under the Cash Balance Formula if you elected the Cash Balance Formula during the Pension Choice Election process and remained continuously Employed from December 31, 2000, through January 1, Your opening account balance under the Cash Balance Formula is equal to the lump sum actuarial present value of your accrued benefit as of January 1, 2002, under the Traditional Pension Formula, payable at age 65 (or your current age, if older). If you are under age 65, this amount was discounted with interest only to your age as of January 1, Your opening account balance was based on the formula used to calculate your normal pension benefit under the Traditional Pension Formula. In general, your opening account balance did not include: Any Purchased Benefits; Pre-1976 variable annuity units; Pre-1976 fixed annuity benefits; The value of any early retirement subsidies; or Any portion of your accrued benefit determined under the terms of the PSI Plan component of the Plan. Transition Credits If you elected the Cash Balance Formula during the Pension Choice Election process and remained continuously Employed from December 31, 2000, through January 1, 2002, you were eligible to receive Transition Credits from January 1, 2002, through December 31, Transition Credits were added to your Cash Balance Account at the end of each month and were in addition to your Basic Credits and Interest Credits. Transition Credits equaled 2.5% of your Eligible Earnings paid each month. Transition Credits were added to your account until the earlier of: December 31, 2006; or The end of the month following the date your Employment with Prudential and its Affiliates ended. If you were receiving Transition Credits, your Employment with Prudential and its Affiliates ended, and you became reemployed by Prudential and its Affiliates prior to December 31, 2006, you resumed earning Transition Credits until the earlier of December 31, 2006, or the date your reemployment with Prudential and its Affiliates ended, provided you had not commenced your Cash Balance Formula benefit, either as a Lump Sum or an Annuity, when your prior Employment ended. If you had commenced your Cash Balance Formula benefit, no Transition Credits were added to your Cash Balance Account during your period of reemployment. If you were on an unpaid leave of absence, other than a military leave of absence covered by USERRA, between January 1, 2002 and December 31, 2006, Transition Credits were not added to your Cash Balance Account during your leave. If you returned to work before December 31, 2006, your Transition Credits resumed once you began to receive Eligible Earnings. Retirement Plan (Home Office and Agency Distribution Field Management) Page 77

88 If you became disabled and were eligible to receive long term disability benefits under The Prudential Welfare Benefits Plan, Transition Credits were added to your Cash Balance Account on a monthly basis, based on your Eligible Earnings, up through the earlier of: 1) The date you commenced your Cash Balance Formula benefit; 2) The first day of the month on or following your 65 th birthday; 3) The date you were no longer eligible to receive long term disability benefits under The Prudential Welfare Benefits Plan; or 4) December 31, While you were eligible to receive long term disability benefits, your Eligible Earnings were assumed to be the same pay that was used to calculate your disability benefits. (See the Disability Program SPD booklet for more information.) Demutualization Credit In connection with the demutualization of The Prudential Insurance Company of America (the conversion from a mutual insurance company to a stock company), effective December 18, 2001, eligible contract holders, including the Retirement Plan, received shares of Prudential Financial, Inc. (PFI) Common Stock. Subsequently, the Compensation Committee of Prudential s Board of Directors gave its approval to distribute the value of demutualization compensation received by the Retirement Plan, less distribution expenses, to all eligible participants. As a result, a cash credit (referred to as the Demutualization Credit ) representing an allocation of this compensation was made to the Cash Balance Account of each eligible participant as of July 31, If an eligible participant did not have a Cash Balance Account as of July 31, 2002, a Cash Balance Account was created and is subject to the same terms as other Cash Balance Accounts. Eligibility If, on December 18, 2001, you were in one of the following categories, you were eligible for this one-time Demutualization Credit: Eligible Employees; Retired Employees; Former Employees with a Vested benefit (including those whose Employment with the Company ended after February 9, 1998, and who received a mandatory lump-sum distribution from the Retirement Plan); Beneficiaries of any participant in one of the categories outlined above; or Alternate Payees, to the extent provided under a Qualified Domestic Relations Order ( QDRO ). In some cases, participants may have fallen into more than one category and received more than one allocation. Vesting You are 100% Vested in the portion of your Cash Balance Account related to any Demutualization Credit you may have received. Calculating Demutualization Credits To calculate the amount allocated to participants, the value of the stock received by the Retirement Plan was determined based on actual sales of shares by an independent, third-party trustee. The amount allocated to each eligible participant generally was based on the amount of his/her pension benefit under the Retirement Plan (not including any non-qualified, supplemental benefit) determined Retirement Plan (Home Office and Agency Distribution Field Management) Page 78

