Investment Performance

Transcription

1 Investment Performance Investment results shown represent historical performance and do not guarantee future results. Investment returns and principal values fluctuate with changes in interest rates and other market conditions so the value, when redeemed may be worth more or less than original costs. Current performance may be lower or higher than the performance data shown. In situations where the net and gross total investment expense figures are different, the mutual fund or underlying fund in which a Separate Account invests has waived/capped a portion of its management fees through the date displayed in the Waiver Expiration Date or Cap Expiration Date column. Differences may also be shown due to the fund family choosing to pay certain expenses that would normally be payable by the fund. Returns displayed are always based on net total investment expense. For more performance information, including most recent monthend performance, visit contact your representative of the Principal Financial Group (The Principal ), or call our participant contact center at Average Annual Total Returns through Inv Manager or SubAdvisor Large U.S. Equity Large Value Edge Asset Management, Inc. Equity Income Separate AccountR3 3, /30/ / 1.09 LargeCap Value Separate AccountR /01/ / 1.02 Westwood / Barrow Hanley LargeCap Value III Separate AccountR3 3, /29/ / 1.34 Russell 1000 Value Index Morningstar Category Average Large Value Total Funds in Category Large Blend Edge Asset Management, Inc. 3, 12, Capital Appreciation Separate AccountR3 16 LargeCap S&P 500 Index Separate AccountR3 2, 8, /30/ / /01/ / 0.72 Russell 3000 Index Standard & Poor's 500 Index Morningstar Category Average Large Blend Total Funds in Category Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

2 Inv Manager or SubAdvisor Large Growth Am Century/Sawgrass Asset Mgmt LargeCap Growth II Separate AccountR3 3, 21, /29/ / 1.46 Columbus Circle Investors LargeCap Growth Separate AccountR /01/ / 1.12 Blue Chip Separate AccountR3 3, /30/ / 1.26 T. Rowe Price/Brown Advisory LargeCap Growth I Separate AccountR3 3, /29/ / 1.20 Russell 1000 Growth Index Morningstar Category Average Large Growth Total Funds in Category Small/Mid U.S. Equity Mid Cap Value LA Capital Mgmt/Victory MidCap Value I Separate AccountR3 1, 3, 21, /01/ / 1.57 Principal Global/Barrow Hanley MidCap Value III Separate AccountR /01/ / 1.22 Russell Midcap Value Index Morningstar Category Average Mid Cap Value Total Funds in Category Mid Cap Blend MidCap S&P 400 Index Separate AccountR3 1, 2, 10, /31/ / 0.72 Standard & Poor's 400 MidCap Stock Index Morningstar Category Average Mid Cap Blend Total Funds in Category Mid Cap Growth Columbus Circle Investors MidCap Growth Separate AccountR /01/ / 1.22 Robert Baird/William Blair 1, 3, 21, MidCap Growth III Separate AccountR /28/ / 1.55 Russell Midcap Growth Index Morningstar Category Average Mid Cap Growth Small Value Average Annual Total Returns through Total Funds in Category DFA/Vaughan Nelson/LA Capital SmallCap Value II Separate AccountR3 1, 3, /01/ / 1.60 Russell 2000 Value Index Morningstar Category Average Small Value Total Funds in Category /28/ /28/2018 Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

3 Inv Manager or SubAdvisor Small Blend SmallCap S&P 600 Index Separate AccountR3 1, 2, 9, /31/ / 0.72 SmallCap Separate AccountR3 1, /01/ / 1.32 Russell 2000 Index Standard & Poor's 600 Stock Index Morningstar Category Average Small Blend Total Funds in Category Small Growth AB/Brown/Emerald 1, 3, 21, SmallCap Growth I Separate AccountR /29/ / 1.67 Russell 2000 Growth Index Morningstar Category Average Small Growth Total Funds in Category Real Estate Principal Real Estate Inv 3, 7, Real Estate Securities Separate AccountR /31/ / 1.60 MSCI US REIT Index Morningstar Category Average Real Estate Total Funds in Category International Equity Diversified Emerging Markets International Emerging Markets Separate /01/ / 1.92 AccountR3 4 MSCI Emerging Markets NR Index Morningstar Category Average Diversified Emerging Markets Foreign Large Value Total Funds in Category Causeway / Barrow Hanley Overseas Separate AccountR3 3, 4, /30/ / 1.67 MSCI EAFE Value Index Morningstar Category Average Foreign Large Value Average Annual Total Returns through Total Funds in Category Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

