Recruiting and Retaining Focus Increasing in Post-Crisis Economy

  Recruiting and Retaining Focus Increasing in Post-Crisis Economy

     New research from The Principal shows nonqualified plan sponsor and
                              participant trends

Business Wire

DES MOINES, Iowa -- December 06, 2012

More employers say recruitment and retention are among the top reasons for
offering nonqualified deferred compensation plans to their key employees. This
according to new findings from a study of employers and their key employees
conducted by Boston Research Group on behalf of the Principal Financial
Group^®.

The vast majority of plan sponsors (91 percent) say nonqualified deferred
compensation plans are important to provide a competitive package for
recruiting employees, a 7 percentage point increase from 2011. Eighty-six
percent of plan sponsors say these plans are important as a retention tool, up
8 percentage points from 2011. Key employees, those identified as most
critical to the business, confirm nonqualified plans factor into employment
decisions:

  *69 percent say these plans are important when making a decision to take a
    new job.
  *61 percent report the plans are important in their decision to stay with a
    current employer.

“Employers and employees alike were shaken by the economic crisis compounded
by the gradual recovery and continued market volatility,” says Gary Dorton,
vice president of nonqualified benefits for The Principal^®. “Employers
recognize that helping employees bolster their retirement savings also makes
good business sense in today’s competitive marketplace to secure top talent.”

The number of participating employees contributing $25,000 or more in
nonqualified deferred compensation plans has steadily increased over the last
three years, now at 44 percent in 2012. Participants also plan to save more in
these plans, with one-in-three (35 percent) planning to increase their
contributions in the plan over the next year. Other actions by employees
surveyed:

  *More than three-fourths (78 percent) report reviewing their investment
    allocation quarterly or more frequently.
  *Just over half (53 percent) sought advice from a financial professional,
    yet 59 percent do not have a written plan that includes goals and sources
    of retirement income.

Nearly 9 in 10 key employees say nonqualified deferred compensation plans are
important in reaching retirement goals. According to Dorton, “A growing number
of employers are more worried than ever before if their key employees will be
adequately prepared for retirement, which is why these plans are shifting
toward a retirement focus. Key employees use them as an additional way to
reach their retirement goals, and employers see them as a valuable part of a
comprehensive benefits package.”

More insights from the 2012 study are available at
www.principal.com/nqresearch. For more news and insights from The Principal,
connect with us on Twitter at http://twitter.com/ThePrincipal.

About the Principal Financial Group
The Principal Financial Group^® (The Principal ^®)^1 is a global investment
management leader offering retirement services, insurance solutions and asset
management. The Principal offers businesses, individuals and institutional
clients a wide range of financial products and services through its diverse
family of companies. Founded in 1879 and a member of the FORTUNE 500^®, the
Principal Financial Group has $392.2 billion in assets under management^2 and
serves some 18.3 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, 2012.

Contact:

The Principal Financial Group
Sonja R. Sorrel, 515-362-2431
sorrel.sonja@principal.com
or
Erica Jensen, 515-362-0049
jensen.erica@principal.com