The Total View - (Page 5) The Total View: A Summary of Findings A Total Retirement Approach • Approximately 58 percent of our retirement plan sales from 2006 involved more than one type of retirement plan – a 59 percent increase over 2005. • 2006 sales of new total retirement solution plans increased 145 percent over the past year and we saw a 90 percent increase in new total retirement solution assets. • Retirement plans that used an integrated retirement services approach typically had higher participation, larger average deferral rates, and bigger average participant account balances. To learn more, turn to page 9. Defined Contribution • Defined Contribution (DC) plans such as 401(k) and 403(b) plans continue to be one of the fastest-growing employer-sponsored retirement benefits. At the end of 2006, The Principal provided administrative services to more than 32,500 DC retirement plans with 2.8 million participants that represented more than $79.5 billion in plan assets under management. To learn more, turn to page 14. Participation & Salary Deferral Rates • Participation rates were more than 10 percent higher for retirement plans with an employer matching contribution than those without a match. • The average participation rate grew slightly to 65.9 percent. • Salary deferral rates increased as age increased, with those aged 50-plus deferring at the highest rates and those less than 35 years old deferring at the lowest rates. To learn more, turn to page 17. Account Balances • Account balances saw a double digit increase of 12 percent to an average of $36,541. To learn more, turn to page 15. Investment Education & Options • The number of plan sponsors who offer “do-it-for-me” investment features continued to rise dramatically – the number nearly tripled in the past year. • Automatic and “do-it-for-me” features increased savings rates over traditional methods. • Our Principal Retire SecureSM program, which offers personalized one-on-one meetings, was provided by 475 plan sponsors nationwide. • Use of lifecycle/lifestyle investment options continued to grow dramatically in 2006, with more than 80 percent of plan sponsors offering them in their investment option line-up, which more than doubled from 2004. • From 2005 to year-end 2006, usage of the Principal Managed Account ProgramSM grew by four times. • On average, a retirement plan had funds in approximately 18 investment options offered within the plan. • The largest percentage of participant retirement funds in plans with services provided by The Principal were directed to the domestic stock (43 percent) category. This was similar to the industry average where 49 percent of participant account balances were allocated to equity investment options. • By the end of 2006, nearly 11,000 plans were using the Easy Enrollment Form from The Principal, which was a significant increase from just over 3,000 in 2005. To learn more, turn to page 23. 5
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