Time to Begin 403(b) Transition is Now

July 1, 2008 2:15 PM EDT

DES MOINES, Iowa--(BUSINESS WIRE)--

Non-profit retirement plan sponsors face a daunting set of new responsibilities in order to bring their 403(b) plans into compliance with new IRS regulations. They need to begin taking action now. But where to start?

New guides from the Principal Financial Group(R) show what to do and when. The 403(b) Compliance Guides break the complicated tasks into manageable steps to help financial professionals and their clients comply with the new requirements by the January 1, 2009 deadline.

One step at a time

"Non-profit plan sponsors face complex and extensive decisions from reviewing their plans to creating new plan documents. On top of that there are new form 5500 requirements. No wonder sponsors are asking for help," said Aaron Friedman, national non-profit practice leader for The Principal(R).

"For years we've been helping non-profits run their 403(b) plans in a manner that meets the spirit of the new requirements. We are able to simplify the process for those who need to make changes and help financial professionals and their clients get there one step at a time," said Friedman.

The first steps

The guides outline step-by-step actions to take over the next several months. The Principal will make the guides available in four stages to coincide with the suggested timing for taking action. Financial professionals can use the guides to help clients get started. The guides also provide tools to help complete the steps.

The first guide, which is available at www.principal.com/403bguides, outlines immediate actions that plan sponsors should begin taking now. They include:

    --  Setting up a committee

    --  Identifying any contracts included in their actively sponsored
        plans

    --  Reviewing and documenting the key provision of each of their
        contracts

The first guide provides a Contract Comparison Tool to make it easier for plan sponsors to make their reviews.

The next guides will be distributed in late July, August and on a rolling schedule during the fourth quarter of 2008.

Other 403(b) resources from The Principal

The Principal has been providing services to non-profit plan sponsors for more than 40 years. The new 403(b) guides are the latest addition to a comprehensive education program from The Principal to help financial professionals and their clients.

    --  An easy interactive 403(b) tool outlines the action steps
        needed by each of type of plan design. The tool is available
        at www.principal.com/403btool.

    --  An easy-to-use guide gives a before-and-after snapshot of key
        provisions of the 403(b) regulations.

    --  Two white papers are available--one by renowned 403(b) expert
        David Powell of the Groom Law Group and the other by Aaron
        Friedman. The white papers are available at
        http://www.principal.com/retirement/biz/pen_403b.htm.

    About the Principal Financial Group

The Principal Financial Group(R) (The Principal (R))(1) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $304.2 billion in assets under management(2) and serves some 18.8 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.

(1) "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

(2) As of March 31, 2008

Source: Principal Financial Group

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