Principal Financial Group 401(k) “Black Tuesday” Restrictions

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Like most 9-to-5ers, I contribute to my company’s 401(k) retirement program. My employer has a matching plan to match 50% of my investments up to 4% of my wage.

That means for the first 4% of my wage I’m actually “contributing” 6% of my wage but it only costs me 4% (thanks to my employers match).

This results in effectively a 50% ROI – at least when the money first goes in. After that it’s up to my investment choices and the market’s performance.

Today I decided to do a little re-balancing in my account. I’m cleaning out the “near net-zero” accounts, those that I haven’t made or lost much, and funneling those funds into the “riskier” international funds (which are VERY low right now).

I’m also trying to “bail out” of what little investments I have in some so-called “mortgage” accounts, to try and cap my losses there (I should have done that a few weeks ago!). When trying to do that I got the following message:

image

This is the first sign of “Black Tuesday” prevention that I’ve seen – ever!

Have we really gotten to that point?

As a side note, silver is trading for $10.85 today.

86 thoughts on “Principal Financial Group 401(k) “Black Tuesday” Restrictions

  1. More information:

    Subject: Important Information about the Principal U.S. PROPERTY SEPARATE ACCOUNT
    Received: Thursday, 09/25/2008, 09:18 PM

    The Principal Financial Group® is a company focused on helping customers achieve long-term financial security. We closely monitor and actively manage holdings in our investment options available to retirement plan participants.

    Because of the current state of the real estate market, The Principal® has taken action to protect participants’ interests in the Principal U.S. Property Separate Account (“Separate Account”). We are implementing a pre-existing contractual limitation in your employer’s group annuity contract which will allow us to manage the Separate Account and satisfy withdrawal requests over time and fairly among all those who request a withdrawal.

    Effective Friday, September 26, 2008 at 12:01 a.m. Central Time, we are applying a built-in contractual limitation which will delay the payment of most withdrawal requests. Those requests will be honored proportionately as sufficient cash becomes available for distribution, in accordance with the terms of your group annuity contract. This limitation applies only to this Separate Account and does not apply to other retirement plan separate accounts or Principal Mutual Funds.

    Background
    The Separate Account, managed by Principal Real Estate Investors, LLC, is unlike most other retirement plan investment options because it invests primarily in owned real estate rather than securities. These holdings include developed, commercial properties such as warehouses, office buildings and retail properties. Unlike public securities sold on an exchange, real estate assets are sold in private transactions that take a period of time.

    The recent turmoil in the credit markets has compounded already challenging conditions in the real estate market, resulting in a sharp slowdown in the sale of commercial real estate assets. In addition, cash flows out of the Separate Account have outpaced new contributions as investors have decided to engage in rebalancing transactions or otherwise move assets from real estate to other investment strategies.

    While the Separate Account has historically maintained sufficient cash to satisfy withdrawal requests, the combination and duration of these market factors has prompted the decision by The Principal to implement a withdrawal limitation for the first time in the 26-year history of the Separate Account.

    The pre-existing contractual limitation allows Principal Real Estate Investors to manage the Separate Account consistent with its investment strategy and objectives. It also provides for payment of withdrawal requests over time proportionately among all customers. While available cash from future sales of real estate assets will be used in part to satisfy withdrawal requests, Principal Real Estate Investors will continue to manage the Separate Account, including use of available cash, in the best interests of plan participants. Sales will not be made under unfavorable circumstances in order to have cash available for withdrawals or any other purpose.

    Outstanding withdrawal requests will be paid proportionately with other pending requests as sufficient cash becomes distributable, as determined by Principal Life Insurance Company. Payments will be based upon the unit value as of the date of the distribution.

    Death and disability benefits are not affected by this limitation and will be processed as usual. In addition, transfers and contributions into this Separate Account are being accepted as usual.

    Gains, losses, and cash flows related to this Separate Account do not affect the general account of Principal Life Insurance Company or any other separate account.

    The Principal Financial Group: Financial strength and stability during turbulent times

    Additional Information
    Please read this Q&A and the letter from the portfolio manager for additional details. If you have any further questions after reviewing these documents, please contact the Client Contact Center at 800-547-7754.

    The Principal U.S. Property Separate Account is available through a group annuity contract issued by Principal Life Insurance Company, a member of the Principal Financial Group, Des Moines, IA 50392.

    Insurance products and plan administrative services are provided by Principal Life Insurance Company, a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.

