The Principal Financial Group Gives Sole Proprietors A New Way to Save for Retirement
October 30, 2007 (Des Moines, Iowa) — Finding comprehensive solutions for retirement savings just got a little easier for sole proprietors. The Principal Financial Group® has introduced a new registered Individual 401(k) plan combining the benefits of investment options from Principal Funds with the expertise of trust services from Principal Trust CompanySM. The Individual 401(k) plan is specifically designed to give sole proprietors and their business partners an easy and effective way to save for retirement without the administrative burden or expense of a traditional 401(k).
The Individual 401(k) plan, offered through independent financial professionals, gives sole proprietors a comprehensive slate of retirement plan investment options and services comparable to those available in traditional 401(k) plans.
"We developed this plan because there is no one-size-fits-all retirement solution," said Doug Grove, vice president — national sales director, Retirement and Investor Services. "The Individual 401(k) plan fills a need in the market for a comprehensive solution. The Principal® is committed to working with financial professionals to help small business owners and sole proprietors maximize their retirement nest eggs and tax savings."
Grove says individuals who earn compensation on IRS Form 1099 may be ideal candidates for the Individual 401(k) plan, such as real estate agents, sales representatives and consultants. Participants can contribute up to $45,000 (depending on income) in 2007 ($50,000 if age 50 or older). The contribution can be adjusted from year to year to meet the participants' needs. The plan also may include spouses who work in the business.
Among other features of the Individual 401(k) plan, business owners get the added benefit of Principal Trust Company acting as the directed trustee over the plan, and coordinating the preparation of required plan compliance tests as well as Form 5500-EZ if needed.
Other features include:
- A simplified process—A complete service package includes quarterly investment statements; tax form preparation; completion of required deferral and contribution limit testing; recordkeeping of contributions, distributions and loan payments; notice and calculation of required minimum distributions; and toll-free customer service support.
- One-stop shop—Sole proprietors may have numerous retirement funds spread among several different solutions, making it difficult to see their complete retirement picture. With the Individual 401(k) plan, participants can consolidate qualified retirement assets in one convenient place.
- Time-based and risk-based investment options—Through the time-based options of Principal Investors LifeTime Funds, portfolio managers actively manage fund allocation to coincide with a target retirement date. For participants who prefer a risk-based investment option, an asset allocation team manages Principal Investors Strategic Asset Management (SAM) Portfolios on a daily basis to meet a stated risk level, adjusting the portfolio as necessary to adjust for changing economic and market conditions.
- Plan loans—Plan loans are available to Individual 401(k) plan participants, who can access a portion of the account balance if necessary.
The Principal offers financial professionals a full slate of retirement plan solutions geared to the needs of small business clients including the Individual 401(k) plan, "EZ" Defined Benefit, SEP-IRA, and SIMPLE-IRA. A dedicated support team is available to assist financial professionals in evaluating the spectrum of retirement solutions available to their clients. For more information, contact the Producer Support Team, 1-800-952-3343, option 2.
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 and national network of financial professionals. A member of the Fortune 500, the Principal Financial Group has $282.1 billion in assets under management2 and serves some 18.1 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.
About the Principal Funds
Principal Funds is a leading provider of mutual fund solutions for individual investors and retirement plans, with approximately $60 billion3 in assets under management. Principal Funds is backed by the extensive asset management capabilities of Principal Global Investors and other leading subadvisors and has special expertise in asset allocation solutions. Including target risk and target date funds, Principal Funds is the 5th largest manager of lifecycle funds in the industry.*4 Principal Funds are sold through a nationwide network of financial professionals associated with brokerage and financial planning firms. Principal Funds Distributor, Inc. and Principal Global Investors are both members of the Principal Financial Group.
Before investing, you should carefully consider a fund's investment objectives, risks, charges, and expenses. Contact your financial professional, visit www.principalfunds.com, or call 800-222-5852 to obtain a prospectus containing this and other information. Read the prospectus carefully before investing.
A mutual fund's share price and investment return will vary with market conditions, and the principal value of an investment when you sell your shares may be more or less than the original cost.
Principal Investors Fund, Inc. is distributed by Principal Funds Distributor, Inc., member of the Principal Financial Group®. Principal Funds Distributor, Principal Shareholder Services, Principal Management Corporation and its affiliates, and Principal Investors Fund, Inc. are collectively referred to as Principal Funds.
Principal Trust Company is the trade name of Delaware Charter Guarantee & Trust Company a member of the Principal Financial Group, Des Moines, IA 50392.
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 June 30, 2007.
3) As of June 30, 2007. Includes Principal Investors Fund, Inc. and Principal Variable Contracts Fund, Inc. assets
4) As of June 30, 2007. Source: FRC Mutual Fund Lifecycle Report
