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HomeMy WebLinkAbout20041919 RESOLUTION RE: APPROVE AMENDMENT TO 401(K) SAVINGS PLAN AND AUTHORIZE CHAIR TO SIGN - PRINCIPAL FINANCIAL GROUP WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS,the Board has been presented with an Amendment to the 401(k)Savings Plan between the County of Weld, State of Colorado, by and through the Board of County Commissioners of Weld County,and Principal Financial Group,effective June 1,2004,with further terms and conditions being as stated in said amendment, and WHEREAS,after review,the Board deems it advisable to approve said amendment,a copy of which is attached hereto and incorporated herein by reference. NOW,THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, Colorado, that the Amendment to the 401(k) Savings Plan between the County of Weld, State of Colorado, by and through the Board of County Commissioners of Weld County, and Principal Financial Group be, and hereby is, approved. BE IT FURTHER RESOLVED by the Board that the Chair be, and hereby is, authorized to sign said amendment. The above and foregoing Resolution was,on motion duly made and seconded,adopted by the following vote on the 12th day of July, A.D., 2004, nunc pro tunc June 1, 2004. E11'me,i� WELRD OF COUNTY COMMISSIONERS COUNTY, COLORADO 1861 (t , falit4 1♦�. Robert D. Mas en, Chair �r. ilClerk to the Board ®11 pm 776 William H. e, Pro-Tem BY: Deputy Clerk to the Board M. C o`l/ AP V AST David Lon? my Attorn Glenn Vaa Date of OciaZ 2004-1919 PE0010 ; /0G -O y Principal Financial Group June 25,2004 MS JEWEL VAUGHN WELD COUNTY 915 10TH STREET P O BOX 758 GREELEY CO 80632-0758 RE Weld County 401(k) Savings Plan Annuity Contract No: (3)66947 Dear Ms.Vaughn Thank you for being a client of the Principal Financial Group®. We appreciate your business. I am enclosing a copy of the contract work that was prepared based on the revision(s)you requested. This contract amendment adds all current available Separate Accounts to your contract. Separate accounts not offered by you as an investment option will be suppressed. This will allow you to change investment options in the future without an additional contract amendment. The contract amendment will become part of your contract with us only after we receive a signed copy of the signature page. Please file the original signature page with your contract. I suggest you review the document with your legal or tax advisor to make sure it meets your needs. If you find additional revisions are needed,please indicate the changes and return the affected pages to me immediately so I can provide you with a revised copy. If you feel the document correctly reflects the revisions you've requested,please return the signed and dated signature page to me promptly. Timely handling of these matters is one of the best ways to avoid compliance issues with your contract. If you have any questions regarding your contract revisions,please call me at 1-800-988-7766, extension 7736. Sincerely �ia e .S c-b ah t (?),t) Dee Schrader Sr Client Service Associate Retirement and Investor Services Phone(509)324-7736 Fax(515)362-2263 Schrader,Dee@principal.com cc Masoud S. Shirazi Retirement Services Office-Denver Amy Jackson Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities offered through Princor Financial Services Corporation,800-547-7754, member SIPC. Princor and Principal Life are members of the Principal Financial Group,Des Moines,IA 50392. PO Box 8600,Waterloo,IA 50704 1-800-988-7766 www.principal.com RIS Adm SK01RI5 2004-1919 Notice of Management Fees WELD COUNTY 401(K) SAVINGS PLAN Contract Number: 3-66947 Effective Date: 06/01/2004 The following chart outlines the management fees and rate levels for the Separate Accounts you have selected for your plan which are listed in the"Premier"rider(s) in your contract, as well as the management fees for any other Separate Accounts currently available in your contract. This chart replaces any previous charts we have provided for your Separate Accounts, and should be filed with your contract, which includes management fees previously in effect. For information regarding the management fees and rate levels of those Separate Accounts listed in the "Premier"rider(s)in your contract,but not selected for your plan, please contact your daily contact. The Separate Account management fees listed do not include the management charge of any underlying mutual funds the Separate Account may invest in. Please see the appropriate prospectuses for such charges. In addition to this management charge,the underlying mutual fund will bear a pro-rata share of the expenses of any funds in which it invests, if applicable. Separate Account-Rate Level Management Fee American Century Ultra(Adv)Sep Acct-Standard 0.16% Fidelity Advisor Mid Cap(T)Sep Acct-Standard 0.16% Principal Bond and Mortgage Separate Account-Standard 0.71% Principal Bond Emphasis Balanced Separate Account-Std 0.00% Principal Government Securities Separate Account-Std 0.56% Principal International Stock Separate Account-Standard 1.06% Principal Large Cap Stock Index Sep Acct-Standard 0.31% Principal Medium Company Blend Separate Account-Standard 0.81% Principal Medium Company Value Separate Account-Standard 0.81% Principal Money Market Separate Account-Standard 0.56% Principal Partners Large-Cap Blend I Separate Acct-Std 0.76% Principal Partners Large-Cap Growth Sep Acct-Standard 1.16% Principal Partners Large-Cap Value Sep Acct-Standard 0.16% Principal Partners Small-Cap Value I Sep Acct-Standard 0.16% Principal Real Estate Separate Account-Standard 1.15% Principal Small Company Blend Separate Account-Standard 0.91% Principal Small Company Growth Sep Acct-Standard 0.91% Principal Stock Emphasis Balanced Separate Account-Std 0.00% Russell LifePoints®Cons Strategy(I))Sep Acct-Standard 0.00% Russell LifePoints®Moderate Strategy(D)Sep Acct-Std 0.00% Russell LifePoints®Balanced Strategy(D)Sep Acct-Std 0.00% Russell LifePoints®Agg Strategy(D)Sep Acct-Standard 0.00% Russell LifePoints®Equity Agg Strat(D)Sep Acct-Std 0.00% Premier t Report Created:06/25/2004 GROUP CONTRACT NO. GA 66947 AMENDMENT NO. 2 We,Us,Our means Principal Life Insurance Company Contractholder means WELD COUNTY It is mutually agreed by the undersigned that this Group Contract,issued by us to the Contractholder,is amended as provided below: Effective June 1,2004, by striking the following: Rider: GP R 45897 Rider: GP R 40119-2 Schedule: 2 and by substituting the following: Schedule: 3 by adding the following: Rider: GP R 50115 Rider: GP R 50117 Rider: GP R 40119-7 Rider: GP R 48916-3 The provisions and conditions set forth on any page of this amendment are a part of this Group Contract as fully as if recited over the signatures on this page. This amendment will not become effective unless we receive a copy signed by the Contractholder at our home office in Des Moines,Iowa,within 30 days following the date we sign it or within such longer period as we may allow. Signed/ us on J U L 0 2 2004 by t \ A' e 03124/10-1 es. (/ Senior Vice President and Chairman.President and Corporate Secretary Chief Executive Officer Registrar Signed for Contractholder by O 1// ''�t � Title 1 o GP 49415 1 Contract# 66947 Amend #2 Principal Financial Group SCHEDULE OF SPECIFICATIONS GA 66947 This Schedule is a part of the contract to which it is attached. Terms defined in the contract have the same meaning where used in this Schedule. This is Schedule number 3 , effective June 1, 2004. It replaces all previous Schedules. Plan Name: WELD COUNTY 401(K) SAVINGS PLAN Deposit Year: The initial Deposit Year begins on the Contract Date and ends on December 31. 1985. Subsequent Deposit Years begin on January 1 and the same day of each following year. Options Available: Guaranteed Interest Investments Separate Account Investments If Separate Account Investments are available under this contract, a Separate Account Investment Rider will be attached. All Separate Accounts available under the contract are listed in the rider or riders attached. (Continued on next page) GPS 5913-2 Schedule of Specifications, Page 2 GA 66947 Riders and Special Attachments: Separate Account Investment Rider- GP R 40119-7 Separate Account Investment Rider--Premier - GP R 48916-3 Premier Separate Account Investment Rider-- Expanded(Allocated) - GP R 50115 Premier Separate Account Investment Rider -- Russell (Allocated) - GP R 50117 Removal of Dividend Section Rider- GP 44609 Flexible Investment Annuity Endorsement Rider- GP R 45038 Colorado Guaranty Association Notice- GP 31597 CO Change of Name Endorsement- GP 25685 (if applicable) Change of Name Endorsement- GP 44629 (if applicable) Separate Account Name Change Endorsement - GP 46688 (if applicable) Separate Account Investment Rider- GP R 48078 (if applicable) Separate Account Change Endorsement - GP 47555 (if applicable) Endorsement- GP 47312 (if applicable) Endorsement- GP 47420 (if applicable) Endorsement- GP 47311 (if applicable) Janus Name Change Letter(if applicable) Closure of Principal European Equity Separate Account Principal Pacific Basin Separate Account Principal Technology Separate Account Endorsement- GP 49435-1 (if applicable) Principal Large Company Blend Separate Account Name Change Endorsement- GP 49480 (if applicable) Temporary Closure or Limitations to a Separate Account Endorsement- GP 49767 (if applicable) Janus Adviser Aggressive Growth(Ret) and Mason Street Endorsement- GP 49809 (if applicable) Closure of Principal Partners Mid-Cap Blend Separate Account Endorsement- GP 49877 (if applicable) Notations: GPS 5913-2 SEPARATE ACCOUNT INVESTMENT RIDER This rider is added to the Group Annuity Contract issued by us of which it is a part. All terms defined in the contract have the same meaning where used in this rider. The effective date of this rider is the latest of(i)the Contract Date,(ii)the date this rider has been approved for use in the state of issue,or(iii)the date stated in the amendment adding this rider to the contract. The purpose of this rider is to allow the contract to participate in our Separate Accounts. We reserve the right to limit both the number of Separate Accounts available under the contract and the number available to each Member. The following Separate Accounts may be available under this contract: Principal Bond Emphasis Balanced Separate Account Principal Stock Emphasis Balanced Separate Account Principal Total Market Stock Index Separate Account Although all Separate Accounts listed above may be available under this contract, you may send us Notification indicating you want the contract administered so that assets held under this contract will not participate in one or more of these Separate Accounts. You may revoke your Notification by sending us a new Notification. A. DESCRIPTIONS OF THE SEPARATE ACCOUNTS. Each Separate Account is a pooled Separate Account for use by our retirement plan customers. The funds held in each Separate Account will be invested and reinvested by us in accordance with applicable law, without regard to any investment requirements of our general account assets or of any of our other Separate Accounts. A Separate Account consists of funds we receive under group annuity contracts or policies which permit deposit in such Separate Account and under which amounts are directed to such Separate Account. All income gains and losses (whether or not realized), and expenses from the assets allocated to a Separate Account will be credited to or charged against that Separate Account without regard to any other income,gains or losses,or expenses we might have for our general account or any other Separate Account. The assets of a Separate Account will not be charged with any liabilities arising out of the investment experience of our general account or any other Separate Accounts outside that Separate Account. We may occasionally invest the assets of any Separate Account in short term money market instruments,cash or cash equivalents. Principal Bond Emphasis Balanced Separate Account. Principal Bond Emphasis Balanced Separate Account is invested in other Separate Accounts established and maintained by us. The majority of the assets will be invested in other Separate Accounts which are invested primarily in bonds,mortgages,commercial paper and other fixed income type investments. The remainder of the assets of this Separate Account will be invested in one or more of our Separate Accounts invested primarily in common stocks and other equity investments. Principal Stock Emphasis Balanced Separate Account. Principal Stock Emphasis Balanced Separate Account is invested in other Separate Accounts established and maintained by us. The majority of the assets will be invested in other Separate Accounts which are invested primarily in common stocks and other equity investments. The remainder of the assets of this Separate Account will be invested in one or more of our Separate Accounts invested primarily in bonds, mortgages, commercial paper and other fixed income type investments. GPR 40119-7 1 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(04/04) Principal Total Market Stock Index Separate Account. Principal Total Market Stock Index Separate Account is invested in a manner calculated to give a result similar to the Standard and Poor's 1500 Supercomposite Stock Index (or a similar stock index if the Standard and Poor's 1500 Supercomposite Stock Index is no longer calculated). Initially,this Account will be invested in the other Principal Stock Index Separate Accounts we offer. If we choose, the Account may also be invested in stocks or securities,stock index futures, commercial paper, mutual funds or other funds managed by other investment managers,and other types of investments as permitted under applicable state law. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described B. DETERMINING SEPARATE ACCOUNT VALUES;OPERATING EXPENSES. The value of a Separate Account is its market value less Operating Expenses accrued but not deducted,if any.If a Separate Account invests in an underlying Mutual Fund the value of such Separate Account is the number of the Mutual Fund shares it holds multiplied by the Mutual Fund's NAV for that Valuation Date. If there is no readily available market, its value is the fair market value of the assets held in such Separate Account as determined by us using generally accepted accounting practices and applicable law. The value of all Separate Accounts will always be expressed in U.S.dollars. We will determine the value of a Separate Account on each Valuation Date. Net Asset Value(NAV)means the price per mutual fund share represented as a dollar amount. Operating Expenses are those charges which must be paid in order to operate a Separate Account or obtain investments for a Separate Account. Operating Expenses include, but are not limited to, custodial fees,transfer taxes,brokerage fees,processing fees,and other taxes and fees associated with the operation of a Separate Account. Operating expenses will be deducted from the Separate Account associated with a particular charge on the next Valuation Date after the Operating Expenses have been paid or are immediately payable. In accordance with our then-current procedures,various Separate Accounts may share in the payment of certain Operating Expenses and, in some cases,we may use certain fees paid to us by third parties to offset Operating Expenses incurred by a Separate Account which would otherwise be payable from that Separate Account. Valuation Date means the date we determine the value of a Separate Account. Valuation Dates will occur on dates we determine,but at least on the last Business Day of a calendar month. Valuation will occur at the end of each such day,according to our then-current procedures. C. MANAGEMENT FEES. The Management Fee under each Separate Account will be a percentage of the value of assets in such Separate Account, subject to the equivalent of a maximum annual percentage listed in the Table of Separate Account Features. We reserve the right to change the Management Fee to any charge up to the maximum limit at any time by giving you written notice at least 30 days before the date the change is to take effect. Management Fee means the fee consisting of the investment management charge and the contract expense charge applicable to this class of contracts for each Separate Account. The assets of Principal Bond Emphasis Balanced Separate Account, Principal Stock Emphasis Balanced Separate Account, and Principal Total Market Stock Index Separate Account will pay Management Fees under our other Separate Accounts in which they are invested. An additional Management Fee will be charged under these Separate Accounts only for management services actually performed exclusively for assets held in these Separate Accounts. GPR 40119-7 2 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(04/04) A pro rata charge will be deducted from each Separate Account on each Valuation Date for the number of calendar days within the Valuation Period ending on such Valuation Date. Valuation Period means the period from the end of a Valuation Date to the end of the next following Valuation Date. D. SEPARATE ACCOUNT INVESTMENT. A Separate Account Investment is established for each Member for a Separate Account for each type of Contribution a Member directs to such Separate Account. E. RETURNS CREDITED TO SEPARATE ACCOUNT INVESTMENTS.Each Separate Account Investment established under this contract will be credited with its portion of the return associated with the appropriate Separate Account. The return for a Separate Account will be based on the change in value of that Separate Account less any Management Fee. In order to track the returns for the Separate Account Investments established under this contract,we will use a unit value system of recordkeeping,unless we determine that another recordkeeping system would be more appropriate. F. UNIT VALUE SYSTEM OF RECORDKEEPING. Under a unit value system of recordkeeping,we will calculate the value of a Separate Account Investment for each Valuation Date by multiplying the number of Separate Account units held in the Separate Account Investment by the applicable Unit Value. A Unit Value is the dollar value for one unit. Contributions or transfers to a Separate Account Investment increase the number of Separate Account units credited to it. Transfers and payments from a Separate Account Investment reduce the number of Separate Account units. The increase or decrease in the number of Separate Account units is calculated by dividing the dollar amount of the contribution,transfer, or payment by the applicable Unit Value. We will calculate the Unit Value applicable to each Separate Account Investment on each Valuation Date. The Unit Value will be based upon the total value of the Separate Account and the number of existing Separate Account units. When crediting Contributions and transfers added to a Separate Account Investment we will use the Unit Value applicable to the Separate Account Investment for the Valuation Date on which we accept the Contribution or transfer. If we accept the Contribution or transfer on a date other than a Valuation Date, we will use the Unit Value for the next following Valuation Date. We reserve the right to change our unit value recordkeeping system upon 30 days notice to you. GPR 40119-7 3 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(04/04) G. DEPOSITS TO SEPARATE ACCOUNTS; RESTRICTIONS AND ORDER OF ENTRY.We reserve the right to defer,limit,or stop your or any Member's(as permitted by the Plan) ability to direct Contributions and transfers to or from a Separate Account,and we may require you to transfer existing account balances out of a Separate Account. We may exercise these rights if we 1. need to comply with regulation, statute,or decisional law to which we are subject, 2. believe it would be imprudent not to do so in fulfilling our fiduciary role as an investment manager under the Employee Retirement Income Security Act of 1974,as amended(ERISA), 3. believe the investment approach of the Separate Account no longer makes sense, is excessively expensive, or does not currently have any favorable investment opportunities available,or 4. decide to suspend or discontinue operation of such Separate Account. Contributions or transfers directed to a Separate Account that we have closed on a temporary basis, will be treated as Contributions or transfers for which we have not received proper investment directions and the provisions of the contract with regard to any such Contributions or transfers will apply. We must receive new investment direction for any Contributions formerly directed to a temporarily closed Separate Account if you or the Member (as permitted by the Plan) wish to change the way investments are treated,as described in the previous paragraph. Once a temporarily closed Separate Account reopens,we must receive new investment directions in order to direct any Contributions or transfers to such Separate Account. We may limit the application of such new investment directions as necessary to protect the Separate Account. Provisions for a permanently closed Separate Account. We will notify you in writing of our intent to permanently close a Separate Account. You will have 60 days to request transfer as described in the Paragraph labeled"Transfers and Payments from a Separate Account"below. If after 60 days we have not received your written notification of where to transfer a closed Separate Account balance,we will treat that account balance as a Contribution for which we do not have investment direction. H. TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. We will,upon Notification from you(the Member if permitted by the Plan),and subject to our right to defer a transfer or payment as described in Section I, 1. transfer to the Member's Guaranteed Interest Investment or another Separate Account Investment all or any portion of the Separate Account Investment specified,or 2. transfer to another Funding Agent all or any portion of the Member's Separate Account Investment,or 3. pay the Member an amount equal to all or any portion of the Member's Separate Account Investment,or 4. pay all or a part of a Member's Separate Account Investment to the Member as a loan if permitted by the Plan. GPR 40119-7 4 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(04/04) The amount to be paid or transferred will be determined and paid or transferred within seven Business Days after(i)the Valuation Date on which we receive the Notification,or(ii)a later Valuation Date specified in the Notification. Payments and transfers will be made in accordance with our then-current procedures. We will notify you in writing of these procedures. The amount transferred or paid will be deducted from the Separate Account Investment from which such transfer or payment was requested on the date of such transfer or payment. Each transfer to another Separate Account Investment may occur only on a Valuation Date of that Separate Account. We are not responsible for the application of amounts transferred to another Funding Agent. LIMITATIONS ON TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. In general, transfers and payments from a Separate Account Investment will be made within seven Business Days after the first Valuation Date following the request specified in Section H of this rider. We reserve the right,however,to defer such transfers or payments up to the maximum number of days shown in the Table of Separate Account Features for each Separate Account. If we defer any transfer or payment under this Section,we will determine the amount to be transferred or paid on the date transfer or payment occurs. We will notify you in the event of any deferment of more than 30 days under the provisions of this Section. These limitations will not apply to the payments to the beneficiary of a Member due to the Member's death, payments to a Member due to disability or retirement under the Plan and to purchases of annuity under Article IV, Section 2 of the contract. Special Limitation for Certain Separate Accounts. We reserve the right to make the portion of a requested transfer in excess of the specified dollar limit in substantially equal monthly installments over a period not to exceed the specified period,if,in the specified period which ends on the requested date of transfer,all transfers and payments from the total of all Separate Account Investments invested in a particular Separate Account which is subject to the dollar limit total the specified dollar limit or more. For purposes of this limitation, transfers and payments from any other Separate Account investments or funds included in the Separate Account from any other contracts or policies issued in connection with the Plan or with any other retirement plan of the Employer will be included as a transfer or payment from a Separate Account Investment. If this limitation is imposed by us,the first installment will be made one month after the date of request, or on such later date that you specify. The specified dollar limit and period are: 1. $20,000,000 and 36 months, respectively, for Principal Bond Emphasis Balanced Separate Account,Principal Stock Emphasis Balanced Separate Account,and Principal Total Market Stock Index Separate Account. Mutual Fund Limitation. Without regard to any other feature of the contract or this rider, if any limitation or delay is imposed by an underlying Mutual Fund, if any, we will be unable to transfer, make payments, or apply amounts held under these Separate Accounts. J. PLANS WHICH MAY INVEST IN THE SEPARATE ACCOUNTS. The Separate Accounts are not registered with the Federal Securities and Exchange Commission and therefore only Plans which meet certain requirements under the Code may invest in the Separate Accounts. If the Internal Revenue Service or a court makes a final determination that the Plan no longer qualifies as a qualified plan, we will require that you transfer any assets invested in the Separate Accounts. If we decide that you must transfer assets from the Separate Accounts,we will send you a notice describing GPR 40119-7 5 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(04/04) your options. Your Notification must clearly specify the Guaranteed Interest Investment(s) or the Funding Agent to which you want the assets transferred. If we do not receive an acceptable Notification from you within 5 Business Days,we will transfer the assets to the Guaranteed Interest Investment with the shortest duration. K. FUNDS. We are the sole owner of all assets held in the Separate Accounts. PRINCIPAL LIFE INSURANCE COMPANY bk`prxhatRte' Chairman, President and Chief Executive Officer GPR 40119-7 6 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(04/04) TABLE OF SEPARATE ACCOUNT FEATURES Maximum Current Maximum Number of Annual Annual Days Management Management Allowed to Fee Fee Defer Percentage Percentage Transfers or Payments Principal Bond Emphasis Balanced Separate Account None 2.00' 270 Principal Stock Emphasis Balanced Separate Account None 2.00' 270 Principal Total Market Stock Index Separate Account None 2.00' 270 The maximum annual Management Fee percentage includes Management Fees paid under this Separate Account (currently none) and the Separate Accounts in which this Separate Account is invested. GPR 40119-7 7 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(04/04) SEPARATE ACCOUNT INVESTMENT RIDER-PREMIER This rider is added to the Group Annuity Contract issued by us of which it is a part. All terms defined in the contract have the same meaning where used in this rider. The effective date of this rider is the latest of(i)the Contract Date,(ii)the date this rider has been approved for use in the state of issue,or(iii)the date stated in the amendment adding this rider to the contract. The purpose of this rider is to allow the contract to participate in our Separate Accounts. We reserve the right to limit both the number of Separate Accounts available under the contract and the number available to each Member. The following Separate Accounts may be available under this contract: Principal Bond and Mortgage Separate Account Principal Government Securities Separate Account Principal High Quality Intermediate-Term Bond Separate Account Principal High Quality Long-Term Bond Separate Account Principal High Quality Short-Term