  2. I’m amazingly disappointed in Principal Financial Group and will soon be transferring whatever is left of my investments there to another financial institution. These so-called protections are for the benefit of PFG — not their clients. Try to find the transfer assests to another financial institution for on their website; you won’t. Stated reason? To protect you (their client). Ask to have the forms emailed or faxed to you: no can do — snail mail only — benefit of the client I presume. What about FedEx? Sure as long as you’re willing to pay the $25 or so cost (another client benefit?). Please do yourself a favor and check other financial institutions costs and client friendliness before you have anything to do with PFG!

  3. I’m with you! I read in one of their publications that there was $175 million in the queue on September 30th. Who knows when we’ll get our money back.

  4. Well how is this for unjust, I was waiting on all money from my retirement investments to be paid out in full by Principal, Paperwork had been filled out and waiting since August, they sat on my withdrawl paperwork for a month before the US Property Acct was frozen and now wont give me my money even though they admit they messed up, now who knows when we will get it but I dont know how they can justify what they have done to me as legal, since my withdrwal paperwork was a cancellation of my policy well before this was in effect, but what is the little guy supposed to do.

  5. @Nikki,

    I would go through their policies and find out when a payout can be delayed, and see if you can’t find some loophole or a number that says when and how payouts are to be made. Possibly file a complaint with your state’s Atty General’s office, and maybe the FDIC. We feel for you! Let us know how things go.

    @Bill,

    No one knows… which is part of the problem with the 401(k) system. My employer tells me the only way I can “cash out” my 401(k) into an IRA is to quit or be fired.

    @Steve,

    That’s amazing. When you get your forms why don’t you scan them and put them on the web somewhere. If Principal is unwilling to publish them perhaps we, the people, need to take matters into our own hands. Granted, they may be copyrighted materials, so you might have to find a host that’s located in a country that doesn’t acknowledge our copyright laws to host the files. Contact the guys at the Pirate Bay and see if they can help. 🙂

    http://www.JoeLevi.com

  6. Ridiculous – I called several times to get a copy of the “Existing contractual agreement that allows them to place the account on hold for almost 2 months now… The supervisor that I spoke to referred me to the U.S. Property Separate Account-R1 statement and specifically to the last sentence – “Payment of principal and earnings may be delayed”.
    Totally ridiculous. I placed a transaction on September 25th (The day before the new restriction was put in place) and not one penny has moved out of that account.

    This is part of the original message sent out on September 26th:
    The Principal Financial Group® is a company focused on helping customers achieve long-term
    financial security. We closely monitor and actively manage holdings in our investment options
    available to retirement plan participants.
    Because of the current state of the real estate market, The Principal® has taken action to
    protect participants’ interests in the Principal U.S. Property Separate Account (“Separate
    Account”). We are implementing a pre-existing contractual limitation in your employer’s group
    annuity contract which will allow us to manage the Separate Account and satisfy withdrawal
    requests over time and fairly among all those who request a withdrawal.
    Effective Friday, September 26, 2008 at 12:01 a.m. Central Time, we are applying a built-in
    contractual limitation which will delay the payment of most withdrawal requests. Those
    requests will be honored proportionately as sufficient cash becomes available for distribution,
    in accordance with the terms of your group annuity contract. This limitation applies only to this
    Separate Account and does not apply to other retirement plan separate accounts or Principal
    Mutual Funds.

  7. Well latest on my withdrawl saga a response from Principal, I would love to know where they actually “mailed” the eligibility for withdrawl paperwork since I filled my new address out on the “withdrawl” paperwork that was archived I am sure of it, there are a number of holes in this which I am waiting on further response to pursue with other agencies, in the meantime read on…

    *Insurance products and plan administrative services are provided by Principal Life Insurance Company, a member of
    the Principal Financial Group, Des Moines, IA 50392.

    ADMC3
    November 17, 2008

    RE Government Of Australia (australian Govt Employees In The U. S.) Retirement Plan
    Annuity Contract No: Member ID No. XXX-XX-6287

    Dear Nicola Mcgregor

    Thank you for your letter dated November 6, 2008 regarding your account under the Government
    of Australia retirement plan and your recent distribution from the plan.

    Our timelines match as to the events that lead up to your distribution:

    5/3/08 – received distribution form
    5/4/08 – Principal faxed out to your former employer for termination information.
    5/9/08 – Principal faxed your former employer again for termination information and received notice
    that you were not terminated
    5/30/08 – request for distribution was filed according to our follow-up procedures. After 2 follow-
    up’s to the employer for the missing information the request is filed and the benefit event notice
    would start the process back up again.
    8/29/08 – Benefit event reported via the internet. Benefit event date was 8/18/08. The benefit event
    60 day window was opened
    9/3/08 – the letter regarding your eligibility for distribution was mailed to you. This would have
    started the 60 day window of time when you would be eligible to receive your distribution from the
    plan. The window starts from the date that Principal receives notice of your termination.
    9/26/08 – US property restriction was put into place
    9/30/08 is the first date we have recorded that you followed up with Client Contact Center on your
    distribution.
    9/30/08 – request for distribution entered into the system, however, a new form should have been
    completed or distribution requested online to initiate the process.
    10/3/08 – request completed – withholding was taken in error ACH deposited 10/7/08
    10/8/08 – additional ACH for withholding processed ACH deposited 10/8/08
    11/11/08 – US property money is still waiting for distribution in the queue based on liquidity of the
    account. See additional information on this account below.

