PRESENTATION INSTRUCTIONS NQ46 | 10/2015 | t q IFTHEN Does not offer an employer contribution… REMOVE last bullet on SLIDE 4 (Congratulations are in Order). REMOVE SLIDE 8 (first of two Benefits of Deferred Comp versions). If using SLIDE 25 or 26, remove reference to employer contributions. Offers an employer contribution… REMOVE SLIDE 9 (second of two Benefits of Deferred Comp versions). Does not offer a Rabbi Trust REMOVE SLIDE 11 (A Measure of Protection).

PRESENTATION INSTRUCTIONS Before you finalize your presentation:  Delete Slides 1-2 (Instructions).  You can either paste a client logo on Slide 3 (Title Slide) or delete that box and center The Principal logo. Customize with presenter’s name.  Customize Slide 14 (Pay Yourself on Your Schedule) based on the distribution options offered in the plan  Customize or remove Slide 18 (Planning for the Unexpected).  Slide 21 (Time to Act) includes the participant service center number. If you know this client’s participants call a different number, change it.  Be sure to remove the words “Optional” or “Customize” from slide headers.  Insert any optional slide content from Slides (Jane Bridges the Gap through Cost of Waiting) into the appropriate point in the core presentation. Be sure to delete any of Slides that you don’t want to include. NQ46 | 10/2015 | t q

A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Name, title(s), designation(s) enrollment meeting Organization name Date Insert plan sponsor logo if available

CONGRATULATIONS ARE IN ORDER A UNIQUE BENEFIT EXCLUSIVELY FOR YOU You are one of the organization’s most valued contributors.  Selected for a unique opportunity  Defer payment of compensation to a future time of your choosing, according to plan provisions  Gain more control over your taxes, how and when you withdraw your savings, how your savings is invested  [And potentially earn additional employer contributions]

WHAT TO CONSIDER BEFORE PARTICIPATING: A SHORT QUIZ A UNIQUE BENEFIT EXCLUSIVELY FOR YOU QUESTIONANSWER Interested in lowering your current taxable income? YES/NO Close to maxing out or maxed out qualified plan contributions? YES/NO Concerned about meeting your retirement savings goals?YES/NO Can you afford to defer compensation?YES/NO Confident in your employer’s continued success?YES/NO

TODAY’S AGENDA THE BASICS Understand what the 457(b) plan is and how it works. THE DETAILS Identify key benefits and considerations. THE EXPERIENCE Learn how this plan could help you meet your savings goals. A UNIQUE BENEFIT EXCLUSIVELY FOR YOU

THIS 457(B) DEFERRED COMPENSATION PLAN A UNIQUE BENEFIT EXCLUSIVELY FOR YOU DECIDE INVEST ENJOY DEFINED: Agreement between you and your employer to receive compensation at a later date. Simply put, it’s as easy as:

THE BENEFITS OF DEFERRED COMP A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Take advantage of pre-tax savings Save more for retirement Enjoy flexibility Receive employer contributions

THE BENEFITS OF DEFERRED COMP A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Take advantage of pre-tax savings Save more for retirement Enjoy flexibility

A UNIQUE BENEFIT EXCLUSIVELY FOR YOU  Ability to defer compensation in excess of qualified plan limits, up to $18,000 in the 457(b) plan  Plan is not subject to age-based distribution rules −No tax penalty for distributions prior to age 59 ½ −No required minimum distributions at age 70 ½ if still employed  Contractual promise made by your employer to pay benefits shown in your account  Participants considered unsecured creditors in event of bankruptcy  Plan assets are owned by organization until paid out THE BENEFITS OF DEFERRED COMP WHAT “NONQUALIFIED” MEANS

A MEASURE OF PROTECTION A UNIQUE BENEFIT EXCLUSIVELY FOR YOU All deferred compensation deposited into a special kind of trust Trust purpose is solely to hold assets and pay deferred comp benefits Protection from change of control in organization ownership or employer’s change of heart

SAVE MORE FOR RETIREMENT A UNIQUE BENEFIT EXCLUSIVELY FOR YOU As your income rises, it may be more challenging to reach your retirement income goals.

