Employer-Sponsored & Education Savings Options

	Individual 401(k) Plan	Profit Sharing Plan	Money Purchase Pension Plan
Highlights	The Individual 401(k) is a version of the popular 401(k) plan, simplified for owner-only businesses. It includes salary deferral, profit sharing, and loan provision features	A Profit Sharing plan is a flexible plan giving employers the discretion to make tax deductible contributions for their employees and to annually change the rate contributed. The plan does not allow salary deferrals.	A Money Purchase Pension plan provides eligible employees with fixed annual contributions. Each year, regardless of profit levels, the employer must contribute a set percentage of each participant's compensation
Advantages	Allows employer/owner maximum tax-deferred savings opportunity Flexible contribution percentage from year to year Permits loans	Flexible contribution percentage from year to year Provides vesting flexibility Permits investments in company stock up to 10% Permits loans	Predictable employer contribution is more visible benefit Provides vesting flexibility Permits loans
Target or Typical Plan Sponsor	Owner only business including partners and spouses. Common law employees are not supported.	All employers including owner-only businesses	All employers including owner-only businesses
Maximum Annual Contributions	Employer: Lesser of 100% of compensation or $46,0001,3 Employee: $15,5001,2	Employer: Lesser of 100% of compensation or $46,0001,3	Employer: Contribution up to 25% of compensation allocated uniformly. Employer contributions cannot exceed lesser of 100% of compensation or $46,0001,3
Maximum Employer Deduction	25% of participating employee compensation. Additional rules apply: Elective deferrals are not subject to the limit Compensation includes deferrals Maximum compensation for 2008 is $230,000	25% of participating employee compensation. Additional rules apply: Elective deferrals are not subject to the limit Compensation includes deferrals Maximum compensation for 2008 is $230,000	25% of participating employee compensation. Additional rules apply: Elective deferrals are not subject to the limit Compensation includes deferrals Maximum compensation for 2008 is $230,000
Deadlines	Established by last day of plan year and funded by tax filing deadline, including extensions	Established by last day of plan year and funded by tax filing deadline, including extensions	Established by last day of plan year and funded by tax filing deadline, including extensions
Eligibility Requirements	No service or age requirements EGTRRA: One year of service (1000 hours) and attainment of age 21	Service and age requirements optional	Service and age requirements optional
Vesting	Immediately 100% vested	Various vesting schedules allowed; from immediate vesting to a 6-year graded or 3-year cliff schedule	Various vesting schedules allowed; from immediate vesting to a 6-year graded or 3-year cliff schedule
Loans Available	Yes	Yes	Yes
Withdrawals	Unlike an IRA, withdrawals generally not permitted until a specified event as identified in the plan occurs (eg. reaching 59½, normal retirement age, death, disability, separation from service)		Reaching age 62, normal retirement age, death, disability, or separation from service
Plan Compliance, Testing and Government Reporting	Annual 415 and 402(g) testing required Annual filing of IRS Form 5500-EZ required for plans with more than $250,000 in assets, IRS Form 1099-R must also be filed for distributions	Annual 415 and top-heavy testing required Annual filing of IRS Form 5500 or 5500-EZ may be required, IRS Form 1099-R must also be filed for distributions	Annual 415 and top-heavy testing required Annual filing of IRS Form 5500 or 5500-EZ may be required, IRS Form 1099-R must be filed for distributions
Calculator	Compare savings among these plans with the Individual 401(k) calculator at www.principaltrust.com

	Coverdell ESA	403(b)(7)
Highlights	A Coverdell Education Savings Account is a trust to which anyone can contribute for the education expenses of a child. Education includes elementary, secondary, or post-secondary institutions If the designated beneficiary does not use up all the funds, the remaining funds can be transferred to another child	A 403(b)(7) Custodial Account allows individuals participating in a 403(b) plan to move their assets from tax-sheltered annuities to mutual funds The custodial account follows the rules set by the plan Contributions and investment earnings grow tax-deferred until withdrawn
Eligibility	Designated beneficiary can be any child under the age of 18 Grantor must meet AGI requirements to fund the account (AGI less than $110,000 for single filers and $220,000 for joint filers)	Employees, former employees, or retired employees with an account in a 403(b) plan
Contribution Limits	Up to $2,000 per child per year Note: Anyone, even the beneficiary, may contribute as long as AGI is less than $110,000 for single filers and $220,000 for joint filers	Individual may contribute up to $15,500 plus $5,000 catch-up (age 50 and over) Employer contributions cannot be deposited directly into this account; however, rollover contributions can include employer (match) contributions
Tax Advantages	Contributions are not tax deductible, but earnings grow tax-free	Contributions and investment earnings grow tax-deferred until withdrawal, at which time they are taxed as ordinary income
Withdrawals	Qualified withdrawals are tax-free; earnings on unqualified withdrawals are taxed as regular income to beneficiary, plus a 10% penalty	Withdrawals (except non-deductible contributions) are taxed as regular income
Timing	Withdrawals may be taken at any time tax-free if used for qualified expenses (eg. tuition, room, board, fees, supplies)	Withdrawals from 403(b)(7)accounts follow the same rules outlined by the plan's provisions
Required Distributions	Funds must be used before the child turns 30¹	Same as Profit Sharing / Pension Plans
Deadline to Establish	Tax filing deadline for the year of the contribution Note: Account must be opened after the child is born and before child turns 18	N/A
Deadline for Contributions	Tax filing deadline for the year of the contribution Note: No contributions can be made after the child turns 18	Employee contributions must be sent as deferrals are made

¹Exceptions are made for special need beneficiaries
²Adjusted Gross Income