The Principal Financial Group Eases Fiduciary Responsibilities for ESOP Plan Sponsors
November 8, 2007 (Des Moines, Iowa) — Administering an Employee Stock Ownership Plan (ESOP) brings complex and time consuming fiduciary responsibilities particularly in the critical task of financial liability forecasting. The Principal Financial Group® is making that important duty easier and more efficient for its ESOP clients with a new tool, My Principal ESOP Repurchase Liability SolutionSM (My PERLSSM).
My PERLS, available in early 2008, is web-based, making it easy for plan sponsors to complete a repurchase liability study at their convenience. The tool also allows the plan's annual census data to feed into My PERLS automatically, eliminating duplicative efforts and increasing the accuracy of projections. My PERLS is provided as a standard tool to ESOP clients of The Principal.
"The Principal has a rich history of expertise and dedication to the ESOP community, and My PERLS is one more way The Principal is helping ESOP plan sponsors to ease their fiduciary and administrative burdens," says Dennis Long, vice president, The Principal. "This solution is an exciting addition to our best-in-class technology suite. The Principal was the first to bring repurchase liability software to the ESOP community, and we're proud to be the only ESOP service provider to now offer clients a web-based repurchase liability tool for no added fee."
Plan sponsors will use My PERLS to project the amount of cash needed to fund future distributions to participants who leave the company. Forecasting ESOP account balances equips the plan sponsor to plan strategically for the cash flow impact of future repurchase liabilities and better structure future ESOP transactions.
My PERLS uses a client's most recent year-end data to make assumptions about value and growth of the workforce and analyzes key factors such as employee compensation levels, vesting schedules, employee gender and typical employee turnover rates. Because these factors are unique for each organization, the projection process and resulting repurchase liability study is highly personalized. Repurchase liabilities typically run from five to 20 years into the future.
My PERLS complements other innovative technology services The Principal offers to help ESOP plan sponsors manage their responsibilities including Principal e-Diversification ServicesSM and Principal e-Distribution ServicesSM. For more information, visit www.principal.com/MyPERLS
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.
Your repurchase calculation will be based on the set of assumptions you use within the My PERLS software. Consultants at The Principal are available to discuss the results generated by your study and the potential alternatives for addressing repurchase liability issues. You should consult appropriate professionals on all matters related to legal, tax, or accounting obligations and requirements.
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, 2007.
