ESOPs at Principal®

Whether a company is considering an employee stock ownership plan (ESOP) or reviewing one already in place, our expertise and holistic approach can make a big difference.

40 of the nation’s top 100 ESOPs choose us.1

Why we’re different

What sets us apart comes down to three things—our people, breadth of experience, and technology. Put simply, we work in the background taking care of the details to make the entire ESOP easier for everyone involved.

With more plans under our belts than anyone else, we truly excel at supporting ESOPs no matter the company size, structure, or industry.2

What separates us from the competition?

  1. Expertise and passion of our people
  2. Breadth of our experience and companies we work with
  3. Technology to drive engagement and keep data safe

An easier ESOP experience

Our full spectrum of ESOP recordkeeping and administrative services can make life easier for companies and give employee owners a better experience.

No cost ESOP liability forecasting

  • Web-based repurchase liability projection tool, My PERLS®, helps companies easily manage ESOP cash flow—and at no additional fee

Quick, secure access anywhere, anytime

  • Mobile app gives employee owners key account information in the moment on the go
  • Convenient access to information that matters for the company and employee owners, 24/7
  • Call center allows employee owners to easily get their questions answered by a real person
  • Efficient data submission and reporting
Easy-ESOP-and-401k-administration-capabilties

An easier ESOP experience

Our full spectrum of ESOP recordkeeping and administrative services can make life easier for companies and give employee owners a better experience.

No cost ESOP liability forecasting

  • Web-based repurchase liability projection tool, My PERLS®, helps companies easily manage ESOP cash flow—and at no additional fee

Quick, secure access anywhere, anytime

  • Mobile app gives employee owners key account information in the moment on the go
  • Convenient access to information that matters for the company and employee owners, 24/7
  • Call center allows employee owners to easily get their questions answered by a real person
  • Efficient data submission and reporting
Easy-ESOP-and-401k-administration-capabilties

Guaranteed data security

  • Guaranteed information security when employee owners take 3 steps to secure their account3
  • Ongoing security measure reviews conducted by an independent auditing firm and a report (SOC2) made available to boost due diligence
  • Confidence we're protecting consumer data with anti-fraud technology that analyzes voices, call location, and phone information along with two-factor authentication for online access

Hassle-free elections

  • Save time and gain confidence with two technology-driven employee owner services—Principal e-DistributionSM and Principal e-DiversificationSM. Both services:
    • Make eligibility determination easier
    • Provide simple elections and confirmations
    • Automate check processing
    • Perform tax withholding and 1099R reporting
    • Deliver quick reports for the company and trustees

We deliver an experience you won’t find anywhere else.

  • Web-based resource to manage ESOP cash flow projections
  • Mobile app
  • Data security reviewed by an independent third party (SOC2 report)

Tailored employee owner communication and education

  • Specialized team that can help deliver customized, results-oriented communication on all things ESOP to enhance employee ownership culture
  • Access to a wealth of Principal® Milestones financial wellness resources, including legal document and will preparation, health savings account integration*, and Alexa flash briefing skill to help manage finances beyond just retirement

Comprehensive fiduciary support

  • Diligent compliance testing support and protection to help manage fiduciary responsibilities

We focus on what we do best—employee stock ownership plan design expertise. This gives you time for what you do best—finances, accounting, legal, and much more. And allows companies to focus on what they care about most—their business.

Meaningful guidance

Our team of experienced ESOP consultants provides proactive consulting to help the ESOP and its benefits meet the ongoing needs of the owner and company.

No matter what stage the ESOP is in—new, existing, or terminating—we've got the experience and processes in place to help.

We understand that an ESOP is a legacy. We'll treat it as one.

  • New plans
  • Existing plans

Determining the fit and building the foundation

To us, an ESOP is much more than just a transaction. Look to our consultants to focus on the long-term success of the ESOP.
We listen in order to …
  • Understand a selling owner's personal goals and company objectives
  • Provide a thorough analysis to ensure an ESOP makes sense
If it's a fit, we …
  • Conduct a thorough assessment of key considerations like owner objectives, company attributes, employee owner benefits, and ERISA and compliance requirements
  • Design the ESOP to meet the company's and selling owner's goals—whether that's selling now or in the future, a total or just a partial sale
  • Work with a team of ESOP professionals including financial professionals, lenders, trustees, valuation firms, CPAs, attorneys, and others to ensure a smooth implementation
  • Communicate, educate, and promote the new ESOP to employee owners

Strengthening the foundation

As a company evolves so should the ESOP. We provide ongoing consultation to ensure the ESOP changes with the company.

