Principal Financial Group

Source: AARP.org | August 30, 2006

Winning years: 2007, 2006, 2005, 2004, 2003, 2002
Industry: Financial Services
Location: Des Moines, IA
URL: www.principal.com

Highlights of 2007 Winning Strategies

The Principal Financial Group partners with Manpower to offer the "Happy Returns" Program to retirees. This program allows retirees to return to work on a temporary basis as an employee of Manpower while maintaining their pension benefit. In addition to providing flexible scheduling choices, Principal implemented the "Working Caregiver Leave" program, which allows employees the option to work a part-time schedule for up to 12 weeks per year while maintaining job security and full benefits. The Principal hosted "Development Week 2006" a two-week company-wide event with opportunities for employees to develop skills and heighten awareness in various business topics.

Additional Policies and Practices:

• Recruiting: In 2006, the company participated in the Des Moines Veterans Career Fair and a local AARP career fair. In addition, the company is a member of the Older Worker Employment Partnership, a group of state agencies and local employers who meet to discuss recruiting, employment, and training opportunities for mature and retired workers.
• Workplace Culture/Continued Opportunities: The company offers learning and development programs to its full- and part-time employees: tuition reimbursement, in-house classroom training, on-line training, and certification classes. Employees must work 20+ hrs/week to be eligible for the tuition reimbursement program. In the past 12 months, 96 percent of Principal employees took part in at least one training opportunity, with an average of 44 training hours. The company conducts training on culture and age diversity through workshops and other resources. An employee opinion survey prompted improvements in employee benefits including: increased PTO load for non-exempt new hires to 40 hours at hire, added ability to purchase up to 40 hours of PTO per year, added 2-week paid Adoption Leave, redesigned the retirement program to better align with employee input and market practices, added a new on-site pharmacy, added new high-deductible health plans with an HSA option, and added maternity parking. One special accommodation for an employee suffering from arthritis and back problems involved purchasing an electric desk, which allows the employee to either sit or stand while working.
• Benefits/Health: Full- and part-time employees (working 20+ hrs/week) receive individual and family medical coverage, individual and family prescription drug coverage, individual and family vision and dental insurance, as well as short- and long-term disability. Health benefits for retirees pre-65 and 65+ include individual as well as spouse medical and drug coverage, vision and dental insurance, as well as life insurance or other death benefit coverage. New hires are eligible for all of these benefits upon retirement. Principal offers its employees an FSA account to assist in covering their out-of-pocket health care costs.
• Benefits/Financial: A 401(k) plan (with company match), cash balance plan, and stock options are among the retirement plans offered to full- and part-time employees. Other than employer match, Principal encourages employees to participate in the 401(k) plan by offering all new hires the opportunity to automatically enroll in the plan, employees may choose to invest in lifecycle funds, and employees 50+ can make catch-up contributions. The Principal Employee Financial Center offers employees free information on financial planning, products, and services. Employees also receive financial planning information from the financial services firm that administers their 401(k) and from external financial planning experts not associated with the 401(k). Principal offers paid time off specifically designated for caregiving, and short-term time off without pay as well as long-term leave of absences without pay to allow for caregiving. Wellness programs offered to full- and part-time employees are: flu shots, health screenings, health risk appraisals, smoking cessation programs, health club discounts, physical activity/exercise programs, weight loss programs, and stress management training. In 2006, all employees received 4 hours of Wellness Time Off/Financial Time Off to work on wellness or personal finances. Seventy-nine percent of Principal employees have participated in at least one of these wellness benefits in the past 12 months. Principal offers referral services to assist with childcare and eldercare to its full- and part-time employees.
• Benefits/Alternative Work Arrangements: Alternative work arrangements offered to full- and part-time employees include: flex time, compressed work schedules, job sharing, and telecommuting. Full-time employees are eligible to move to part-time work on a permanent or temporary basis.
• Opportunities for Retirees: Principal currently has 1,940 retirees. There is an individual who has a direct responsibility for retiree relations. The company stays connected with retirees by communicating regularly with them, inviting them to events, providing them with ongoing access to retirement planning information, and formally acknowledging them when they retire. The company offers retirees the following work arrangements: temporary work assignments, consulting/contract work, telecommuting, and part-time work. Age of Workforce: Nineteen percent of Principal's employees are 50+. The average tenure of employees age 50+ is 14.5 years.

Winning Strategies 2006

In 2005 the company initiated its 'Wellness Time Off' program which allows employees extra time away from work to take care of health and wellness needs. The company's 'Happy Returns' program helps retirees return to work with the assistance of Manpower staffing service.