    Principal Financial Group processed your distribution timely based on the 9/30/08 date that you
    contacted us.

    I have reviewed your situation with upper management and there are no exceptions to this
    restriction. The contract is in force and the contract is with the Government of Australia and your
    account is subject to the provisions of the contract with the employer.

    Please note funds held in the Principal U.S. Property Separate Account (“Separate Account”) ,
    Principal Life has implemented a pre-existing contractual limitation in your employer’s group
    annuity contract which will allow us to manage the Separate Account and satisfy withdrawal
    requests over time and fairly among all those who request a withdrawal. This withdrawal limitation
    applies only to the Separate Account only–it does not apply to any other investment options in your
    employer’s retirement plan. For additional information regarding this Separate Account and the
    contractual limitation, please go to your account on-line and see the message entitled “Important
    Information about the Principal U.S. Property Separate Account”.

    Nicola Mcgregor
    November 17, 2008
    Page 2

    You contacted us on September 30, 2008, however this was after the restriction was put in place.
    As stated above it is necessary to follow the contractual statement relating to the Principal U.S.
    Property Separate Account (“Separate Account”). On September 26th
    , 2008 Principal Life
    implemented a pre-existing contractual limitation. All distributions processed after September
    26th
    , 2008 relating to terminations of employment, must follow this limitation.

    Sincerely

    Terri Yarrow
    Client Service Manager
    Retirement and Investor Services
    Phone (800) 258-9041
    Fax (866) 704-3594

    cc Cynthia C Atwater
    Retirement Services Office – Washington D.c.
    Matthew Sherman
    Government of Australia

  8. In addition do you sense a “here you go a 60 day window – ha ha oh we changed our mind” type scenario?

    The rules seem to be being made up as they go along I believe.

  9. I think it’s time we filed a Class Action Lawsuit against Principal Financial Group. The SEP Account will only continue to drop. Once thought a safehaven, my 401k is quickly becoming a toilet. It won’t be long before it’s completely gone. Is there a lawyer out there who can help?

  10. I’m with you Pat. My account is dropping like a rock and soon will be at $0 I’m afraid. I’ve been saving for 20 years for this? I guess when it’s $0 I can transfer out maybe. Principal has never frozen an account in 26 years. I guess we are the lucky ones, huh?

  11. Mr./Mrs. Hale (executive at The Principal), I am inquiring about the release of my money from the Real Estate Separate account which is currently at -13.0% and dropping like a rock. I see my hard earned money being flushed away daily and I am told I can’t transfer it or get a loan out indefinitely.

    I have made numerous inquiries to The Principal and my 401 k plan advisary company. They refer me to the Black Tuesday memo on 9/25/08 where we were told our money would be frozen on 9/26/08. I was also told that many people tried to get funds out on 9/25/08 but were denied. I would consider that action illegal.

    I also understand there will be a class action law suit against The Principal which I will gladly join.

    It’s funny as a taxpayer I am bailing out wall street companies like The Principal with $700B of hard earned money, and then getting cut off at the knees when trying to get my money out which I have saved for over 20 years.

    The American tax payer can’t stand anymore of this BS. I am curious as to how many millions Mr. Zimpleman’s bonus will be this year. I will be sure to mention it in my complaint to the SEC.

    I have read hundreds of stories like mine all across the country via the internet concerning the Real Estate Separate Account. The grass roots movement is well under way and the sleeping giant is awake. Get ready.

  12. Good on you Jim! I’m sorry for yours and Nikki’s losses and will gladly join you and other’s in a lawsuit against Principal. I’ve discussed this with my fund account manager as well and told him he’s about to start earning his monthly administrative fee. Please let me know what I need to do to help.

