Close Close

Retirement Planning > Saving for Retirement

Principal: New Worksite Pitch Gets Results

Your article was successfully shared with the contacts you provided.

Principal Financial Group Inc. has developed a worksite presentation that seems to be increasing voluntary benefit plan participation rates.

The laptop-based presentation, designed with the help of International Business Machines Corp., Armonk, N.Y., is used by Principal’s salaried benefits enrollers in one-on-one meetings with employees during employer enrollments, the company says.

The presentation, Milestones, is tailored to fit the specific circumstances of each individual.

That tailored approach makes it easy for employees to establish goals for retirement, disability, life and other coverage and to stay on track with their retirement goals, according to Principal, Des Moines, Iowa.

Employees meet one-on-one with a salaried benefits specialist from Principal on company time, at no charge to the employee and the plan sponsor.

Milestones is designed for all employees regardless of income or assets. On average, employees reached by the program are ages 43 to 44, with an annual income of about $40,000. This is a target market usually underserved by worksite marketers, says Luke Vandermillen, national director of worksite benefits at Principal, Des Moines, Iowa.

“We call it ‘financial planning for the rest of us,’” Vandermillen says.

At the time of the initial meeting between an employee and a Principal specialist, Milestone is already programmed with information, furnished by the employer, about the employee’s income, existing benefits, contribution levels and other particulars.

The roughly 30-minute presentation helps identify financial needs and determine what benefits employees need to meet those objectives, at what levels, and how their projected payroll deduction would affect their paycheck.

The program helps the specialist identify gaps in the employee’s financial needs, such as shortfalls in recommended levels of life insurance or retirement savings. Milestone then creates a personalized agenda of action steps needed to remedy problems, along with a timetable for accomplishing each step.

Principal specialists follow up yearly to review what the employee needs to do next, the company says.

When employees are unable to attend one-on-one sessions, they can speak over the phone to a Principal representative while reviewing the Milestone presentation live online, the company says.

Benefit plans that use the Milestone presentation showed significantly higher participation rate than plans that did not, Vandermillen says.

After one-on-one meetings with over 68,000 employees of 1,500 employers, the Principal saw 40,000 take some action, such as buying new voluntary benefits, increasing insurance levels or increasing the percent of income deferred for retirement, Vandermillen says.

Participation rates increased 13% for retirement accounts and about 40% for voluntary insurance products.

In addition, last year the program motivated employees to roll over almost $200 million in retirement savings from individual retirement accounts to worksite retirement plans sponsored by the Principal.

The Principal has added around 100 salaried employees to its staff to handle Milestone meetings and plans to add another 15 to 20 this year, Vandermillen says.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.