89 as of January 1, 2002, as shown on the Retirement Plan systems. No stock or stock-equivalent was allocated or distributed. QSERP Benefits Cash Balance Formula benefits under the Prudential Cash Balance Pension Plan Document, a component of The Prudential Merged Retirement Plan (referred to in this section as the Qualified Plan ) may include additional amounts (referred to as QSERP benefits) that originally would have been paid from the Prudential Supplemental Retirement Plan (the Non-Qualified Plan ) for certain participants described in the 2003 QSERP and 2012 QSERP sections below. Individuals who are eligible for these QSERP benefits were previously notified by Prudential of their QSERP benefit eligibility QSERP If you were actively employed continuously from January 1, 2002, through June 30, 2003 (and previously notified by Prudential that you were eligible for this QSERP benefit), the value of your Supplemental Retirement Plan Cash Balance Account accrued as of January 1, 2002, plus Interest Credits attributable to that amount since January 1, 2002, was shifted from your Supplemental Retirement Plan Cash Balance Account to your Qualified Plan Cash Balance Account on June 30, QSERP If you were actively employed continuously from April 1, 2012, through June 30, 2012 (and previously notified by Prudential that you were eligible for this QSERP benefit), all or a portion of the value of your Supplemental Retirement Plan Cash Balance Account accrued as of April 1, 2012, plus Interest Credits attributable to that amount since April 1, 2012, was shifted from your Supplemental Retirement Plan Cash Balance Account to your Qualified Plan Cash Balance Account on June 30, How the QSERPs Affect Your Cash Balance Formula Benefit These shifts do not affect your total combined Cash Balance Formula benefit payable under the Qualified Plan and the Supplemental Retirement Plan, but allow for a larger portion of your total combined Cash Balance Formula benefit under both plans to be paid from the Qualified Plan, subject to the maximum benefit allowed by the Internal Revenue Code. Please note: If it is determined that the amount to be paid from the Qualified Plan, as determined when your Employment with Prudential and its Affiliates ends, exceeds the maximum benefit allowed by the Internal Revenue Code, a portion of your Qualified Plan Cash Balance Formula benefit may be moved back and paid from the Supplemental Retirement Plan to comply with the Internal Revenue Code. (See Internal Revenue Code Limits on page 51 for more information.) Retirement Plan (Home Office and Agency Distribution Field Management) Page 79

90 Appendix D Additional Traditional Pension Formula Benefits This appendix contains more detailed information about Traditional Pension Formula benefits that were available to certain Employees who were participating in the Plan during certain periods before January 1, Demutualization Credit In connection with the demutualization of The Prudential Insurance Company of America (the conversion from a mutual insurance company to a stock company), effective December 18, 2001, eligible contract holders, including the Retirement Plan, received shares of Prudential Financial, Inc. (PFI) Common Stock. Subsequently, the Compensation Committee of Prudential s Board of Directors gave its approval to distribute the value of demutualization compensation received by the Retirement Plan, less distribution expenses, to all eligible participants. As a result, a cash credit (referred to as the Demutualization Credit ) representing an allocation of this compensation was made to the Cash Balance Account of each eligible participant as of July 31, If an eligible participant did not have a Cash Balance Account as of July 31, 2002, a Cash Balance Account was created and is subject to the same terms as other Cash Balance Accounts. Eligibility If, on December 18, 2001, you were in one of the following categories, you were eligible for this one-time Demutualization Credit: Eligible Employees; Retired Employees; Former Employees with a Vested benefit (including those whose Employment with the Company ended after February 9, 1998, and who received a mandatory lump-sum distribution from the Retirement Plan); Beneficiaries of any participant in one of the categories outlined above; or Alternate Payees, to the extent provided under a Qualified Domestic Relations Order ( QDRO ). In some cases, participants may have fallen into more than one category and received more than one allocation. Vesting You are 100% Vested in the portion of your Cash Balance Account related to any Demutualization Credit you may have received. Calculating Demutualization Credits To calculate the amount allocated to participants, the value of the stock received by the Retirement Plan was determined based on actual sales of shares by an independent, third-party trustee. The amount allocated to each eligible participant generally was based on the amount of his/her pension benefit under the Retirement Plan (not including any non-qualified, supplemental benefit) determined as of January 1, 2002, as shown on the Retirement Plan systems. No stock or stock-equivalent was allocated or distributed. QSERP Benefits Traditional Pension Formula benefits under the Prudential Traditional Retirement Plan Document, a component of The Prudential Merged Retirement Plan (referred to in this section as the Qualified Plan ) may include additional amounts (referred to as QSERP benefits) that originally would have been paid from the Prudential Supplemental Retirement Plan (the Non-Qualified Plan ) for certain Retirement Plan (Home Office and Agency Distribution Field Management) Page 80