4 Inv Manager or SubAdvisor Foreign Large Blend Origin Asset Management LLP International I Separate AccountR3 3, 4, 21, /01/ / 1.54 Diversified International Separate AccountR /20/ / 1.47 International Equity Index Separate AccountR3 2, 3, 4, 27, 28, /30/ / 0.92 MSCI ACWI Ex USA Index MSCI EAFE NR Index Morningstar Category Average Foreign Large Blend Foreign Small/Mid Blend /DFA 1, 4, International SmallCap Separate AccountR Total Funds in Category /01/ / 1.87 MSCI World Ex US Small Cap Index Morningstar Category Average Foreign Small/Mid Blend World Stock Total Funds in Category Global Opportunities Separate AccountR3 3, 4, /30/ / 1.42 MSCI All Country World Index Morningstar Category Average World Stock Total Funds in Category Global Real Estate Principal Real Estate Inv Global Real Estate Securities Separate /30/ / 1.47 AccountR3 3, 4, 7, 12, 33 FTSE EPRA/NAREIT Developed Index NR Morningstar Category Average Global Real Estate Balanced/Asset Allocation Allocation15% to 30% Equity Multiple SubAdvisors SAM Flexible Income Separate AccountR3 12, 14, 15, 18, 23, 26, 39, Total Funds in Category /16/ / 1.44 SAM Flexible Income Blended Index Morningstar Category Average Allocation15% to 30% Equity Average Annual Total Returns through Total Funds in Category Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

5 Inv Manager or SubAdvisor Allocation30% to 50% Equity Multiple SubAdvisors 3, 12, Diversified Real Asset Separate AccountR3 24, 33 Multiple SubAdvisors Global Diversified Income Separate AccountR3 3, 12, 19, /31/ / /30/ / 1.35 Multiple SubAdvisors SAM Conservative Balanced Separate /16/ / 1.54 AccountR3 12, 14, 18, 23, 26, 39, 43 Diversified Real Asset Strategic Index Global Diversified Income Blended Index SAM Conservative Balanced Blended Index Morningstar Category Average Allocation30% to 50% Equity Allocation50% to 70% Equity Multiple SubAdvisors 12, 14, 18, 23, SAM Balanced Separate AccountR3 26, 39, Total Funds in Category /16/ / 1.58 SAM Balanced Blended Index Morningstar Category Average Allocation50% to 70% Equity Allocation70% to 85% Equity Multiple SubAdvisors SAM Conservative Growth Separate AccountR3 12, 14, 18, 23, 26, 39, Total Funds in Category /16/ / 1.65 SAM Conservative Growth Blended Index Morningstar Category Average Allocation70% to 85% Equity TargetDate Retirement Multiple SubAdvisors 14, 18, Principal LifeTime Hybrid Income CIT R3 23, 26, 39, 55, 56, 57, 58, Total Funds in Category /07/ / 1.18 Multiple SubAdvisors Principal LifeTime Strategic Income Separate /30/ / 1.17 AccountR3 14, 18, 23, 26, 39, 42 S&P Target Date Retirement Income Index Morningstar Category Average TargetDate Retirement Allocation85%+ Equity Multiple SubAdvisors SAM Strategic Growth Separate AccountR3 12, 14, 15, 18, 23, 26, 39, Total Funds in Category /16/ / 1.61 SAM Strategic Growth Blended Index Morningstar Category Average Allocation85%+ Equity Average Annual Total Returns through Total Funds in Category Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3 12/30/ /30/2017

6 Inv Manager or SubAdvisor TargetDate Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2010 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2010 Separate AccountR3 14, 18, 23, 26, 39, /07/ / /30/ / 1.21 S&P Target Date 2010 Index Morningstar Category Average TargetDate TargetDate 2015 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2015 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2015 Separate AccountR3 14, 18, 23, 26, 39, Total Funds in Category /07/ / /29/ / 1.24 S&P Target Date 2015 Index Morningstar Category Average TargetDate 2015 TargetDate 2020 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2020 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2020 Separate AccountR3 14, 18, 23, 26, 39, Total Funds in Category /07/ / /30/ / 1.26 S&P Target Date 2020 Index Morningstar Category Average TargetDate 2020 TargetDate 2025 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2025 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2025 Separate AccountR3 14, 18, 23, 26, 39, Total Funds in Category /07/ / /29/ / 1.28 S&P Target Date 2025 Index Morningstar Category Average TargetDate 2025 Average Annual Total Returns through Total Funds in Category Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

