1. Streamline participants’ investment decisions
Qualified Default Investment Alternative (QDIA)
Asset allocation and diversification do not ensure a profit or protect against a loss.
For plan sponsor use only.

2. Are Not Bank Guaranteed
Neither Merrill Lynch, Pierce, Fenner & Smith Incorporated, nor any of its affiliates or financial advisors provide legal, tax or accounting advice. Clients should consult their legal and or tax advisors before making any financial decisions.
Nothing discussed or suggested in these materials should be construed as permission to supersede or circumvent any Bank of America, Merrill Lynch, Pierce, Fenner & Smith Incorporated policies, procedures, rules, and guidelines.
Bank of America Corporation (“Bank of America”) is a financial holding company that, through its subsidiaries and affiliated companies, provides banking and investment products and other financial services. Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) is a wholly- owned subsidiary of Bank of America Corporation, and a registered broker-dealer and member of FINRA and SIPC.
Investment products offered through MLPF&S:
The views and opinions expressed in this presentation are not necessarily those of Bank of America Corporation; Merrill Lynch, Pierce, Fenner & Smith Incorporated; or any affiliates.
Principal is not affiliated with Bank of America Corporation, or any of its subsidiaries.
Are Not FDIC Insured
May Lose Value
Are Not Bank Guaranteed
NOTE: Remove this slide (Slide #2), unless using with Merrill Lynch financial professionals. Review slide with audience.
For plan sponsor use only.

3. Plan sponsors investing participants’ undirected funds
Qualified Default Investment Alternative (QDIA)1,2
Three long-term investment options qualify:
Created under the Pension Protection Act (PPA) 1
Age-based (target date series) 2
Balanced risk-based (target risk series)
As a plan fiduciary, one of the challenges you face is determining how to invest participants’ undirected retirement funds — for those participants who fail to indicate their investment choices. To help address this challenge, and to help plan fiduciaries make decisions that may help participants over the long term, the Qualified Default Investment Alternative (QDIA) is available.
QDIA was created under the Pension Protection Act (PPA). In 2006, the Department of Labor (DOL) added provisions to ERISA section 404(c) in the PPA to help plan fiduciaries with this challenge of what to do with undirected participant retirement plan funds.
The DOL defined a QDIA as an investment option that:
Applies generally accepted investment theories.
Is diversified in a manner to minimize the risk of large losses.
Is designed to provide varying degrees of long-term appreciation and capital preservation through a mix of equity and fixed income investment options.
And is one of three long-term investment options:
Based on age, target retirement date or life expectancy (i.e., target date series).
Managed to provide equity and fixed income exposures consistent with a target level of risk appropriate for participants of the plan as a whole (i.e., target risk series).
Offered through an investment management service that allocates the assets of individual participant accounts (i.e., managed accounts). 3
Participant managed account
1 The ultimate decision as to whether an investment option is an appropriate investment for a plan and whether it can serve as a QDIA belongs to the appropriate retirement plan fiduciary.
2 The appropriate fiduciary may be able to select other QDIAs, depending on plan design and characteristics of the plan’s employees.
For plan sponsor use only.

4. QDIA advantages for plan fiduciaries
We warrant
Our lifecycle series and certain lifestyle investments meet the investment characteristics to be considered a QDIA.1
Offers fiduciary protection1
Choice of investment options for the plan’s QDIA
May help increase participant satisfaction
Purpose of this slide: To frame the plan fiduciary benefits of a QDIA.
Key points of this slide:
Selecting a QDIA offers many advantages for plan fiduciaries:
Fiduciary protection: When you provide eligible participants a notice prior to enrollment and annually thereafter, plan fiduciaries receive Safe Harbor protection from fiduciary liability when selecting default investments.*
Choice: Plan fiduciaries can choose which of three QDIA investment options best aligns with the needs of the plan’s participants.
Increased participant satisfaction: Using a target date series as the QDIA can help to reduce participants’ confusion and worry about selecting a diverse set of investment options. This helps to increase participants’ satisfaction in the plan.
* The ultimate decision as to whether an investment options is an appropriate investment for a plan and whether it can serve as a QDIA belongs to the appropriate retirement plan fiduciary.
1 Principal Life Insurance Company warrants our lifecycle (target date and certain target risk) investment options meet the investment characteristics to be considered a QDIA. For purposes of investment fiduciary support and services only, our lifecycle investment options include the target date Sub-Advised Investment Options and the following SAM portfolios: SAM Flexible Income Portfolio, SAM Conservative Balanced Portfolio, SAM Balanced Portfolio and SAM Conservative Growth Portfolio. All these investment options take into consideration either matters such as the participant’s age and target retirement date or target level of risk appropriate for participants of a plan as a whole. The use of a QDIA does not relieve the fiduciary of their responsibility to prudently select and monitor the retirement plan’s QDIA.
For plan sponsor use only.