Bond Separate Account Principal International Emerging Markets Separate Account Principal International Small Company Separate Account Principal International Stock Separate Account Principal International Stock II Separate Account Principal Large-Cap Blend I Separate Account Principal Large Cap Stock Index Separate Account(aka Stock Index 500) Principal Large Company Growth Separate Account Principal Large Company Value Separate Account Principal LifeTime 2010 Separate Account Principal LifeTime 2020 Separate Account Principal LifeTime 2030 Separate Account Principal LifeTime 2040 Separate Account Principal LifeTime 2050 Separate Account Principal LifeTime Strategic Income Separate Account Principal Medium Company Blend Separate Account Principal Medium Company Growth Separate Account Principal Medium Company Value Separate Account Principal Mid Cap Stock Index Separate Account Principal Money Market Separate Account Principal Partners International Separate Account Principal Partners Large-Cap Blend Separate Account Principal Partners Large-Cap Blend I Separate Account Principal Partners Large-Cap Growth Separate Account Principal Partners Large-Cap Growth I Separate Account Principal Partners Large-Cap Growth II Separate Account Principal Partners Large-Cap Value Separate Account Principal Partners Mid-Cap Growth Separate Account Principal Partners Mid-Cap Growth I Separate Account Principal Partners Mid-Cap Value Separate Account Principal Partners Mid-Cap Value I Separate Account Principal Partners Small-Cap Blend Separate Account Principal Partners Small-Cap Growth I Separate Account Principal Partners Small-Cap Growth II Separate Account Principal Partners Small-Cap Value Separate Account GPR 48916-3 1 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) Principal Partners Small-Cap Value I Separate Account Principal Preferred Securities Separate Account Principal Real Estate Separate Account Principal REIT Separate Account Principal Small Cap Stock Index Separate Account Principal Small Company Blend Separate Account Principal Small Company Growth Separate Account Principal Small Company Value Separate Account Although all Separate Accounts listed above may be available under this contract, you may send us Notification indicating you want the contract administered so that assets held under this contract will not participate in one or more of these Separate Accounts. You may revoke your Notification by sending us a new Notification. A. DESCRIPTIONS OF THE SEPARATE ACCOUNTS. Each Separate Account is a pooled Separate Account for use by our retirement plan customers. The funds held in each Separate Account will be invested and reinvested by us in accordance with applicable law, without regard to any investment requirements of our general account assets or of any of our other Separate Accounts. A Separate Account consists of funds we receive under group annuity contracts or policies which permit deposit in such Separate Account and under which amounts are directed to such Separate Account. All income gains and losses (whether or not realized), and expenses from the assets allocated to a Separate Account will be credited to or charged against that Separate Account without regard to any other income,gains or losses,or expenses we might have for our general account or any other Separate Account. The assets of a Separate Account will not be charged with any liabilities arising out of the investment experience of our general account or any other Separate Accounts outside that Separate Account. We may occasionally invest the assets of any Separate Account in short term money market instruments,cash or cash equivalents. Principal Bond and Mortgage Separate Account. Principal Bond and Mortgage Separate Account is invested primarily in bond and mortgage-type investments similar to our general account,including bonds and mortgages from both United States and non-United States corporations. Principal Government Securities Separate Account. Principal Government Securities Separate Account is invested primarily in obligations issued or guaranteed by United States governmental agencies and instrumentalities, including, but not limited to, the Government National Mortgage Association, the Federal National Mortgage Association, the Federal I-lome Loan Mortgage Association and the Student Loan Marketing Association. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. GPR 48916-3 2 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) Principal High Quality Intermediate-Term Bond Separate Account. Principal High Quality Intermediate-Term Bond Separate Account is a pooled investment account invested primarily in high quality,publicly traded bonds(mainly corporates),Treasury notes and bonds,and government agency bonds. The investments may also include such other foreign bond investments as are generally considered appropriate for a high quality bond account. Such holdings shall be predominantly denominated in U.S. dollars. In addition, some funds may be invested in OTC (over the counter) derivative instruments such as options and futures. The fixed income investments in the account typically have maturities of five to ten years. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal High Quality Long-Term Bond Separate Account. Principal High Quality Long-Term Bond Separate Account is a pooled investment account invested primarily in high quality, publicly traded bonds (mainly corporates), Treasury notes and bonds, and government agency bonds. The investments may also include such other foreign bond investments as are generally considered appropriate for a high quality bond account. Such holdings shall be predominantly denominated in U.S. dollars. In addition, some funds may be invested in OTC (over the counter) derivative instruments such as options and futures. The fixed income investments in the account typically have maturities of ten years or longer.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal High Quality Short-Term Bond Separate Account. Principal High Quality Short-Term Bond Separate Account is a pooled investment account invested primarily in high quality, publicly traded bonds (mainly corporates), Treasury notes and bonds, and government agency bonds. The investments may also include such other foreign bond investments as are generally considered appropriate for a high quality bond account. Such holdings shall be predominantly denominated in U.S. dollars. In addition, some funds may be invested in OTC (over the counter) derivative instruments such as options and futures. The fixed income investments in the account typically have maturities of less than five years.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal International Emerging Markets Separate Account. Principal International Emerging Markets Separate Account is invested primarily in common stocks of corporations located in countries outside the United States where structural changes are causing rapid economic growth and improved standards of living. These investments may be made in either United States or foreign currency or equivalencies.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal International Small Company Separate Account. Principal International Small Company Separate Account is invested primarily in stocks or other securities of small corporations located outside the United States. These investments may be made in either United States or foreign currency or equivalencies. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. GPR 48916-3 3 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(05/04) Principal International Stock Separate Account. Principal International Stock Separate Account is invested primarily in a broad base of stocks or other securities of corporations located outside the United States,but especially in Europe,South America,and the Pacific rim.These investments will be made in foreign currency or equivalencies but investments in U.S. dollars are also allowed. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal International Stock H Separate Account. Principal International Stock II Separate Account invests primarily in a broad base of stocks or other securities of corporations located outside the United States, whose shares primary trading market is outside the United States, or who derive most of their revenues outside the United States.These investments will be made in foreign currency or equivalencies but investments in U.S. dollars are also allowed. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Large-Cap Blend I Separate Account. Principal Large-Cap Blend I Separate Account invests primarily in common stocks of large capitalization companies selected with value and/or growth characteristics. A portfolio is constructed using an investment process designed to systematically identify stocks with desirable characteristics and combine these stocks in a risk- managed portfolio to maximize return potential by controlling risk. The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities,or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Large Cap Stock Index Separate Account(aka Stock Index 500). Principal Large Cap Stock Index Separate Account is invested primarily in stocks and securities of companies similar to those stocks which are used to calculate the Standard and Poor's 500 Stock Index(or a similar stock index if the Standard and Poor's 500 Stock Index is no longer calculated). The investments may also include a reasonable amount of stock index futures, commercial paper, OTC (over the counter) derivative securities and other types of investments.In addition,some funds may be invested in stock index accounts operated by other investment managers,including funds operated by affiliates of ours. Principal Large Cap Stock Index Separate Account attempts to earn a return similar to that of the Standard&Poor's 500 Stock Index.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Large Company Growth Separate Account. Principal Large Company Growth Separate Account is invested primarily in common stocks from large,established companies whose earnings are expected to grow at above-average rates. The investments may also include OTC(over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. GPR 48916-3 4 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) Principal Large Company Value Separate Account. Principal Large Company Value Separate Account is invested primarily in common stocks from large, established companies with below- average price/earnings ratios and above-average dividend yields which we view as undervalued by the market. The investments may also include OTC (over the counter) derivative instruments such as options and futures, other equity securities or other convertible securities that may be converted to common stocks. If the market as a whole is overvalued,we may hold assets of this account in fixed income securities instead of stocks.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal LifeTime 2010 Separate Account. Principal LifeTime 2010 Separate Account invests in portfolios of the Principal Investors Fund. The intent is to give the account broad exposure to the domestic and foreign equity and fixed-income markets.The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal LifeTime 2020 Separate Account. Principal LifeTime 2020 Separate Account invests in portfolios of the Principal Investors Fund. The intent is to give the account broad exposure to the domestic and foreign equity and fixed-income markets.The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal LifeTime 2030 Separate Account. Principal LifeTime 2030 Separate Account invests in portfolios of the Principal Investors Fund. The intent is to give the account broad exposure to the domestic and foreign equity and fixed-income markets.The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal LifeTime 2040 Separate Account. Principal LifeTime 2040 Separate Account invests in portfolios of the Principal Investors Fund. The intent is to give the account broad exposure to the domestic and foreign equity and fixed-income markets.The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal LifeTime 2050 Separate Account. Principal LifeTime 2050 Separate Account invests in portfolios of the Principal Investors Fund. The intent is to give the account broad exposure to the domestic and foreign equity and fixed-income markets.The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal LifeTime Strategic Income Separate Account. Principal LifeTime Strategic Income Separate Account invests in portfolios of the Principal Investors Fund. The portfolio uses a moderate allocation strategy that is intended to give the assets exposure to the domestic and foreign equity and fixed-income markets. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. GPR 48916-3 5 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) Principal Medium Company Blend Separate Account. Principal Medium Company Blend Separate Account is invested primarily in common stocks from medium-sized,established companies whose stock exhibits a combination of substantial value and good earnings growth potential. The investments may also include OTC (over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Medium Company Growth Separate Account. Principal Medium Company Growth Separate Account is invested primarily in common stocks from medium-sized,developing companies whose earnings are expected to grow at above average rates. The investments may also include OTC (over the counter)derivative instruments such as options and futures,other equity securities,or other convertible securities that may be converted to common stocks.