In June of 2023, we announced the addition of Principal® Guaranteed Option (PGO), a new investment option with a higher crediting rate in the fixed income category. This new investment option is to replace Principal® Fixed Income Guaranteed Option (PFIGO), which will be closed permanently. Existing PFIGO assets will be transferred to the newly added PGO, on December 11th, 2023.
Why is PGO replacing PFIGO?
Rising interest rates have led to competitive advantages in favor of PGO. While PFIGO has served members well over the last decade of low interest rates, it is not a competitive guaranteed fixed-rate option in the current interest rate environment. On July 3rd, 2023, PGO was added to the investment lineup. PGO is currently crediting a rate of 4.40% as compared to PFIGO crediting a rate of 1.30%.
Summary of Changes
On June 30th, 2023, PFIGO was no longer available for new contributions or transfers and PFIGO investment contributions were automatically allocated to PGO. If you have a remaining existing balance in PFIGO, it will automatically be transferred to PGO on December 11th, 2023.
Can I transfer balances from PFIGO to PGO?
You are not allowed to transfer balances directly from PFIGO to PGO. An investment transfer restriction (called an Equity Wash provision) is in place for transfers out of PFIGO.
What if I transferred balances from PFIGO to a non-PGO investment?
Then you are subject to an investment wash transfer restriction known as an “Equity Wash” restriction. Balances transferred from PFIGO into a non-PGO investment must remain there for at least 90 days before they can be transferred into PGO.
How can I tell if the equity wash time is complete?
When you log into your account at principal.com and begin the process of transferring out of the non-PGO investment you chose, the system will automatically alert you if it has not yet been 90 days.
How do I transfer my investment balance into PGO?
Log into your Principal account. (If you have never established your online access, see these instructions.)
Go to Investments, then Investment Details.
Scroll to the bottom of the screen and click Change Investments.
Select Transfer Balances Between Investments.
Then you can choose whether you want to Transfer from one investment to another or Allocate 100% of the money to a different investment mix, and make the selection(s) you want.
Once you have clicked to submit your choices, you may get a prompt asking if you want to also change your paycheck contributions (any future contributions or rollovers that may come into your account). If you would like to make these changes apply to future contributions, you can select that option.
Don’t hesitate to reach out if you have any questions about this process. We are here to help!