7 Inv Manager or SubAdvisor TargetDate 2030 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2030 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2030 Separate AccountR3 14, 18, 23, 26, 39, /07/ / /30/ / 1.29 S&P Target Date 2030 Index Morningstar Category Average TargetDate 2030 TargetDate 2035 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2035 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2035 Separate AccountR3 14, 18, 23, 26, 39, Total Funds in Category /07/ / /29/ / 1.31 S&P Target Date 2035 Index Morningstar Category Average TargetDate 2035 TargetDate 2040 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2040 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2040 Separate AccountR3 14, 18, 23, 26, 39, Total Funds in Category /07/ / /30/ / 1.31 S&P Target Date 2040 Index Morningstar Category Average TargetDate 2040 TargetDate 2045 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2045 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2045 Separate AccountR3 14, 18, 23, 26, 39, Total Funds in Category /07/ / /29/ / 1.33 S&P Target Date 2045 Index Morningstar Category Average TargetDate 2045 Average Annual Total Returns through Total Funds in Category Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

8 Inv Manager or SubAdvisor TargetDate 2050 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2050 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2050 Separate AccountR3 14, 18, 23, 26, 39, /07/ / /30/ / 1.33 S&P Target Date 2050 Index Morningstar Category Average TargetDate 2050 TargetDate 2055 Multiple SubAdvisors 14, 18, 23, Principal LifeTime Hybrid 2055 CIT R3 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2055 Separate AccountR3 14, 18, 23, 26, 39, Total Funds in Category /07/ / /29/ / 1.35 S&P Target Date 2055 Index Morningstar Category Average TargetDate 2055 TargetDate Multiple SubAdvisors 14, 15, 18, Principal LifeTime Hybrid 2060 CIT R3 23, 26, 39, 55, 56, 57, 58, 59 Multiple SubAdvisors Principal LifeTime 2060 Separate AccountR3 14, 15, 18, 23, 26, 39, Total Funds in Category /01/ / /01/ / 1.38 S&P Target Date Index Morningstar Category Average TargetDate ShortTerm Fixed Income Average Annual Total Returns through Total Funds in Category Guaranteed Interest Account 2 year /15/1941 Guaranteed Interest Account 3 year /15/1941 Guaranteed Interest Account 4 year /15/1941 Guaranteed Interest Account 5 year /15/1941 Guaranteed Interest Account 6 year /15/1941 Guaranteed Interest Account 7 year /15/1941 Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

9 Inv Manager or SubAdvisor Stable Value Morley Financial Services, Inc Principal Stable Value Sig Fund /09/ / 1.15 Bloomberg Barclays 13 Yr Government Index Short Term Bond Edge Asset Management, Inc. 3, 12, 17, ShortTerm Income Separate AccountR3 18, /31/ / 1.00 Bloomberg Barclays Credit 13 Years Index Morningstar Category Average Short Term Bond Money Market Total Funds in Category Liquid Assets Separate AccountR3 6, 32, /10/ / 0.97 SEC 7Day Yield as of is 0.19% *** Bloomberg Barclays Treasury Bellwethers 3 Month Index Morningstar Category Average Money Market Total Funds in Category Fixed Income High Yield Bond JP Morgan / Neuberger Berman High Yield I Separate AccountR3 3, 5, 17, /31/ / 1.22 High Yield Separate AccountR3 3, 5, 12, 17, /30/ / 1.17 Bloomberg Barclays US Corp High Yld 2% Issuer Capped Index Morningstar Category Average High Yield Bond IntermediateTerm Bond Total Funds in Category Edge Asset Management, Inc. Income Separate AccountR3 3, 12, 17, /30/ / 1.07 Mellon Capital Mgmt 2, 17, Bond Market Index Separate Account R /30/ / 0.82 Core Plus Bond Separate AccountR3 17, 18, 33, /01/ / 1.12 Bloomberg Barclays Aggregate Bond Index Morningstar Category Average IntermediateTerm Bond Average Annual Total Returns through Total Funds in Category Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

