The Principal Financial Group Hails Senate Approval of Pension Reform

Nov. 18, 2005 (Des Moines, Iowa) — The Principal Financial Group^®, the nation's 401(k) leader and total retirement solutions innovator, hails the United States Senate for passage of major pension reform legislation that includes creation of a DB(k)-a hybrid combination of a traditional defined benefit plan and a 401(k) defined contribution plan. The Principal^® applauds Senate Finance Committee Chairman Charles Grassley (R-IA) for his leadership in guiding the legislation, which is focused on addressing multiple challenges facing the nation's retirement savings system.

"The Senate measure moves pension reform in the right direction, especially adoption of the DB(k). Changes are needed to end the uncertainties that are threatening defined benefit pension plans, which are a critical source of dependable retirement income for U.S. workers," said Larry Zimpleman, president, Retirement and Investor Services, at The Principal. "The DB(k) is a fresh, innovative approach which will make it easier for employers, especially small and medium-sized companies, to offer comprehensive retirement programs to help their employees achieve long term financial security."

The DB(k) is a concept developed over the past six years by The Principal^® and the American Society of Pension Professionals & Actuaries (ASPPA) which would allow employers to provide the security of defined benefit pensions and 401(k) participant savings in a single plan without the additional complexities of administering two separate plans. The DB(k) legislation removes regulatory and administrative hurdles that frequently prevent employers from offering defined benefit pension plans.

"We urge Congress to continue thoughtful consideration of the impact of proposed reforms to ensure that the final legislation creates a strong, more accessible retirement savings system for employers and American workers," said Zimpleman.

For details about proposed features of the DB(k) go to The Principal Research Center, www.principal.com/about/news/research.htm

Insurance products and plan administrative services are provided by Principal Life Insurance Company, a member of the Principal Financial Group, Des Moines, IA 50392. # 8813112007

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 $188.4 billion in assets under management² and serves some 15.3 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 service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.}
^{2) As of September 30, 2005.}