Principal Reaches Wells Fargo IRT Integration Milestone; Names Key Platforms to Bring Combined Suite of the Best Capabilities to Customers

Tech infrastructure selected to serve trust and custody and nonqualified and employee stock ownership plans

Principal Financial Group^® today announced further progress in the integration of the Wells Fargo Institutional Retirement & Trust (IRT) business, by naming technology platforms for its Trust and Custody (T&C), Nonqualified (NQ) and Employee Stock Ownership Plan (ESOP) business segments. After a comprehensive analysis, the current SEI platform was selected to serve trust and custody clients and the Principal^® platform was selected to serve ESOP and NQ plans moving forward. Just last month, Principal announced its retirement recordkeeping platform would also serve 401(k) plans and defined benefit customers.

This collective tech infrastructure is not only flexible, robust and efficient, it also provides a solid foundation to build enhancements in the future.

"We're committed to delivering a results-driven, customer-first experience," said Renee Schaaf, President of Retirement and Income Solutions at Principal. "These digital and service model investments support our efforts to bring the best from both organizations to provide unparalleled value to participants, clients, advisors and consultants."

Tailored Trust and Custody Solutions
As a part of the commitment to — and investment in — the trust and custody business, Principal will retain the SEI trust accounting platform Wells Fargo IRT uses today to support the combined organization. Using the existing trust accounting platform provides a familiar, reliable, high-quality interface for clients and employees, and builds additional capabilities for Principal.

• Comprehensive platform with robust reporting. Clients will benefit from single login access to account information across the trust accounting and additional reporting platforms, including access to performance measurement for domestic and multi-currency investment portfolios.
• Customized trust and custody services for more industries and entities. The combined organization safeguards more than $1 trillion in assets and builds on the Principal 75-year history of providing trust and custody services.¹ Together, the organizations bring deep experience in key services such as trustee/custodial/paying agent, global and domestic custodial service, timely and accurate disbursements for benefit payment systems, global reporting, and customizable data delivery.
  • Built around the needs of corporations, financial institutions, endowments/foundations, government and public funds, healthcare and insurance organizations, nonprofit organizations, and Taft Hartley plans.
• Accountable service. The trust and custody teams bring a depth of talent, passion, and expertise to provide clients and consultants high-quality, personal service.
• Bank and fiduciary expertise. For clients who require a bank as part of the trust and custody transaction, Principal Bank^® provides nation wide fiduciary services. The strength of the Principal financial services organization allows for the delivery of technology, client service, diverse offering and infrastructure to support and grow this business moving forward.

Visit the Principal Trust and Custody website for more information.

Principal^® Total Retirement Suite: improving plan health and retirement readiness
The Principal retirement recordkeeping platform is being enhanced by Wells Fargo IRT capabilities, such as deep plan benchmarking and real-time performance monitoring, and feedback to promote plan health. With Principal as the service provider, plan sponsors and participants will be able to seamlessly access multiple retirement plan types — including ESOP, NQ, 401(k) and DB — from one login.

Employee Stock Ownership Plans
Being part of Principal—the #1 recordkeeper of ESOPs—provides customers and service teams access to industry-leading expertise and a holistic, integrated approach to retirement. This is why 40% of the nation's largest ESOP organizations chose Principal.^2,3

• Simpler ESOP administration. Our full spectrum of ESOP recordkeeping and administrative services can make life easier for companies and give employee owners a better experience.
• Hassle-free elections. Technology-driven employee owner services, such as Principal e-Distribution^SM and Principal e-Diversification^SM, can help save time and ensure accuracy. Together these services can help make eligibility determination easier, provide simple elections and confirmations, automate check processing, perform tax withholding/1099R reporting, and deliver quick reports for the company and trustees.
• Tailored communication to enhance employee ownership culture. One common benefit of an ESOP is a better engaged and productive workforce. The Principal ESOP team specializes in working with clients on the complexity of ESOPs and delivering tailored, results-oriented communication to help maximize this benefit.
• Comprehensive fiduciary support. Extensive reporting and compliance services include helping plan sponsors with government filings, compliance testing ESOP cash management, and budgeting. The ESOP service team continuously monitors related legislation and regulations to help ensure clients can keep their plans in good standing.

Visit the Principal ESOP website for more information.

Nonqualified Plans
As the #1 service provider of nonqualified deferred compensation plans, the Principal operating platform and service model are designed to address unique design needs.⁴

• Top-tier digital experience. Principal has made significant investments in advancing the user interface and enrollment experience for both plan sponsors and participants. Plan sponsors will also have a comprehensive view of all plans using our services in a single place, and participants a holistic picture of their total retirement health.
• Robust client-focused teams that ta consulting approach. Specialized administrative services delivered with speed and accuracy. Additionally, teams hold Rabbi trust expertise, offering a comprehensive range of financing and trust services.
• Well positioned for future innovation. The accelerated digital investments position retirement plan services well for cloud-computing, 5G connectivity, and application programming interface (API) enhancements.

Visit Principal NQ website for more information.

"Retirement plan and non-retirement clients can expect to benefit from our continued digital investments, innovative solutions, and service support," said Schaaf. "The powerful combination of Principal and Wells Fargo IRT talent, expertise, processes and technology are designed to deliver best-in-class enhancements that help drive customer goals."

Work is underway to further enhance these platforms, which will be available to clients starting in 2020. Visit www.principal.com/BetterRetirement for more information about the Principal tech-driven customer experience.

About Principal^®
Principal helps people and companies around the world build, protect, and advance their financial well-being through retirement, insurance, and asset management solutions that fit their lives. Our employees are passionate about helping clients of all income and portfolio sizes achieve their goals – offering innovative ideas, investment expertise and real-life solutions to make financial progress possible. To find out more, visit us at principal.com.

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 conversion of IRT business operations, employees, and clients will occur over the following 12-24 months. 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 and plan administrative services provided through Principal Life Insurance Co. Securities offered through Principal Securities, Inc., 800-547-7754, member SIPC, and/or independent broker-dealers. Annuities, insurance, retirement plans, mutual funds and other securities are not insured by the FDIC, are not obligations or deposits for Principal Bank^® nor guaranteed by Principal Bank, and involve risk, including possible loss of the principal invested. Principal Securities, Principal Bank and Principal Life Insurance Company are members of the Principal Financial Group^® (Principal^®), Des Moines, IA 50392. Certain investment options may not be available in all states or U.S. commonwealths. Bank products and services are provided by Principal Bank^®, member FDIC. Principal Bank is a member 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^®.

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¹ Pro-Forma calculations based upon data as of Dec. 31, 2017 provided by PLANSPONSOR 2018 Recordkeeping Survey and inclusive of shock lapse and new sales assumptions.

² Based on number of employee stock ownership plans, PLANSPONSOR Recordkeeping Survey, July 2018.

³ 100 Largest Majority Employee-Owned Companies, NCEO, July 2019.

⁴ Based on total number of nonqualified deferred compensation plans (excluding 457 plans), PLANSPONSOR 2019 NQDC Recordkeeping Survey, July 2019.

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