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Principal Launches New Retirement Modeling Planner


DES MOINES, IA, August 15, 2017 -- Principal Financial Group® announced today the launch of a first of its kind retirement modeling planner that provides a real-time assessment of retirement plan design scenarios. Plan sponsors and advisors will not only be able to assess retirement plan health, but will be able to see immediately how action to improve the overall health of the plan improves employee retirement readiness, all in one place.

"The advanced modeling planner provides a single platform to model best practice plan design features," said Jerry Patterson, senior vice president - retirement and income solutions at Principal®. "Plan sponsors and their advisors can conduct automatic enrollment, auto-escalation, and stretch-match formulas -- in real time with real client data -- to identify the most beneficial retirement solutions for their business and employees."

The advanced modeling planner is designed to:

  • Show how automatic plan design features, such as enrollment and escalation, are the most effective way to show the impact on participant retirement readiness.
  • See what action can be taken to improve overall retirement plan health.
  • View projected cost estimates of matching contributions (as a percentage of payroll reported).

According to a 2017 Principal Retirement Readiness Survey, the majority of U.S.-based employees said they're okay with their employer adding automatic enrollment and suggesting how much to save. Contrary to some employers fears about receiving employee backlash when setting high starting default savings rates, 84 percent of those same employees surveyed said they were okay with automatic enrollment with 6 percent starting deferral percentage.

"At Principal, we are committed to helping people have enough, save enough and protect enough when it comes to their financial future," said Patterson. "The new modeling planner is one of our latest offerings using technology to provide real-time, actionable insights to make sound financial decisions."

Principal Financial Group has long promoted best practice plan design features with a core focus on:

  • Automatic enrollment of the entire workforce.
  • Offering auto escalation to help workers step-up to high savings levels over time.
  • Setting the starting deferral rate at 6 percent or more with an escalation to 10 percent over time.
  • Stretching the match formula to max out at 8 percent or 10 percent.
  • Default to a diversified investment option like a target date fund.
  • Automatically resweeps the entire workforce into the default plan design to ensure they review their retirement strategy at least once per year.

"We believe in partnering with plan sponsors to promote best practice plan design features, which often result in life changing impacts for their participants. For many plan sponsors, the story sounds great, but it's not enough to drive them to action. They need to understand the specific financial impacts to their organization and employees," said Patterson. "This planner helps plan sponsors and the advisors that serve them, turn that "story" into an actionable strategy for their specific workforce."

About the Advanced Modeling Planner

Plans with eligible employees in a single location will be able to use the modeling planner, provided all participants are subject to the same automated plan provisions. Plans with eligible employees in multiple locations will be available by year end. This includes 401k, 403b and 457 plan types.

The advanced modeling planner is being rolled out in a phased approach. The advanced modeling planner is being rolled out in a phased approach. Over the next few weeks, more than 2,000 plan sponsors and their respective advisors are set to access the advanced modeling planner. Subsequent rollout plans are underway.

The advanced modeling planner is the newest offering as a part of our approach to workplace retirement readiness. It's built around a digital platform of capabilities and services designed to make retirement plans work better for both participants and plan sponsors through plan design, participant experience and strategic measures. Employers can also use the Principal Benefit Design ToolSM, an online resource that provides a comparison point for group dental, short-term disability, long-term disability and life insurance.

About Principal®

Principal helps people and companies around the world build, protect and advance their financial well-being through retirement, insurance and asset management solutions that fit their lives. Our employees are passionate about helping clients of all income and portfolio sizes achieve their goals, offering innovative ideas, investment expertise and real-life solutions to make financial progress possible. To find out more, visit us at https://www.principal.com.


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