Deals & People February 26, 2008

Zimpleman Expands Role at Principal

Larry D. Zimpleman will take on the new role of chief executive officer at the Principal Financial Group, effective May 1, 2008.
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Zimpleman will retain the title of president, as he assumes complete responsibility for company strategy and operations, according to the firm. J. Barry Griswell will continue as chairman.
The change was announced by the company’s Board of Directors, as part of its planned succession process.
Zimpleman joined the company in 1971 as a part-time actuarial student and became a full-time actuary in 1973. From 1976 to 1997 he served in various management and leadership positions in the Pension department. He was named vice president in 1997, senior vice president in 1999, executive vice president in 2001, president of Retirement and Investor Services in 2003, and president and chief operating officer in 2006.
Other Changes
The Principal also announced the following executive promotions, effective March 1, 2008:
  • Daniel J. Houston as president – Retirement and Investor Services (RIS) Division with responsibility for U.S. asset accumulation businesses, including Principal Bank. In addition to his current responsibilities for the full service pension business and RIS distribution, Houston adds responsibility for the mutual fund and annuity lines of business. He joined the company in 1984 as a group representative in the Dallas group and pension office. He held various management positions with the company from 1990 to present, including being named vice president in 1997, senior vice president in 2000 and executive vice president in 2006.
  • Norman Sorensen is named executive vice president with responsibility for strategy, development and operation of all international asset accumulation businesses for The Principal. Sorensen joined the company in 1998. Previously he was a senior executive at AIG. Prior to joining AIG, he held a number of senior international marketing and general management positions at American Express Company and Citigroup.
  • Gregory J. Burrows is named senior vice president – Retirement and Investor Services with responsibility for the full service pension business. He joined the company in 1986 as a senior group and pension representative. In 1991 he was named regional director of group and pension sales. From 1994-1996, he was president and CEO of America’s Health Plan, a former subsidiary. Burrows served as the managing director of Principal International’s Argentina operation from 1996-1999 and Japan operation from 1999-2001. He returned to Des Moines, Iowa, in 2001 as the Retirement and Investor Services chief marketing officer, where his responsibilities included merger and acquisition oversight.

The Markets February 26, 2008

Key in Target-Date Funds: Diversity and Downside Protection

A new research paper about target-date funds finds that the most effective designs include extended and alternative assets and remain highly diversified for the entire investment horizon.
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In a news release about its research, JPMorgan Asset Management (JPMAM) said its findings were “conclusive” that ultimately, target-date strategies emphasizing diversification and downside protec­tion were most likely to help the greatest number of participants across all industries reach their retirement funding goals.

This was particularly true, JPMAM said, since:

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  • participants’ behavior, which is resistant to change, is still compromising the ability to save and invest, and consequently, diminishing their retirement income security, and
  • the objective to provide downside protection to participants is justified across all industries.

JPMAM asserted that plan sponsors should not dramatically change their target-date strategy unless their industry’s variability is very different from the average of all workers in all professions.

JPMAM’s latest research, “Sharpening Your Aim – Selecting the Best Target Date Strategy for Your Participants,” explores whether differences by industry in workers’ saving and investing behavior should change plan sponsors’ target-date strategies. JPMorgan analyzed data in 10 industries including: Consumer Durables; Consumer Services; Consumer Staples; Energy; Financial; Healthcare; Industrials; Information Technology; Materials and Utilities.

In its announcement, JPMAM mentioned its findings its two industries:

  • Consumer Durables – Above average withdrawals and a below average savings rate for workers in this industry can leave a less than adequate amount of savings available for retirement.
  • Information Technology – Despite above average savings rates, larger than average withdrawals for workers in this industry can decrease participant success rates and increase the need for downside protection.

“Not a lot of people are thinking about the impact of participant behavior on success rates, but they should,” said Anne Lester, Senior Portfolio Manager, Global Multi-Asset Group, JPMorgan Asset Management, in the announcement. “It’s true that plan sponsors have a challenge when it comes to changing participant behavior in the short term, but there is something they can do today – they can choose a well-diversified target-date strategy. This not only will help them satisfy their fiduciary responsibilities, but it is one thing plan sponsors can do quickly that can begin to mitigate the impact of participant behavior. A well diversified target-date portfolio, which achieves a better balance of risk and return, is more likely to get more participants to income replacement safely. Not all target-date fund designs are created equal and this is something for plan sponsors to watch out for.’

A copy of the report is available here.

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