SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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                                    FORM 8-K

                                 CURRENT REPORT



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

                        Date of Report: FEBRUARY 27, 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))

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                                       1
<PAGE>

ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

HUMAN RESOURCES COMMITTEE ACTIONS

2006 SALARIES

On February 27, 2006, the Human  Resources  Committee (the  "Committee")  of the
Board of Directors of Principal  Financial Group, Inc. (the "Company")  approved
the  annual  base  salaries  (effective  as of March 4,  2006) of the  Company's
executive  officers  after a review  of  comparative  compensation  information,
individual  performance,  internal  equity and other  factors  as the  Committee
determined  important.  The  following  table sets forth the annual  base salary
levels of the Company's Named Executive Officers (which officers were determined
by reference to the Company's proxy statement dated March 31, 2005) for 2006:

      NAME AND POSITION                                      BASE SALARY

J. Barry Griswell , Chairman, President and
         Chief Executive Officer....................        $  1,000,000

John E. Aschenbrenner, President,
         Insurance and Financial Services...........             550,000

Michael H. Gersie, Executive Vice President and
         Chief Financial Officer ...................             470,000

James P. McCaughan, President,
         Global Asset Management....................             525,000

Larry D. Zimpleman, President,
         Retirement and Investor Services...........             585,000

ANNUAL INCENTIVE COMPENSATION

Also on  February  27,  2006,  the  Committee  authorized  the payment of annual
incentive awards to each of the Company's Named Executive Officers in respect of
the year ended December 31, 2005. The annual incentive awards were made pursuant
to the  Principal  Financial  Group,  Inc.  Annual  Incentive  Plan (the "Annual
Incentive  Plan").  The Annual Incentive Plan contains a performance  measure of
two percent of the  Company's  Operating  Income that makes  available an annual
incentive award pool. That pool  establishes the maximum amount that may be paid
under the plan for that year. The Committee establishes corporate, business unit
and individual  goals  relating to financial,  operational  and other  strategic
areas of performance under the Company's  broad-based  employee annual incentive
plan  ("PrinPay").  The Committee uses these performance goals and other factors
determined by the Committee to guide its decision regarding whether (and, if so,
how) to use its negative  discretion to reduce the actual awards earned by Named
Executive  officers  under the Annual  Incentive  Plan.  In February  2005,  the
Committee approved the following components upon which to base awards for senior
officers under the PrinPay Plan for 2005: (1) Company performance and individual
performance in the case of the Chief Executive  Officer and senior officers with
service  unit  responsibilities,  and (2)  Company  performance,  business  unit
performance  and  individual  performance  in the case of senior  officers  with
business unit responsibilities.

In February 2005, the Committee  decided a single metric relating to achievement
of a  stated  level of  operating  earnings  for the  total  organization  would
determine  Company  performance  for purposes of the PrinPay Plan for 2005.  The
Committee  established  a level of  operating  earnings  achievement  as  target
performance for the Company component under the plan.  "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.

In approving  the PrinPay  awards for 2005,  the Committee  determined  that the
result  obtained for Company  performance  yielded a 152% payout.  The extent to
which  the  Company  performance  result  affected  any  particular  participant
depended  on  the  relative  weight  of the  Company  performance  component  to
individual and any business unit components applicable to the participant. After
the Committee  assessed the Company's,  applicable  business unit and individual
performance  for the year, a final award was  approved for each senior  officer.
For 2005, the Committee had approved for eligible senior officers, including the


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Named Executive Officers,  target awards at ranges of 50% to 250% of base salary
for achieving  performance  at target and maximum awards of 100% to 500% of base
salary  for  achieving  performance  above  target.   Attainment  of  individual
performance targets varied among Named Executive Officers.

The following table sets forth cash payments to the Named Executive  Officers in
respect of their annual  incentive  awards under the Annual  Incentive  Plan for
2005:


         NAME                                          ANNUAL INCENTIVE AWARD


    Mr. Griswell......................                    $    2,100,000
    Mr. Aschenbrenner.................                           794,492
    Mr. Gersie........................                           503,573
    Mr. McCaughan.....................                         2,108,519
    Mr. Zimpleman.....................                           796,831

LONG-TERM INCENTIVE COMPENSATION; OPTION AND PERFORMANCE SHARE GRANTS

Beginning in 2004, the Committee  determined  that the long-term  incentive plan
for senior officers would consist of stock-based  compensation  awards under the
Company's  Stock  Incentive  Plan.  Prior to 2004,  the Company also made awards
under a long-term plan that existed before the Company became  publicly-held  in
2001,  the "Long-Term  Performance  Plan." The last  three-year  cycle under the
Long-Term  Performance  Plan ended on December 31, 2005.  Payouts for the 2003 -
2005  performance  period were reported in the Company's  Current Report on Form
8-K dated February 3, 2006.

     On February 27, 2006, the Committee approved grants of non-qualified  stock
options and performance  shares to each of the Named Executive Officers pursuant
to the Company's 2005 Stock  Incentive  Plan.  For 2006, the Committee  replaced
restricted  stock units,  which vest based  solely on the passage of time,  with
performance  shares.  Performance  shares are similar to restricted  stock units
except the number of shares that are earned  depends on Company  performance  as
measured  against  three-year  goals  set at the  beginning  of the  performance
period. The performance shares will be earned and paid in shares of Common Stock
if  performance  requirements  are met or exceeded.  A return on equity  ("ROE")
objective  (a simple  average of the ROE for each of the  calendar  years  ended
during the  three-year  performance  period) and an earnings  per share  ("EPS")
objective (the  cumulative EPS for the  three-year  performance  period) must be
achieved  for any of the  performance  shares to be earned.  If the  performance
requirements are not met, the performance shares will be forfeited.