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Medium Company Value Separate Account. Principal Medium Company Value Separate Account is invested primarily in common stocks from medium-sized, financially stable companies with below-average price/earnings ratios and above-average dividend yields which we view as undervalued by the market. The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities or other convertible securities that may be converted to common stocks. If the market as a whole is overvalued,we may hold assets of this account in fixed income securities instead of stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Mid Cap Stock Index Separate Account. Principal Mid Cap Stock Index Separate Account is invested primarily in stocks and securities of companies similar to those stocks which are used to calculate the Standard and Poor's 400 MidCap Stock Index(or a similar stock index if the Standard and Poor's 400 MidCap Stock Index is no longer calculated). The investments may also include a reasonable amount of stock index futures, commercial paper, OTC (over the counter) derivative securities and other types of investments. In addition,some funds may be invested in stock index accounts operated by other investment managers,including funds operated by affiliates of ours. Principal Mid Cap Stock Index Separate Account attempts to earn a return similar to that of the Standard&Poor's 400 MidCap Stock Index. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Money Market Separate Account. Principal Money Market Separate Account is invested primarily in money market instruments such as the obligations of the United States government and its agencies, commercial paper, bank certificates of deposit and similar instruments. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. GPR 48916-3 6 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(05/04) Principal Partners International Separate Account. Principal Partners International Separate Account is a pooled separate account which is invested in a mutual fund that invests primarily in common stocks of companies located outside the United States. These stocks are selected for growth- oriented characteristics and an attractive valuation. These investments may be made in either United States or foreign currency or equivalencies. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Large-Cap Blend Separate Account. Principal Partners Large-Cap Blend Separate Account invests primarily in equity securities of companies that offer superior growth prospects or of companies whose stock is undervalued and,to a limited extent,foreign companies.The investments may also include OTC (over the counter) derivative instruments such as options and futures,other equity securities or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Large-Cap Blend I Separate Account. Principal Partners Large-Cap Blend I Separate Account is invested primarily in common stocks from large, established companies whose stock exhibits a combination of substantial value and good earnings growth potential.The investments may also include OTC (over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Partners Large-Cap Growth Separate Account.Principal Partners Large-Cap Growth Separate Account uses an active and aggressive style of management to invest primarily in common stocks of larger, established companies. The investments may also include OTC(over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Partners Large-Cap Growth I Separate Account. Principal Partners Large-Cap Growth I Separate Account seeks to maximize long-term capital appreciation by investing primarily in equity securities of U.S. and, to a limited extent, foreign companies that exhibit strong or accelerating earnings growth. This Separate Account uses an active and aggressive style of management to invest primarily in common stocks of larger,established companies.The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Large-Cap Growth II Separate Account. Principal Partners Large-Cap Growth II Separate Account invests primarily in common stocks of large capitalization companies that are expected to experience accelerating growth.The investments may also include OTC(over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. GPR 48916-3 7 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) Principal Partners Large-Cap Value Separate Account. Principal Partners Large-Cap Value Separate Account invests primarily in undervalued equity securities of companies among the 750 largest by market capitalization believed to offer above-average potential for growth in future earnings. The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Mid-Cap Growth Separate Account. Principal Partners Mid-Cap Growth Separate Account uses an active and aggressive style of management to invest primarily in common stocks of medium sized companies. The investments may also include OTC (over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Partners Mid-Cap Growth I Separate Account. Principal Partners Mid-Cap Growth I Separate Account is a pooled separate account which is invested in a mutual fund that invests primarily in common stocks of medium capitalization companies. The mutual fund uses a growth- oriented value approach. The mutual fund may also hold investments in large and small capitalization companies, including emerging and cyclical growth companies. The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities,or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Mid-Cap Value Separate Account. Principal Partners Mid-Cap Value Separate Account invests primarily in common stocks of medium sized companies using a value-oriented investment approach.The investments may also include OTC(over the counter)derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Mid-Cap Value I Separate Account. Principal Partners Mid-Cap Value I Separate Account is a pooled separate account which is invested in a mutual fund that invests primarily in common stocks of medium capitalization companies. The mutual fund uses a value- oriented investment approach. The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities,or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Small-Cap Blend Separate Account. Principal Partners Small-Cap Blend Separate Account invests primarily in common stocks of small capitalization companies selected using a disciplined investment process that combines fundamental analysis and risk management with a multi-factor model that searches for undervalued stocks. The investments may also include OTC(over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the GPR 48916-3 8 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(05/04) investments previously described. Principal Partners Small-Cap Growth I Separate Account. Principal Partners Small-Cap Growth I Separate Account invests mainly in common stocks of smaller companies believed to be poised for growth because of new products,markets, or management. The investments may also include OTC (over the counter)derivative instruments such as options and futures,other equity securities,or other convertible securities that may be converted to common stocks.The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Small-Cap Growth II Separate Account. Principal Partners Small-Cap Growth II Separate Account invests primarily in equity securities of smaller companies offering superior prospects for earnings growth. These companies are generally characterized as"growth"companies. The investments may also include OTC(over the counter)derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Small-Cap Value Separate Account. Principal Partners Small-Cap Value Separate Account is invested primarily in common stocks of small capitalization companies that are considered to be under-valued by the market. Such stocks are commonly described as"value stocks". The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Partners Small-Cap Value I Separate Account. Principal Partners Small-Cap Value I Separate Account invests primarily in a diversified group of equity securities of U.S.companies with small market capitalizations selecting those securities using fundamental research, systematic stock valuation and a disciplined portfolio construction process. The investments may also include OTC (over the counter)derivative instruments such as options and futures,other equity securities,or other convertible securities that may be converted to common stocks. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Preferred Securities Separate Account.Principal Preferred Securities Separate Account is invested primarily in preferred stocks of U.S. companies. The Separate Account may also invest in common stocks, debt securities, and securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Real Estate Separate Account. Principal Real Estate Separate Account is invested primarily in real estate such as office buildings,industrial buildings,shopping centers,retail stores and similar property. Principal REIT Separate Account. The Principal RUT Separate Account invests primarily in equity securities of companies principally engaged in the real estate industry. Investments may include real estate investment trusts and companies with substantial real estate holdings such as paper, GPR 48916-3 9 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) lumber, hotel, and entertainment companies. The portfolio may invest up to 25% of its assets in securities of foreign real estate companies. The Separate Account may also invest directly in the investments previously described or in some other type of investment that maintains the investments previously described. Principal Small Cap Stock Index Separate Account. Principal Small Cap Stock Index Separate Account is invested primarily in stocks and securities of companies similar to those stocks which are used to calculate the Standard and Poor's 600 SmallCap Stock Index(or a similar stock index if the Standard and Poor's 600 SmallCap Stock Index is no longer calculated). The investments may also include a reasonable amount of stock index futures, commercial paper, OTC (over the counter) derivative securities and other types of investments. In addition,some funds may be invested in stock index accounts operated by other investment managers,including funds operated by affiliates of ours. Principal Small Cap Stock Index Separate Account attempts to earn a return similar to that of the Standard&Poor's 600 SmallCap Stock Index.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Small Company Blend Separate Account. Principal Small Company Blend Separate Account is invested primarily in common stocks from smaller, established companies whose stock exhibits a combination of substantial value and good earnings growth potential. The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities, or other convertible securities that may be converted to common stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Small Company Growth Separate Account. Principal Small Company Growth Separate Account is invested primarily in common stocks from smaller,developing companies whose earnings are expected to grow at above average rates. The investments may also include OTC (over the counter) derivative instruments such as options and futures, other equity securities, or other convertible securities that may be converted to common stocks.This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. Principal Small Company Value Separate Account. Principal Small Company Value Separate Account is invested primarily in common stocks from smaller, financially stable companies with below-average price/earnings ratios and above-average dividend yields which we view as undervalued by the market. The investments may also include OTC(over the counter)derivative instruments such as options and futures,other equity securities or other convertible securities that may be converted to common stocks. If the market as a whole is overvalued,we may hold assets of this account in fixed income securities instead of stocks. This Separate Account may invest in the investments outlined in this Separate Account description or in an underlying mutual fund or other type of investment that maintains the investment described. B. DETERMINING SEPARATE ACCOUNT VALUES; OPERATING EXPENSES.The value of a Separate Account is its market value (appraised market value for Principal Real Estate Separate Account) less Operating Expenses accrued but not deducted, if any. To the extent that a Separate Account invests in a Mutual Fund,the value of such Separate Account is the number of the shares invested in the Mutual Fund multiplied by the Mutual Fund's NAV for that Valuation Date.If there is no readily available market, its value is the fair market value of the assets held in such Separate Account as determined by us using generally accepted accounting practices and applicable GPR 48916-3 10 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) law. The value of all Separate Accounts will always be expressed in U.S.dollars. We will determine the value of a Separate Account on each Valuation Date. Net Asset Value(NAV)means the price per mutual fund share represented as a dollar amount. Operating Expenses are those charges which must be paid in order to operate a Separate Account or obtain investments for a Separate Account. Operating Expenses include, but are not limited to, custodial fees,transfer taxes,brokerage fees,processing fees,and other taxes and fees associated with the operation of a Separate Account. Operating expenses will be deducted from the Separate Account associated with a particular charge on the next Valuation Date after the Operating Expenses have been paid or are immediately payable. In accordance with our then-current procedures,various Separate Accounts may share in the payment of certain Operating Expenses and, in some cases, we may use certain fees paid to us by third parties to offset Operating Expenses incurred by a Separate Account which would otherwise be payable from that Separate Account. Valuation Date means the date we determine the value of a Separate Account. Valuation Dates will occur on dates we determine,but at least on the last Business Day of a calendar month. Valuation will occur at the end of each such day, according to our then-current procedures. For purposes of the Principal International Stock Separate Account, Principal International Stock II Separate Account, Principal International Small Company Separate Account,Principal International Emerging Markets Separate Account, and Principal Partners International Separate Account only those days on which both the value of the underlying investments is determined and we are open for business