91 participants described in the 2003 QSERP and 2012 QSERP sections below. Individuals who are eligible for these QSERP benefits were previously notified by Prudential of their QSERP benefit eligibility. Generally, if you were eligible, all or a portion of your Supplemental Retirement Plan Traditional Pension Formula benefit under the 2003 QSERP and/or 2012 QSERP (described below) was shifted from the Supplemental Retirement Plan to the Qualified Plan. This shift does not affect your total combined Traditional Pension Formula benefit payable under the Qualified Plan and the Supplemental Retirement Plan, but allows for a larger portion of your total combined Traditional Pension Formula benefit under both plans to be paid from the Qualified Plan, subject to the maximum benefit allowed by the Internal Revenue Code QSERP If you were actively employed continuously from January 1, 2002, through June 30, 2003 (and previously notified by Prudential that you were eligible for this QSERP benefit), all or a portion of your Supplemental Retirement Plan Traditional Pension Formula benefit accrued as of January 1, 2002, was shifted from the Supplemental Retirement Plan to the Qualified Plan on June 30, QSERP If you were actively employed continuously from January 1, 2012, through June 30, 2012 (and previously notified by Prudential that you were eligible for this QSERP benefit), all or a portion of your Supplemental Retirement Plan Traditional Pension Formula benefit accrued as of January 1, 2012, was shifted from the Supplemental Retirement Plan to the Qualified Plan on June 30, Determining Your Qualified Plan Traditional Pension Formula Benefit Your Qualified Plan Traditional Pension Formula benefit will be determined as the greater of: 1) Your Qualified Plan Traditional Pension Formula benefit determined as of January 1, 2002, plus the 2003 QSERP benefit amounts shifted from the Supplemental Retirement Plan; 2) Your Qualified Plan Traditional Pension Formula benefit determined as of January 1, 2012 (which may be the benefit amount determined in 1) above) plus the 2012 QSERP benefit amounts shifted from the Supplemental Retirement Plan; and 3) Your Qualified Plan Traditional Pension Formula benefit determined as of the date your employment with Prudential and its Affiliates ends (not including the QSERP benefit amounts shifted from the Supplemental Retirement Plan). Please note: If it is determined that the amount to be paid from the Qualified Plan, as determined when your Employment with Prudential and its Affiliates ends, exceeds the maximum benefit allowed by the Internal Revenue Code, a portion of your Qualified Plan Traditional Pension Formula benefit may be moved back and paid from the Supplemental Retirement Plan to comply with the Internal Revenue Code. (See Internal Revenue Code Limits on page 51 for more information.) Additional Retirement Benefit Under the Retirement Plan The Additional Retirement Benefit is an additional benefit that may be payable under the Retirement Plan on or after the date your Employment with Prudential ends. Who Is Eligible You may be eligible for an Additional Retirement Benefit if you meet the following conditions: You were notified in writing by January 1, 2001, that you were eligible for this benefit; You satisfied all terms and conditions set forth in any written termination notification; and You signed a waiver and release of claims in the form and at the time designated by Prudential. Retirement Plan (Home Office and Agency Distribution Field Management) Page 81

