Employees Overwhelmed by Benefit Choices and Greater Responsibility

Jan. 24, 2005 (Des Moines, Iowa) – While today’s workforce grapples with greater responsibility for their retirement and healthcare benefits than ever before, employers face even greater challenges in helping workers make the critical decisions that impact their long-term financial security. Now a new guide shows how 10 successful growing companies are helping employees make the most of their benefits and take control of their financial futures, resulting in a more loyal, productive workforce.

Innovations at Work: A Guide to Best Practices in Employee Benefits outlines the experiences of The Principal® 10 Best Companies for Employee Financial Security – a group of small and medium-sized businesses (5 to 1000 employees) from across the nation recognized in 2004 for excellence in employee benefits programs.

“Many employees today are overwhelmed by complicated healthcare options and are daunted by the responsibility of ensuring a financially secure retirement. Employers are searching for cost-effective ways to help employees make informed decisions,” said Renee Schaaf, vice president, The Principal.® “The Principal 10 Best Companies have developed creative methods of helping their employees get the most out of the benefits they offer. At the same time, they’ve come up with benefits solutions that create a more loyal and highly productive workforce, without breaking the bottom line.”

The new guide outlines simple, inexpensive and effective tactics used by The Principal 10 Best Companies to:

Provide affordable, competitive healthcare options
Increase employee participation in the company sponsored retirement plan
Communicate the importance of participating in the employee benefit package, and help employees make informed decisions

Tools Employers Can Use

The guide also provides:

A chart to help employers benchmark their benefits against The Principal 10 Best and their peers across the nation.
Interactive checklists to help employers quickly review solutions to their own company’s benefits challenges.
Detailed examples of the retirement, healthcare and employee communication best practices employed by The Principal 10 Best Companies.
A look ahead at the next generation of healthcare and retirement benefit solutions.

The 2005 edition of Innovation at Work: A Guide to Best Practices in Employee Benefits is available at no charge at www.principal.com/theprincipal10best/bestpractices.htm.

The Principal 10 Best Companies for Employee Financial Security were selected by an independent panel of financial services and human resources experts, renowned for their expertise in employee benefits. The Principal 10 Best Companies-2004 are: American Urological Association Education and Research, Inc., Linthicum Heights, Md.; American Society of Health-System Pharmacists, Bethesda, Md.; Clipper Belt Lacer Company, Grand Rapids, Mich.; Distilled Spirits Council of the United States, Inc., Washington, DC; ELTECH Systems Corporation, Chardon, Ohio; First National Bank of Greencastle, Greencastle, Pa.; Leupold & Stevens, Inc., Beaverton, Ore.; Pharmacists Mutual Insurance Company, Algona, Iowa; RATHBUN INSURANCE AGENCY, Lansing, Mich.; and USA Federal Credit Union, Auburn Hills, Mich..

About The Principal 10 Best Companies Program

The Principal 10 Best Companies for Employee Financial Security is a nationwide program that searches for and recognizes small and medium-size companies that excel in providing for employee financial security. Entries for the 2004 search were accepted from Feb. 1, 2004, through May 1, 2004. The program was open to any company with between five to 1,000 employees. To qualify, all entrants must have been based in the United States and have provided a broad range of employee benefits for at least five years. Qualifying companies must have, at a minimum, offered “traditional” employee benefits, such as those relating to retirement, health, life or disability. No entry fee was required, and employees of The Principal were not eligible to enter. The evaluation process was designed in conjunction with Mathew Greenwald & Associates, Inc., a leading independent research firm based in Washington, D.C. Entry forms for the 2005 recognition program will be available February 1, 2005. For more information, visit The Principal Web site at www.principal.com/theprincipal10best.

About The Principal Financial Group

The Principal Financial Group^® (The Principal)^®¹ is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $156.0 billion in assets under management² and serves some 14.7 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
trademarks of Principal Financial Services, Inc., a member of the Principal
Financial Group.}
^{2) As of September 30, 2004.}