Principal® Completes Integration of Wells Fargo Institutional Retirement Business

Rhea-AI Summary

Principal Financial Group has successfully integrated Wells Fargo's Institutional Retirement and Trust business, enhancing its capabilities and market position in retirement services. This acquisition, completed in July 2019, added 4.3 million eligible participants and approximately $150 billion in account value. Principal now serves over 10 million participants, managing over $537 billion. Key improvements include enhanced retirement offerings, increased savings rates averaging 9%, and expanded client services, positioning Principal among the top in multiple retirement plan categories.

Positive

• Acquisition of Wells Fargo's Institutional Retirement business increased eligible participants by 4.3 million and account value by $150 billion.
• Now serves over 10 million participants, managing over $537 billion in total account value.
• Enhanced retirement offerings and improved savings rates averaging 9% among participants.
• Expanded capabilities in retirement services, securing top market positions in key categories.

Negative

• None.

Principal Financial Group^®, a global leader in retirement plan services and investment management, recently completed the integration of the Wells Fargo Institutional Retirement business. Principal acquired the Institutional Retirement and Trust business in July 2019 to enhance its retirement and income capabilities, achieve greater scale and balance, and drive business growth.

Through the acquisition and new business wins, Principal currently serves over 10 million eligible participants and individual account holders representing more than $537 billion in total account value.¹ Principal also added to and upgraded its retirement service offerings, furthering its market leadership positions in the full spectrum of retirement plans with Principal^® Total Retirement Solutions and including top-tier investment, income and financial wellness offerings.

“Our teams worked hard to ensure a successful integration for plan sponsors, participants, and financial professionals. Their dedication to our combined organization has positioned our business for continued growth,” said Renee Schaaf, president, Retirement and Income Solutions at Principal. “We remain committed to our customers and dedicated to advancing our services to deliver flexible, efficient, and personalized options to help more people feel secure in their retirement.”

As a result of the acquisition Principal added 4.3 million eligible participants, approximately $150 billion dollars in account value and welcomed 1,500 new employees. The company onboarded clients in a series of structured waves through the end of June 2021, resulting in the successful integration of thousands of plan sponsors.

Enhanced Retirement Offerings, Improved Savings Rates

The integration of the Wells Fargo Institutional Retirement and Trust business along with strategic investment and initiatives has enhanced and expanded the retirement offerings Principal provides to both participants and plan sponsors.

• In October of 2020 Principal started welcoming participants through Principal^® Real Start, a simplified and highly personalized onboarding experience available in both English and Spanish. This platform has helped increase savings rates for participants to an average of about 9 percent, and nearly 40 percent of participants are deferring 10 percent or more.²
• Participants are also benefitting from a more robust financial wellness experience through award-winning online tools³ and resources backed by specialized teams of education professionals and contact center licensed financial professionals.⁴
• For plan sponsors, enhancements include more robust plan sponsor reporting and participant engagement dashboards.
• Sponsors also have access to new managed and self-directed brokerage account capabilities.
• The retirement business expanded Principal^® Total Retirement Solutions, which provides unmatched breadth, depth, and expertise for plan sponsors of all sizes and needs. These solutions include defined contribution plans, defined benefit plans, nonqualified deferred compensation plans, and stock plans including the recently added Principal^® Equity Compensation Solutions.
• Today, Principal^® Total Retirement Solutions helps thousands of employers manage multiple retirement plans.

“We are already seeing our expanded capabilities receive rave reviews from existing clients as well as attract new business,” Schaaf said. “We’re glad to now hold industry-leading market positions in all of the key retirement plan types with the ability and expertise to serve small, medium and large-sized plans. We look forward to more innovation and growth in the months and years ahead.”

Investment Solutions and Trust & Custody Business

After moving to Principal, customers now have access to top-tier, differentiated asset allocation and managed account alternatives from Principal, both in plans and for individual participants. Principal offers extensive choice across investment strategies and managers, including a full suite of actively managed and hybrid target-date funds that help meet customers’ unique investment and retirement needs.

Principal continues to integrate the Wells Fargo Trust & Custody business from the acquisition, which will enhance and add new capabilities to Principal^® Custody Solutions and increases assets under custody to over $1 trillion. The company plans for completion of the integration by March 2022.

