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Key Employees Optimistic About Employers' Future, Not Economy

New research from The Principal studies retirement plan participants and their employers

November 16, 2011 (Des Moines, Iowa) – Key employees, those most critical to a business, show positive signs for retirement savings in 2012 according to new research from the Principal Financial Group®. Nearly all surveyed indicate they will either increase (37 percent) or maintain (58 percent) contributions to their employer’s nonqualified deferred compensation plan in the coming year. Of those planning to increase contributions almost eight in 10 (78 percent) cite they believe in the success of their employer, an increase of 14 percentage points from the 2010 survey results.

The survey (PDF: 111 KB) of American workers participating in nonqualified deferred compensation retirement plans and their employers was conducted with the Boston Research Group and The Principal®.

While key employees report optimism in their employers, the same does not hold true for their view of the economy. In a recent survey of the Principal Financial Well-Being IndexSM, key employees (41 percent) are significantly more pessimistic than all other employees (28 percent) when it comes to their sentiment regarding their economic outlook for the rest of 2011. And, seven in ten (72 percent) key employees think the economic outlook for 2012 will be same or worse.[1]

“Volatile financial markets have no doubt created concern about the future of the economy, yet key employees continue to gain confidence in the future of their employer,” said Gary Dorton, vice president of nonqualified benefits for the Principal Financial Group. “Employers recognize their key employees are critical to the success of the business. They want to keep them to protect the future of their business, but also help them save for their own financial future through multiple retirement savings options.”

In the Boston Research Group survey, nine in 10 employers (94 percent) report the most important reason they offer a nonqualified deferred compensation plan is to allow employees to save additional money for retirement. Other top reasons include providing a competitive recruiting package (84 percent) and retaining key employees (78 percent). Nearly three in five employers (59 percent) who sponsor these plans make employer contributions.

“Many people assume nonqualified plans are only for Wall Street when in reality, these are really main street employees who are key to the success of their employer,” Dorton said. Nearly one-third (32 percent) of participants responding to the survey were mid-level managers, which demonstrates nonqualified deferred compensation plans are available to a broad group of employees.

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About the Principal Financial Group

The Principal Financial Group® (The Principal®)[2] is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $320.8 billion in assets under management[3] and serves some 17.8 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

Survey of 1,150 employees and 301 key employees conducted online by Harris Interactive, July/August 2011.
“The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
As of September 30, 2011.

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