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Investment Fiduciary Support Services

We provide a level of fiduciary indemnification on our Sub-Advised Investment Options to help with plan sponsors’ investment fiduciary obligations. We also make available optional fiduciary support through services provided by Wilshire.

Why Wilshire?

Wilshire Methodology

A level of fiduciary protection

Sub-Advised Investment Options

Principal Life provides support to cover the investment-related fiduciary concerns regarding:

  • Broad Range Requirement under 404(c) of ERISA
    Principal Life warrants the use of investment options* across each of the following five broad asset classes to satisfy the Broad Range Requirement under Section 404(c):
    • Short-Term Fixed Income
    • Fixed Income
    • Large US Equity
    • Small/Mid US Equity

    International Equity

    *Investment options available for use in the Broad Range Requirement under 404(c) coverage include Sub-Advised Investment Options, Mutual Fund Network investment options, and certain short-term fixed income investment options.

  • Qualified Default Investment Alternative (QDIA)
    Principal Life warrants that our lifecycle investment options subject to this coverage1 meet the investment characteristics to be considered a QDIA as required by the Department of Labor.**
  • Prudent selection and monitoring
    Through our due diligence process:
    • Principal Life warrants that our due diligence process provides prudent and careful review in the selection and ongoing monitoring of managers of Sub-Advised Investment Options
    • The due diligence process uses a quantitative and qualitative screening process to select, monitor and replace (when appropriate) the managers for our Sub-Advised Investment Options2.
    • Our due diligence process supports the efforts of financial professionals by providing research information on investment managers.

**Plan sponsors are still responsible for the selection and ongoing monitoring of the investment option as the plan’s QDIA and investment.

Mutual Fund Network

We make quantitative data available to help you monitor and manage the investment manager selection process.

Optional ERISA 3(21) and 3(38) Fiduciary Services

We also make available the optional 3(21) and 3(38) fiduciary services provided by Wilshire Associates Incorporated ("Wilshire®") — an independent third-party firm.

3(21) Fiduciary Service
Under Wilshire's ERISA 3(21) fiduciary service, Wilshire will prudently select investment options to create a list (the "Select List") from which the plan sponsor/plan fiduciary – with education from their financial professional – picks investment options to create an investment lineup for a plan. Investment options chosen from the Select List will receive 3(21) fiduciary coverage from Wilshire. Plan sponsors can still choose investment options that are not on the Select List, but those investment options do not receive fiduciary coverage. There is an additional fee for this service.

3(38) Fiduciary Service
Under ERISA 3(38) fiduciary service, Wilshire will have discretion for picking the investment options for a plan (the "Lineup"), monitoring, and making changes when they deem appropriate. (As an ERISA 3(38) fiduciary with discretionary control over investments, Wilshire will also be the plan's 3(21) fiduciary.) There is an additional fee for this service.

All financial professionals (based on broker dealer approval) have the option of offering these Wilshire-provided services to their clients, including RIAs, who may wish to supplement their current services to clients.

 

1. For purposes of the QDIA coverage by Principal Life, our lifecycle investment options include Principal LifeTime portfolios, Principal LifeTime Hybrid Funds, Principal TrustSM Target Date Collective Investment Funds, and the following Principal Strategic Asset Management (SAM) Portfolios — SAM Flexible Income Portfolio, SAM Conservative Balanced Portfolio, SAM Balanced Portfolio and SAM Conservative Growth Portfolio. All these investment options take into consideration either the participant’s target retirement date or a participant’s target level of risk appropriate for participants of a plan as a whole.

2. Sub-Advised Investment Options include the Principal Stable Value Fund and the Principal Life Separate Accounts available through a group annuity contract with Principal Life Insurance Company, Des Moines, IA 50392.

Wilshire® is a registered service mark of Wilshire Associates Incorporated, Santa Monica, California. All other trade names, trademarks, and/or service marks are the property of their respective holders.

Wilshire is not an affiliate of any member company of the Principal Financial Group®.

Principal Life does not act as an ERISA 3(21) or 3(38) fiduciary under the Wilshire-provided fiduciary services.

For full terms and conditions please see the Investment Fiduciary Support and Services Terms and the ERISA 3(38) Service for Defined Contribution Plans – Fiduciary Service Agreement document for more information about the support and services, including the Definitions, Duties and Obligations.

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.

Equity investment options involve greater risk, including heightened volatility, than fixed-income investment options. Small and mid-cap stocks may have additional risks including greater price volatility. 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.

Insurance products and plan administrative services are provided by Principal Life Insurance Company. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities are offered through Principal Securities Inc., 800-547-7754, Member SIPC and/or independent broker/dealers. Principal Funds Distributor, Principal Securities and Principal Life are members of the Principal Financial Group®, Des Moines, IA 50392. Investment options 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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