  13. Exerpt Follows:
    Specialty Lender, Asset Manager & Investment Company – Industry News
    Fixed-Income Focus: Insurers express cautious optimism on CMBS
    December 10, 2008 6:49 PM ET
    By Tim Zawacki
    Options Toolbox

    Related Companies

    Hartford Financial Services (HIG)

    MetLife Inc. (MET)

    Principal Financial Group Inc. (PFG)

    Prudential Financial Inc. (PRU)

    Related Documents

    Investor Presentation (IP)
    Principal Financial Group Inc.
    12/10/2008, filed on 12/10/2008

    Investor Presentation (IP)
    MetLife Inc.
    12/8/2008, filed on 12/8/2008

    Investor Presentation (IP)
    Hartford Financial Services
    12/5/2008, filed on 12/5/2008

    Investor Presentation (IP)
    Prudential Financial Inc.
    12/4/2008, filed on 12/4/2008

    During recent meetings, several U.S. life insurers with significant investments in commercial mortgage-backed securities sought to reassure investors and analysts over their positions in the increasingly volatile asset class.

    At separate investor days between Dec. 4 and Dec. 10, executives with MetLife Inc., Prudential Financial Inc., Hartford Financial Services Group Inc. and Principal Financial Group Inc. — together the holders of approximately $40 billion in CMBS as of their most recent financial disclosures — did not discount the potential for mounting credit woes involving underlying collateral, but emphasized the relative health of their own distinct books. A general consensus among the four companies was that market illiquidity, not fundamentals, was to blame for the volatility, highlighted by the November blowout in spreads across the various outstanding series and tranches of the CMBX index and more recent speculation about spreads in the cash market.

    Principal reported Dec. 10 that it held $5.77 billion of CMBS at amortized cost as of Sept. 30. Of that amount, only 63% was rated AAA and 28.6% related to the 2007 vintage; in the case of the former, a lower level than generally had been reported by its peers, and in the case of the latter, considerably higher than some of its peers.

    Chief Investment Officer Julia Lawler described the CMBS portfolio as high-quality and diversified. The company indicated that the underlying mortgages have original loan-to-value ratios of 65%.

    Under various stress scenarios Lawler outlined, Principal would see minimal losses across vintages in the first three years, with “manageable” losses largely isolated to the 2006 and later vintages thereafter. She said $4 billion, or just more than two-thirds, of Principal’s CMBS holdings have no exposure to loans maturing in 2009, and only $1.5 billion, or 32% of the portfolio, have some exposure to 2009 maturities. Lawler said those maturities occur within bonds that have weighted average subordination of 31%, and the vast majority of the underlying loans were originated in the late 1990s.

    Company officials said they expect that a small percentage of the CMBS bonds with loans maturing in 2009 may have to get extended. However, none of those bonds are contained within Principal’s portfolio. Overall, they projected that defaults and losses will eventually rise within the asset class, but strongly emphasized that current pricing reflects a market driven by fear and forced selling. They have observed some reduction in spreads in the cash market in December, but conceded that the market continues to be subject to illiquidity, with few trades taking place.

  14. OMG I am so frustrated by this, they are supposed to give a 30 day notice before they can do this. Let me know if a class action is in the works, I will definitely join in.

  15. Here is what i have done so far:

    called the SEC and they bounced me to the Department of Labor (DOL). DOL told me to get a prospectus. Twice i was told by Principal agents not only that there was a prospectus, but that they would fax it to me. when i still hadn’t received it, i called again and was told this fund has no prospectus because it is not publicly traded – this agent pointed me at the last line on the fact sheet as the “contractual language” permitting them to do this. I told her that was ridiculous and asked for what was referred to in the email notification i received on September 25, i.e., our group annuity contract.

    I won’t bore you with the circuitous route i had to take to get the contract – suffice it to say i now have it.

    The relevant language, at least in my company’s contract, is as follows:

    “Because of the illiquid nature of the assets in which Principal US Property Separate Account is invested, we reserve the right to defer transfers or payments from a Principal US Property Separate Account investment if a transfer or payment would exceed the amount of cash and other liquid assets held in Principal US Property Separate Account, reduced by amounts committed to purchase properties or needed for Operating Expenses. We will not defer requested transfers for longer than three years under this paragraph. For any Plan that allow members to direct some or all of their investments to the Principal US Property Separate Account, we will notify all Members in the event of any deferment of more than 45 days of a type described under this paragraph which arises under any of our contracts having access to the Principal US Property Separate Account. Our notice to those Members will be in writing and will explain the investment and transfer options available to the Members.”

    I certainly don’t consider an email to my box on the principal website at 9:30 pm on a Thursday night detailing a change that is slated to take place in two and a half hours *notifying* me, particularly when the change is locking me into a losing proposition for THREE YEARS!!

    Unfortunately, the DOL didn’t seem to care how vague the contractual language was – as long as Principal put language into the contract that was not inconsistent with what they had actually done, then the DOL seemed satisfied that Principal had not broken any rules.