10 Inv Manager or SubAdvisor Intermediate Government Edge Asset Management, Inc. Government & High Quality Bond Separate /01/ / 0.97 AccountR3 17, 18, 20 Bloomberg Barclays US Agency Fixed Rate MBS Index Morningstar Category Average Intermediate Government InflationProtected Bond BlackRock Financial Mgmt, Inc. 3, 17, 18, Inflation Protection Separate AccountR Total Funds in Category /31/ / 0.96 Bloomberg Barclays US Treas TIPS Index Morningstar Category Average InflationProtected Bond Owned Real Estate Total Funds in Category Principal Real Estate Inv U.S. Property Separate AccountR /01/ / 1.56 NFIODCE EqualWeight Preferred Stock Spectrum Preferred Securities Separate AccountR3 3, 17, /31/ / 1.34 Preferreds Blended Index Morningstar Category Average Preferred Stock Total Funds in Category Other Multialternative Multiple SubAdvisors 3, 12, Global MultiStrategy Separate AccountR3 31, 33 Hedge Fund Research, Inc. Fund of Funds Composite Index /30/ / Morningstar Category Average Multialternative Total Funds in Category Please see important information at the end of this presentation. Asset Class ShortTerm Fixed Income Average Annual Total Returns through Investment Option Name and Description Fixed Income Guaranteed Option 48,49 12/30/ /30/2017 Crediting Rate 12/01/ /31/2017 This group annuity contract is a guarantee, backed by the assets in the multibillion dollar general account of the Principal Life Insurance Company (Principal Life). The contract makes benefit payments at book value (i.e., no market value adjustments or surrender charge adjustments) for plan benefit events. An employerlevel surrender of the plan's interest or initiated transfer will be subject to either a 12month irrevocable advance notice or a 5% surrender charge, whichever the employer chooses Rate Level Service Fee 50 Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

11 Average Annual Total Returns through Inv Manager or SubAdvisor Asset Class Investment Option Name and Description Rate Level Service Fee Fixed Income / Guaranteed Income ppb1, ppb2, ppb3, ppb4 Principal Pension Builder(SM)Z This is a deferred income annuity which provides guaranteed income in retirement. Purchase rates vary based on assumptions such as your age and current interest rate market; monthly income quotes will be available at the time of purchase. The monthly guaranteed income amount assumes an income start date of age 65 or your normal retirement date under your plan, if later. The default annuity form is a singlelife annuity with a 10year certain period beginning on the income start date, meaning income will be paid for 10 years or your lifetime, whichever is longer. Guarantees are backed by the General Account of Principal Life Insurance Company (Principal Life). Transfers from Principal Pension Builder may be subject to a surrender charge Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

12 Important Information Subadvised Investment Options include Separate Accounts available through a group annuity contract with the Principal Life Insurance Company. Insurance products and plan administrative services, if applicable, are provided by Principal Life Insurance Company a member of the Principal Financial Group, Des Moines, IA See the fact sheet for the full name of the Separate Account. Certain investment options may not be available in all states or U.S. commonwealths. Principal Life Insurance Company reserves the right to defer payments or transfers from Principal Life Separate Accounts as described in 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 is not a subadvised investment option. Guarantees are backed by all the assets in the Principal Life general account. *** The 7Day Yield % more closely reflects the current earnings of this money market investment option than the total return displayed. Percentile rankings are based on total returns in accordance with the appropriate Morningstar peer group. Returns shown for periods of less than one year are not annualized. All returns displayed here are after Total Investment Expense of the investment option. Investment options are subject to investment risk. Shares or unit values will fluctuate and investments, when redeemed, may be worth more or less than their original cost. This does not apply, however, to the guaranteed portions of group annuity contracts issued by Principal Life that constitute guaranteed benefit policies as defined in ERISA 401(b)(2)(B). Any operating expenses of a mutual fund or underlying mutual fund that are part of net Total Investment Expense are obtained from the mutual fund's most recent prospectus. The operating expenses shown as part of Total Investment Expense include voluntary expense limits and fee credit. 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. A surrender charge may apply to withdrawals or transfers from an unmatured guaranteed interest account. Results shown for guaranteed accounts are average annual guaranteed interest rates. The historical performance displayed for the guaranteed interest account are calculated as an accumulation of interest based on the average applicable interest rates in effect over the time period. Interest rates are market based and future interest rates will be based on future market conditions. Past rates are not indicative of expected future rates. Current rates may be lower or higher than what is shown here. For a Separate Account investment option, Total Investment Expense gross equals the sum of these expenses: (a)the amount of money, expressed as a percentage, deducted for the costs of managing a separate account where applicable, fees for plan administrative services and agent compensation, plus (b) if the separate account invests in an underlying mutual fund, the total fund operating expenses of the underlying mutual fund, plus (c) if an underlying mutual funds invests in other mutual funds, the weightedaverage management fee of those other mutual funds, as listed in the most recent prospectus. The actual Total Investment Expense may change if an underlying mutual fund s allocation of assets to other mutual funds changes. This report includes investment options that contain information from a variety of sources. A primary source is Morningstar which provides holdings information, operations data, and rankings or statistics proprietary to Morningstar. Morningstar is generally the source of information on mutual funds unaffiliated with the Principal. Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