  • Assess how company changes could affect the ESOP and provide recommendations
  • Deliver guidance for ESOP in company mergers and acquisitions
  • Advise on the sale of additional shares of stock
  • Consult on ESOP design and plan operations
  • Proactively help manage ongoing cash flow for the plan
  • Provide thorough audit support for the ESOP
  • Analyze, recommend, and implement modifications to employee stock ownership plan documents
  • Communicate employee stock ownership plan design changes to employee owners

Evaluating options

We'll conduct a thorough evaluation to help determine if it makes sense to terminate the plan. And if it's decided to end the ESOP, we'll manage the process including compliance, distributions, and communicating to employee owners.

We've seen how plan design can determine whether or not an ESOP and the company are successful.
Good news—this is where we excel. Let us help!

Integrated retirement plan services

We get that most ESOP companies offer more than an ESOP as part of their retirement benefits. As a retirement plan leader, we excel like no one else at streamlining the experience for plan sponsors with multiple plans to provide comprehensive, holistic services for a company's entire retirement program—we've got it covered.

Streamlined experience

  • Single, secure digital access gives employers convenient access to all retirement plan information
  • Ease of knowing who to go to for all plan needs

Simplified communication and reporting

  • Total retirement view with consolidated, combined reports and statements
  • Combined testing at no additional charge

Coordinated support

  • Comprehensive service team for a holistic approach that considers the entire retirement suite
  • Single source for data management means information is shared for payroll and compliance one time to one service provider

Synchronized participant experience

  • Single website with one secure login gives access to on-demand consolidated statements
  • One mobile app that covers it all
  • Integrated call center to answer any type of question
Customer care: Our full-service approach - benefits of integrated services for ESOP companies Customer care: Our full-service approach - benefits of integrated services for ESOP companies

Leader in total workplace solutions for 140 years

Total retirement services

#1

Employee stock ownership plans4

Top

5

Defined contribution plans5

#1

Defined benefit plans6

#1

Nonqualified plans7

Leader in total workplace solutions for 140 years

Total retirement services

#1

Employee stock ownership plans4

 

Top

5

Defined contribution plans5

 

#1

Defined benefit plans6

 

#1

Nonqualified plans7

More than a retirement plan

Every owner and company looks a little different, but most share four common goals: recruit, retain, reward, and retire.

Through our tailored approach, an ESOP can often address all of these succession planning needs. With a firm plan for the future, an owner gains back time to focus on what matters—helping their company and people grow.

Wondering if an ESOP is a potential fit?
Take our ESOP assessment >

Let us help you

Contact your Principal representative or our Advisor Support Team by e-mail or phone at 800-952-3343, option 2.
* HSA integration available through the Retirement Wellness Planner for Principal clients with an ESOP and 401(k) plan.
1 100 Largest Majority Employee-Owned Companies, NCEO, July 2019.
2 Based on number of employee stock ownership plans, PLANSPONSOR Recordkeeping Survey, July 2018.
3 Employer-sponsored retirement plans are defined benefit or defined contribution. The guarantee applies to employer sponsored defined benefit or defined contribution plans and is effective for unauthorized activity that occurs on or after Aug. 10, 2017, and after you have activated two-factor authentication. Exclusions to the policy may apply.
4 Based on number of plans, PLANSPONSOR Recordkeeping Survey, July 2018
5 Based on number of plans and participants, PLANSPONSOR Recordkeeping Survey, July 2018.
6 Based on number of plans, PLANSPONSOR DB Administration Survey, May 2019.
7 Based on number of plans, PLANSPONSOR Recordkeeping Survey, July 2018.

Important information

Amazon Alexa is a trademark of Amazon.com, Inc.

Principal® does not make available products related to health savings accounts.

The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment, or accounting obligations and requirements.

Your repurchase calculation will be based on the set of assumptions you use within the My PERLS software. Consultants at Principal are available to discuss the results generated by your study and the potential alternatives for addressing repurchase liability issues. You should consult appropriate professionals on all matters related to legal, tax, investment, or accounting obligations and requirements.

Participants should consider the differences in investment options and risks, fees and expenses, tax implications, services, and penalty-free withdrawals. There may be other factors to consider due to their specific needs and situation. Participants may wish to consult their tax or investment advisor or legal counsel.

Insurance products and plan administrative services provided through Principal Life Insurance Co., a member of the Principal Financial Group®, Des Moines, Iowa 50392.

919454-082019