will be Valuation Dates. C. MANAGEMENT FEES. The Management Fee under each Separate Account will be a percentage of the value of assets in such Separate Account, subject to the equivalent of a maximum annual percentage listed in the Table of Separate Account Features. We will determine the Management Fee for each Separate Account and report it to you. We reserve the right to change the Management Fee to any charge up to the maximum limit at any time by giving you written notice at least 30 days before the date the change is to take effect. Management Fee means the charge consisting of the investment Management Fee and the contract expense charge applicable to this class of contracts for each Separate Account which we determine and report to you. A pro rata charge will be deducted from each Separate Account on each Valuation Date for the number of calendar days within the Valuation Period ending on such Valuation Date. Valuation Period means the period from the end of a Valuation Date to the end of the next following Valuation Date. D. SEPARATE ACCOUNT INVESTMENT. A Separate Account Investment is established for each Member for a Separate Account for each type of Contribution a Member directs to such Separate Account. An Unallocated Separate Account Investment will be established for Contributions we accept for which we do not have investment direction or for which you have Notified us that such Contributions are not to be allocated at this time. You may Notify us of the Separate Account you wish to be used as the Unallocated Separate Account Investment. If you have not given us such Notification, we will establish such an account for this contract using the Principal Money Market Separate Account. In GPR 48916-3 11 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) any event, if you do not wish to have an Unallocated Separate Account Investment established hereunder,you may so Notify us and we will not establish one. If no Unallocated Separate Account Investment is established under this contract, all Contributions for which we have no investment direction will be directed to Member's Guaranteed Interest Investment with the shortest Guarantee Period then available under the contract. Unallocated Separate Account Investment means the account established to hold unallocated Contributions, invested in the separate account specified by you or the Principal Money Market Separate Account,and operates as if it were a Member's account. By mutual agreement with us,you may specify one or more other Separate Accounts to use as Unallocated Separate Account Investments. If more than one Unallocated Separate Account Investment is established, you must Notify us which Unallocated Separate Account Investment is to be used for any such unallocated Contributions. E. RETURNS CREDITED TO SEPARATE ACCOUNT INVESTMENTS. Each Separate Account Investment established under this contract will be credited with its portion of the return associated with the appropriate Separate Account. The return for a Separate Account will be based on the change in value of that Separate Account less any Management Fee. In order to track the returns for the Separate Account Investments established under this contract,we will use a unit value system of recordkeeping,unless we determine that another recordkeeping system would be more appropriate. F. UNIT VALUE SYSTEM OF RECORDICEEPING. Under a unit value system of recordkeeping,we will calculate the value of a Separate Account Investment for each Valuation Date by multiplying the number of Separate Account units held in the Separate Account Investment by the applicable Unit Value. Unit Value means the dollar value for one unit. Contributions or transfers to a Separate Account Investment increase the number of Separate Account units credited to it. Transfers and payments from a Separate Account Investment reduce the number of Separate Account units. The increase or decrease in the number of Separate Account units is calculated by dividing the dollar amount of the contribution, transfer, or payment by the applicable Unit Value. We will calculate the Unit Value applicable to each Separate Account Investment on each Valuation Date. The Unit Value will be based upon the total value of the Separate Account and the number of existing Separate Account units. When crediting Contributions and transfers added to a Separate Account Investment we will use the Unit Value applicable to the Separate Account Investment for the Valuation Date on which we accept the Contribution or transfer. If we accept the Contribution or transfer on a date other than a Valuation Date,we will use the Unit Value for the next following Valuation Date. We reserve the right to change our unit value recordkeeping system upon 30 days notice to you. GPR 48916-3 12 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(05/04) G. DEPOSITS TO SEPARATE ACCOUNTS; RESTRICTIONS AND ORDER OF ENTRY.We reserve the right to defer,limit,or stop your or any Member's(as permitted by the Plan) ability to direct Contributions and transfers to or from a Separate Account,and we may require you to transfer existing account balances out of a Separate Account. We may exercise these rights if we 1. need to comply with regulation,statute, or decisional law to which we are subject, 2. believe it would be imprudent not to do so in fulfilling our fiduciary role as an investment manager under the Employee Retirement Income Security Act of 1974,as amended(ERISA), 3. believe the investment approach of the Separate Account no longer makes sense, is excessively expensive, or does not currently have any favorable investment opportunities available, or 4. decide to suspend or discontinue operation of such Separate Account. Contributions or transfers directed to a Separate Account that we have closed on a temporary basis, other than Principal Real Estate Separate Account, will be treated as Contributions or transfers for which we have not received proper investment directions and the provisions of the contract with regard to any such Contributions or transfers will apply. We must receive new investment direction for any Contributions formerly directed to a temporarily closed Separate Account if you or the Member(as permitted by the Plan) wish to change the way investments are treated,as described in the previous paragraph. Once a temporarily closed Separate Account reopens,we must receive new investment directions in order to direct any Contributions or transfers to such Separate Account. We may limit the application of such new investment directions as necessary to protect the Separate Account. Contributions or transfers directed to the Principal Real Estate Separate Account,if we have closed it on a temporary basis,will be directed to Principal Money Market Separate Account,if available,or to such other separate account or general account option as you or the Member may have chosen for a default. We will maintain records of all such Contributions or transfer requests so that such amounts will be transferred to the closed Separate Account as soon as permitted under the terms of the contract. Provisions for Principal Real Estate Separate Account if it has been temporarily closed. We have established the following order of entry into this Separate Account that was temporarily closed, then reopened: 1. All amounts held in Principal Money Market Separate Account waiting for transfer to the Separate Account. 2. Any amounts held in any other Separate Account or in our general account which are to be transferred to the Separate Account. Within each of the above 2 categories, amounts will be transferred one customer at a time, in order from the oldest waiting Contribution or transfer to the newest Contribution or transfer. Normally, if the amount of the intended transfer is greater than the amount open for acceptance by a previously closed Separate Account,the entire amount of the transfer will continue to be held in the investment option it was in at the time of the request until the Valuation Date when complete transfer GPR 48916-3 13 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(05/04) may be made. However,we and you(the Member, if permitted by the Plan)may mutually agree to transfer only a portion of the intended amount to the Separate Account. We will notify you in writing when amounts have been transferred to a reopened Separate Account. You or a Member,as permitted by the Plan,may revoke a request for transfer of finds to a Separate Account by telling us in writing before the date transfer is made. The notification must also include new investment directions for the intended transfer. Provisions for a permanently closed Separate Account. We will notify you in writing of our intent to permanently close a Separate Account. You will have 60 days to request transfer as described in the Paragraph labeled"Transfers and Payments from a Separate Account"below. If after 60 days we have not received your written notification of where to transfer a closed Separate Account balance,we will treat that account balance as a Contribution for which we do not have investment direction. H. TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. We will,upon Notification from you(the Member if permitted by the Plan),and subject to our right to defer a transfer or payment as described in Section I, 1. transfer to the Member's Guaranteed Interest Investment or another Separate Account Investment all or any portion of the Separate Account Investment specified,or 2. transfer to another Funding Agent all or any portion of the Member's Separate Account Investment,or 3. pay the Member an amount equal to all or any portion of the Member's Separate Account Investment,or 4. pay all or a part of a Member's Separate Account Investment to the Member as a loan if permitted by the Plan. The amount to be paid or transferred will be determined and paid or transferred within seven Business Days after(i)the Valuation Date on which we receive the Notification,or(ii)a later Valuation Date specified in the Notification. Payments and transfers will be made in accordance with our then-current procedures. We will notify you in writing of these procedures. The amount transferred or paid will be deducted from the Separate Account Investment from which such transfer or payment was requested on the date of such transfer or payment. Each transfer to another Separate Account Investment may occur only on a Valuation Date of that Separate Account. We are not responsible for the application of amounts transferred to another Funding Agent. LIMITATIONS ON TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. In general, transfers and payments from a Separate Account Investment will be made within seven Business Days after the first Valuation Date following the request specified in Section H of this rider. We reserve the right,however,to defer such transfers or payments up to the maximum number of days shown in the Table of Separate Account Features for each Separate Account. If we defer any transfer or payment under this Section,we will determine the amount to be transferred or paid on the date transfer or payment occurs. We will notify you in the event of any deferment of more than 30 days under the provisions of this Section. GPR 48916-3 14 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) These limitations will not apply to the payments to the beneficiary of a Member due to the Member's death, payments to a Member due to disability or retirement under the Plan and to purchases of annuity under Article IV, Section 2 of the contract. Special Real Estate Limitations. Because of the illiquid nature of the assets in which Principal Real Estate Separate Account is invested, we reserve the right to defer transfers or payments from a Principal Real Estate Separate Account Investment if a transfer or payment would exceed the amount of cash and other liquid assets held in Principal Real Estate Separate Account,reduced by amounts committed to purchase properties or needed for Operating Expenses. We will not defer requested transfers or payments for longer than three years under this paragraph. For any Plan that allows Members to direct some or all of their investments to the Principal Real Estate Separate Account and for which we keep records,we will notify all Members in the event of any deferment of more than 45 days of a type described under this paragraph which arises under any of our contracts having access to the Principal Real Estate Separate Account. Our notice to those Members will be in writing and will explain the investment and transfer options available to the Members. Principal Real Estate Separate Account may be illiquid for indefinite periods of time. We will not manage Principal Real Estate Separate Account to provide a liquidity pool for requests for transfer or payment. If requests for transfer or payment from Principal Real Estate Separate Account are deferred,then the deferred transfers or payments,when made, will be made in the following order: 1. Any death benefits payable under a defined contribution plan. 2. All or a portion of each of the other requests for payment,determined as follows: a. the amount of the request, divided by b. the amount of all waiting requests,multiplied by c. the amount we determine to be available to pay requests;provided,however,that no more than the amount of the request shall be paid out. Deferred transfers or payments,when paid,will be made as of a Valuation Date and will be based on the Principal Real Estate Separate Account Unit Value as of the date paid. In determining the amount available to pay requests, we will subtract amounts payable under any other group annuity contract which requires that we make payments from the Principal Real Estate Separate Account using a method other than the one described in this Section. We reserve the right to make payments in a different manner than described in this Section if we(i) are required to do so under applicable statutes,regulations,or decisional law to which we are subject, (ii) must do so to comply with our fiduciary responsibilities as an ERISA investment manager as described in Article H,Section 8,or(iii)deem it necessary to make a change to maintain an equitable distribution of assets under all of our group annuity contracts. We will not implement a change under item(iii)before the notice to all affected Contractholders is provided and the appropriate time period after the notice has elapsed. Special Limitation for Certain Separate Accounts. We reserve the right to make the portion of a requested transfer in excess of the specified dollar limit in substantially equal monthly installments over a period not to exceed the specified period,if,in the specified period which ends on the requested date of transfer,all transfers and payments from the total of all Separate Account Investments invested GPR 48916-3 15 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) in a particular Separate Account which is subject to the dollar limit total the specified dollar limit or more. For purposes of this limitation, transfers and payments from any other Separate Account investments or funds included in the Separate Account from any other contracts or policies issued in connection with the Plan or with any other retirement plan of the Employer will be included as a transfer or payment from a Separate Account Investment. If this limitation is imposed by us,the first installment will be made one month after the date of request, or on such later date that you specify. The specified dollar limit and period are: 1. $1,000,000 and 12 months,respectively,for Principal International Small Company Separate Account,Principal International Emerging Markets Separate Account. 