Employee Benefits that Work: The Principal Financial Group Rolls Out Revolutionary New Worksite Voluntary Benefit Program

DES MOINES, Iowa August 29, 2005

Personalized benefit assistance at the workplace helps employees ease anxiety, prepare for the future

Workplace benefits are nearing a new dawn, giving employers the opportunity to help employees feel financially secure so they can concentrate on the task at hand - their job. One such benefit is the personalized needs-based employee enrollment experience unlike anything available today - Principal Work Secure(SM) by the Principal Financial Group(R).

With 83 percent of employees in small to mid-size companies reporting interest in having access to financial planning as a benefit available through the workplace - and 61 percent saying they expect it to be available at no cost(1) - Principal Work Secure is being introduced to the voluntary benefit market at a key time.

Many employees don't recognize that their employee benefits may not meet all of their personalized needs and few actually seek out financial or benefits assistance. Principal Work Secure is designed to address this need by providing employees access to a team of salaried financial professionals at the workplace who can help them define and prioritize their insurance and/or financial needs and then design and select the most appropriate type and level of voluntary benefits available through their employer. By addressing employees' individual needs, these financial professionals can create a more effective total solution that works.

"Principal Work Secure is based on the philosophy that there is no 'one size fits all' solution when it comes to benefits. Every employee has unique needs, and are at different stages in their lives. Plus, for many employees, the process of selecting benefits is complicated and overwhelming," said Deanna Strable, senior vice president of the Specialty Benefits Division of the Principal Financial Group. "If an employee is given the opportunity to meet with a financial professional at the workplace to discuss insurance and financial goals, our experience shows that the employee will benefit by putting a plan in place, eliminating the worry that comes with ambiguity. That translates to peace-of-mind for the employee, and a more productive workforce for the employer."

How Principal Work Secure Works

Through Principal Work Secure, a salaried Employee Benefits Specialist from the Principal Financial Group works with the broker and the employer to put together a comprehensive enrollment strategy for the voluntary benefits the employer chooses to offer employees - such as dental, disability and life insurance. The Principal Employee Benefit Specialist then meets one-on-one with employees in the workplace.

"While sitting down individually with employees may be offered by some, what's different is the tailored, personalized, needs-based and low pressure enrollment experience Principal Work Secure provides. Industry studies have shown that the number one reason employees are not satisfied with the workplace benefit enrollment experience is that they don't feel they're being listened to. That's something we wanted to address with Principal Work Secure," said Strable. "This program is unlike any competitor plan, in that it is designed to meet the needs of all employees - not only the highly-paid or executives, but the general employee base, regardless of salary level."

The Employee Benefit Specialist provides an overview of the employer-sponsored benefits available, helps the employee identify potential gaps in coverage for the employee or his or her family using an interactive needs analysis tool. And finally, a team of financial professionals work with the employee to tailor product solutions, both inside and outside of their group plan, based on the identified needs considering what's most important to the employee.

"Principal Work Secure is flexible enough to match the dynamics of the company, whether it has one location, or many. Phone-based meetings with individual employees are also available, allowing an employer to offer the comprehensive program, to the entire staff," noted Strable.

For the Employer: Competitive Benefit Package Without Added Costs

As the employee benefit budget continues to tighten for owners of growing companies, many workers feel the pressure. According to the most recent Principal Financial Well-Being Index(SM), employees of growing businesses reported a significant decrease since this time last year in available employer-sponsored life and disability insurance - two of the most requested benefits by employees after medical coverage. Through Principal Work Secure, The Principal provides a resource for employers to offer a competitive employee benefit package without increasing their benefit costs.

"Employees have different needs, and everyone has his or her own preference for how to receive and access financial information. Many employees have never even worked with a financial professional," said Strable. "When you combine the trends with the fact that many employers have limited resources to educate and direct employees in making benefit decisions, Principal Work Secure provides a much needed service. Employees will be in a better position to take advantage of the benefits that are offered to them by their employer, while securing their financial future. What's more, as result of Principal Work Secure, employees will have a better appreciation of the benefits offered to them, translating into enhanced recruitment and retention for the employer."

Principal Work Secure - The Next Phase to Worksite Solutions

To address the nation's retirement savings challenge, the Principal Financial Group recently launched Principal Retire Secure (to read the news release, visit www.principal.com/about/news/press.htm). With the addition of Principal Work Secure, The Principal is able to help employees figure out their retirement income and insurance protection needs through a personalized needs-based program.

Principal Work Secure and Principal Retire Secure will be introduced in key markets throughout 2005 and 2006.

About the Principal Financial Group

The Principal Financial Group(R) (The Principal(R))(2) 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 $174.7 billion in assets under management(3) and serves some 14.9 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.

Insurance products and plan administrative services are provided by Principal Life Insurance Company.

(1) Principal Financial Well-Being Index(SM), 2002

(2) "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

(3) As of March 31, 2005 CONTACT: The Principal Financial Group, Des Moines Rhonda Clark-Leyda, 515-247-6634 [email protected]