    Well, with that perspective, i suppose the DOL would be ok with Principal just spending all the money in that fund on executive vacations, as long as they had put something along the lines of “some funds might be expended on executive vacations” into their contract.

    I, on the other hand, think there *must* be some authority that regulates things like how much advance notice is required before locking up a member’s money for up to three years, so i kept looking and tonight stumbled across FINRA (FInancial Industry Regulatory Authority), which one FINRA rep said only regulates brokers and dealers, which could be relevant here because my company utilizes an agent, UBS, as the liaison to Principal, and UBS are definitely brokers – and another agent after listening to my tale of woe said someone in my local district office might be able to shed some light on the matter.

    However, that will have to wait until tomorrow because i didn’t manage to get to them before they closed at 6 pm.

    if anyone is interested in further developments, let me know!

  16. So, is there really a Class Action in process? I have damages of almost $4,000 to date, and the number goes up just about every day.

  17. Kg, Thanks for the update and all your hard work to investigate this matter. I have continued to bombard PFG with Emails via the secure message center. They have yet to reply back with anything other than an apology for the delay and any inconvenience we may have caused you. What a crok! I reminded them they were obligated to give us at least a 30 day notice prior to freezing assets (queing as they call it…give me a break). It’s been over 3 months and still no funds transferred to the Guranteed Interest fund. That’s all I asked for was a transfer to another PFG 401k option. Since the fund has dropped $100 per share, by the time they do allow internal transfers to other Principal funds, they will have saved billions of dollars. So in reality, all they are doing is shoring up their bottom line at the expense of our retirement future. Nice way to treat your customers eh! As a Federal Credit Union VP, I would no longer have a job if I treated my members they way PFG has treated all of us. Does anyone have any news on a possible law suit? Thanks for keeping the fire stoked everybody!

  18. thanks, pat! what regulation is it that requires them to give 30 days notice? seems to me whatever authority requires such would be the place to bring our complaint. did not have a chance to call FIRNA today, will call tomorrow.

  19. kg, I believe the 30 days notice is mentioned in their own disclosures…but not certain. However, the Q&A and Sep 25th notice said they did not have sufficient time to notify investors so they sent the message to everyone via the Principal.com message center. Like we read that every day! I did send an Email to The law firm of Galligan, Doyle, Reid & Galligan, P.C., with offices in Des Moines via their website to see if they are interested in taking up the battle for us. Since they are located near the HQ, they might be so inclined. Hope so.

  20. Have any of you considered the “hardship loan” exception? I was able to get some of my cash out thru this exception.

  21. I wrote and asked for a hardship withdrawal but they told me I didn’t have a valid qualifing reason. I’d hate to go the loan route since it will incur interest on the payback. Thanks for the suggestion Luis.

  22. and it is. a 401K plan is a defined contribution plan, and a defined contribution plan is an individual account plan, as defined by ERISA:

    (34) The term “individual account plan” or “defined contribution plan” means a pension plan which provides for an individual account for each participant and for benefits based solely upon the amount contributed to the participant’s account, and any income, expenses, gains and losses, and any forfeitures of accounts of other participants which may be allocated to such participant’s account.”

    From the U.S. Code Online via GPO Access
    [wais.access.gpo.gov]
    [Laws in effect as of January 3, 2006]
    [CITE: 29USC1002]

  23. Nice Research kg! I called PFG on this and they said…are you ready…their actions are not considered an actual “Blackout.” They have their best people manning the customer service desk these days who are doing an excellent job of calming the waters with those of us who call to demand transfers of funds to guranteed interest funds or withdrawals. Within minutes the lady I spoke with had me eating out of her hand like a little puppy dog. She was so pleasant, I just couldn’t yell at her. Oh well, what next?

  24. hi pat,

    here is the definition of blackout – it would be pretty hard even for the best of the best to talk his/her way out of this one:

    (1) Blackout period—(i) General. The term “blackout period” means, in connection with an individual account plan, any period for which any ability of participants or beneficiaries under the plan, which is otherwise available under the terms of such plan, to direct or diversify assets credited to their accounts, to obtain loans from the plan, or to obtain distributions from the plan is temporarily suspended, limited, or restricted, if such suspension, limitation, or restriction is for any period of more than three consecutive business days.

    this is an ERISA issue, i believe, and i will call them tomorrow to see.

    ‘course, the us property sep account had made quite a turnaround as of earlier today…

  25. Thanks kg! Good luck with your efforts. The plan is still down $100 per share and they said whenever funds are moved it will be at the current rate rather than the rate at the time funds were frozen. That’s probably my biggest issue with this whole mess. Best to all.