5. Target date series: QDIA advantages for plan participants1
Suited for long-term investing 2
Choice
• Streamlined
• Diversified
• Adjusts as participants age
• Disciplined rebalancing
Target date series:
Purpose of this slide: Discuss the QDIA advantages for plan participants.
Key points:
Suited for long term: Given the criteria to qualify as a QDIA, the QDIA investment options are intended to be well-suited to long-term retirement investing.
Choice: Participants still have the choice to opt out of the QDIA and select investments available within the plan — both at plan enrollment and throughout their tenure with the plan. A participant whose retirement funds are invested in a QDIA by default must be able to transfer from the QDIA at least as often as from other plan investment options, and at least quarterly.
The next four advantages are additional benefits if the plan fiduciary selects a target date series as the plan’s QDIA:
Streamlined: The asset allocation decision-making process is more streamlined with a target date investment option as the QDIA.
Diversified: A target date series as the QDIA provides a diversified investment option for long-term retirement savings — particularly for those who don’t have the expertise or interest in selecting and monitoring investment options.
Adjusts as the participant gets closer to retirement: Target date series follow a glide path to become progressively more conservative as the participant approaches retirement, when he/she can least afford a large loss of principal.
Disciplined rebalancing: Automatic rebalancing helps to keep the target date series aligned with its target asset allocation.
Asset allocation and diversification do not ensure a profit or protect against a loss.
Asset allocation and diversification do not ensure a profit or protect against a loss.
For plan sponsor use only.

6. QDIA transition strategy
Purpose of this slide: To transition to a discussion of the QDIA transition strategy as one option for the transition of plan assets from one service provider to another.
Asset allocation and diversification do not ensure a profit or protect against a loss.
For plan sponsor use only.

7. QDIA transition strategy
Retirement program transitions
90 percent of clients new to Principal® use a QDIA transition strategy.1,2
Participants are automatically defaulted into the plan’s QDIA.
They have the flexibility to opt out, and during the transition they can change investment selection at any time.
Purpose of this slide: Discuss the advantages of using a QDIA Transition Strategy.
Key points:
Plan sponsors are often faced with plan design and investment-related decisions that can create fiduciary liability — especially as plans transition between service providers.
A QDIA transition strategy could help plan fiduciaries meet some of their fiduciary obligations.
Plan participants receive a notice describing how they can opt out of the plan’s QDIA and choose their own investment options and allocations.
When a target date series is selected as the plan’s QDIA by the appropriate plan fiduciary, participants who may be overwhelmed with investment decisions — or who just don’t take action — are defaulted into a professionally managed investment option that is diversified, adjusts as they age and rebalances automatically.
This is not the only transition strategy we make available, but one plan fiduciaries can consider to help save time and manage some of their fiduciary responsibility.
Asset allocation and diversification do not ensure a profit or protect against a loss.
1 Principal, as of 12/31/2016.
2 The ultimate decision as to whether an investment option is an appropriate investment for a plan and whether it can serve as a QDIA belongs to the appropriate retirement plan fiduciary.
For plan sponsor use only.

8. Benefits of a QDIA transition strategy
Streamlined experience
Choice and flexibility
Fiduciary protection1,2
Purpose of this slide: To discuss the benefits of a QDIA Transition Strategy.
Key points of this slide:
Streamlined experience.
Participants are automatically defaulted into this transition option and receive an appropriate notice.
Choice and flexibility.
We make available to plan fiduciaries several choices of investment options that meet QDIA requirements.
Participants have the flexibility to opt out and choose their own investment options.
Fiduciary Protection
ERISA QDIA Safe Harbor as long as requirements are met
1. The use of a QDIA as part of a transition strategy may provide a level of fiduciary protection. The regulations do not relieve the fiduciary of their responsibility to prudently select and monitor the retirement plan’s QDIA.
2. Participants must be given notice 30 days in advance of the transition to elect to not have their retirement funds directed to the QDIA and instead make their own investment elections. Also, QDIA notices must be distributed to all participants at least 30 days prior to the time that funds are invested in the plan’s QDIA and then annually there after.
1 The use of a Qualified Default Investment Alternative (QDIA) as part of a transition strategy may provide a level of fiduciary protection. The regulations do not relieve the fiduciary of their responsibility to prudently select and monitor the retirement plan’s QDIA.
2 Participants must be given notice 30 days in advance of the transition to elect to not have their retirement funds directed to the QDIA and instead make their own investment elections. Also, QDIA notices must be distributed to all participants at least 30 days prior to the time that funds are invested in the plan’s QDIA and then annually thereafter.
For plan sponsor use only.

