Lower expenses for Principal LifeTime Hybrid CIT, new 2065 portfolios for all
Our array of target date fund series is comprised of well-diversified portfolios designed to match up with participants’ approximate normal retirement dates.1 We’re committed to meeting the needs of clients and their participants by building on our solid asset allocation strategies.
Changes to Principal LifeTime Hybrid Collective Investment Funds (CITs)
We’re lowering the total investment expense ratios on this series across all vintages. And we’re simplifying our pricing structure so that target date fund expenses in the series will be set for the portfolio itself and no longer be driven by the weighted-average expenses of the underlying investment options. This simplification does the following:
- Streamlines our target date fund series offerings for our clients.
- Levelizes the fees across vintages in the series.
- Eliminates the impact of underlying allocation changes on the total investment expense ratio, meaning investors don’t necessarily need to worry about changing fees if a new asset class were added.
Our share class naming methodology will be streamlined to be more simple and in line with the industry. Our total investment expense ratios for the series are lower, the structure is simplified and we’re providing this guide.
These go into effect Jan. 2, 2018; check with your representative of Principal® for any plan pricing implications.
Changes to all Principal target date fund series
We’re announcing the addition of a 2065 target date investment option to all of our target date fund series. New target date funds continue to be needed as younger participants enter the work force.
The following investment options will be added to retirement plan lineups on Jan. 2, 2018:*
|Series||New investment option|
|Principal LifeTime Funds||Principal LifeTime 2065 Fund|
|Principal LifeTime Hybrid Funds||Principal LifeTime Hybrid 2065 Fund|
|Principal LifeTime Separate Accounts||Principal LifeTime 2065 Separate Account|
|Principal LifeTime Hybrid Collective Investment Funds (CITs)||Principal LifeTime Hybrid 2065 CIT|
* The new investment option will automatically be added for clients who make one of these series – in five-year increments – available to plan participants.
If you have clients who are impacted by these changes, we’ll be in touch directly with next steps.
For more information:
- Investment Data Reporting Tool: View details about investments, performance and expenses.
- Expense FAQ
- 2065 FAQ
- Your Principal representative. (In Retirement Plan Dashboard select the Contacts tab and click on View Details.)
- Advisor Support Team at 800-952-3343.
1 Retirement date assumed to be age 65.
Before directing retirement funds to a separate account, investors should carefully consider the investment objectives, risks, charges and expenses of the separate account as well as their individual risk tolerance, time horizon and goals. For additional information contact us at 800-547-7754 or by visiting principal.com.
Carefully consider the Fund’s objectives, risks, charges, and expenses. Contact your financial professional or visit principal.com for a prospectus, or summary prospectus if available, containing this and other information. Please read it carefully before investing.
Investing involves risk, including possible loss of principal.
Asset allocation and diversification does not ensure a profit or protect against a loss. Equity investment options involve greater risk, including heightened volatility, than fixed-income investment options. Fixed-income investments are subject to interest rate risk; as interest rates rise their value will decline. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. These risks are magnified in emerging markets.
There is no guarantee that a target date investment will provide adequate income at or through retirement.
The Principal LifeTime Hybrid Collective Investment Funds (CITs) are collective investment trusts maintained by Principal Global Investors Trust Company, (the Trust Company). The Trust Company has retained Principal Global Investors, LLC, doing business as Principal Portfolio Strategies (the Adviser), to serve as investment adviser with respect to the CITs, subject to the Trust Company’s supervision and review. The Adviser is an indirect wholly owned subsidiary of Principal Financial Group, Inc., and is under common control with the Trust Company. The Adviser also manages portfolios which may be included as underlying investments in the CITs. The Adviser receives management fees from these portfolios. The Adviser or other affiliates of the Trust Company may provide services to the CITs and may receive fees for such services. The CITs are available only to certain qualified retirement plans and governmental 457(b) plans.
The CITs are not mutual funds and are not registered with the Securities and Exchange Commission, the State of Oregon, or any other regulatory body. Units of the CITs are not deposits or obligations of, guaranteed by, or insured by the Trust Company or any affiliate, and are not insured by the FDIC or any other federal or state government agency. The value of the CITs will fluctuate so that when redeemed, units may be worth more or less than the original cost. The declaration of trust, participation agreement, and disclosure documents contain important information about investment objectives, risks, fees and expenses associated with investment in the CITs and should be read carefully before investing. The declaration of trust is available at principal.com. A copy of the participation agreement can be obtained from your plan administrator.
Principal Life and Principal Global Investors are members of the Principal Financial Group®, Des Moines, Iowa 50392.
Insurance products and plan administrative services provided through Principal Life Insurance Co. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., 800-547-7754, member SIPC and/or independent broker-dealers. Principal Life, Principal Funds Distributor, Inc. and Principal Securities are members of the Principal Financial Group®, Des Moines, Iowa 50392. Certain investment options and contract riders may not be available in all states or U.S. commonwealths. Separate Accounts are available through a group annuity contract with Principal Life Insurance Company. See the group annuity contract for the full name of the Separate Account. Principal Life Insurance Company reserves the right to defer payments or transfers from Principal Life Separate Accounts as permitted by the group annuity contracts providing access to the Separate Accounts or as required by applicable law. Such deferment will be based on factors that may include situations such as: unstable or disorderly financial markets; investment conditions which do not allow for orderly investment transactions; or investment, liquidity and other risks inherent in real estate (such as those associated with general and local economic conditions). If you elect to allocate funds to a Separate Account, you may not be able to immediately withdraw them.
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