that can last throughout your retirement

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1 AWARD WINNING! NAGDCA Leadership Recognition Old Stone Mill, ClintonIncome that can last throughout your retirement When you think about retirement, what do you see? Traveling? Taking up new hobbies? Going back to school? Enjoying time with friends and family? Whatever retirement means to you, one thing is certain: You ll need an income stream you can rely on. What Do You Want from Your Retirement Plan? Potential for growth downside market protection for retirement income access to your assets flexibility to adjust contributions. All are important considerations in addressing your retirement planning needs. You are working hard to save and invest wisely. Your goal is to build a base you can use someday to replace your employer paychecks with self-funded retirement income that won t run out. Today, your retirement plan offers you a valuable retirement planning innovation. Prudential IncomeFlex Target is a simple solution with: Guaranteed lifetime income* Sustained potential for growth Downside market protection for retirement income Flexible access to your market value** IncomeFlex Target is offered by Prudential Retirement Insurance and Annuity Company. * Guarantees are based on the claims-paying ability of the insurance company and are subject to certain limitations, terms, and conditions. ** Withdrawals or transfers out of the IncomeFlex Target Fund proportionately reduce guaranteed values prior to Locking-In. After Lock-In, withdrawals in excess of the Lifetime Annual Withdrawal Amount will reduce future guaranteed withdrawals proportionately and may even eliminate them. (continued...)

2 How IncomeFlex Target Works While market declines are normal, the years prior to and just after you retire are when you can least afford a dramatic loss. Because IncomeFlex Target includes a guarantee 1 that protects your income stream in retirement, regardless of how the market performs while you are saving, it can provide the income preservation you want with the growth potential you need. IncomeFlex Target helps you accumulate assets in the journey to retirement and convert those assets into guaranteed income. To do this, it tracks two key values Market Value and Income Base. Your Market Value is a daily value that rises and falls based on fund performance. The Market Value is the actual dollar value of your investment in the IncomeFlex Target Balanced Fund. This is the amount used for withdrawals or transfer amounts (subject to any requirements of your retirement plan). This is also the amount that will be passed on to your beneficiaries as a death benefit. This amount is not guaranteed and fluctuates daily due to market performance, contributions and transfers, like any account balance. We may also refer to this as IncomeFlex Target Market Value. Your Income Base is a value that is tracked in addition to your Market Value and is used to determine how much guaranteed income you can withdraw from IncomeFlex Target each year in retirement. The Income Base is used to calculate guaranteed values and is not available for withdrawal at any time. Like Market Value, your Income Base increases with contributions. In addition, on each birthday, your Income Base increases to reflect any gains from fund performance. If declining markets result in negative performance, the Income Base is protected. How these two values work together Initially, your Income Base is equal to your IncomeFlex Target Fund Market Value. Just like your Market Value, it increases dollarfor-dollar with every contribution. Unless you make a withdrawal or transfer, your Income Base will never decrease 2. Every year, on your birthday, your Income Base is compared to your Market Value. If your Market Value has increased above your Income Base, this higher value is tracked as your new Income Base. If your Market Value is lower than your Income Base, your Income Base remains unchanged. Market Gains with Downside Income Protection Guaranteed Income for Life On your birthday, the Market Value and Income Base are compared. If Market Value has decreased, the Income Base remains unchanged. If Market Value has increased, the Income Base is adjusted to match. Your Income Base may rise in up markets, but it will never decline in response to market volatility. Lock-In Although not shown in this exhibit, after Lock-In, if Market Value exceeds the Income Base (as determined on your birthday), the annual income amount is adjusted upward. Guaranteed Lifetime Income Initially, your Market Value and Income Base are equal. Moving forward, both increase with contributions and decrease with withdrawals. Once you Lock-In, your Lifetime Annual Withdrawal Amount is guaranteed for as long as you live, regardless of market volatility. 2 Income Base Market Value Birthdays The hypothetical example above is for illustration purposes only. It does not reflect an actual experience with the product, an actual account value or the performance of any investment. 1 Guarantees are based on the claims-paying ability of the insurance company and are subject to certain limitations, terms, and conditions. 2 Withdrawals in excess of the Lifetime Annual Withdrawal Amount will reduce further guaranteed withdrawals proportionately and may even eliminate them.

