1. A reward that’s worth the wait
A unique benefit exclusively for you
[Plan name] enrollment meeting
[Company name]
Presenter 1 name
Presenter 2 name (or delete)
Title(s) go on this line
Title(s) go on this line
[ Welcome attendees and introduce yourself. ]

2. Congratulations are in order
Getting started
Congratulations are in order
You are one of your organization’s most valued contributors, selected for an exclusive benefit:
Your organization sets aside an incentive payment on your behalf. After that money is vested, you take a payout.
The plan helps you:
Put your reward pay to work
Delay your tax bill on this additional income
Tailor an investment strategy to meet your unique needs
Common approach for incentive reward program
You’re in great company. Look around at the people in this room (or on the phone). You’re amongst <Company Name>’s most valued contributors. Because of that, you’re being offered a unique opportunity to participate in a plan that allows you to sweeten the reward you’ve earned for your hard work.
It’s called a nonqualified deferred compensation plan. In essence, it’s like taking an I.O.U. and paying your future self. The plan helps you:
Put 100 percent of your reward pay to work
Delay your tax bill for this additional income until it’s vested, giving you time to plan
Tailor your investment strategy to meet your unique needs

3. Today’s agenda Getting started Earn Invest Enjoy
You’ve been rewarded for being a top performer. Learn about how the plan will help you manage that reward, the tax implications and what you need to consider
Invest
Providing investment direction for the incentive reward
Enjoy
What to expect when you participate
With that, let’s take a look at today’s agenda – broken into three steps:
Earn
We’ll learn how this nonqualified deferred comp plan works. We’ll also look at the tax implications on the front end and on the back end. We’ll then cover the things you need to consider (with your spouse, financial and/or tax advisor).
Invest
We’ll explain how you can tailor your investment strategy to meet your unique needs.
Enjoy
We’ll talk through the steps you’ll take to participate in the plan and receive this hard-earned benefit down the road.

4. Participating in the plan
Earn
Participating in the plan
Managing reward income through the plan

5. How does this plan work? Earn
An agreement between you and your employer
You earn an annual incentive reward
Reward income is managed through the deferred comp plan
Similar pre-tax experience to a 401(k) plan
You receive income plus earnings in one lump sum, once fully vested.
So, how does this plan work?
This deferred compensation plan is an agreement between you and your employer. You agree to delay payment on some reward income and your employer agrees to pay you that income (plus any earnings) at a later date.
This plan will remind you of the 401(k) plan experience because like a 401(k), you’ll delay paying income tax on compensation you set aside until you take a payout. This lets you further reduce the income you currently pay taxes on…and to plan for the future when those taxes come due.
You’ll receive that reward income plus any earnings later on, once it’s fully vested, in one lump sum.

6. Benefits of deferred comp
Earn
Benefits of deferred comp
Pre-tax savings
Incentive pay contributions and earnings are tax deferred
Taxed as ordinary income when distributed
Save in excess of qualified plan limits
Tailored investment strategy
There are several benefits to deferring compensation in a plan like this:
Take advantage of pre-tax savings — Pre-tax deferrals, tax-deferred growth and compound earnings help you save and plan for
Save more— Since this plan is not subject to the same contribution limits as qualified plans, such as a 401(k) or IRA, your incentive income can be deferred to diversify your savings strategy and help meet your savings goals.
Personalized investment strategy—you can tailor an investment strategy for that reward income to meet your needs

7. Tap into pre-tax savings power
Earn
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.
Tap into pre-tax savings power
19.8% improvement
Because your reward income is deferred pre-tax, and the earnings on those dollars compound on a tax-deferred basis, more of your money is working for you. If you invested in stocks or bonds, for example, you would have already paid taxes on the money you’re investing. With pre-tax savings in a nonqualified plan, 100% of every dollar is working for you – allowing you to save in a more tax-effective manner.
The example here shows that over time, assuming the same earnings rate, you would have a larger account value from a pre-tax investment, such as a nonqualified deferred compensation plan.

8. Your organization’s vesting schedule
Earn
Your organization’s vesting schedule
In this plan, the vesting period is X years. You’ll receive your incentive pay plus any credited earnings X years after your employer provides the reward. It pays to stay.
Read from slide.