13 (C) 2017 Morningstar, Inc. All Rights Reserved. Part of the investment data contained herein includes Morningstar peer group comparisons, ratings, holdings and other data from its mutual fund and variable annuity databases and : (1) is proprietary to Morningstar and/or its content providers: (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. ppb1. Principal Pension Builder SM is a deferred income annuity rider available through certain group annuity contracts with Principal Life Insurance Company, a member of the Principal Financial Group, Des Moines Iowa Principal Pension Builder may not be available in all states. Principal Pension Builder provides for the purchase of deferred income annuities that provide guaranteed income in retirement. Guaranteed income may change due to elections by the plan fiduciary or participant, such as changing the income start date or annuity form or surrendering guaranteed income. Funds transferred and contributions used to purchase guaranteed income through Principal Pension Builder will no longer be subject to market gains or losses. In exchange, the participant is purchasing a guaranteed future income stream. ppb2. Any transfer from Principal Pension Builder SM will result in a 12month restriction period during which investment transfers into Principal Pension Builder will not be allowed. Contributions directed to Principal Pension Builder can continue. ppb3. As an annuity, Principal Pension Builder SM does not have investment performance, a management fee or expense ratio; those are concepts unique to investment products. If applicable, the Rate Level Service Fee illustrated represents a fee included in the purchase price of Principal Pension Builder for the purpose of offsetting a portion of the fees the plan pays to Principal Life as a provider of administrative services to the plan, as agreed to by the plan fiduciary. ppb4. The ability of Principal Life Insurance Company to pay the guarantee is based on the claimspaying ability of the general account and is subject to the terms of the contract. Insurance products and plan administrative services are provided by Principal Life Insurance Company, a member of the Principal Financial Group, Des Moines, IA Compliance number: t t1 1. Smallcap and midcap investment options are subject to more fluctuation in value and may have additional risks than other investment options with stocks of larger, more stable companies. 2. Each index based investment option is invested in the stocks or bonds of the index it tracks. Performance of indexes reflects the unmanaged results for the market segment the selected stocks or bonds represent. There is no assurance an index based investment option will match the performance of the index tracked. 3. This Separate Account invests solely in the Institutional class shares of the Principal Funds. All voting rights associated with ownership of shares in the mutual fund are the rights of the Separate Account, not of contract holders investing in the Separate Account. For further information on the underlying mutual fund, see the prospectus of the fund. 4. International and global investment options are subject to additional risk due to fluctuating exchange rates, foreign accounting and financial policies, and other economic and political environments. 5. High yield investment options are subject to greater credit risk and volatility that is associated with high yield bonds. 6. Liquid asset investment options are not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC), or any other government agency. Although the investment option may seek to preserve the value of an investment, it is possible to lose money by investing in the portfolio. 7. Real Estate investment options are subject to investment and liquidity risk and other risks inherent in real estate such as those associated with general and local economic conditions. Property values can decline due to environmental and other reasons. In addition, fluctuation in interest rates can negatively impact the performance of real estate investment options. Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