92 How an Additional Retirement Benefit Is Calculated Your Additional Retirement Benefit is calculated in two steps. First, your weekly Base Pay is multiplied by a factor based on your full and partial years of Credited Service, determined under the following schedule: Years of Credited Service Factor 2 or fewer 2 More than 2, but not more than 5 2 plus one for each full or partial year over 2 More than 5, but not more than 10 5 plus 2 for each full or partial year over 5 More than 10, but not more than plus 3 for each full or partial year over 10 More than Second, the amount determined in step one is increased by 3%, with the result rounded to the next higher $100 increment, if necessary. How an Additional Retirement Benefit Is Paid How your Additional Retirement Benefit is paid depends on whether you were Retirement-Eligible when your Employment with Prudential and its Affiliates ended. If you do not choose one of the available options, the default election is to defer payment of the Additional Retirement Benefit until your Normal Retirement Date. At that time, the benefit will be paid to you under a standard form of payment, unless you elect another option. Options If You Were Not Retirement-Eligible If you had not yet reached your earliest possible retirement date when your Employment ended, your Additional Retirement Benefit can be paid on the first day of any month following the date your Employment ends, according to the options described below. If you are married on the date your pension benefit commences, you must obtain your Spouse s written, notarized consent. The following applies to all options: You must make the form of payment election before the date as of which your monthly pension benefit payments commence; Any form of payment election becomes irrevocable on the date as of which your monthly pension benefit payments commence; and Each optional form of payment and alternative method of payment is, in general, Actuarially Equivalent to the Life Annuity form of payment. You may elect only one form of payment. Lump Sum: This form of payment provides a single sum distribution. You may elect to have the qualified portion of your Lump Sum rolled over directly to another tax-qualified plan (such as PESP or another employer s tax-qualified plan [including a governmental 457(b) plan that agrees to separately account for such amounts]), a traditional IRA (excluding a SIMPLE IRA or a Coverdell Education Savings Account [formerly known as an Education IRA]), or a Roth IRA or paid to you directly, less applicable tax withholding. (For information about taxes, refer to the Federal Tax Withholding from Lump-Sum Payments section beginning on page 50.) If you elect the Lump Sum form of payment, no further pension benefit is payable. Life Annuity: This form of payment provides a monthly pension benefit payment to you for your lifetime. Upon your death, no further pension benefit is payable. This is the standard form of payment for unmarried participants. 50% Qualified Joint and Survivor Annuity: This form of payment provides a monthly pension benefit payment to you for your lifetime. Upon your death, 50% of the monthly pension benefit Retirement Plan (Home Office and Agency Distribution Field Management) Page 82

93 payment you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 50% Qualified Joint and Survivor Annuity is not available if you are not married on your commencement date. This is the standard form of payment for married participants. If you want to commence your pension benefit under any other form of payment, you must obtain your Spouse s written, notarized consent to waive the 50% Qualified Joint and Survivor Annuity. 75% Qualified Optional Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 75% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 75% Qualified Optional Joint and Survivor Annuity is not available if you are not married on your commencement date. 100% Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 100% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. Your monthly pension benefit will be reduced to reflect the cost of providing this additional benefit to your surviving Spouse. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 100% Joint and Survivor Annuity is not available if you are not married on your commencement date. Alternatively, you may defer payment up to your Normal Retirement Date. The benefit will accrue interest at the rate of 3% per year, credited based on completed months, until you elect to commence payment, at which time the same options described above apply. Your benefit must commence on your Normal Retirement Date, if you have not elected to receive your benefit before that time. Retirement Plan (Home Office and Agency Distribution Field Management) Page 83

