The Principal Launches Guaranteed Income Option for Plan Participants

Principal Pension BuilderSM offers participants an income stream for life

DES MOINES, Iowa--()--For retirement plan participants who want to lock down a guaranteed amount of income before retirement, the Principal Financial Group® has created Principal Pension BuilderSM, an option that allows a deferred income annuity to be purchased while participating in the plan.

Offered as an option in a defined contribution plan, Principal Pension Builder lets participants build a steady stream of guaranteed income for life by directing a portion of their retirement plan contributions into a deferred income annuity. They can transfer part of their retirement plan account balance to purchase guaranteed income, or direct a portion of their plan contributions toward purchasing guaranteed income.

“Nobody wants to outlive their money, and everybody wants to know they can meet their core financial needs once they stop getting a paycheck,” said Jerry Patterson, senior vice president of retirement and investor services at The Principal®. “This product allows pre-retirees to set the stage for the moment of retirement by purchasing future guaranteed income ahead of time.”

Plan sponsors can add Principal Pension Builder to their retirement plans later this year, and plan participants can begin contributing to it in March 2016.

Because Principal Pension Builder is offered within the existing retirement plan, participants don’t have to move funds out of the plan to start building guaranteed income. They also benefit from the increased buying power of group pricing, and the funds are protected from market fluctuations. In addition, purchasing guaranteed income over time helps smooth out the effect of changing interest rates on the amount of income purchased.

For plan sponsors, adding Principal Pension Builder to their retirement plan helps manage their fiduciary responsibility to offer a range of investment choices. It gives participants an opportunity to diversify their in-plan retirement savings and play an active role in planning for retirement income, allowing them to build a guaranteed income stream, much like Social Security or a pension plan.

“Guaranteed income is a key factor in creating a reliable base for retirement,” said Patterson. “Think of Principal Pension Builder as a way to supplement your Social Security by adding an additional portion of guaranteed income.”

Principal Pension Builder is an extension of Principal® PlanWorks, an approach to workplace retirement readiness that includes a platform of capabilities and services designed to help make retirement plans work better for both participants and plan sponsors. Principal PlanWorks is made up of three key pieces—plan design, participant experience and strategic measures—to help drive successful retirement outcomes.

“We know a successful retirement income strategy is built upon a sufficient amount of savings,” Patterson said. “Our combination of effective plan design and resources that drive positive behaviors can help participants reach their desired level of savings.”

For more research, analysis and insights from The Principal, visit The Principal Knowledge Center and connect with us on Twitter.

The ability of Principal Life Insurance Company to pay the guarantee is based on the claims-paying ability of its general account and is subject to the terms of the contract.

About the Principal Financial Group
The Principal Financial Group® (The Principal®)1 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $539.9 billion in assets under management2 and serves some 20.1 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

1 “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

2 As of June 30, 2015.

Contacts

The Principal Financial Group
Jaime Naig, 515-247-0798
naig.jaime@principal.com

Contacts

The Principal Financial Group
Jaime Naig, 515-247-0798
naig.jaime@principal.com