14 8. S&P 500 is a trademark of The McGrawHill Companies, Inc., and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. 9. S&P SmallCap 600 is a trademark of The McGrawHill Companies, Inc. and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. 10. S&P MidCap 400 is a trademark of The McGrawHill Companies, Inc. and has been licensed for use by Principal Life Insurance Company and Principal Management Corporation. The product is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the product. 12. These calculated returns reflect the historical performance of the oldest share class of the fund, adjusted to reflect a portion of the fees and expenses of this share class. For time periods prior to inception date of the fund, predecessor performance is reflected. Please see the fund's prospectus for more information on specific expenses, and the fund's most recent shareholder report for actual date of first sale. Expenses are deducted from income earned by the fund. As a result, dividends and investment results will differ for each share class. 13. Effective November 13, 2006, Dimensional Fund Advisors (DFA) was added as an additional subadvisor. Performance results displayed reflect all subadvisors managing this portfolio during the time periods displayed. 14. Equity investment options involve greater risk, including heightened volatility, than fixedincome investment options. Fixedincome investment options are subject to interest rate risk, and their value will decline as interest rates rise. 15. Asset allocation does not guarantee a profit or protect against a loss. Investing in real estate, smallcap, international, and highyield investment options involves additional risks. 16. Smallcap and midcap stocks may have additional risks, including greater price volatility. 17. Fixedincome investment options are subject to interest rate risk, and their value will decline as interest rates rise. Neither the principal of bond investment options nor their yields are guaranteed by the U.S. government. 18. Fixedincome and asset allocation investment options that invest in mortgage securities are subject to increased risk due to real estate exposure. 19. Fixedincome investment options are subject to interest rate risk, and their value will decline as interest rates rise. Lowerrated securities are subject to additional credit and default risks. Risks associated with preferred securities differ from risks inherent with other investments. In particular, in the event of bankruptcy, a company's preferred securities are senior to common stock but subordinated to all other types of corporate debt. International investing involves increased risks due to currency fluctuations, political or social instability, and differences in accounting standards, these risks are magnified in emerging markets. REIT securities are subject to risk factors associated with the real estate industry and tax factors of REIT registration. 20. Effective April 9, 2009, this portfolio is subadvised by Edge Asset Management. Prior to April 9, 2009, the portfolio was subadvised by Principal Global Investors. 21. This Separate Account invests solely in the Institutional class share of a mutual fund (Fund) from Principal Funds, Inc. The manager of the Fund, Principal Management Corporation, invests between 10% and 40% of the Fund's assets in common stocks in an attempt to match or exceed the performance of the Fund's benchmark index for performance. 23. Asset allocation and diversification do 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. Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

15 24. Fixedincome investment options are subject to interest rate risk, and their value will decline as interest rates rise. Neither the principal of bond investment options nor their yields are guaranteed by the U.S. or any other government entity. Concentrating investments in natural resources industries can be affected significantly by events relating to those industries, such as variations in the commodities markets, weather, disease, embargoes, international, political and economic developments, the success of exploration projects, tax and other government regulations and other factors. Investment in derivatives entails specific risks relating to liquidity, leverage and credit that may reduce returns and/or increase volatility. REIT securities are subject to risk factors associated with the real estate industry and tax factors of REIT registration. An MLP that invests in a particular industry (e.g., oil and gas) may be harmed by detrimental economic events within that industry. As partnerships, MLPs may be subject to less regulation (and less protection for investors) under state laws than corporations. In addition, MLPs may be subject to state taxation in certain jurisdictions, which may reduce the amount of income paid by an MLP to its investors. 26. The Investment Advisor will display "Multiple SubAdvisors" for certain targetdate, targetrisk and specialty investment options where the assets are directed by the Investment Manager to multiple underlying investment options. These underlying investment options may use multiple subadvisors who are responsible for the daytoday management responsibilities. 27. The International Equity Index investment option described herein is indexed to an MSCI index. 28. The Statement of Additional Information for the underlying mutual fund contains a more detailed description of the limited relationship MSCI has with Principal and any related investments. 29. This investment option is subject to investment and liquidity risk and other risks inherent in real estate such as those associated with general and local economic conditions. If you elect to contribute funds into the U.S. Property Separate Account, withdrawals may be delayed for up to 3 years. 31. This fund utilizes alternative investment strategies such as arbitrage, leverage, derivatives, and shorting securities in addition to traditional investments. Investment risk may be magnified with the use of these alternative strategies. In addition, securities such as bonds, equities, commodities, international and emerging market securities, and currencies are used to implement the investment strategy. These investments are subject to risks associated with market and interest rate movements. The fund is considered nondiversified which may make it more susceptible to price volatility if the fund does not meet its objective. Due to the nature of the investment process, investors should not expect significant outperformance during market rallies. Additional risks are included in the funds prospectus. It is possible to lose money when investing in the fund. 32. The net return experienced may be negative if the costs to maintain and operate the Liquid Assets Separate Account exceed returns. Participants may also see negative returns if plan expenses, if applicable, are netted or deducted from their accounts. 33. The risks associated with derivative investments include that the underlying security, interest rate, market index, or other financial asset will not move in the direction the Investment Adviser and/or SubAdvisor anticipated, the possibility that there may be no liquid secondary market, the risk that adverse price movements in an instrument can result in a loss substantially greater than a fund's initial investment, the possibility that the counterparty may fail to perform its obligations; and the inability to close out certain hedged positions to avoid adverse tax consequences. 36. Effective January 13, 2014, this portfolio is subadvised by Baird and William Baird and William Blair. Prior to January 13, 2014, this portfolio was subadvised by Turner and Jacobs Levy. The portfolio has had various subadvisors since its inception. Performance results displayed reflect all subadvisors managing this portfolio during the time periods displayed. 37. Effective June 3, 2014, this portfolio is subadvised by Origin Asset Management. Prior to June 3, 2014, this portfolio was subadvised by Fidelity and Schroders. The portfolio has had various subadvisors since its inception. Performance results displayed reflect all subadvisors managing this portfolio during the time periods displayed. 38. Effective December 30, 2014, this portfolio is subadvised by American Century and Sawgrass Asset Management. Prior to December 30, 2014, the portfolio was subadvised by American Century and Montag & Caldwell. The portfolio has had various subadvisors since its inception. Performance results displayed reflect all subadvisors managing this portfolio during the time periods displayed. 39. International and global investing involves greater risks such as currency fluctuations, political/social instability and differing accounting standards. 40. Formerly known as SmallCap Blend Separate Account. Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