  26. Not this this is any consolation to those of you who are rightfully expecting to receive distributions, but I happen to know for a fact that dozens of people at PFG have been laid off since October. Hundreds have been laid off company-wide. You have all the right in the world to be furious at PFG for creating the queue. Fact is that the the commercial real estate market is frozen (that is the real culprit). Anyway – be mad, but keep in mind that people are losing their jobs.

  27. Liz, Thanks for reminding me of the human side of this mess. I do feel bad for the PFG employees and their families affected by this mess. I will add them to my daily prayer list.
    Blessings

  28. I’ve read most of this feed. Here’s the dill pickles. If your funds with Principal are part of a company 401k plan then your beef MUST go through the Department Of Labor as an ERISA issue. Get your contract number of the plan or annuity you enrolled in. Find out where your regional office of the DOL is and fire off a letter to them… They are helping me out. It will take time ( I know we are all losing money as the clock ticks). I believe the only thing we have to hang our collective hats on is the fact that Principal just unloaded this on everybody and they did not provide adequate prior notification.

  29. I just got off the phone with PFG, they told me that they could change the wording on Sarbanes-Oxley or soxly anytime they want. The three year limitation is only a pipe-dream. Our money is as good as gone. I recommend that everyone jam their phone lines calling as many times a week as possible, if they have to keep adding personnel due to this, then maybe they might pay us the money that we have donated blood plasma for.

  30. Good work glad I am not alone and will immediately hop on the bus if we can find a lawyer.
    Checked my acct balance today and it’s gone down 200 or so dollars over Xmas. Hard to stomach when you read about the bailouts.

  31. I am also interested in a class action lawsuit.
    After my wife got laid off, and moving my wife’s 401K out of the principal accounts, principal is holding onto a large chunk of money in the US sep real estate account.

    I suspect if an attorney looked at Principal’s actions, regarding the real estate account, under a microscope, they may find something illegal.

    Mike – what is the attorney and the email you are referring to?

  32. Ted, Mike, Nikki and Will;
    Seems like the dialogue stopped in or around mid February. Has there been any new information since then? I would definitely be interested in this class action lawsuit, if there exists an attorney who believes in our cause…Perhaps an attorney who is waiting for their distribution from the PFG SEP account?

  33. I lost my job last week, and i need my money out of the us property account. Looks like i’m screwed for now. I think a class action suit is the only way to go at this point. 100 million dollar embezzelment should not be placed on the backs of the investors. i only have about 10,000 dollars in this account and they will not let me have it, even though its now a hardship case. They should be sued over this crap.

  34. There should be accountability for the persons who manage the account. We cannot let Principal continuing getting commissions out of our life savings. We need transparency. We need to know how much money has been taken out from account in detail: for what purpose, when and to whom. What are the plans for the account? Should we ask our government to intervene? The practice of the account has not been good. They sent a ‘delay payment’ email to investor’s web site account at Thursday, 09/25/2008, 09:10 PM and the ‘freeze’ time was at Friday, 09/26/2008, 12:01 AM. There has been no mail or email to investors about the action except the web email hiding in the website somewhere. I’m sure that a lot of people, who invested to account and do not know that it has been ‘freeze’. They listed the account as stable – fixed income. However, when you talk to them now, some of them will tell you it is very risk account and you can lose everything. Where is the honesty? Do you trust those bustards?

  35. I just stumbled upon this site and I can not agree more about filing a class action suit and maybe even a criminal suit against Principal.
    I have been bombarding Principal with emails and phone calls regarding the return of my money out of this forsaken Property Acct to no avail and I watch every day as it loses money hand over fist and it is just disheartening.
    I had over 40% of my portfolio in there and the moment I read that "Black Tuesday" letter (which was the second week of October because, like someone stated in this thread, who reads the updates every hour… I do now), I tried to have my money moved to another option and have been denied ever since.
    I have threatened hiring an attorney but Principal just sends mumble jumble about how they can not pay and all the other crap they keep feeding us.

    So, if and when we do get this class action law suit started, I am in!!!

  36. My husband has a 401K with Principal. I have been doing most of the work on it. He left the employer with which the 401K was held in June 2007 but we decided to leave it there until we were ready to "ROLLOVER". Same as others, I tried to "diversify" in Sept. I totally stumbled on the "secure email". We never received any notice. We were put in the fancy word for "line". Still today, "YOU HAVE PENDING TRANSACTIONS…" ha What a joke!
    My husband called those idiots at PFG today; we cannot rollover our money; have lost over $30,000.00 since Sept. I am so, so infuriated, can't think straight!
    One thing I DO know is we would be willing to join any class action or whatever it takes to expose this disaster. And for us, it is. My husband is 62. Even if he retired TODAY, NO MONEY. He's not 65. There will be nothing left-zero, zilch, nada!
    I need to do something. Please count me in.