3 The cost of the guarantee In exchange for the guarantees, a fee of 0.90% (nine-tenths of a percent) is assessed through a reduction of the fund s investment return. This fee is in addition to standard Investment Management fees. Your guarantees let you invest more aggressively With your Income Base guaranteed, you may want to stay invested in the market. Maintaining exposure to equities can be important because it may give you the opportunity to benefit from positive market performance needed to grow your Market Value now and throughout retirement. Investing in IncomeFlex Target Experts agree that a sound strategy includes choosing a mix of investments that, together, complement your specific retirement goal. That s why you will have two ways to invest in IncomeFlex Target: as an individual investment option or through GoalMaker. Build your own portfolio including IncomeFlex Target Choose the investments in your NJSEDCP account from among the array of investment options within your Plan. This option allows participants who have money invested in the frozen State-managed funds to invest in the IncomeFlex Target Balanced Fund outside of GoalMaker. The IncomeFlex Target Balanced Fund is simply another option within the investment lineup. Or Include IncomeFlex Target within your GoalMaker portfolio GoalMaker is an optional asset allocation program that is available at no additional cost. It can help identify a model asset allocation from the available investment options in your plan. Whether you are already enrolled in GoalMaker or are considering enrolling now, you can elect to include IncomeFlex Target in your GoalMaker portfolio. 3 Your chosen investor style is used to determine the percentage of your allocation allocated to IncomeFlex Target 4 : Conservative 70% Moderate 50% Aggressive 30% Consider the example below of an investor who has elected to include the IncomeFlex Target Fund in their moderate GoalMaker portfolio with 6-10 years to retirement. Once the investor turns age 55, GoalMaker with IncomeFlex Target will automatically allocate 50% of their portfolio to IncomeFlex Target. For that portion of your portfolio, IncomeFlex Target guarantees that the income it will generate will be available when you need it, regardless of market performance. Keep in mind that application of asset allocation and diversification concepts does not assure a profit or protect against loss in a declining market. It is possible to lose money by investing in securities. 10% 10% 16+ years 17% 24% M 04 9% 6% 24% Moderate GoalMaker Portfolios Years to Retirement years 6-10 years 13% 8% 8% 18% 18% M 03 20% 15% Stable Value Large-Cap Stock Growth Small-/Mid-Cap Stock Growth International Stock 10% 6% 6% Asset classes M 02 28% 22% 11% 0-5 years 5% 8% 5% 11% Fixed Income Large-Cap Stock Value Small-/Mid-Cap Stock Value Retirement Income 26% M 01 34% Moderate portfolio 6-10 years to retirement (before age 55) 10% 6% 6% 28% 22% At age 55 Retirement income: Prudential IncomeFlex Target Moderate portfolio with income 6-10 years to retirement (after age 55) 50% 11% 7% 7% 3% 5% 3% This illustration shows how the GoalMaker portfolio of an investor with a moderate investing style and 6-10 years to retirement would change to include the guarantee option. 4 In this example, 50% of their portfolio is allocated to retirement income investments. 3 Please be aware that any assets moved out of the state-managed investment options may not be reinvested in those options in the future. This includes assets that are moved as part of a rebalancing request, such as would occur with a GoalMaker enrollment or any rebalancing election. If you choose GoalMaker or any form of rebalancing, your existing account balance in the four prior investment options (DCP Money Market Fund, DCP Bond Fund, DCP Equity Fund and DCP Small Cap Equity Fund) will be automatically redirected into your chosen portfolio on the same business day that you enroll. If you have selected GoalMaker or Automatic Rebalancing, your account will automatically rebalance at the end of each quarter thereafter. If you wish to maintain all or part of your balances in these four investment options, you are prohibited from using GoalMaker or any rebalancing feature. 4 Guarantees only apply to the portion of your portfolio allocated to IncomeFlex Target.

4 Guaranteed income in retirement When you re ready to begin making withdrawals from IncomeFlex Target, you Lock In what s called a Lifetime Annual Withdrawal Amount that is determined by your age and your Income Base. Your Income Base is used to determine your Lifetime Annual Withdrawal Amount. On the day you decide to Lock-In your guaranteed benefit, your Market Value and Income Base are compared (both as of the previous business day). If the Market Value is higher, the Income Base automatically adjusts upwards to match. Prudential Retirement guarantees that you can withdraw this amount each year for the rest of your life. Unlike Market Value, which is available for withdrawals permitted by your plan, the amount reflected as your Income Base is never available as a withdrawal. This Lifetime Annual Withdrawal Amount is a guaranteed amount of money you can withdraw each year for the rest of your life. 5 Even if either declining market performance or your annual guaranteed withdrawals reduce the Market Value to zero dollars, Prudential Retirement will continue to pay your lifetime annual withdrawal amount for as long as you live (and your spouse, if elected). Potential to increase guaranteed withdrawals After locking-in, if your IncomeFlex Target Market Value exceeds your Income Base on any of your birthdays, the amount available for you to withdraw each year will increase automatically 6. This is called a Step-Up. Guaranteed withdrawals for your spouse 7 When you re ready to lock-in, you can elect to provide guaranteed lifetime income for your spouse should he or she outlive you. This optional benefit is elected at Lock-in. When you choose the spousal benefit, there is no additional fee, but your withdrawal percentage is reduced (see below), based on the younger of your age or your spouse s age. 3.75% (If you are between the ages of 55 and 64) 4.50% (If you are between the ages of 65 and 69) 5.25% (If you are 70 or older) Ongoing flexibility You can cancel the guarantee by transferring out of your IncomeFlex Target fund at any time. You can also withdraw more or less than your Lifetime Annual Withdrawal Amount based on your needs. Keep in mind, after Lock-in, withdrawals that are greater than your Lifetime Annual Withdrawal Amount (excess withdrawals) will reduce guaranteed withdrawals proportionately in future years. 5 After Lock-In, withdrawals in excess of the Lifetime Annual Withdrawal Amount will reduce guarantees proportionately. If excess withdrawals reduce the Income Base or Lifetime Annual Withdrawal Amount to $0, Prudential will no longer guarantee an annual payment. 6 If Prudential changes the Guarantee Fee associated with IncomeFlex Target under your plan, you must accept the fee change to order to have a Step-Up take effect. 7 Before electing the Spousal Benefit (if available) on behalf of any beneficiary not recognized as your spouse under Federal law (for example, a same gender domestic partner, civil union partner or spouse), be aware that provisions of the Plan or Internal Revenue Code might prevent, limit or otherwise affect the ability of the beneficiary to receive the Spousal Benefit.