2. $20,000,000 and 36 months,respectively, for all other Separate Accounts described in this Rider except Principal Money Market Separate Account and Principal Bond and Mortgage Separate Account. Mutual Fund Limitation. Without regard to any other feature of the contract or this rider, if any limitation or delay is imposed by an underlying Mutual Fund, if any, we will be unable to transfer, make payments,or apply amounts held under these Separate Accounts. J. PLANS WHICH MAY INVEST IN THE SEPARATE ACCOUNTS. The Separate Accounts are not registered with the Federal Securities and Exchange Commission and therefore only Plans which meet certain requirements under the Code may invest in the Separate Accounts. If the Internal Revenue Service or a court makes a final determination that the Plan no longer qualifies as a qualified plan,we will require that you transfer any assets invested in the Separate Accounts. If we decide that you must transfer assets from the Separate Accounts, we will send you a notice describing your options. Your Notification must clearly specify the Guaranteed Interest Investment(s)or the Funding Agent to which you want the assets transferred. If we do not receive an acceptable Notification from you within 5 Business Days,we will transfer the assets to the Guaranteed Interest Investment with the shortest duration. K. FUNDS. We are the sole owner of all assets held in the Separate Accounts. L. AMENDMENT BY US. As of any date,we may unilaterally strike this rider and replace it with a rider to allow participation in any additional Separate Account or Accounts offered by us. Such revised rider will not change the provisions of any existing Separate Account. Participation in any additional Separate Account by a member will be by Notification. PRINCIPAL LIFE INSURANCE COMPANY RJI� Chairman, President and Chief Executive Officer GPR 48916-3 16 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(05/04) TABLE OF SEPARATE ACCOUNT FEATURES Maximum Maximum Number Annual of Days owed to Separate Account Management Defer Transfers anlsfers or Fee Percentage Payments Principal Bond and Mortgage Separate Account 2.00 270 Principal Government Securities Separate Account 2.00 90 Principal High Quality Intermediate-Term Bond Separate Account 2.00 270 Principal High Quality Long-Term Bond Separate Account 2.00 270 Principal High Quality Short-Term Bond Separate Account 2.00 270 Principal International Emerging Markets Separate Account 2.00 270 Principal International Small Company Separate Account 2.00 270 Principal International Stock Separate Account 2.00 270 Principal International Stock II Separate Account 2.00 270 Principal Large-Cap Blend I Separate Account 2.00 270 Principal Large Cap Stock Index Separate Account 2.00 270 Principal Large Company Growth Separate Account 2.00 270 Principal Large Company Value Separate Account 2.00 270 Principal LifeTime 2010 Separate Account 2.00 270 Principal LifeTime 2020 Separate Account 2.00 270 Principal LifeTime 2030 Separate Account 2.00 270 Principal LifeTime 2040 Separate Account 2.00 270 Principal LifeTime 2050 Separate Account 2.00 270 Principal LifeTime Strategic Income Separate Account 2.00 270 Principal Medium Company Blend Separate Account 2.00 270 Principal Medium Company Growth Separate Account 2.00 270 Principal Medium Company Value Separate Account 2.00 270 Principal Mid Cap Stock Index Separate Account 2.00 270 Principal Money Market Separate Account 2.00 90 Principal Partners International Separate Account 2.00 270 Principal Partners Large-Cap Blend Separate Account 2.00 270 Principal Partners Large-Cap Blend I Separate Account 2.00 270 Principal Partners Large-Cap Growth Separate Account 2.00 270 Principal Partners Large-Cap Growth I Separate Account 2.00 270 Principal Partners Large-Cap Growth II Separate Account 2.00 270 Principal Partners Large-Cap Value Separate Account 2.00 270 Principal Partners Mid-Cap Growth Separate Account 2.00 270 Principal Partners Mid-Cap Growth I Separate Account 2.00 270 Principal Partners Mid-Cap Value Separate Account 2.00 270 Principal Partners Mid-Cap Value I Separate Account 2.00 270 Principal Partners Small-Cap Blend Separate Account 2.00 270 Principal Partners Small-Cap Growth I Separate Account 2.00 270 Principal Partners Small-Cap Growth II Separate Account 2.00 270 Principal Partners Small-Cap Value Separate Account 2.00 270 GPR 48916-3 17 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(05/04) Maximum Maximum Number Separate Account Annual of Days Allowed to Management Defer Transfers or Fee Percentage Payments Principal Partners Small-Cap Value I Separate Account 2.00 270 Principal Preferred Securities Separate Account 2.00 270 Principal Real Estate Separate Account None Three(3)years Principal REIT Separate Account 2.00 270 Principal Small Cap Stock Index Separate Account 2.00 270 Principal Small Company Blend Separate Account 2.00 270 Principal Small Company Growth Separate Account 2.00 270 Principal Small Company Value Separate Account 2.00 270 • GPR 48916-3 18 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(05/04) PREMIER SEPARATE ACCOUNT INVESTMENT RIDER- EXPANDED (ALLOCATED) This rider is added to the Group Annuity Contract issued by us of which it is a part. All terms defined in the contract have the same meaning where used in this rider. The effective date of this rider is the latest of(i)the Contract Date,(ii)the date this rider has been approved for use in the state of issue, or(iii)the date stated in the amendment adding this rider to the contract. The purpose of this rider is to allow the contract to participate in our Separate Accounts which invest in nonproprietary Mutual Funds and other authorized investments. We reserve the right to limit both the number of Separate Accounts available under the contract and the number available to each Member. Although all Separate Accounts listed in Schedule I may be available under this contract,you may send us Notification indicating you want the contract administered so that the Plan will not participate in one or more of these Separate Accounts. You may revoke your Notification by sending us a new Notification. A. DEFINITIONS. Management Fee means the charge consisting of the investment management fee and the contract expense charge applicable to this class of contracts for each Separate Account which we determine and report to you. Mutual Fund means any diversified,open-end management investment company registered under the Investment Company Act of 1940 which is an underlying investment of the Separate Account which is made available by us, as listed in Schedule 1. We reserve the right, subject to compliance with applicable law, to make additions to, deletions from, substitution for, or combinations of,the Mutual Funds listed in Schedule 1 which are made available through one or more Separate Accounts. Net Asset Value (NAV)means the price per share of a Mutual Fund represented as a dollar amount. Separate Account means each Separate Account established by us, which is maintained by us, made available to you by us, and identified in Schedule 1 of this rider. Each Separate Account is a pooled Separate Account for use by our retirement plan customers. The amounts held in each Separate Account will be invested and reinvested in accordance with applicable law. Amounts credited to any Separate Account shall be invested in the shares of the Mutual Fund in which the Separate Account invests. GPR 50115 1 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3 (08/03) A Separate Account consists of funds we receive under group annuity contracts or policies which permit deposit in such Separate Account and under which amounts are directed to such Separate Account. All income gains and losses(whether or not realized),and expenses from the assets allocated to a Separate Account will be credited to or charged against that Separate Account without regard to any other income,gains or losses,or expenses we might have for our general account or any other Separate Account. The assets of a Separate Account will not be charged with any liabilities arising out of the investment experience of our general account or any other Separate Accounts outside that Separate Account. We may occasionally invest the assets of any Separate Account in short term money market instruments, cash or cash equivalents. We reserve the right, subject to compliance with applicable law, to make additions to, deletions from,substitution for,or combinations of,the Separate Accounts listed in Schedule 1. Valuation Date means the date we determine the value of a Separate Account. Valuation Dates will occur on dates we determine,but at least on the last Business Day of each calendar month. Valuation will occur at the end of each such day, according to our then-current procedures. Valuation Period means the period from the end of a Valuation Date to the end of the next Valuation Date. B. DETERMINING SEPARATE ACCOUNT VALUES. The value of a Separate Account on any Valuation Date is the number of Mutual Fund shares held in the Separate Account multiplied on a Valuation Date by the Mutual Fund's NAV for that Valuation Date. The value of all Separate Accounts will always be expressed in U.S. dollars. We will determine the value of a Separate Account on each Valuation Date. C. MANAGEMENT FEES. The Management Fee under each Separate Account will be a percentage of the value of the amounts held in such Separate Account, subject to the equivalent of the maximum annual percentage listed in the Table of Separate Account Features of this rider. We will determine the Management Fee for each Separate Account and report it to you. We reserve the right to change the Management Fee to any amount up to the maximum limit at any time by giving you written notice at least 30 days before the date the change is to take effect. Each Mutual Fund's management fees are separate from the Management Fees of the Separate Accounts and can be found in the prospectus for the Mutual Fund. The Management Fee will be deducted pro-rata from each Separate Account on each Valuation Date for the number of calendar days within the Valuation Period ending on such Valuation Date. GPR 50115 2 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3 (08/03) Operating Expenses are those charges which must be paid in order to operate a Separate Account or obtain investments for a Separate Account. Operating Expenses include,but are not limited to,custodial fees,transfer taxes,brokerage fees,processing fees,and other taxes and fees associated with the operation of a Separate Account. Operating expenses will be deducted from the Separate Account associated with a particular charge on the next Valuation Date after the Operating Expenses have been paid or are immediately payable. In accordance with our then-current procedures, various Separate Accounts may share in the payment of certain Operating Expenses and,in some cases,we may use certain fees paid to us by third parties to offset Operating Expenses incurred by a Separate Account which would otherwise be payable from that Separate Account. D. SEPARATE ACCOUNT INVESTMENT. A Separate Account Investment is established for each Member for each Separate Account to which the Member directs Contributions. E. RETURNS CREDITED TO SEPARATE ACCOUNT INVESTMENTS. Each Separate Account Investment established under this contract will be credited with its portion of the return associated with the appropriate Separate Account. The return for a Separate Account will be based on the change in value of that Separate Account less any Management Fee. In order to track the returns for the Separate Account Investments established under this contract,we will use a unit value system of recordkeeping,unless we determine that another recordkeeping system would be more appropriate. F. UNIT VALUE SYSTEM OF RECORDKEEPING. Under a unit value system of recordkeeping, we will calculate a unit value to be. used with the Separate Account Investments on each Valuation Date. To calculate the unit value, we first determine the value of the Separate Account as described in Section B. of this rider. Then, we will calculate the Management Fee as described in Section C. of this rider. Finally, we will calculate the unit value by dividing the value of the Separate Account less any Management Fee by the aggregate number of units in the Separate Account attributable to the contract. We will calculate the unit value on each Valuation Date. Contributions or transfers to a Separate Account Investment increase the number of Separate Account units credited to it. Transfers and payments from a Separate Account Investment reduce the