  37. I did find out that your employer along with mine should have been given PFG disclosures of withdrawal limitations of the US Property Separate Account. My employer had the PFG disclosure form but failed to provide it to the employees. After talking to the state insurance office in my state, I was informed it is the responsibility of the employer to disclose any limitations within the 401k plans to its employees. I hate PFG as much as everyone else. I do have a copy of the disclosure form they had sent to my employer if anyone is interested in it.
    principal.skinner13@gmail.com

  38. Unless you are over 65, hardship withdrawal is your only option here. I am getting a health savings account with a $3,500 deduct and will send in all medical bills from now until I have depleted my money invested in this account.

  39. I explained this situation to Dave Ramsey the other day on the radio in front of millions of listeners. I told him that I did not want to go after my employer for only a few thousand dollars, so he advised me to chalk up losing this money to experience and not to play with principal anymore. He also said that he was surprised with principal, (almost like he thought that they were an ethical company or something), he waited 6 days before he broadcasted our conversation, he might have been checking the facts to make sure that I was telling the truth about principal.

  40. I was just interviewed by the Wall Street Journal regarding this issue. She found my article and has read all of your comments.

    I'll reply with any information she gives me regarding publishing of her story as soon as I know more.

    http://www.JoeLevi.com

  41. I was just interviewed by the Wall Street Journal regarding this issue. She found my article and has read all of your comments.

    I'll reply with any information she gives me regarding publishing of her story as soon as I know more.

    http://www.JoeLevi.com

  42. I was just interviewed by the Wall Street Journal regarding this issue. She found my article and has read all of your comments.

    I'll reply with any information she gives me regarding publishing of her story as soon as I know more.

    http://www.JoeLevi.com

  43. I was just interviewed by the Wall Street Journal regarding this issue. She found my article and has read all of your comments.

    I'll reply with any information she gives me regarding publishing of her story as soon as I know more.

    http://www.JoeLevi.com

  44. I was just interviewed by the Wall Street Journal regarding this issue. She found my article and has read all of your comments.

    I'll reply with any information she gives me regarding publishing of her story as soon as I know more.

    http://www.JoeLevi.com

  45. I was just interviewed by the Wall Street Journal regarding this issue. She found my article and has read all of your comments.

    I'll reply with any information she gives me regarding publishing of her story as soon as I know more.

    http://www.JoeLevi.com

  46. In October 2008, my husband contacted Principal Financial Group to ask them to transfer the majority of his money in his 401K fund (U.S. Property Separate Account) to another fund. Via Principal's website, my husband received an important notice stating, "U.S. Property Separate Account: You currently have transactions awaiting processing." Principal put the transfer on hold. They sent my husband a letter stating, "We are applying a built in contractual limitation which will delay the payment of most withdrawal requests. Those requests will be honored proportionately as sufficient cash becomes available for distribution." In the meantime, the transfer did not take place as directed by my husband and we have lost to date $15,000. We are told that we might be able to make a move in the fall of 2009. This is our money how can they tell us that we cannot transfer it to another account. This should be illegal. How do we get a class action suit started? Tell me where to sign up.

  47. The broker hired by my husband's company to oversee their 401K is going to call Principal Financial this week to inquire about the delay of payment. Have you heard anything since your last email to this website? An indefinite delay of payment does not sound legal.

  48. I took an early retirement in October, had put in a transfer of funds in September, and received my notice that the funds were being held. So now 7 months later and 8,000 dollars poorer, with no end in sight. I also am of the mind that there should be something we can do legally to get our money. This account was advertised to be a safe fixed fund account with a long history. I knew I was getting close to retirement, and was tired of losing money in risky stock market accounts, so I chose this as one of my 2 fixed account options. Now I wish I would have left it all in the only real fixed account they had, even though it was paying nothing. With all the bail out money being given to these people, we as honest taxpayers, who worked hard for our money. And who were only looking for safe gains in our accounts, are now being raped by another company who under bad management has taken our money to make themselves rich, and leave us with nothing in our retirement. If I had years to work yet and time to take chances in the market, this would still be an account and a company that would still have me boiling under the collar. Who can we trust anymore, how can we get the President our congress to realize that this act should be illegal. Will gladly join any class action suit.

  49. Joel,

    Do you have a copy of the Wall Street article? What is currently going on with this issue with Principal Financial Group? Is anyone going to file any legal action?
    Please contact me tlinstrom@bctonline.com

    Thank

    Tom

  50. In 2008, they told us perhaps in the fall we could move our money out of the U. S. Property Separate Account. I called today, October 5, 2009, and they told me they do not know when we can move our money. We have lost over $40, 000 invested in this account. Are they waiting for the account to go down to zero before we can make a move?

