Products November 30, 2005

Principal Aids Analysis of Roth 401k Option

November 30, 2005 (PLANSPONSOR.com) - The Principal Financial Group has announced that it is prepared to offer the Roth 401(k) option to sponsors of 401(k) and 403(b) plans on January 1 and has prepared educational materials for financial professionals and plan sponsors to help participants with their decision.
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In the announcement, The Principal says it has developed easy to understand guides to help participants determine if the Roth elective deferral could be a fit for them.  Chris Bowman, vice president of Retirement and Investor Services at The Principal, said that a major challenge for employees is estimating when they will pay the most tax, especially when no one can accurately predict whether the tax code will change.

One of the new guides from The Principal helps employees by profiling characteristics of the kind of participant who would likely benefit from a Roth elective deferral and the kind of participant who probably would not be a good candidate for the new Roth option.

In addition, The Principal has created specific materials for financial professionals to educate their clients about the Roth 401(k) option.   “We want to make sure plan sponsors are prepared to field questions from participants …questions with no easy answers,” said Bowman, in the announcement.

More about The Principal Financial Group can be found at www.principal.com .    

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