Principal® Meeting Rising Demand for Personalized Retirement Investment Strategies With New Hybrid QDIA

Principal Financial Group^® has launched a new, hybrid qualified default investment alternative (QDIA) – Principal^® Intelligent QDIA – to help meet the growing demand for personalized investment strategies within employer-sponsored retirement savings plans. Plan sponsors that choose Principal^® Intelligent QDIA will provide participants with a path to greater personalization as their careers and lives evolve since the hybrid QDIA offers both target date strategies as well as a managed account service in one default option.

Unless a different investment election is made during enrollment, participants younger than the plan’s set transition age (e.g. 45 years old) will be defaulted into a target date fund. Once participants reach the plan’s set transition age, they will automatically move to a managed account service that will enable tailored investment strategies that consider more than age by using additional factors such as contribution levels, account balance, and social security benefit. Participants can further refine the strategy by inputting additional financial and goal-based information such as other retirement accounts, desired retirement age, planned retirement expenses, and lifestyle in retirement.

“We know from research and our direct conversations with customers that personalized investment advice has become a need for retirement savers,” said Brett Fisher, head of investment product strategy for Retirement and Income Solutions at Principal^®. “Principal^® Intelligent QDIA can help participants feel more confident in their financial futures by getting them started on a savings path for retirement before ultimately helping them manage the wealth they’ve accumulated.”

Hybrid QDIAs have become more attractive over the past two years. The number of plan sponsors adopting them as the default investment option increased 67% year-over-year from 2020 to 2021¹. Going into 2023, 86% of plan sponsors and 76% of financial professionals Principal surveyed agreed the most common default option by 2030 will likely be a target date fund with a managed account service².

Participants also acknowledge the value of advice, indicating their investing confidence increases from 35% to 65% when receiving professional help.³

“Our ultimate goal is to give participants a holistic view of their financial outlooks so we can help them determine what may be necessary to reach their retirement goals,” Fisher said. “The more personalized and tailored those experiences can be, the better outcomes we believe can be created.”

About Principal Financial Group^®

Principal Financial Group^® (Nasdaq: PFG) is a global financial company with 19,000 employees⁴ passionate about improving the wealth and well-being of people and businesses. In business for more than 140 years, we’re helping more than 62 million customers⁵ plan, protect, invest, and retire, while working to support the communities where we do business, and build a diverse, inclusive workforce. Principal^® is proud to be recognized as one of the 2023 World’s Most Ethical Companies^® by Ethisphere⁶, a member of the Bloomberg Gender Equality Index, and a “Best Place to Work in Money Management⁷.” Learn more about Principal and our commitment to building a better future at principal.com.

Asset allocation and diversification does not ensure a profit or protect against a loss.

Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Company^®. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., member SIPC and/or independent broker/-dealers. Principal Global Investors leads global asset management. Referenced companies are members of the Principal Financial Group^®, Des Moines, Iowa 50392.

© 2023 Principal Financial Services, Inc. Principal^®, Principal Financial Group^®, and Principal and the logomark design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and services marks of Principal Financial Services, Inc., in various countries around the world.

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¹ U.S. Retirement Markets 2021, Cerulli and Associates, December 2021

² Principal Future of Retirement Survey, November 2022

³ Principal Retirement Security Survey – Investments, July 2022

⁴ As of December 31, 2022

⁵ As of December 31, 2022

⁶ Ethisphere, 2023

⁷ Pensions & Investments, 2022

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