SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------



                                    FORM 8-K

                                 CURRENT REPORT



                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        Date of Report: JANUARY 25, 2006
                        (Date of earliest event reported)



                         PRINCIPAL FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)


         DELAWARE                     1-16725                  42-1520346
(State or other jurisdiction    (Commission file number)     (I.R.S. Employer
     of incorporation)                                   Identification Number)


                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)

                                 (515) 247-5111
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)
[ ] Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17
    CFR 240.14a-12)
[ ] Pre-commencement  communications  pursuant  to  Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))

                               ------------------


<PAGE>

ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On January 25, 2006,  the Human  Resources  Committee (the  "Committee")  of the
Board of Directors of Principal  Financial  Group,  Inc.  (the  "Company")  made
decisions  for the  performance  period of January 1, 2006 to December  31, 2006
with respect to the Principal  Financial Group,  Inc. Annual Incentive Plan (the
"Annual  Incentive  Plan").  The Committee  affirmed the incentive  pool for the
performance  period as defined in the plan and determined that the  participants
in the plan will  include the chief  executive  officer and each other  "covered
employee"  within the meaning of  162(m)(3) of the Internal  Revenue  Code.  The
Committee also determined that the maximum award for the performance  period for
the chief executive officer will be 40% of the incentive pool, the maximum award
for the second highest "covered employee" will be 20% of the incentive pool, and
the  maximum  award  for each of the  other  participants  shall be 13.3% of the
incentive  pool. The Committee  intends to administer the Annual  Incentive Plan
through the use of negative  discretion  and subject to the  achievement  of the
applicable  performance  criteria  (without  regard to any  adjustment  that may
increase the amounts  payable),  so that the actual annual awards payable to any
such officer do not exceed the amount that would have been payable  based on the
same  performance  measures,  components and weightings as those that would have
been applicable to such senior officers under the Company's  broad-based  annual
incentive  compensation  plan (the "PrinPay  Plan"),  and such other factors the
Committee may determine appropriate.

For 2006,  the  performance  components  of the  PrinPay  Plan  approved  by the
Committee  will  be (1)  corporate  and  individual  in the  case  of the  chief
executive   officer   and   the   "covered    employees"   with   service   unit
responsibilities, and (2) corporate, business unit and individual in the case of
"covered employees" with business unit  responsibilities.  The Committee decided
that there would be a single  metric to measure  performance  for the  corporate
portion of the PrinPay Plan.  That single  metric  relates to  achievement  of a
stated level of operating  earnings for the Company.  "Operating  earnings" is a
non-GAAP  financial  measure used as the key financial  measure in the Company's
industry.  It is  believed to best  illustrate  the  performance  of a company's
normal,  ongoing operations,  which is important in understanding and evaluating
financial condition and results of operations on a basis comparable to that used
by  securities  analysts.  The  Committee  has not  yet  established  the  final
performance  targets for the business  unit or  individual  components  for 2006
under the PrinPay Plan.


                                    SIGNATURE

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                    PRINCIPAL FINANCIAL GROUP, INC.


                                    By:     /S/ JOYCE N. HOFFMAN
                                            -----------------------------------
                                    Name:   Joyce N. Hoffman
                                    Title:  Senior Vice President and Corporate
                                            Secretary

Date:    January 31, 2006


                                       2
<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        Date of Report: JANUARY 25, 2006
                        (Date of earliest event reported)

                         PRINCIPAL FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)

         DELAWARE                     1-16725                  42-1520346
(State or other jurisdiction    (Commission file number)     (I.R.S. Employer
     of incorporation)                                   Identification Number)

                     711 HIGH STREET, DES MOINES, IOWA 50392
                    (Address of principal executive offices)

                                 (515) 247-5111
              (Registrant's telephone number, including area code)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)
[ ] Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17
    CFR 240.14a-12)
[ ] Pre-commencement  communications  pursuant  to  Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))

                               ------------------
ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On January 25, 2006,  the Human  Resources  Committee (the  "Committee")  of the
Board of Directors of Principal  Financial  Group,  Inc.  (the  "Company")  made
decisions  for the  performance  period of January 1, 2006 to December  31, 2006
with respect to the Principal  Financial Group,  Inc. Annual Incentive Plan (the
"Annual  Incentive  Plan").  The Committee  affirmed the incentive  pool for the
performance  period as defined in the plan and determined that the  participants
in the plan will  include the chief  executive  officer and each other  "covered
employee"  within the meaning of  162(m)(3) of the Internal  Revenue  Code.  The
Committee also determined that the maximum award for the performance  period for
the chief executive officer will be 40% of the incentive pool, the maximum award
for the second highest "covered employee" will be 20% of the incentive pool, and
the  maximum  award  for each of the  other  participants  shall be 13.3% of the
incentive  pool. The Committee  intends to administer the Annual  Incentive Plan
through the use of negative  discretion  and subject to the  achievement  of the
applicable  performance  criteria  (without  regard to any  adjustment  that may
increase the amounts  payable),  so that the actual annual awards payable to any
such officer do not exceed the amount that would have been payable  based on the
same  performance  measures,  components and weightings as those that would have
been applicable to such senior officers under the Company's  broad-based  annual
incentive  compensation  plan (the "PrinPay  Plan"),  and such other factors the
Committee may determine appropriate.

For 2006,  the  performance  components  of the  PrinPay  Plan  approved  by the
Committee  will  be (1)  corporate  and  individual  in the  case  of the  chief
executive   officer   and   the   "covered    employees"   with   service   unit
responsibilities, and (2) corporate, business unit and individual in the case of
"covered employees" with business unit  responsibilities.  The Committee decided
that there would be a single  metric to measure  performance  for the  corporate
portion of the PrinPay Plan.  That single  metric  relates to  achievement  of a
stated level of operating  earnings for the Company.  "Operating  earnings" is a
non-GAAP  financial  measure used as the key financial  measure in the Company's
industry.  It is  believed to best  illustrate  the  performance  of a company's
normal,  ongoing operations,  which is important in understanding and evaluating
financial condition and results of operations on a basis comparable to that used
by  securities  analysts.  The  Committee  has not  yet  established  the  final
performance  targets for the business  unit or  individual  components  for 2006
under the PrinPay Plan.

                                    SIGNATURE

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the  registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                    PRINCIPAL FINANCIAL GROUP, INC.

                                    By:     /S/ JOYCE N. HOFFMAN
                                            -----------------------------------
                                    Name:   Joyce N. Hoffman
                                    Title:  Senior Vice President and Corporate
                                            Secretary

Date:    January 31, 2006

                                       2