Other Benefits:

• Recruiting: Principal Financial Group uses senior placement agencies to recruit mature workers. In 2005 the company participated in the AARP Foundation's Workforce Initiative to attract and retain mature workers.
• Workplace Culture/Continued Opportunities: The company offers the following learning and development programs to its full- and part-time employees: tuition reimbursement (3.6% used in past 12 months), in-house classroom training, on-line training, and certification classes. Employees must work at least 20 hrs/week to be eligible for the tuition reimbursement program. Long-service anniversaries are celebrated with announcements, parties, gifts and awards. The following benefits were added due to employee requests in the past three years: increased the PTO load for non-exempt new hires to 40 hours at hire, added ability to purchase up to 40 hours of PTO per year, added two week paid adoption leave, improved retirement program, increased 401(k) match, and updated pension plan.
• Benefits/Health: Full- and part-time employees (working at least 20 hrs/week) receive individual and family medical coverage, individual and family prescription drug coverage, individual and family vision and dental insurance, individual and family long-term care insurance, as well as short- and long-term disability. Forty percent of employees are enrolled in the individual medical and prescription drug coverage plans, while 51% of employees are enrolled in the employee and family medical and drug coverage plans. Thirty-six percent of employees are enrolled in the individual vision insurance plan, 49% in the employee and family vision insurance plan, 39% in the individual dental plan, 52% in the employee and family dental plan, and 100% are enrolled in the short- and long-term disability plans. Health benefits for retirees pre-65 and 65+ include individual as well as spouse medical and drug coverage, vision, dental and long-term care insurance, as well as individual and spouse life insurance or other death benefit coverage. New hires are eligible for all of the above retiree benefits upon retirement. The company offers a health flexible spending account and a health reimbursement account.
• Benefits/Financial: The company offers a 401(k), cash balance and stock option retirement savings plan to its full- and part-time employees. The company matches 75% of elective deferrals up to the first 8% of deferral on the 401(k). All new hires are automatically enrolled in the 401(k) plan, employees may choose to invest in lifecycle funds and those age 50+ can make 'catch-up' contributions to their 401(k). The company offers referral services to assist with child care and elder care. The referral services to assist with child care are offered to employees to use for their grandchildren. The following wellness programs are offered to full- and part-time employees: flu shots, health screenings, health risk appraisals, smoking cessation programs, health club discounts, exercise programs, weight loss programs, and stress management training programs. In the past 12 months, 78% of the company's employees have used at least one of the above wellness benefits.
• Benefits/Alternative Work Arrangements: The company offers the following alternative work arrangements to its full- and part-time employees; flex time (61% participation), compressed work schedules (18% participation), job sharing, and telecommuting (14% participation). Full-time employees are eligible to move to part-time work on a permanent and temporary basis. Although the company does not have a formal phased retirement program, employees are allowed to transition into part-time work with leader approval. The company offers paid time off that is specifically designated for care giving.
• Opportunities for Retirees: The company currently has 1,935 retirees. There is an individual who has a direct responsibility for retiree relations. The company stays connected with its retirees by communicating on a regular basis with the retiree, inviting retirees to organization events/celebrations, providing retirees with ongoing access to retirement planning workshops, and formally acknowledging retirees on the occasion of their retirement. Retirees are offered the following work arrangements; temporary work assignments (25 retirees used in past 12 months), consulting/contract work (25 retirees used in past 12 months), telecommuting (3 retirees used in past 12 months), part-time work (25 retirees used in past 12 months), and full-time work.
• Age of Workforce: Nineteen percent of the company's employees are 50+. Seven percent of the company's past twelve month new hires are 50+. The average tenure of employees age 50+ is 13.7 years.

Winning Strategies 2005

The Principal Financial Group's paid time off accrual rates go up permanently on milestone anniversaries like 10 and 25 years.

Growth opportunities include mentoring, international assignments, and job rotation programs. The Principal partners with Manpower on a program that allows retirees to work in a temporary position at the company while still receiving pension benefits. It also has a relationship with AARP through the National Employer Team (formerly Featured Employers). This is an AARP initiative to match older workers returning to the job market or looking for career changes with companies looking for experienced hands.

Although it has no formal phased retirement program, the company allows employees to transition to a part-time work schedule with approval. Employees also have the option of working a part-time schedule (20 to 39 hours/week) for up to 12 weeks within a year while maintaining job security and full benefits. The time can be used to provide care for a newborn, newly adopted baby, or newly placed foster child or to care for an ill family member, including same-sex or opposite-sex domestic partners and his or her dependents.

Benefits:

• Full-time employees pay 22 percent of the premium for employee and family health insurance and prescription drug coverage; part-time employees (minimum 20 hours/week) pay 61 percent. The company covers short- and long-term disability insurance in full for all employees.
• The Principal offers a defined contribution, cash balance, employee stock purchase plan, and annual incentive compensation to its full and part-time employees. The 401(k) match is 75 percent of elected deferrals up to the first 8 percent of pay. Ninety-three percent of employees participate in the 401(k).

Nineteen percent of the company's employees are 50+. Seven percent of the company's past year new hires are 50+.