number of Separate Account units. The increase or decrease in the number of Separate Account units is calculated by dividing the dollar amount of the contribution, transfer, or payment by the applicable unit value. GPR 50115 3 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3 (08/03) When crediting Contributions and transfers to a Separate Account Investment we will use the unit value applicable to the Separate Account Investment for the Valuation Date on which we accept the Contribution or transfer. A Contribution is considered accepted on the date we receive both the money and all the information necessary for us to complete the crediting and allocation of the Contribution without further information or instruction and without the exercise of any discretion on our part to allocate and credit the Contribution. G. DEPOSITS TO SEPARATE ACCOUNTS; RESTRICTIONS AND ORDER OF ENTRY. We reserve the right to defer, limit, or stop your or any Member's(as permitted by the Plan)ability to direct Contributions and transfers to or from a Separate Account,and we may require you to transfer existing Separate Account Investments out of a Separate Account. We may exercise these rights if we 1. need to comply with regulation, statute, or decisional law to which we are subject, 2. believe it would be imprudent not to do so in fulfilling our fiduciary role as an investment manager under the Employee Retirement Income Security Act of 1974,as amended (ERISA), 3. believe the investment approach of the Separate Account no longer makes sense, is excessively expensive, or does not currently have any favorable investment opportunities available, or 4. decide to suspend or discontinue operation of such Separate Account. Contributions or transfers directed to a Separate Account that we have closed on a temporary basis, will be treated as Contributions or transfers for which we have not received proper investment directions and the provisions of the contract with regard to any such Contributions or transfers will apply. Once a temporarily closed Separate Account reopens, we must receive new investment directions in order to direct any Contributions or transfers to such Separate Account. We may limit the application of such new investment directions as necessary to protect the Separate Account. Provisions for a permanently closed Separate Account. We will notify you in writing of our intent to permanently close a Separate Account. You will have 60 days to request transfer as described in the Paragraph labeled "Transfers and Payments from a Separate Account"below. If after 60 days we have not received your written notification of where to GPR 50115 4 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3 (08/03) transfer a closed Separate Account balance, we will treat that account balance as a Contribution for which we do not have investment direction. H. TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. We will,upon Notification from you(the Member if permitted by the Plan),and subject to our right to defer a transfer or payment as described in Section J.of this rider, 1. transfer to the Member's Guaranteed Interest Investment or any Separate Account Investment available under the contract all or any portion of the Member's Separate Account Investment specified, or 2. transfer to another Funding Agent all or any portion of the Member's Separate Account Investment specified, or 3. pay all or a part of a Member's Separate Account Investment to the Member as a loan if permitted by the Plan, or, 4. as a result of the occurrence of a Benefit Event,pay the Member an amount equal to all or any portion of the Member's Separate Account Investment specified. The amount to be paid or transferred will generally be determined and paid or transferred within seven Business Days after (i) the Valuation Date on which we receive the Notification, or (ii) a later Valuation Date specified in the Notification. Payments and transfers will be made in accordance with our then-current procedures. We will notify you in writing of these procedures. The amount transferred or paid will be deducted from the Separate Account Investment from which such transfer or payment was requested on the date of such transfer or payment. Each transfer to another Separate Account Investment may occur only on a Valuation Date of that Separate Account. We are not responsible for the application of amounts transferred to another Funding Agent. MUTUAL FUND LIMITATION. Without regard to any other feature of the contract or this rider, if any limitation or delay is imposed by an underlying Mutual Fund we will be unable to transfer,make payments,accept Contributions,or apply amounts held under these Separate Accounts. GPR 50115 5 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3 (08/03) J. LIMITATIONS ON TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. In general,transfers and payments from a Separate Account Investment will be made within seven Business Days after the first Valuation Date following the request specified in Section H. of this rider. We reserve the right, however, to defer such transfers or payments up to the maximum number of days shown in the Table of Separate Account Features of this rider for each Separate Account. If we defer any transfer or payment under this Section, we will determine the amount to be transferred or paid on the date transfer or payment occurs. We will notify you in the event of any deferment of more than 30 days under the provisions of this Section. These limitations will not apply to the payments to the beneficiary of a Member due to the Member's death,payments to a Member due to disability or retirement under the Plan and to purchases of annuity under Article IV, Section 2 of the contract. Special Limitation for Separate Accounts. We reserve the right to make the portion of a requested transfer in excess of $20,000,000 in substantially equal monthly installments over a period of 36 months, if, in the 36 month period which ends on the requested date of transfer, all transfers and payments from the total of all Separate Account Investments invested in a particular Separate Account totals $20,000,000 or more. For purposes of this limitation,transfers and payments from any other Separate Account investments included in the Separate Account from any other contracts or policies issued in connection with the Plan or with any other retirement plan of the Employer will be included as a transfer or payment from a Separate Account Investment. If this limitation is imposed by us,the first installment will be made one month after the date of request, or on such later date that you specify. K. PLANS WHICH MAY INVEST IN THE SEPARATE ACCOUNTS. The Separate Accounts are not registered with the Federal Securities and Exchange Commission and therefore only Plans which meet certain requirements under the Code may invest in the Separate Accounts. If the Internal Revenue Service or a court makes a final determination that the Plan no longer meets the requirements of a Qualified Plan,we will require that you transfer any amounts held in any Separate Accounts. If we decide that you must transfer amounts out of the Separate Accounts, we will send you a notice describing your options. Your Notification must clearly specify the Guaranteed Interest Investment(s)or the Funding Agent to which you want the amounts transferred. If we do not receive an acceptable Notification from you within five Business Days, we will transfer theses amounts to the Guaranteed Interest Investment with the shortest duration. GPR 50115 6 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3 (08/03) L. FUNDS. We are the sole owner of all amounts held in the Separate Accounts. We may exercise all owner's rights in regard to all amounts in any Separate Account Investment or Separate Account, including,but not limited to,the following: 1. The right to hold, sell, exchange, convey, or transfer. 2. The right to exercise any conversion privileges,subscription rights,or other options, and to make any payments incidental thereto. 3. The right to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities. 4. The right to foreclose any loan on real estate. PRINCIPAL LIFE INSURANCE COMPANY poa.tre, Chairman, President and Chief Executive Officer GPR 50115 7 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3 (08/03) TABLE OF SEPARATE ACCOUNT FEATURES Maximum Maximum Annual Number of Days Separate Account Management Allowed to Fee Defer Transfers or Payments Percentage Putnam Equity Income(M) Separate Account 3.00 270 American Century Ultra(Adv) Separate Account 3.00 270 American Century Income&Growth(Adv) Separate Account 3.00 270 American Century Small Cap Value(Adv) Separate Account 3.00 270 Fidelity Advisor Equity Growth(T) Separate Account 3.00 270 Fidelity Advisor Mid-Cap(1') Separate Account 3.00 270 Fidelity Advisor Small Cap(T) Separate Account 3.00 270 Mason Street Aggressive Growth Stock(A) Separate Account 3.00 270 Mason Street International Equity(A) Separate Account 3.00 270 Mason Street Asset Allocation (A) Separate Account 3.00 270 Mason Street High Yield Bond(A) Separate Account 3.00 270 Mason Street Growth Stock(A) Separate Account 3.00 270 Mason Street Small Cap Growth(A) Separate Account 3.00 270 Mason Street Select Bond(A) Separate Account 3.00 270 Janus Adviser Capital Appreciation(Ret) Separate Account 3.00 270 INVESCO Small Company Growth Separate Account 3.00 270 INVESCO Leisure Separate Account 3.00 270 GPR 50115 8 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3 (08/03) SCHEDULE 1 Separate Account Mutual Fund Putnam Equity Income(M) Separate Account Putnam Equity Income(M Shares) American Century Ultra(Adv) Separate Account American Century Ultra(Advisor Shares) American Century Income&Growth(Adv) Separate Account American Century Income and Growth(Advisor Shares) American Century Small Cap Value(Adv) Separate Account American Century Small Cap Value(Advisor Shares) Fidelity Advisor Equity Growth(1') Separate Account Fidelity Advisor Equity Growth(T Shares) Fidelity Advisor Mid-Cap(1') Separate Account Fidelity Advisor Mid Cap (T Shares) Fidelity Advisor Small Cap (D Separate Account Fidelity Advisor Small Cap(T Shares) Mason Street Aggressive Growth Stock(A) Separate Account Mason Street Aggressive Growth Stock(A Shares) Mason Street International Equity(A) Separate Account Mason Street International Equity(A Shares) Mason Street Asset Allocation(A) Separate Account Mason Street Asset Allocation(A Shares) Mason Street High Yield Bond(A) Separate Account Mason Street High Yield Bond(A Shares) Mason Street Growth Stock(A) Separate Account Mason Street Growth Stock(A Shares) Mason Street Small Cap Growth(A) Separate Account Mason Street Small Cap Growth(A Shares) Mason Street Select Bond(A) Separate Account Mason Street Select Bond(A Shares) Janus Adviser Capital Appreciation(Ret) Separate Account Janus Adviser Capital Appreciation(Retirement Shares) INVESCO Small Company Growth Separate Account INVESCO Small Company Growth INVESCO Leisure Separate Account INVESCO Leisure GPR 50115 9 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3 (08/03) PREMIER SEPARATE ACCOUNT INVESTMENT RIDER- RUSSELL (ALLOCATED) This rider is added to the Group Annuity Contract issued by us of which it is a part. All terms defined in the contract have the same meaning where used in this rider. The effective date of this rider is the latest of(i)the Contract Date,(ii)the date this rider has been approved for use in the state of issue, or(iii)the date stated in the amendment adding this rider to the contract. The purpose of this rider is to allow the contract to participate in our Separate Accounts which invest in nonproprietary Mutual Funds and other authorized investments. We reserve the right to limit both the number of Separate Accounts available under the contract and the number available to each Member. Although all Separate Accounts listed in Schedule 1 may be available under this contract,you may send us Notification indicating you want the contract administered so that the Plan will not participate in one or more of these Separate Accounts. You may revoke your Notification by sending us a new Notification. A. DEFINITIONS. Management Fee means the charge consisting of the investment management fee and the contract expense charge applicable to this class of contracts for each Separate Account which we determine and report to you. Mutual Fund means any diversified,open-end management investment company registered under the Investment Company Act of 1940 which is an underlying investment of a Separate Account which is made available by us, as listed in Schedule 1. We reserve the right, subject to compliance with applicable law, to make additions to, deletions from, substitution for, or combinations of,the Mutual Funds listed in Schedule 1 which are made available through one or more Separate Accounts. Net Asset Value(NAV)means the price per share of a Mutual Fund represented as a dollar amount. Separate Account means each Separate Account established by us,which is maintained by us, made available to you by us, and identified in Schedule 1 of this rider. Each Separate Account is a pooled Separate Account for use by our retirement plan customers. The amounts held in each Separate Account will be invested and reinvested in accordance with applicable law,without regard to any investment requirements of our general account assets GPR 50117 1 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(08/03) or of any of our other Separate Accounts. Amounts credited to any Separate Account shall be invested in the shares of the Mutual Fund in which the Separate Accounts invest. A Separate Account consists of finds we receive under group annuity contracts or policies which permit deposit in such Separate Account and under which amounts are directed to such Separate Account. All income gains and losses(whether or not realized),and expenses from the assets allocated to a Separate Account will be credited to or charged against that Separate Account without regard to any other income,gains or losses,or expenses we might have for our general account or any other Separate Account. The assets of a Separate