16 41. Formerly known as Bond and Mortgage Separate Account. 42. This Separate Account invests directly in the Institutional class shares of a Principal LifeTime Fund. The mutual fund operating expenses for each Principal LifeTime Fund are reflected in the Total Investment Expense of the Separate Accounts well as the operating expenses of the underlying funds in which the Principal LifeTime Fund invests. Based on the asset allocation of the Principal LifeTime Funds as in the prospectus dated March 1, 2016, the weighted average operating expenses of the underlying funds are: Principal LifeTime Strategic Income, 0.58%; Principal LifeTime 2010, 0.63%; Principal LifeTime 2015, 0.66%; Principal LifeTime 2020, 0.68%; Principal LifeTime 2025, 0.70%; Principal LifeTime 2030, 0.71%; Principal LifeTime 2035, 0.73%; Principal LifeTime 2040, 0.73%; Principal LifeTime 2045, 0.74%; Principal LifeTime 2050, 0.75%; Principal LifeTime 2055, 0.78%; Principal LifeTime 2060, 0.75%. For further information on all mutual fund expenses, see the prospectus of the underlying Principal LifeTime Fund. All voting rights associated with ownership of shares in the mutual fund are the rights of the Separate Account, not of contract holders investing in the Separate Account. 43. This Separate Account invests directly in the Institutional class shares of a Principal Strategic Asset Management Portfolio (SAM). Performance results shown prior to January 16, 2007, are of the mutual fund (Institutional class performance adjusted based on the historical performance of the A class shares of the Fund where Institutional class shares is not available) only adjusted for the fees of the Separate Accounts since the Separate Account was not available. The underlying SAM Portfolio indirectly bears its pro rata share of the management fees incurred by the underlying Principal Fund in which this portfolio invests. Based on the asset allocation of the Principal Strategic Asset Management Portfolio outlined in the prospectus dated March 1, 2016, the weighted average operating expenses of the underlying funds are: Flexible Income, 0.55%; Conservative Balanced, 0.65%; Balanced, 0.70%; Conservative Growth, 0.77%; Strategic Growth, 0.73%. While the operating expenses of the underlying mutual funds are not part of the SAM Portfolio operating expenses they are included in the Total Investment Expense. Performance results shown for the SAM Portfolio reflect the application of these expenses. For further information on all mutual fund expenses, see the prospectus of the underlying SAM Portfolio. All voting rights associated with ownership of shares in the mutual fund are the rights of the Separate Account, not of contract holders investing in the Separate Account. 44. Effective June 30, 2016, this portfolio is subadvised by LA Capital and Victory Capital. Prior to June 30, 2016, the portfolio was subadvised by Goldman Sachs and LA Capital. The portfolio has had various subadvisors since its inception. Performance results displayed reflect all subadvisors managing this portfolio during the time periods displayed. 45. Effective September 30, 2016, this portfolio is subadvised by AB LP, Brown Advisory and Emerald Advisors, Inc. Prior to September 30, 2016, the portfolio was subadvised by AB LP, Brown Advisory, Emerald Advisors, Inc. and Columbus Circle Investors. The portfolio has had various subadvisors since its inception. Performance results displayed reflect all subadvisors managing this portfolio during the time periods displayed. 47. Prior to January 1, 2017, the name of this investment option was Principal Money Market Separate Account. 48. Principal Fixed Income Guaranteed Option is the Group Annuity Contract Custodial Guaranteed Interest Contract available through Principal Life Insurance Company, a member of the Principal Financial Group, Des Moines Iowa May not be available in all states. 49. If the retirement program provides a participant access to the Fixed Income Guaranteed Option and Competing Plan Investment Options, participant transfers, either directly or indirectly, to Competing Plan Investment Options will generally be subject to an Equity Wash. An Equity Wash requires that transfers must be directed to a noncompeting investment option under the plan for 90days before such transferred amounts may be directed to any other Competing Plan Investment Option. Competing Plan Investment Options include other guaranteed investment options, or fixed income, money market, or bond funds that have ever had an average duration of 3.0 years or less. 50. The Fixed Income Guaranteed Option is a guarantee backed by the general account of Principal Life Insurance Company(Principal Life). As a guarantee, it does not have an investment management fee or expense ratio; those are concepts unique to investment products. The Rate Level Service Fee illustrated here represents the part of the overall fee arrangement that the plan pays for services from Principal Life as a provider of administrative services to the plan, as agreed to in the Service and Expense Agreement for the plan. 51. The crediting rate shown for the Fixed Income Guaranteed Option is an effective annual rate and is displayed here as the rate guaranteed by Principal Life net of the fees for administrative services to the plan illustrated in the Rate Level Service Fee column for the Fixed Income Guaranteed Option. Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3

