Principal Financial Group has filed a plan to demutualize with the Iowa Insurance Commissioner.
Principal, based in Des Moines, Iowa, plans to give all eligible policyholders at least 100 shares of stock as it converts itself into a publicly traded company. To be eligible for compensation under state law, a policyholder must own an eligible Principal Life policy or contract from March 31, 2000–or one year prior to the board of directors adoption of the plan–continuously until the effective date of the demutualization.
Most eligible policyholders will have the option of receiving cash or shares.
During the demutualization process, the company, one of the countrys largest 401(k) plan providers, will create a separate account to help small and midsize employers protect the tax-qualified status of their retirement plans and reduce the administrative burden associated with receiving demutualization compensation.
“They will have a number of investment options including this separate account,” says Jeff Rader, a spokesman for Principal. “The separate account will be invested primarily in Principals common shares.”