Account will not be charged with any liabilities arising out of the investment experience of our general account or any other Separate Accounts outside that Separate Account. We may occasionally invest the assets of any Separate Account in short term money market instruments, cash or cash equivalents. We reserve the right, subject to compliance with applicable law, to make additions to, deletions from,substitution for,or combinations of,the Separate Accounts listed in Schedule 1. Valuation Date means the date we determine the value of a Separate Account. Valuation Dates will occur on dates we determine,but at least on the last Business Day of each calendar month. Valuation will occur at the end of each such day, according to our then-current procedures. Valuation Period means the period from the end of a Valuation Date to the end of the next Valuation Date. B. DETERMINING SEPARATE ACCOUNT VALUES. The value of a Separate Account on any Valuation Date is the number of Mutual Fund shares held in the Separate Account multiplied on a Valuation Date by the Mutual Fund's NAV for that Valuation Date. The value of all Separate Accounts will always be expressed in U.S. dollars. We will determine the value of a Separate Account on each Valuation Date. C. MANAGEMENT FEES. The Management Fee under each Separate Account will be a percentage of the value of the amounts held in such Separate Account, subject to the equivalent of the maximum annual percentage listed in the Table of Separate Account Features of this rider. We will determine the Management Fee for each Separate Account and report it to you. We reserve the right to change the Management Fee to any amount up to the maximum limit at any time by giving you written notice at least 30 days before the date the change is to take effect. Each Mutual Fund's management fees are separate from the Management Fees of the Separate Accounts and can be found in the prospectus for the Mutual Fund. GPR 50117 2 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(08/03) The Management Fee will be deducted pro-rata from each Separate Account on each Valuation Date for the number of calendar days within the Valuation Period ending on such Valuation Date. Operating Expenses are those charges which must be paid in order to operate a Separate Account or obtain investments for a Separate Account. Operating Expenses include,but are not limited to,custodial fees,transfer taxes,brokerage fees,processing fees,and other taxes and fees associated with the operation of a Separate Account. Operating expenses will be deducted from the Separate Account associated with a particular charge on the next Valuation Date after the Operating Expenses have been paid or are immediately payable. In accordance with our then-current procedures, various Separate Accounts may share in the payment of certain Operating Expenses and, in some cases,we may use certain fees paid to us by third parties to offset Operating Expenses incurred by a Separate Account which would otherwise be payable from that Separate Account. D. SEPARATE ACCOUNT INVESTMENT. A Separate Account Investment is established for each Member for each Separate Account to which the Member directs Contributions. E. RETURNS CREDITED TO SEPARATE ACCOUNT INVESTMENTS. Each Separate Account Investment established under this contract will be credited with its portion of the return associated with the appropriate Separate Account. The return for a Separate Account will be based on the change in value of that Separate Account less any Management Fee. In order to track the returns for the Separate Account Investments established under this contract,we will use a unit value system of recordkeeping,unless we determine that another recordkeeping system would be more appropriate. F. UNIT VALUE SYSTEM OF RECORDKEEPING. Under a unit value system of recordkeeping, we will calculate a unit value to be used with the Separate Account Investments on each Valuation Date. To calculate the unit value, we first determine the value of the Separate Account as described in Section B. of this rider. Then, we will calculate the Management Fee as described in Section C. of this rider. Finally, we will calculate the unit value by dividing the value of the Separate Account less any Management Fee by the aggregate number of units in the Separate Account attributable to the contract. We will calculate the unit value on each Valuation Date. GPR 50117 3 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(08/03) Contributions or transfers to a Separate Account Investment increase the number of Separate Account units credited to it. Transfers and payments from a Separate Account Investment reduce the number of Separate Account units. The increase or decrease in the number of Separate Account units is calculated by dividing the dollar amount of the contribution, transfer, or payment by the applicable unit value. When crediting Contributions and transfers to a Separate Account Investment we will use the unit value applicable to the Separate Account Investment for the Valuation Date on which we accept the Contribution or transfer. A Contribution is considered accepted on the date we receive both the money and all the information necessary for us to complete the crediting and allocation of the Contribution without further information or instruction and without the exercise of any discretion on our part to allocate and credit the Contribution. G. DEPOSITS TO SEPARATE ACCOUNTS; RESTRICTIONS AND ORDER OF ENTRY.We reserve the right to defer,limit,or stop your or any Member's (as permitted by the Plan)ability to direct Contributions and transfers to or from a Separate Account,and we may require you to transfer existing Separate Account Investments out of a Separate Account. We may exercise these rights if we 1. need to comply with regulation, statute, or decisional law to which we are subject, 2. believe it would be imprudent not to do so in fulfilling our fiduciary role as an investment manager under the Employee Retirement Income Security Act of 1974,as amended(ERISA), 3. believe the investment approach of the Separate Account no longer makes sense, is excessively expensive, or does not currently have any favorable investment opportunities available, or 4. decide to suspend or discontinue operation of such Separate Account. Contributions or transfers directed to a Separate Account that we have closed on a temporary basis, will be treated as Contributions or transfers for which we have not received proper investment directions and the provisions of the contract with regard to any such Contributions or transfers will apply. Once a temporarily closed Separate Account reopens, we must receive new investment directions in order to direct any Contributions or transfers to such Separate Account. We GPR 50117 4 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(08/03) may limit the application of such new investment directions as necessary to protect the Separate Account. Provisions for a permanently closed Separate Account. We will notify you in writing of our intent to permanently close a Separate Account. You will have 60 days to request transfer as described in the Paragraph labeled"Transfers and Payments from a Separate Account"below. If after 60 days we have not received your written notification of where to transfer a closed Separate Account balance,we will treat that account balance as a Contribution for which we do not have investment direction. H. TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. We will,upon Notification from you(the Member if permitted by the Plan),and subject to our right to defer a transfer or payment as described in Section J. of this rider, 1. transfer to the Member's Guaranteed Interest Investment or any Separate Account Investment available under the contract all or any portion of the Member's Separate Account Investment specified, or 2. transfer to another Funding Agent all or any portion of the Member's Separate Account Investment specified, or 3. pay all or a part of a Member's Separate Account Investment to the Member as a loan if permitted by the Plan, or, 4. as a result of the occurrence of a Benefit Event,pay the Member an amount equal to all or any portion of the Member's Separate Account Investment specified. The amount to be paid or transferred will generally be determined and paid or transferred within seven Business Days after (i) the Valuation Date on which we receive the Notification, or (ii) a later Valuation Date specified in the Notification. Payments and transfers will be made in accordance with our then-current procedures. We will notify you in writing of these procedures. The amount transferred or paid will be deducted from the Separate Account Investment from which such transfer or payment was requested on the date of such transfer or payment. Each transfer to another Separate Account Investment may occur only on a Valuation Date of that Separate Account. We are not responsible for the application of amounts transferred to another Funding Agent. MUTUAL FUND LIMITATION. Without regard to any other feature of the contract or this rider, if any limitation or delay is imposed by an underlying Mutual Fund we will be unable to transfer,make payments,accept Contributions,or apply amounts held under these Separate Accounts. GPR 50117 5 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(08/03) J. LIMITATIONS ON TRANSFERS AND PAYMENTS FROM A SEPARATE ACCOUNT INVESTMENT. In general,transfers and payments from a Separate Account Investment will be made within seven Business Days after the first Valuation Date following the request specified in Section II. of this rider. We reserve the right, however, to defer such transfers or payments up to the maximum number of days shown in the Table of Separate Account Features of this rider for each Separate Account. If we defer any transfer or payment under this Section, we will determine the amount to be transferred or paid on the date transfer or payment occurs. We will notify you in the event of any deferment of more than 30 days under the provisions of this Section. These limitations will not apply to the payments to the beneficiary of a Member due to the Member's death,payments to a Member due to disability or retirement under the Plan and to purchases of annuity under Article IV, Section 2 of the contract. Special Limitation for Separate Accounts. We reserve the right to make the portion of a requested transfer in excess of $20,000,000 in substantially equal monthly installments over a period of 36 months, if, in the 36 month period which ends on the requested date of transfer, all transfers and payments from the total of all Separate Account Investments invested in a particular Separate Account totals $20,000,000 or more. For purposes of this limitation,transfers and payments from any other Separate Account investments included in the Separate Account from any other contracts or policies issued in connection with the Plan or with any other retirement plan of the Employer will be included as a transfer or payment from a Separate Account Investment. If this limitation is imposed by us,the first installment will be made one month after the date of request, or on such later date that you specify. K. PLANS WHICH MAY INVEST IN THE SEPARATE ACCOUNTS. The Separate Accounts are not registered with the Federal Securities and Exchange Commission and therefore only Plans which meet certain requirements under the Code may invest in the Separate Accounts. If the Internal Revenue Service or a court makes a final determination that the Plan no longer meets the requirements of a Qualified Plan,we will require that you transfer any amounts held in any Separate Accounts. If we decide that you must transfer amounts out of the Separate Accounts, we will send you a notice describing your options. Your Notification must clearly specify the Guaranteed Interest Investment(s)or the Funding Agent to which you want the amounts transferred. If we do not receive an acceptable Notification from you within five Business Days, we will transfer theses amounts to the Guaranteed Interest Investment with the shortest duration. GPR 50117 6 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(08/03) L. FUNDS. We are the sole owner of all amounts held in the Separate Accounts. We may exercise all owner's rights in regard to all amounts in any Separate Account Investment or Separate Account, including,but not limited to, the following: 1. The right to hold, sell, exchange, convey, or transfer. 2. The right to exercise any conversion privileges,subscription rights,or other options, and to make any payments incidental thereto. 3. The right to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities. 4. The right to foreclose any loan on real estate. PRINCIPAL LIFE INSURANCE COMPANY Chairman, President and Chief Executive Officer GPR 50117 7 For use w/FIA-F: GP A 5913-2 &FIA-S GP A 5914-3(08/03) TABLE OF SEPARATE ACCOUNT FEATURES Maximum Annual Maximum Number of Management Fee Days Allowed to Defer Separate Account Transfers or Payments Percentage Russell LifePoints®Aggressive Strategy(D) 3.00 270 Separate Account Russell LifePoints®Balanced Strategy (D) 3.00 270 Separate Account Russell LifePoints®Conservative Strategy (D) 3.00 270 Separate Account Russell LifePoints® Equity Aggressive Strategy 3.00 270 (D) Separate Account Russell LifePoints® Moderate Strategy(D) 3.00 270 Separate Account GPR 50117 8 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(08/03) SCHEDULE 1 Separate Account Mutual Fund Russell LifePoints®Aggressive Strategy(D) Russell LifePoints®Aggressive Strategy Fund Separate Account (D Shares) Russell LifePoints® Balanced Strategy(D) Russell LifePoints®Balanced Strategy Fund(D Separate Account Shares) Russell LifePoints® Conservative Strategy(D) Russell LifePoints® Conservative Strategy Fund Separate Account (D Shares) Russell LifePoints® Equity Aggressive Strategy Russell LifePoints®Equity Aggressive Strategy (D) Separate Account Fund (D Shares) Russell LifePoints®Moderate Strategy(D) Russell LifePoints®Moderate Strategy Fund Separate Account (D Shares) GPR 50117 9 For use w/FIA-F: GP A 5913-2 & FIA-S GP A 5914-3(08/03) Hello