5 Additional Information about IncomeFlex Target What happens if I withdraw more than my lifetime annual withdrawal amount? IncomeFlex Target is flexible. But, excess withdrawals will reduce your lifetime annual withdrawal amounts in subsequent years. Note: If your Market Value falls to zero dollars due to excess withdrawals, your IncomeFlex Target guarantees will expire and you will no longer receive lifetime annual withdrawals. What are the underlying investments for IncomeFlex Target? The IncomeFlex Target Fund is made up of a mix of the investment options already found in your Plan s investment lineup. Please refer to the Prudential IncomeFlex Important Considerations and the Fund Fact Sheet for more detailed information. How much does IncomeFlex Target cost? In addition to asset allocation management fees of the underlying funds, activating the IncomeFlex Target guarantee also triggers an annual 0.90% guarantee fee. This fee will reduce the fund s investment return and is reflected in the Market Value on a daily basis. When does this fee take effect? The fee is not applied until your guarantee is activated. Can I change my mind and cancel the IncomeFlex guarantee? Yes. You can cancel IncomeFlex Target at any time, with no fees or charges. What happens in the event of my death? Any remaining Market Value you have can be passed on to your beneficiaries as a death benefit. Is there a way to provide guaranteed income to my spouse? Yes, if married, you can elect the spousal benefit. This allows for your surviving spouse to continue receiving guaranteed income for the remainder of his or her life. How much guaranteed income can I withdraw each year? This amount called the Lifetime Annual Withdrawal Amount is a percentage of your Income Base that is determined when you Lock-In. Age at Lock-In Benefit for You Benefit for You & Spouse % 3.75% % 4.50% % 5.25% When can I Lock-In? You can Lock-In anytime after you turn 55, provided your Income Base generates a Lifetime Annual Withdrawal Amount of $250 or more. To learn more: Visit Meet with your onsite NJSEDCP Education Consultant. Their contact information can be found online. Call toll free at NJSEDCP ( ). Toll-free TDD is available at

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8 SAVE. Only you can do it. New Jersey State Employees Deferred Compensation Plan GoalMaker s model allocations are based on generally accepted financial theories that take into account the historic returns of different asset classes. But, of course, past performance of any investment does not guarantee future results. Prudential Financial encourages participants to consider their other assets, income, and investments when enrolling in the GoalMaker program. We also recommend participants periodically reassess their GoalMaker investments to make sure their model portfolio continues to correspond to their changing attitudes and retirement time horizon. The Prudential IncomeFlex Target Fund is a separate account under a group variable annuity contract issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT. PRIAC does not guarantee the investment performance or return on contributions to the separate account. You should consider the objectives, risks, charges, and expenses of the Fund and guarantee features before purchasing this product. Like all variable investments, this fund may lose value. Availability and terms may vary by jurisdiction; subject to regulatory approvals. For this and other information, please visit or call NJSEDCP ( ) for a copy of the Prudential IncomeFlex Target Important Considerations before investing. Before electing the Spousal Benefit (if available) on behalf of any beneficiary not recognized as your spouse under Federal law (for example, a same gender domestic partner, civil union partner or spouse), be aware that provisions of Internal Revenue Code might prevent, limit or otherwise affect the ability of the beneficiary to receive the Spousal Benefit. Annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Contract form # GA-2020-TGWB NJ. Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide YJBR044 05/2012