We have all heard about predators.  Having lived near Yellowstone Park most of my life, the news media was rift with reports about wolves living in the park, and preying on ranchers livestock outside park boundaries.  Predators can be vicious, attacking the young of livestock because they are easy prey.  They also run in wolf packs, wearing down their prey before devouring them.  As the above image depicts, wolves can be handsome, and in some cases, behave as family pets, but as evidence shows, they can be unpredictable and vicious.

Financial predators prey on your 401(k) plans as well.  Just as a wolf will devour your young, the financial predator will consume your 401(k) plan, destroying your hopes for happiness.   Bernie Madoff is perhaps the best known example today of a financial predator.  The Madoff Ponzi Scheme used money from new investors to pay imaginary profits to older investors.  When you invest in insurance company separate accounts, your plan provider is basically doing the same thing.  If you take the time to review annual reports (prospectus’ do not exist in the separate account investment structure), or other literature that simulates a prospectus, you will see what I mean.  The financials will show contributions & distributions… money coming into the income stream, and distributions, or money leaving as withdrawals.  If the month went well, the contributions will exceed the distributions, if not, there will be a negative net contribution value.  Financial literature, including annual reports, will contain disclosures that the information contained therein cannot be considered as true, whereas an SEC regulated security prospectus can be relied upon for investment decisions.

Predators will devour their prey until nothing is left but bones.  A few years ago I decided to find the annual reports filed with the State of Iowa by the Principal group of Companies, domiciled in the state of Iowa.  Not an easy task, but finally i was able to locate the financials filed with the state in 2013.  Scrolling down to the discussion of separate accounts, I located the separate account financials.   The separate account net gain from operations excluding unrealized gains or losses were $11 for the first 6 months!  In the prior year, there was a $206 loss, as illustrated below!401(k)

You might argue that the net investment income was $1.3 billion in 2013, more than enough to offset the net gain, but you would be mistaken.  Principal owns your plan assets under common law, and it is their argument that the income from investments they own, belongs to them.  As an investor, you are entitled only to the change in market value, or fair value, as determined by Principal management.  In this case, you earned $11 during the first half of 2013!

I did not make up these numbers… the report is online, filed with the State of Iowa for your viewing.  Consider the fact that the Iowa insurance commissioner has never questioned Principal’s lack of ethics, instead praising them for their contributions to the Iowa economy.  Principal donates millions each year, donations made through a golf classic and other promotions to build integrity in Iowa as well as nationwide.  Principal will target small to medium employers, uneducated victims much like wolves will target the young and older victims, because they make easy targets.

During the past three years, I have published hundreds of posts like this one, blasting Principal as corrupt, vulturous, and feeding on the weaknesses of others.  I have supported my accusations with documents proving my comments are true.  I can do this because the First Amendment says I can do so, as long as it is truthful.  The First Amendment states the following…

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Principal allows me to publish my blog because the government says I have a right to do so.  At the same time, laws exist that provide redress for libelous and slanderous statements made against another, as follows…

“Under common law, to constitute defamation, a claim must generally be false and must have been made to someone other than the person defamed. Some common law jurisdictions also distinguish between spoken defamation, called slander, and defamation in other media such as printed words or images, called libel.”

 continue their investments.  In my opinion, these two events, while mutually exclusive, completely contradict reason.

I do not draw this information relating to Principal’s lack of ethics and compliance, and outright fraudulent activities, from thin air.  You should not as well.  As have been suggested dozens of times by myself and others, do your due diligence, curate the internet, and draw conclusions from the reliable information you find.  Principal’s predatory issues are known world-wide.  Research other countries, like Peru, for example, where pensioners have been rioting in the streets for Principal’s removal from their country!

Chilean pensioners already recognize Principal’s lack of ethics.  In Chile, there is a call to arms to overhaul their private pension system and bring down Principal Financial Group, Inc. by pulling their money out of AFP Cuprum SA, a pension fund owned by Principal…..401(k)  In this article published by Bloomberg, Principal is currently under investigation by Chilean authorities for avoiding the payment of hundreds of  millions of dollars in taxes when they purchased the fund a few years ago.  Cuprum is the third largest fund manager in Chile with $36 billion.

The Bible, Matthew 7:15 warns us to “Beware of false prophets, which come to you in sheep’s clothing, but inwardly they are ravening wolves.”  I was raised on a sheep ranch in South Dakota in the 1940’s…  I have seen, first hand, what a predator can do to a sheep or lamb… make an effort today to protect your life savings…

Posted by Dennis Myhre

Beginning in 1968, Dennis Myhre has enjoyed a successful career in investigative research, including involvement in several specialty assignments such as the investigation of transport related damages to new production motor vehicles originating from Detroit. His team related research formed the foundation of car hauler designs still in use today by the rail transport industry. Other successful investigations include identifying two major recreational vehicle manufacturer's safety violations and the short selling of investment products by a Registered Investment Adviser. Dennis' early career as a claims investigator included specialized training and active employment in pre-trial investigations on behalf of defense firms, accident reconstruction, and major loss settlements. In 1991, he and his wife Audrey contracted with a major catastrophe services organization, and for the next 20 years, worked as adjusters and supervised adjusters, resolving thousands of claims involving virtually every major national disaster, beginning with Hurricane Andrew. Beginning in the early 1990's, their employer offered a 401(k) Plan with Principal Life Insurance Company, and for the next 16 years, Dennis and Audrey contributed the maximum allowable into the Plan. In early 2008, they transferred their entire retirement savings into the Principal U.S. Property Separate Account, a fixed income account offered by Principal. On September 26, 2008, a withdrawal restriction was announced, and withdrawals were restricted for the next three years. Both Dennis and Audrey were 65 years of age, and they were convinced the plan definition of retirement would permit them to withdraw their funds and continue to work. After several months of discussion with Principal, the Myhre's were notified that Principal had "redefined" the definition of retirement to include separation of service. Reluctantly, Dennis and Audrey were both forced to resign their positions with their employer to recover their remaining account balances. Between September 26, 2008 and December 31, 2009, the net asset value of U.S. Property Separate Account plummeted by almost 50%. Through exhaustive research, Myhre has since uncovered self dealing and fraud involving Principal's activities during the account withdrawal restriction, and his research was brought to the attention of both the Department of Labor and Principal's Chief of Compliance, with no action taken by either party. Because of the lack of enforcement of ERISA regulations by the Department of Labor, this website is intended to educate investors of the pitfalls of investing in separate accounts offered by insurance companies.