Deals and People November 12, 2024

Principal Says President Deanna Strable to Take Over as CEO in 2025

Strable, named president in August, will take the top job from Dan Houston, effective January 7.

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Deanna Strable

Principal Financial Group’s board of directors announced Tuesday that Chief Operating Officer and recently named President Deanna Strable will take over as CEO on January 7, 2025.

Strable will replace Dan Houston, who will continue to serve as executive chair of the board. Houston will step down after about 10 years as CEO.

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Strable will also join Principal’s board of directors in January, according to the announcement. Strable had been the company’s CFO from 2017 to 2024 and, before that, was president of the firm’s workplace benefits and insurance business.

“Deanna has been a trusted partner and a co-architect in the company’s growth strategy,” Houston said in a statement. “I have the utmost confidence in her leadership and business acumen and look forward to working with her to ensure a smooth transition.”

Strable “has been instrumental in leading business strategy and operations,” the firm stated in the announcement, pointing to her work to build the company’s benefits and protection business before she became business unit president in 2015.

“I am honored to be appointed as the company’s next president and CEO and build upon the strong foundation we’ve established under Dan’s leadership,” Strable said in a statement. “Throughout my career, I’ve seen Principal strengthen its position as a leading global financial services company dedicated to helping customers build strong financial futures.”

Houston was appointed president and CEO in 2015 after holding several leadership positions at the firm. He started at Principal as an insurance sales representative in 1984.

During his tenure as CEO, Principal’s market capitalization grew to more than $20 billion from $13 billion.

Houston referenced that growth Monday during the PLANADVISER 360 national conference in Scottsdale, Arizona, where he spoke to an audience of advisers.

Dan Houston

When asked to consider his legacy at the company, however, he referred back to when he first decided to work at Principal. He said he had offers from three companies: the company then called Bankers Life; a plywood manufacturer; and a tire and rubber company. The person recruiting for the life insurance job asked Houston if he wanted to be in the plywood business the rest of his life, the tire business for the rest of his life, or if he wanted to “come to the Bankers Life Insurance Company of Des Moines, Iowa, and help changes people’s lives.”

“I didn’t fully understand what he was saying at the time,” Houston recalled. “But it didn’t take me long in this industry to know that whether it’s a life insurance benefit, a disability benefit, lifetime income for retirement or the ability to [help someone] save for retirement … that’s what attracted me to this industry, and it’s what attracts me to this industry still today. What you do in this room really, really matters.”

Ask the Experts November 12, 2024

What Are the 2025 Maximum Deferral Limits When 403(b), 457(b) Plans Are Present?

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.

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Q: Can you update your prior Ask the Experts column on the maximum deferral limits when both a 403(b) and 457(b) plan are in place to reflect the new limits for 2025?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

A: Certainly! The 2025 limit is quite a bit of money, with the absolute maximum permissible deferral dependent on which catch-up contributions a plan sponsor offers (including a new catch-up election for 2025) and an employee’s eligibility for those provisions. In 2025, eligible employees who elect to make deferrals to both a 403(b) and 457(b) plan will generally be able to contribute up to $23,500 in deferrals to their 403(b) plan and another $23,500 in deferrals to their 457(b) plan, for a total of $47,000, provided that the employee earns at least $47,000 in compensation. (Note: If an employee receives employer contributions to their 457(b) plan, the $23,500 limit for that plan would be reduced by those contributions.)

If an employee is at least 50 years old by the end of 2025, and both the 403(b) and 457(b) plans offer an age-50+ catch-up election, the total deferral limit would increase to $62,000 ($23,500 + $7,500 catch-up to each plan for 2025). Please note that the age-50+ catch-up election is only available to 457(b) plans that are governmental plans. If the 457(b) plan is not a governmental plan, an age-50+ catch-up is not permitted, and therefore, the combined limit would be $54,500 ($23,500 + $7,500 catch-up to the 403(b) plan + $23,500 to the 457(b) plan). Also, a new catch-up election referred to as the age-60 super catch-up, will be introduced in 2025. For employees who are at least 60 years of age, but no older than 63 years of age as of December 31, 2025, the catch-up will be $11,250, instead of $7,500. Thus, if both the 403(b) and 457(b) plans offer the age-60 catch-up election, an eligible employee could defer up to $69,500 ($23,500 + $11,250 catch-up to each plan for 2025). If the 457(b) plan is not a governmental plan, the combined limit would be lowered to $58,250 ($23,500 + $11,250 catch-up to the 403(b) plan + $23,500 to the 457(b) plan).

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There are some more obscure elections which a small number of employees may use to further increase their contribution limits, provided the plan offers them. The first is the 457(b) three-year catch-up election, which allows the employee to contribute the lesser of twice the 457(b) limit or the 457(b) limit plus any unused limitations in prior years. If the plan offers the election and the employee qualifies, that could increase the maximum dollar deferral limit in the 457(b) plan to $47,000, making it possible for an employee to defer a total of $78,000 ($23,500 in deferrals + $7,500 in catch-up to the 403(b) plan + $23,500 in deferrals + $23,500 in three-year catch-up to the 457(b) plan) to both plans if the employee is older than 50. (Note: the three-year catch-up and the age-50+ catch-up cannot be used in the same year in the 457(b) plan.) If the plan permits, the age-60 super catch-up, an eligible employee could defer a whopping $81,750 into the combined plans ($23,500 in deferrals + $11,250 in catch-up to the 403(b) plan + $23,500 in deferrals + $23,500 in three-year catch-up to the 457(b) plan).

The second election is the 403(b) plan 15-year catch-up election, which would allow for up to an additional $3,000 to be deferred to the 403(b) plan (for a total of $84,750 when added to the scenario described above), if the plan permits the election and the employee qualifies. However, this particular election is so difficult for plan sponsors to administer that many have opted not to offer it.

The 2025 section 415(c) limit is $70,000. Keep in mind that as an employee’s deferrals increase, the section 415(c) limits may come into play, depending on the employer contribution to the 403(b) plan.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

Do YOU have a question for the Experts? If so, we would love to hear from you! Simply forward your question to Amy.Resnick@issgovernance.com with Subject: Ask the Experts, and the Experts will do their best to answer your question in a future column.

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