Principal Financial Group announced the launch of Principal IMPACT on May 13, a next-generation 401k retirement plan package the company says is “designed specifically to deliver best-in-class resources and support to advisors and their clients new to Principal from $1 million to $10 million in plan assets.”
Intended as a retirement plan solution for small- and medium-sized businesses (SMBs), Principal IMPACT rounds out the company’s roster of solutions for plan sponsors of all sizes, including defined contribution plans, defined benefit plans, employee stock ownership plans, and non-qualified deferred compensation plans.
“We are really excited about the introduction of Principal IMPACT, which amplifies the ability of Principal to serve as a ‘one-stop-shop’ for multiple retirement plan needs across all employer market segments,” said Jerry Patterson, senior vice president of Retirement and Income Solutions at Principal. “This new offering brings together competitive pricing and services that are often reserved for large employers.”
Driven by market insights and needs
The development of Principal IMPACT was driven by the needs of retirement plan advisors and sponsors in combination with company market experience. Among advisors, the No. 1 expectation is flawless service, closely followed by need for responsiveness.1 And, with a strong economy and more SMBs than ever before, there’s lots of continued growth. Today, 95% of all retirement plans are in the under $10 million market [600,000 plans].2
“Small- and medium-sized businesses are motivated to support their people,” said Patterson. “Principal IMPACT helps employers take care of their employees’ future lives while spending less time on administrative complexity.”
The technology is designed to help make plan administration easier for plan sponsors and to make retirement savings and financial wellness inviting and engaging for employees. Among its features:
- Client-Focused Service Approach: Employs a dedicated, cross-disciplinary team with service expertise to address the specific needs of Principal IMPACT clients and their advisors. The collaborative team provides personalized support—from onboarding to annual review.
- Industry Leading Technology and Digital Resources: Boosts saving rates for participants with interactive, digital resources that help improve their financial confidence. The broad range of resources help make saving for retirement unintimidating and easy to understand and implement for employees. Participants who use Principal’s digital resources have a 10-point higher average Retirement Wellness Score, an indicator that helps retirement plan participants quickly see how well they’re tracking toward their retirement goals.3
- Financial wellness beyond retirement savings: From helping younger workers manage student loan debt and supporting parents exploring scholarship options for kids headed for college to preparing a will or leveraging the power of a well-constructed target date fund, Principal IMPACT is designed to address financial needs and more for the SMBs Principal serves.
- Modern investment lineup: Features institutionally managed, zero revenue investments designed specifically for retirement plans. Based on 2018 research from Principal, approximately 78% of the Z share class of Principal-branded investment options are in the top half of Morningstar category peer groups.4
- Ongoing Fiduciary Support: Services to help manage fiduciary responsibilities and reduce administrative work so SMBs can have more time to focus on their business.
- Low Cost and Transparent Pricing: Given the constant pressures on SMBs to be efficient, Principal IMPACT also features very competitive and transparent pricing. SMBs can be confident in understanding the value they are getting for their investment in this benefit.
“At the end of the day, participant outcomes are the top focus,” Patterson said. “Principal IMPACT models our holistic approach to retirement planning, as we recognize that it is only one component of participant’s broader financial wellness journey.”
1 BrightWork Partners. Absolutely Essential Criteria. 2017.
2 Retirement Markets. Retirement Insights, LLC. February 2019.
3 Principal Financial Group. Participant Data Report: Jan. 1 through Dec. 31, 2017. January 2018.
4 Principal Financial Group. Principal®IMPACT: Retirement Plan Best Practices. December 2018.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