9. Earn
Considerations
By rule, assets are your organization’s until you take a payout.
If the organization goes bankrupt, you’d be an “unsecured creditor.”
No rollovers or loans are allowed.
Distributions are taken in one lump sum, once fully vested
There are also things to consider when participating in a nonqualified deferred compensation plan:
By rule, assets are your organization’s until you take a payout. This is a little different than a 401(k) where the money you set aside is yours no matter what.
If the organization goes bankrupt, you’d be considered an “unsecured creditor.” It doesn’t necessarily mean you won’t get paid. It just means you’ll be treated like anyone else the company owes money. The bankruptcy process would determine how remaining organization assets are divided.
No rollovers or loans are allowed.

10. Provide investment direction
Research reference investments, control allocations and monitor performance
Now that we’ve walked through how the plan works, it’s time to think through an investment strategy for that income that is tailored to meet your needs.

11. Available reference investment options
Your plan has multiple reference investment options
Broad array of reference investment options
Elect reference investments based on performance and risk objectives
Monitor ongoing performance
Teachers will sometimes put students through an investing exercise to help them learn how the market works. They start with a set account balance, put together their own investment strategy and watch as the market does its thing. No money is actually changing hands, but at the end, they get a grade on their results. How much would they have gained or lost if they were using their own money?
What we call “reference” investments work similarly but with real money involved on the back end. Once a plan balance is established, you elect reference investment options in which to allocate your deferred reward and can monitor credited performance as if you were actually invested.
The reference investments you select may or may not actually be owned by the company. Your employer could choose to invest in other ways, but this plan establishes a contractual obligation between you and your employer to honor any potential growth or loss in the reference investments when it comes time for payout.

12. Enjoy
Ready to participate?
Here are next steps.

13. Time to act Enjoy Review enrollment and investment materials
Consult with advisors
3. Participate in the plan
Visit the nonqualified plan enrollment center at principal.com.
For further assistance, call
<SPEAKER NOTE: If you know a different phone number is used with this client, change it on the slide.>
There’s quite a bit to consider. Take your time to think it through and consult with your family and your investment and tax advisors.
Here are the next steps we recommend:
First, we’ve found that to really understand and take the best advantage of the plan, you will need to read through all the enrollment and investment materials.
Talk with your personal financial and/or tax advisor.
And, when you’re ready, log on and enroll at principal.com.
Remember, we’re only a phone call away if you need assistance.

14. An eye on your account Periodic paper and electronic statements
Digital access at
Principal® Mobile
Online access at
principal.com
You can monitor your account through multiple ways:
Periodic statements – electronic and paper
Online access – principal.com
Mobile access – on our app called Principal Mobile

15. Questions?
[ Optional: If time allows, you can offer Q&A at the end of the session. ]
Are there any questions I can address for you before we go?

16. 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.
<SPEAKER NOTE: Leave on screen long enough for people to read. Reinforce that the presentation will not include legal, accounting or tax advice, and any such questions should be referred to experts in those fields.>
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17. Get in touch with any questions
A unique benefit, exclusively for you
Presenter 1 name
Presenter 2 name
Phone Website
Phone Website
[ Encourage the audience to contact you with any other questions or if they’d like to discuss their specific situation one-on-one. ]
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18. Thank you Thank you again for attending today’s session.
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19. Participating in the plan: 3-year vesting schedule example
Year 1 reward
Year 2 reward
Year 3 reward
Year 4 reward
Year 5 reward
Year 6 reward
Years in the plan 1 2 3 4 5 6
Payout: Year 1 reward
Payout: Year 2 reward
Payout: Year 3 reward
Let’s look at an example of a participant who earns an annual reward, and their organization’s plan has a three-year vesting schedule.
First, let’s look at how each year of participation, the reward is earned---ADVANCE SLIDE FOR EACH REWARD TO APPEAR—years 1-6.
In addition to earning the reward in Year 4, three years will have passed since they began participating in the plan, so the participant starts receiving payouts—in year 4 of the plan, the participant actually receives the reward they earned in year 1. In year 5, they receive the reward they earned in year 2 and so on. KEEP ADVANCING THE SLIDE TO SEE THREE PAYOUTS. 4 5 6