17 55. This Principal LifeTime Hybrid CIT indirectly bears its pro rata share of the Total Investment Expense incurred by the underlying investment options in which this fund invests. Based on the asset allocation of the Principal LifeTime Hybrid CITs as of March 31, 2016, the weighted average operating expenses of the underlying investment options are: Principal LifeTime Hybrid Income, 0.33%; Principal LifeTime Hybrid 2010, 0.33%; Principal LifeTime Hybrid 2015, 0.32%; Principal LifeTime Hybrid 2020, 0.32%; Principal LifeTime Hybrid 2025, 0.32%; Principal LifeTime Hybrid 2030, 0.32%; Principal LifeTime Hybrid 2035, 0.32%; Principal LifeTime Hybrid 2040, 0.32%; Principal LifeTime Hybrid 2045, 0.33%; Principal LifeTime Hybrid 2050, 0.33%; Principal LifeTime Hybrid 2055, 0.34%; Principal LifeTime Hybrid 2060, 0.34%. This fund may invest in underlying mutual funds. For more information on the underlying funds and their expenses, see the prospectus for those funds. 56. Effective January 1, 2017, the trustee for the Principal LifeTime Hybrid Collective Investment Funds changed from Principal Trust Company to Principal Global Investors Trust Company. Principal Trust Target Date Collective Investment Funds were renamed the Principal LifeTime Hybrid Collective Investment Funds (CITs). 57. For the Principal Lifetime Hybrid Collective Investment Funds (CITS), Total Investment Expense Net equals the sum of these expenses: (a) the amount of money, expressed as a percentage, deducted for the cost of managing the collective investment trust, and where applicable, fees for plan administrative services and compensation to your Financial Professional based on the amount of business they have with us including such factors as total deposits and assets, plus (b) if the collective investment trust invests in an underlying mutual fund, separate account, or collective investment trust, the total investment operating expenses of the underlying investment option, as listed in the most recent prospectus if applicable. 58. The Principal LifeTime Hybrid Collective Investment Funds (CITs) are collective investment trusts maintained by Trust Company, (the Trust Company). The Trust Company has retained, LLC (the Adviser), to serve as investment adviser with respect to the CITs, subject to the Trust Companys 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. 59. 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. Benchmark Descriptions Bloomberg Barclays 13 Yr Government Index is comprised of both the Treasury Bond Index and the Agency Bond Index. Bloomberg Barclays Aggregate Bond Index represents securities that are domestic, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage passthrough securities, and assetbacked securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis. Bloomberg Barclays Credit 13 Years Index is composed of publicly issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. To qualify, bonds must be SECregistered. Bloomberg Barclays Treasury Bellwethers 3 Month Index is composed of public obligations of the U. S. Treasury with a maturity of three months. Bloomberg Barclays US Agency Fixed Rate MBS Index covers the fixedrate mortgagebacked passthrough securities issued by GinnieMae (GNMA), Fannie Mae (FNMA), and Freddie Mae (FHLMC). Bloomberg Barclays US Corp High Yld 2% Issuer Capped Index is an unmanaged index comprised of fixed rate, noninvestment grade debt securities that are dollar denominated. The index limits the maximum exposure to any one issuer to 2%. Principal Stable Value Signature, Principal Pension Builder (SM) Z, Principal Trust Target CIT's, Principal Fixed Income Guaranteed Option, DC PCRP Guaranteed, DC PCRP Sep Accts Version 18, R3