94 Options If You Were Retirement-Eligible If you had reached your earliest possible retirement date when your Employment ended, your Additional Retirement Benefit can be paid the first day of any month according to the options described below. If you are married on the date your pension benefit commences, you must obtain your Spouse s written, notarized consent. The following applies to all options: You must make the form of payment election before the date as of which your monthly pension benefit payments commence; Any form of payment election becomes irrevocable on the date as of which your monthly pension benefit payments commence; and Each optional form of payment and alternative method of payment is, in general, Actuarially Equivalent to the Life Annuity form of payment. You may elect only one form of payment. Lump Sum: This form of payment provides a single sum distribution. You may elect to have the qualified portion of your Lump Sum rolled over directly to another tax-qualified plan (such as PESP or another employer s tax-qualified plan, [including a governmental 457(b) plan that agrees to separately account for such amounts]), a traditional IRA (excluding a SIMPLE IRA or a Coverdell Education Savings Account [formerly known as an Education IRA]) or a Roth IRA, or paid to you directly, less applicable tax withholding. (For information about taxes, refer to the Federal Tax Withholding from Lump-Sum Payments section beginning on page 50.) If you elect the Lump Sum form of payment, no further pension benefit is payable. Life Annuity and 15-Year Period Certain: This form of payment provides a monthly pension benefit to you for your lifetime with a guarantee of 15 years of monthly payments. If you die after receiving 15 years of monthly pension benefit payments, all payments stop at your death. If you die before receiving 15 years of monthly pension benefit payments, the remainder of the guaranteed payments will be made to your Beneficiary(ies) or your estate. There is no cost for providing this additional benefit, if any, to your Beneficiary(ies). This means that your monthly pension benefit amount will not be reduced to provide this additional benefit. Instead of the remaining installments, your Beneficiary(ies) may arrange to have a single lump sum paid upon your death. This amount will be the Actuarial Equivalent of the remaining installments. Under the Life Annuity and 15-Year Period Certain, your Beneficiary(ies) may be changed at any time. This is the standard form of payment for unmarried participants. 50% Qualified Joint and Survivor Annuity: This form of payment provides a monthly pension benefit payable to you for your lifetime. Upon your death, 50% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. There is no cost for providing this additional benefit to your surviving Spouse. This means that your monthly pension benefit amount will not be reduced to provide this additional benefit. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 50% Qualified Joint and Survivor Annuity is not available if you are not married on your commencement date. Retirement Plan (Home Office and Agency Distribution Field Management) Page 84

95 This is the standard form of payment for married participants. If you want to commence your monthly pension benefit under any other form of payment, you must obtain your Spouse s written, notarized consent to waive the 50% Qualified Joint and Survivor Annuity. 75% Qualified Optional Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 75% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. There is no cost for providing the first 50% of this additional benefit to your surviving Spouse. As a result, your monthly pension benefit will be reduced, but only to reflect the cost of providing a Joint and Survivor Annuity percentage in excess of 50%. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 75% Qualified Optional Joint and Survivor Annuity is not available if you are not married on your commencement date. 100% Joint and Survivor Annuity: This optional form of payment provides a monthly pension benefit payable for your lifetime. Upon your death, 100% of the monthly pension benefit you were receiving will continue to be paid to your surviving Spouse for the remainder of his/her lifetime. There is no cost for providing the first 50% of this additional benefit to your surviving Spouse. As a result, your monthly pension benefit will be reduced, but only to reflect the cost of providing a Joint and Survivor Annuity percentage in excess of 50%. All payments will end when both you and your Spouse die. If your Spouse dies before you and your pension benefit payments have not yet commenced, your election will be canceled without affecting the amount of your monthly benefit, and you may choose another form of payment. However, if your Spouse dies before you but after your pension benefit commences, your monthly pension benefit will not be recalculated. In this case, you will continue to receive the lower amount for your lifetime, and you may not designate another surviving Spouse to receive monthly pension benefit payments after your death. Once you commence your monthly pension benefit, your designated Spouse cannot be changed for any reason (including divorce or remarriage). The 100% Joint and Survivor Annuity is not available if you are not married on your commencement date. Alternatively, you may defer payment up to your Normal Retirement Date. The benefit will accrue interest at the rate of 3% per year, credited based on completed months, until you elect to commence payment, at which time the same options described above apply. Your benefit must commence on your Normal Retirement Date, if you have not elected to receive your benefit before that time. Please note: IRS Circular 230 disclosure: Neither Prudential nor its representatives are authorized to provide tax or legal advice or financial advice on behalf of the Plan. Any tax information provided is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. You are encouraged to consult with your tax, financial and/or legal advisors for advice regarding your particular situation. Survivor Benefits If you die before your pension benefit payments begin, payment of your Additional Retirement Benefit survivor benefit is generally subject to the same requirements as your other Traditional Pension Formula benefit as described in Survivor Benefits beginning on page 44. However, your surviving Spouse or Beneficiary may elect to receive payment of your Additional Retirement Benefit in the Lump Sum or Life Annuity forms described in How an Additional Retirement Benefit Is Paid beginning on Retirement Plan (Home Office and Agency Distribution Field Management) Page 85