Principal now holds leading positions in the retirement space that include:

• Top 3 defined contribution recordkeeper⁵
• #1 employee stock ownership plans⁶
• #1 defined benefit recordkeeper⁷
• #1 nonqualified deferred compensation⁸
• Top 3 pension risk transfer provider⁹
• Top 5 leader across all major retirement market measures¹⁰

For more information, visit us at: Principal.com.

About Principal Financial Group^®

Principal Financial Group^® (Nasdaq: PFG) is a global financial company with 18,000 employees^[1] passionate about improving the wealth and well-being of people and businesses. In business for more than 140 years, we’re helping more than 45.5 million customers^[2] plan, insure, invest, and retire, while working to support the communities where we do business, improve our planet, and build a diverse, inclusive workforce. Principal^® is proud to be recognized as one of the World’s Most Ethical Companies^[3], a member of the Bloomberg Gender Equality Index, and a Top 10 “Best Places to Work in Money Management^[4].” Learn more about Principal and our commitment to sustainability, inclusion, and purpose at principal.com.

^[1] As of June 30, 2020.
^[2] As of June 30, 2020.
^[3] Ethisphere Institute, 2021.
^[4] Pensions & Investments, 2020.

Custody and trust services are provided by Principal Bank^®, Member FDIC, and/or Principal Trust Company^®. These services are provided under the trade name Principal^® Custody Solutions, a division of Principal Bank. Principal Trust Company is a trade name of Delaware Guarantee & Trust Company. Principal Bank and Principal Trust Company are members of the Principal Financial Group^®, Des Moines, Iowa 50392.

Principal Financial Group closed the acquisition of certain assets of the Wells Fargo Institutional Retirement and Trust business (IRT) on July 1, 2019. The transition, transfer, and integration of IRT business operations, employees, and clients is scheduled to occur by March 2022. During the transition period, Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company, will continue to operate and service the IRT business for the benefit of Principal®, including providing recordkeeping, trustee, and/or custody services. Wells Fargo has not reviewed the content of the attached material and makes no judgment of its accuracy

Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., 800-247-1737, member SIPC and/or independent broker/-dealers. Referenced companies are members of the Principal Financial Group^®, Des Moines, Iowa 50392. Principal Global Investors leads global asset management and is a member of the Principal Financial Group^®.

¹Principal Retirement and Income Solutions data including all employer retirement plans, individual annuity and individual retirement accounts, minus Trust & Custody, as of 6/30/21.
² Principal data shows an average savings deferral rate on Principal Real Start of 8.87 percent, and 39 percent of participants are deferring 10 percent or more as of 6/30/21.
³ Principal received the DALBAR Communications Seal of Excellence for 2021. Dalbar is considered the financial community’s leading independent expert for evaluating, auditing, and rating business practices, customer performance, product quality and service.
⁴ Most representatives have registration.
⁵ Top 3 defined contribution provider by number of participants, according to the annual PLANSPONSOR Defined Contribution Recordkeeping Survey, July 2021.
⁶ No. 1 ESOP provider by number of plans, according to the annual PLANSPONSOR Defined Contribution Recordkeeping Survey, July 2021.
⁷ No. 1 defined benefit recordkeeper by number of plans, according to the annual PLANSPONSOR Defined Contribution Recordkeeping Survey, May 2021.
⁸ No. 1 non-qualified provider based on total number of Section 409A plans, according to the annual PLANSPONSOR Defined Contribution Recordkeeping Survey, July 2021.
⁹ No. 3 Pension risk transfer provider. Based on total PRT assets, LIMRA Secure Retirement Institute, as of 12/31/2019.
¹⁰ According to the annual PLANSPONSOR Defined Contribution Recordkeeping Survey, July 2021.

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FAQ

What was the impact of the Wells Fargo business integration on Principal Financial Group (PFG)?

The integration significantly enhanced Principal's retirement service capabilities, adding 4.3 million eligible participants and $150 billion in account value.

How many participants does Principal Financial Group serve after the acquisition?

Principal Financial Group now serves over 10 million eligible participants.

What is the average savings rate among participants after Principal's acquisition?

Participants have an average savings rate of approximately 9%.

What positions does Principal Financial Group hold in the retirement services market?

Principal is among the top in key retirement plans, including defined contribution recordkeeping and employee stock ownership plans.