Principal LDI Separate Accounts offer liability-driven investing for all plans of all sizes
DES MOINES, Iowa–(BUSINESS WIRE)–As defined benefit plan sponsors grapple with managing plan volatility in a low-interest-rate environment, many are turning from total-return investment strategies to liability-driven investing (LDI). But this transition has generally been difficult for all but the largest plans.
The Principal Financial Group® announces a new suite of separate accounts that make it easier for defined benefit plans of all sizes to implement an LDI strategy. The Principal LDI Separate Accounts are a line-up of four fixed income investment options of varying durations that can be combined to match the duration of a plan’s liabilities.
“Until now, sponsors of small and medium-sized defined benefit plans and their financial professionals have struggled to implement anLDI strategy because typically only the largest plans had enough fixed income assets to create the customized bond portfolio needed to match the duration of a plan’s liabilities,” said Janet Kubik, vice president of retirement and investor services at The Principal, the number one provider of defined benefit plans. “The Principal LDI Separate Accounts provide fixed income investment options of varying durations that can be combined together soall sizes of defined benefit plans can use LDI strategies.”
Each of the Principal LDI Separate Accounts offers financial professionals and their defined benefit clients a distinct duration band and an emphasis on corporate bonds.
“The Principal LDI Separate Accounts represent the results of our extensive effort to provide a corporate bond emphasis within the composition of each separate account,” said Kubik. “This focus on corporate bonds is desirable because the funded status of a defined benefit plan is so closely tied to the corporate interest rate environment.”
The LDI Separate Accounts are also supported by a due diligence process to help plan sponsors manage their investment-related fiduciary responsibilities.
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About the Principal Financial Group
The Principal Financial Group® (The Principal®) is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $367.1 billion in assets under management4 and serves some 18.2 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.