96 page 82. If you do not have a surviving Spouse or Beneficiary, your Additional Retirement Benefit will be paid to your estate in the form of a Lump Sum payment. Individuals in Service Before June 1, 1975 If you were first hired before June 1, 1975, you were covered under a prior version of the Plan. If you made an irrevocable choice to have your pension benefit for service through 1975 based on the terms of the 1965 Plan benefit formula in the pre-1976 version of the Plan, your pension benefit for service after 1975 will be based on the terms of the current Plan but will be calculated differently from the calculation described in Traditional Pension Formula section of this SPD booklet beginning on page 27. If you did not make this election, your entire pension benefit is paid under the Traditional Pension Formula, as described beginning on page 27 (but see also the Minimum Death Benefit section beginning below.) Here is how your pension benefit will be calculated: Pension benefit based on service after 1975: Your pension benefit using your total years of Credited Service is determined as described in the previous section. Then, your pension benefit calculated as described in the previous section, but using your service before 1976 only, is subtracted. The difference is your pension benefit for the period after Pension benefit based on service before 1976: According to the 1965 Plan benefit formula in the pre-1976 version of the Plan, from 1965 through 1975, you would have been credited with 1.4% of your Eligible Earnings for each year up to the maximum Eligible Earnings on which Social Security taxes were calculated. To this, 2% of the rest of your Eligible Earnings would have been added. The lower percentage (1.4%) in the formula is replaced by the higher percentage (2%) until you reach age 62. Prior to 1965, the formulas were different. For More Information If you have any questions about the 1965 Plan benefit formula in the pre-1976 version of the Plan or any other prior formula, please refer to the prior version of the Plan or call PRU-EASY ( ), follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefits Center Representative. A Prudential Benefits Center Representative can give you more information about: How your pension benefit was determined; How your pension benefit payments will be calculated (including general information on the tax treatment of benefits attributable to your own contributions, if any); and Withdrawals of Employee contributions by terminated Employees. Minimum Death Benefit If you were first hired before June 1, 1975, and you die on or following your Normal Retirement Date, your Beneficiary would be entitled to the largest of the following three amounts: 1) The annual amount of your lifetime pension benefit (lifetime pension benefit means the amount payable after your 65 th birthday until your death) accrued prior to 1970, disregarding service after your 65 th birthday, any options you elected, and any supplements granted by Prudential after your employment with Prudential and its Affiliates ended (with reductions to reflect your Early Pension Factor); 2) Your contributions, if any, plus interest, less any payments received under the Plan; or 3) The annual amount of pension benefit credited to you during the years 1941 through 1965 (without reduction for early commencement). If your Employment with Prudential and its Affiliates ends and you die before age 65, your Beneficiary(ies) would receive the greater of items 2) and 3) above. If you die before your pension benefit becomes payable, your Beneficiary(ies) would receive your contributions plus interest. Retirement Plan (Home Office and Agency Distribution Field Management) Page 86

97 You may designate the Beneficiary(ies) who will receive this death benefit. If you do not choose a particular Beneficiary(ies), your Beneficiary(ies) under the Prudential-provided Basic Group Life Insurance coverage under The Prudential Welfare Benefits Plan will receive the benefit (or, if you do not have such a Beneficiary(ies), your estate will receive the benefit). To designate a Beneficiary for this death benefit, call the Prudential Benefits Center at PRU-EASY ( ), follow the prompts for Pension, and follow the instructions to speak to a Prudential Benefits Center Representative. Retirement Plan (Home Office and Agency Distribution Field Management) Page 87

98 2014 The Prudential Insurance Company of America 751 Broad Street, Newark, NJ ALL RIGHTS RESERVED. CPS# H ORD Ed. 06/2014