The Principal Financial Group has introduced a personalized, at-a-glance retirement wellness scoring system for retirement plan participants. The Principal says the personalized Retirement Wellness Score is one feature of a broad new participant digital experience it is bringing to retirement plan clients. As explained by the firm, the score represents the percentage of a participant’s pre-retirement income that they will likely be able to maintain in retirement, ranging from 0% to 100% or higher. The score is based on account balances; contribution levels in defined contribution, defined benefit and nonqualified plans; an estimate of income from Social Security; outside savings entered by the participant; and other assumptions and data.
The score is embedded in an intuitive color-coded display system that represents different ranges of income replacement. Participants with a score of 70% and above fit into the green group, while those with a 50% to 69% percent income replacement score are placed in the yellow category. The red group is for those with less than a 49% projected income replacement ratio. The Principal says the color-coding system helps motivate participants to take positive action to improve their retirement outlook.
Other features of the improved participant digital experience include expanded account management and educational resources and services. Mobile-friendly functionality and streamlined designs have also been introduced based on feedback from participants, plan sponsors, advisors and experts in behavioral finance and digital design. The new platform will be fully launched by the end of the year, according to The Principal.
The digital enhancements are part of a new approach to workplace retirement readiness called Principal PlanWorks, a platform of capabilities and services designed to make retirement plans work better for both participants and plan sponsors through plan design, participant experience and strategic measures.
For more on The Principal’s value-adds for advisors, visit their NAPA Partner page.