  51. I have lost over $80000 in this account. I will do all I can to warn people not to let this company touch their money, and I would advise everyone else to do the same. This “fixed income” investment was more volatile than any of their other investments…………..should have left it in a high risk investment , it would have been safer.

  52. I'd be happy to sue my ex-employer e.magination network in Baltimore MD for not giving me a copy of the group contract, and for offering this high risk US Properties Separate Account as part of our 401K plan.

    Also, Principal should obviously be sued for their fraudulent actions – for not informing their clients of the “built-in contractual agreement”, and putting a freeze on the withdrawls. If they don't have the liquidity to honor the withdrawl requests, they should declare bankruptsy.

    Any lawyers willing to help? Is anyone in the government listening?

  53. I just stumbled on this website and I also have money tied up in the Principal Separate scam. I would be pleased to join in any legal action, civil or criminal, against Principal.
    We have to get what's rightfully ours or somebody will have to pay big time, one way or another.
    Heinz R.

  54. i wasn't able to identify a lawyer who would take this case. i've contacted
    two firms and haven't got a response from them yet. if you do, let me
    know.

    the argument is that if Principal cannot pay us the money, it should declare
    bankruptcy. also, it did not clearly disclose to the investors that they
    could 'limit' (read “freeze”) withdrawl. they did not publish this
    information on their website, not even on the pages available to the
    investor.
    i don't have a lot of money invested in this account, but still it is an
    amount. i believe in God, the Angels, the Prophets, Revealed Books, Heaven
    and Hell, and the Day of Judgement, so i'm hoping to collect then.

  55. I had contacted an Orlando law firm that deals with stock and financial issues and they also didn't take the case, they left me with the feeling that what Principal is doing is perfectly legal. That actually makes it worse than the Madoff screwing. We need to rattle every possible cage of every elected official, congressmen, governors, attorneys general, AARP, anybody that has some clout, and call attention to the legal rape of American workers in these times of economic disaster when whatever money we have left goes to bail out millionaire executives. That's the stuff revolutions are made of.

  56. They released a Whopping $13,000 to me on 1/29/10 still have a lot more to release did anyone else get any released????

    1. Bobby Rupe – they released around $700 of mine, which is around 10% of my recent (significantly reduced) total amount in that account. What percentage of your total amount did they return?

      In the meantime, they continue to siphon off the money and not file for bankruptcy, as well as giving their executives obscene bonuses and buying further properties.

      Does anyone know how the class action against AT&T mobile’s early termination fee was won? The AT&T contract stated that an early termination fee would be charged but the consumers still won the class action suit against it.

      We should ask for the amount that was in the account at the time we had requested the withdrawl. At least they should return the amount that was due to us the day they processed our application (the maximum period for processing the request is 2 weeks, if I am not mistaken).

  57. Bobby Rupe – they released around $700 of mine, which is around 10% of my recent (significantly reduced) total amount in that account. What percentage of your total amount did they return?

    In the meantime, they continue to siphon off the money and not file for bankruptcy, as well as reporting a profit, giving their executives obscene bonuses and buying further properties.

    Does anyone know how the class action against AT&T mobile’s early termination fee was won? The AT&T contract stated that an early termination fee would be charged but the consumers still won the class action suit against it.

    We should ask for the amount that was in the account at the time we had requested the withdrawl. At least they should return the amount that was due to us the day they processed our application (the maximum period for processing the request is 2 weeks, if I am not mistaken).

  58. I resigned (4/12/13) from a job about three weeks ago that paid into a Principal Financial Group retirement fund on my behalf. Just before leaving the job, I called Principal to get information about their cash payout process and policy. The rep I spoke to told me that it’s a simple process that can be done electronically. Two days after my last day, I submitted a distribution request for 100% of my account balance to be paid into my personal checking. I provided all my information and was assured that the processing time is upwards of 48 hours for direct deposits. When I called in later that week to check on the status of my request, I was told they were awaiting confirmation of my last date of employment from my previous employer.

    That information was provided on 04/22/13. However, I was told then that it will take 7 business days to process my request and an additional 48 hours for it to be deposited into my personal checking. After monitoring the request status for the last 8 days, I found out today that Principal did a rollover into a Principal Banking account instead of honoring my request. I have spent most of today arguing with low level call center employees who are either unwilling or unable to fix the situation.

    Does anyone know of any pending litigation against Principal for woeful negligence or fraud?

    Thanks!

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