Principal Beats Guaranteed 401(k) Investment Profits Appeal (1)

Principal Life Insurance Co. defeated an appeal challenging how it profits from the guaranteed investment products it offers to 401(k) plans when the Eighth Circuit ruled Friday that the insurer’s practices comply with federal law.

Fixed-income investment products have become a popular 401(k) investment option because they reduce the risk participants bear in an oscillating market. The decision confirms that companies like Principal absorb fiduciary responsibilities when they deduct from investment returns and set participant interest rates, but that they can do so safely when they balance those factors.

Principal met its burden of showing that its compensation was reasonable, ...