9. Asset allocation expertise
Principal is a leader in the target date series marketplace.1
More than $111.3 billion in asset allocation assets under management,2 of which more than $54.2 billion are in target date assets under management.3
Retirement-focused investment platform comprised of more than 50 prominent underlying investment firms.3
A due diligence process centered on selecting and monitoring combinations of specialty investment managers and/or sub-advisors.
Outcome-oriented strategies that seek to address key retirement risks: volatility, longevity and inflation.
Platform includes both a more actively managed and more passively managed target date series.
Purpose of this slide: To frame up our asset allocation expertise.
Key points of this slide:
AUM — when you consider the various types of asset allocation investment options we make available, we have significant asset allocation assets under management (AUM).
Our entire investment platform is retirement-focused and multi-managed — comprised of more than 50 prominent underlying investment firms. We realize you’d likely not create an investment lineup with just one fund or one investment manager. That’s why our entire investment platform is constructed using a multi-managed approach.
Our due diligence process is the “engine” behind our asset allocation expertise. Through our due diligence process, we seek best-in-class sub-advisors, each fulfilling a specific role within an investment strategy. 1 Then, we monitor them to make sure they continue to fill the role we intended them to fill.
Outcome-oriented: Through our strategic and disciplined approach, we bring to our clients and their financial professionals investment options focused on generating positive outcomes, including strategies that seek to address today’s key retirement risks, such as volatility, longevity and inflation. We provide single investment options focused on specific risks, as well as target date series that include access to these types of investment options in a professionally managed structure.
Choice of target date series styles: The choice of Principal LifeTime portfolios or Principal LifeTime Hybrid CITs or Funds provides the choice of more actively vs. more passively managed target date investment options.
1 The sub-advisors for our investment platform are selected using a proprietary due diligence process that provides a rigorous and disciplined framework for identifying, hiring and retaining premier investment managers within each asset class and investment style. It is characterized by comprehensive and continuous review of all investment managers based on our specific investment guidelines.
Asset allocation and diversification do not ensure a profit or protect against a loss.
1 12/31/2016 data: More than 1.9 million target date users, defined as participants with 50% or more of assets in a target date fund with a DC plan serviced by Principal.
2 12/31/2016. This includes assets invested in target date, target risk, Core-Satellite, and Portfolio Construction Strategy investment options.
3 As of 12/31/2016.
For plan sponsor use only.

10. Outcome-Based Retirement Investment Expertise
When it comes to retirement plan investments, we’re anything but typical
Recognized retirement leadership results in a retirement-focused investment platform and total retirement services resources.
Global investment management means access to institutional-quality investment options.
Asset allocation expertise delivers streamlined investing for participants through our target date series and a multi-managed approach.
Outcome-Based Retirement Investment Expertise
Purpose of this slide: Wrap up with our overall investment story — why consider our investment management capabilities.
Key points:
Global investment management means access to institutional-quality investment options typically only available to the largest retirement plans.1
Asset allocation expertise delivers streamlined investing for participants, and a variety of investment management approaches and broad range of investment managers.
Recognized retirement leadership results in a retirement-focused investment platform and fiduciary support and services.
Our investment platform:
• Aligns with the financial professional seeking to provide a better outcome:
We focus on retirement readiness.
We take a thoughtful approach to helping plan sponsors develop an investment lineup that meets the needs of their plan participants.
• Multi-managed/multiple sub-advisors:
We make available more than 80 Sub-Advised Investment Options managed by more than 50 institutional-quality managers, including our own boutique affiliates. 2
• Retirement-focused:
Designed to specifically meet the needs of retirement plan participants and focuses on long-term investing.
We do all of this with our global investment management, asset allocation expertise and retirement leadership.
1 Sub-advisors for Principal investment options are selected using our proprietary due diligence process that provides a rigorous and disciplined framework for identifying, hiring and retaining premier investment managers within each asset class and investment style. It is characterized by the comprehensive and continuous review of all investment managers based on our specific investment guidelines.
2 As of 9/30/2015.
These three attributes define us as an organization and drive our focus — to help you strive for better outcomes — every day in the marketplace.
No investment strategy, such as asset allocation or diversification, can guarantee a profit or protect against loss in periods of declining values.
For plan sponsor use only.

