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But that Xbox it is well known that many pension plans may be even yours are going bust but before you start to stress over disappearing savings.
We wanted to show you how maybe you can make money on other people's retirement accounts Larry simple -- -- Principal Financial Group chairman CEO and president.
This is a publicly traded companies joining me at a Fox Business exclusive from de Moines.
And your company.
Basically administers employee sponsored funds and plans for some of the biggest of the big in the entire nation Larry good to see you thank you for being here.
Thanks -- great to be with you thank you for your time absolutely you know you did well in your earnings -- bottom line -- -- by several cents and things looked rather good the stock is down today but.
Right off the bat I want to know what is the state of US retirement funds in in the aggregate so to speak.
Well in night I think you really to get the right answer -- -- you have to sort of separate the two.
The the comment you were making earlier around the the stress and turmoil in the pension landscape really is more around defined benefit plans.
And that's a function of interest rates as much as everything it has anything else because when interest rates are lower the cost to provide retirement income increases.
On the other hand where most of the action is today is defined contribution plans so we handle today over 45000.
Defined contribution plans for all sized businesses.
And we actually look at what's happening a defined contribution plans -- with the rise in the market over the last few months we find an account values there are at an all time high.
Now you're earnings though we're down about 13% so what you're doing pretty significant business to what to attribute the little bit of softness here.
Well our our our first quarter earnings -- were up 8% 233 million -- 8% over our year ago quarter.
And -- EPS for the first quarter was 11% about so.
We've been able to continue to generate very very strong flows and a combination of strong positive flows.
And the rising equity market is really what's -- allowing us to grow earnings at this point the cycle.
Are worried about some state pension plans and -- I want -- protections for a minute because so many of them are underfunded and and we cannot ignore that issue but.
But we've we've had different people on here for example Nobel Prize winner of Robert -- who is the -- Nobel Prize of volatility and he said.
One of the most worrisome things on the horizon for him for the next ten to fifteen years and and more so in the short term.
Are the underfunded pensions that he believes can really cause some some mayhem here in the United States if things go south.
Great insight obviously somebody who knows what they're talking about.
And again this is one of these perhaps slightly unintended consequences Liz.
Of the Fed policy and many quantitative easing programs that we've seen over the last couple of years.
You know were taken a view that interest rates are gonna remain low for some extended period of time.
And that's what is causing such pain and suffering for many of these defined benefit plans.
And in most states today at their form of funding is a defined benefit plan so that concern.
About the underfunding -- state plans this is absolutely spot on.
Larry you're going to the Milken global conference correct correct and Los Angeles I will be there as well so we'll see rare.
-- -- -- -- -- -- said at the top that that may be good investor for our viewers in other people's funds of what we met was that your stock is up about 22%.
Over the past year outpacing the S&P 500 so.
Congratulations on thanks we appreciate it and toddlers implement his Principal Financial Group chairman CEO and president I'll be in the lobby they're all set up at Fox Business -- -- come say hi.
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