Today’s Guarantees for Tomorrow’s Retirees

New white paper makes the case for in-plan deferred income annuities

DES MOINES, Iowa–(BUSINESS WIRE)–For retirees, “risk” may be a four-letter word. But employers who
sponsor retirement plans have an opportunity to help employees plan for you
know what
before their paychecks stop and retirement starts.

A new white paper, The
Retirement Income Dilemma: An In-Plan Solution
, walks through how
in-plan deferred income annuities offered within a retirement plan help
future retirees manage different risks such as outliving their savings,
downturns in the market and changing interest rates.

Principal
Financial Group
® commissioned Bruce Ashton of Drinker
Biddle & Reath LLP to write the paper.

“Today’s retirees will live longer and face different financial issues.
They may be entering retirement with mortgages, credit card balances and
even student loans,” said Jerry Patterson, senior vice president of
retirement and income solutions at Principal®. “The prospect
of living longer, combined with higher fixed expenses, makes it even
more important to strike a balance between investments that grow and
investments that are guaranteed.”

The paper includes sections on:

  • The risks retirees and near-retirees face when it comes to making
    their income last through retirement.
  • How an in-plan deferred income annuity addresses more of these risks
    than other products available today.
  • What steps a plan fiduciary should take to research options and make a
    prudent decision.

The paper is available in condensed
and full
versions. It also includes checklists for plan sponsors to use in
researching different in-plan products and providers.

Principal’s income outcome
Principal launched an in-plan
deferred income annuity late last year. Principal
Pension Builder
lets retirement plan participants make a lump sum
transfer or direct future plan contributions to it, just like an
investment option within the plan. Each transfer or contribution
purchases a known amount of regular, guaranteed income in retirement.

When they near retirement, participants select the age they want to
start receiving payments and what form those payments will take.

“We have been in the market for several months now and interest among
advisors and plan sponsors has been very high. They love the simplicity
of the design and see it as a powerful way for employees to begin to set
the stage for life without a paycheck,” Patterson said. “By making
guaranteed income easier and more convenient to access through a
retirement plan, millions of Americans can make progress today toward a
more secure tomorrow.”

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

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 principal.com.

Principal, Principal and symbol design and Principal Financial Group are
trademarks and service marks of Principal Financial Services, Inc., a
member of the Principal Financial Group.

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

Principal Pension BuilderSM is a deferred income annuity
rider available through certain group annuity contracts with Principal
Life Insurance Company, a member of the Principal Financial Group®, Des
Moines, Iowa 50392. Principal Pension Builder may not be available in
all states.

Principal Pension Builder provides for the purchase of deferred income
annuities that provide guaranteed income in retirement. Income may
change due to elections by the plan fiduciary or participant, such as
changing the income start date or annuity form or surrendering
guaranteed income. Contributions and transfers used to purchase
guaranteed income in Principal Pension Builder will not be subject to
market gains or losses. In exchange, the participant is purchasing a
guaranteed future income stream.

Contacts

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