11. Important target date information
About target date investment options:
Target date portfolios are managed toward a particular target date, or the approximate date the investor is expected to start withdrawing money from the portfolio. As each target date portfolio approaches its target date, the investment mix becomes more conservative by increasing exposure to generally more conservative investments and reducing exposure to typically more aggressive investments. Neither the principal nor the underlying assets of target date portfolios are guaranteed at any time, including the target date. Investment risk remains at all times. Neither asset allocation nor diversification can assure a profit or protect against a loss in down markets. Be sure to see the relevant prospectus or offering document for full discussion of a target date investment option, including determination of when the portfolio achieves its most conservative allocation. 
For plan sponsor use only.

12. Important information
Carefully consider the Fund's objectives, risks, charges and expenses. Contact your financial professional or visit principal.com for a prospectus, or summary prospectus if available, containing this and other information. Please read it carefully before investing.
Before directing retirement funds to a separate account, investors should carefully consider the investment objectives, risks, charges and expenses of the separate account as well as their individual risk tolerance, time horizon and goals. For additional information contact us at or by visiting principal.com.
Investing involves risk, including possible loss of principal.
Asset allocation and diversification does not ensure a profit or protect against a loss. Additionally there is no guarantee this investment option will provide adequate income at or through retirement. Equity investment options involve greater risk, including heightened volatility, than fixed-income investment options. Fixed-income investments are subject to interest rate risk; as interest rates rise their value will decline. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. These risks are magnified in emerging markets.
There is no guarantee that a target date investment will provide adequate income at or through retirement.
For plan sponsor use only.

13. Important information
The Principal LifeTime Hybrid Collective Investment Funds (CITs) are collective investment trusts maintained by Principal Global Investors Trust Company, (the Trust Company). The Trust Company has retained Principal Global Investors, LLC, doing business as Principal Portfolio Strategies (the Adviser), to serve as investment adviser with respect to the CITs, subject to the Trust Company's supervision and review. The Adviser is an indirect wholly owned subsidiary of Principal Financial Group, Inc., and is under common control with the Trust Company. The Adviser also manages portfolios which may be included as underlying investments in the CITs. The Adviser receives management fees from these portfolios. The Adviser or other affiliates of the Trust Company may provide services to the CITs and may receive fees for such services. The CITs are available only to certain qualified retirement plans and governmental 457(b) plans.
The CITs are not mutual funds and are not registered with the Securities and Exchange Commission, the State of Oregon, or any other regulatory body. Units of the CITs are not deposits or obligations of, guaranteed by, or insured by the Trust Company or any affiliate, and are not insured by the FDIC or any other federal or state government agency. The value of the CITs will fluctuate so that when redeemed, units may be worth more or less than the original cost. The declaration of trust, participation agreement, and disclosure documents contain important information about investment objectives, risks, fees and expenses associated with investment in the CITs and should be read carefully before investing. The declaration of trust is available at principal.com. A copy of the participation agreement can be obtained from your plan administrator.
For plan sponsor use only.

14. Important information
Insurance products and plan administrative services are provided by Principal Life Insurance Company. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities are offered through Principal Securities, Inc., , Member SIPC and/or independent broker/dealers. Securities sold by a Principal Securities Registered Representative are offered through Principal Securities. Principal Funds Distributor, Principal Securities and Principal Life are members of the Principal Financial Group®, Des Moines, Iowa Investment options may not be available in all states or U.S. commonwealths. Separate Accounts are available through a group annuity contract with Principal Life Insurance Company. See the group annuity contract for the full name of the Separate Account. Principal Life Insurance Company reserves the right to defer payments or transfers from Principal Life Separate Accounts as permitted by the group annuity contracts providing access to the Separate Accounts or as required by applicable law. Such deferment will be based on factors that may include situations such as: unstable or disorderly financial markets; investment conditions which do not allow for orderly investment transactions; or investment, liquidity and other risks inherent in real estate (such as those associated with general and local economic conditions). If you elect to allocate funds to a Separate Account, you may not be able to immediately withdraw them.
This document is not a recommendation and is not intended to be taken as a recommendation. This material was prepared for general distribution and is not directed to a specific individual.
©2017 Principal Financial Services, Inc.
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