POWER OF PRE-TAX SAVINGS A UNIQUE BENEFIT EXCLUSIVELY FOR YOU The illustration is a hypothetical example showing the principle of compounding. This example assumes an initial investment of $10,000 with ongoing annual contributions of $10,000 growing at an annual 7% rate of return compounded annually over a 20- year period. The example does not include the impact of any fees and expenses that would be associated with an actual investment. It does include a lump sum distribution of the pre- tax amount with a 40% tax rate. This hypothetical illustration is not intended to represent any specific type of investment. Keep in mind there is no assurance the investment will grow at a steady rate of return and consumers need to consider their personal investment horizon and income tax bracket, both current and anticipated when making investment decisions as these may further impact the results of the comparison.

PAY YOURSELF ON YOUR SCHEDULE A UNIQUE BENEFIT EXCLUSIVELY FOR YOU  With no age-based distribution rules, retire on your schedule.  Choose a lump sum to spend however you see fit.  Take smaller payments over time, with remaining balance continuing to grow tax- deferred.

FROM RETIREMENT GAP TO EARLY RETIREMENT A UNIQUE BENEFIT EXCLUSIVELY FOR YOU

SOME THINGS TO CONSIDER A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Taxes are due the year money comes out, and rates may vary. Deferral amount changes can be made monthly. No rollovers or loans but transfers may be allowed Delaying a scheduled distribution Difference between investments and reference investments Deferrals are not protected

UNDERSTANDING “REFERENCE” INVESTMENTS * Sample sheet for illustrative purposes only. Specific reference investment options available will be determined by your employer. Let’s take a look at your fund fact sheet:  You elect reference investments based on your asset allocation strategy.  You can monitor investment performance.  Reference investments may or may not be owned by the organization.  Your employer honors potential growth or losses when it comes time for payout.

PLANNING FOR THE UNEXPECTED A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Need for distributionInstallmentsLump Sum Leaving your employer prior to {Normal retirement age} Leaving your employer after {Normal retirement age} Death Disability Unforeseeable emergency

WHAT WE’VE COVERED SO FAR A UNIQUE BENEFIT EXCLUSIVELY FOR YOU  How nonqualified deferred compensation works  Potential benefits of participating  Looked at your organization’s specific plan  Real-life scenarios  Considerations before signing up

AN EYE ON YOUR ACCOUNT A UNIQUE BENEFIT EXCLUSIVELY FOR YOU PERIODIC STATEMENTS Electronic and Paper MOBILE ACCESS m.principal.com ONLINE ACCESS principal.com NQ Plan of Sample Company

TIME TO ACT A UNIQUE BENEFIT EXCLUSIVELY FOR YOU 1. Review enrollment and investment materials. 2. Assess retirement and other savings needs. 3. Consult with advisors. 4. Finalize decisions on deferral, distribution and investment elections.  Visit the nonqualified plan enrollment center at principal.com.  Follow instructions provided in the Enrollment Guide.  For further assistance, call Enroll in the plan

Q&A A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Questions?

A UNIQUE BENEFIT EXCLUSIVELY FOR YOU The subject matter in this communication is provided with the understanding that The Principal ® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. Insurance products issued by Principal National Life Insurance Co. (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., , Member SIPC and/or independent broker/dealers. Principal National, Principal Life, Principal Funds Distributor, Inc. and Principal Securities are members of the Principal Financial Group ®, Des Moines, IA No part of this presentation may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage and retrieval system, without prior written permission from the Principal Financial Group. NQ46 | 10/2015 | t q

THANK YOU Presenter name Contact info - phone Contact info – Contact info - website NQ46 | 10/2015 | t q

JANE BRIDGES THE GAP A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Jane draws funds from the deferred comp plan first. Then, she taps into her 403(b) and Social Security. Jane contributes to her 403(b) and deferred comp plan during her working years. AGE 65AGE 60AGE 45 Early retirement

TAXES 101 A UNIQUE BENEFIT EXCLUSIVELY FOR YOU Marginal Tax Rate How your last and next dollar of taxable income are taxed.

MARGINAL TAX RATES A UNIQUE BENEFIT EXCLUSIVELY FOR YOU 15% 25% 28% 33% 35% 39.6% 10% Deferred comp plan

COST OF WAITING A UNIQUE BENEFIT EXCLUSIVELY FOR YOU