The Committee  determines the level of options and  performance  shares it could
grant Named  Executive  Officers under the plan by considering the percentage of
total compensation that competitors award in the form of options and other forms
of equity compensation for comparable positions, and other factors the Committee
deems  important.  Utilizing this  information,  the Committee sets target award
opportunities for long-term incentive compensation, expressed as a percentage of
base salary.  Actual  grants may vary from these  targets  based on a variety of
factors such as  individual  performance  and the  importance  of retaining  the
senior officer ("Adjusted Target Award  Opportunity").  The Committee calculates
the actual  number of options it will award to a senior  officer by dividing the
present value of one option,  utilizing the  Black-Scholes  model (but adjusting
for the possibility of forfeitures of options), into the portion of the Adjusted
Target Award Opportunity to be granted in options.  The Committee calculates the
actual number of  performance  shares it will award a senior officer by dividing
the 20-day  average  stock price  immediately  preceding the grant date into the
portion of the Adjusted  Target Award  Opportunity  to be granted in performance
shares.  The following table sets forth  information  regarding  grants of stock
options and performance  shares to the Named Executive Officers made on February
27, 2006.

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                                   NUMBER OF STOCK      NUMBER OF PERFORMANCE
               NAME               OPTIONS (1),(2)(3)           SHARES (4)

    Mr. Griswell............             242,890               62,854
    Mr. Aschenbrenner.......              67,400               17,442
    Mr. Gersie..............              47,565               12,309
    Mr. McCaughan...........              63,760               16,499
    Mr. Zimpleman...........              82,885               21,449


(1)  Options  vest in three equal  annual  installments  beginning  February 27,
     2007, subject to continuous employment.

(2)  Options  granted  to the Named  Executive  Officers  under  the 2005  Stock
     Incentive  Plan are  exercisable  for ten  years  after  the date of grant,
     generally subject to the optionee's  continued service with the Company and
     its  subsidiaries.  Unvested options terminate upon termination of service,
     except in the event of such  participant's  death,  disability  or approved
     retirement.  In the event of a participant's  death or disability,  options
     granted  to  the  participant   become   immediately   exercisable  by  the
     participant,  or  participant's  beneficiary,  if  applicable,  and  may be
     exercised  at any  time  prior  to the  earlier  of the  expiration  of the
     remaining  term of the  option  or  three  years  from the date of death or
     termination of employment due to disability, as applicable. In the event of
     a  participant's  approved  retirement,  options granted to the participant
     become  immediately  exercisable by the participant and may be exercised at
     any  time  during  the  remaining  term  of the  option.  The  vesting  and
     exercisability  of the options may also accelerate upon the occurrence of a
     change of  control,  unless  the  options  are  honored or assumed on terms
     intended to preserve  the value of the option for the  optionee  (including
     acceleration of vesting upon an involuntary  termination following a change
     of control).

(3)  The per-share  option  exercise price of $49.25 equals the closing price of
     the Common Stock on the date of grant.

(4)  Performance  shares are similar to  restricted  stock units.  The number of
     shares that are earned depends on the  participant's  continued  employment
     through the performance period and Company  performance as measured against
     three-year goals set at the beginning of the performance period.

CHANGE IN CONTROL AGREEMENTS

In 2005 and early 2006,  the Committee  reviewed the provisions and costs of the
change of control  employment  agreements with  executives.  As a result of this
review,  the  Committee on February 28, 2006  directed the Company to enter into
new change of control agreements to give the Company the ability to amend change
of control agreements upon 12 months' notice rather than upon 24 months' notice,
as is currently provided in most of the agreements.

The Company has offered "change of control" employment agreements to each of the
Named  Executive  Officers,  effective as of February 28, 2006,  to simplify and
clarify the terms and  operation of such  agreements  and  otherwise  conform to
changes  in  best  practices  for  such  arrangements.  The  revised  agreements
generally have a term of two years and will  automatically  renew for successive
one-year  periods  unless and until the  Company  provides a notice to a covered
executive electing not to so extend the term. However, if at any time during the
term of these arrangements, there shall occur a "pre-change of control event" or
a "change  of  control"  (in  either  case as  defined  in such  agreements  and
described  below),  the term of the agreements  will generally  extend until the


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<PAGE>

second anniversary of a change of control (and regardless of whether a notice of
non-renewal  shall have been  delivered  prior to the  occurrence of either such
event).

While  these  agreements  will not have any effect  unless and until a change of
control occurs (and, at that time, the covered  executive has been  continuously
employed by the Company or one of its  affiliates  from the date as of which the
agreement  was entered  into),  the  severance  and other  termination  benefits
provided under such agreements  will be available to a covered  executive if his
or her employment is terminated  following or in connection with a pre-change of
control event,  if any third party requests or otherwise  causes the termination
of  executive's  employment or an adverse  change in the terms and conditions of
the  executive's  employment  with the Company or its affiliate.  This result is
effected  under  the  agreements  by  deeming  such  termination  or  change  in
employment  conditions or terms to have occurred immediately  following the date
on  which a change  in  control  occurs  (rather  than at the  time it  actually
occurs).  For this  purpose,  a pre-change of control event will mean any one or
more of the following events:


     o    the commencement of a tender offer that would, if completed, result in
          a third party owning 40% of our voting securities;

     o    the  commencement  by a  person  other  than  the  Company  of a proxy
          solicitation or contest for the election of one or more members of the
          Company's Board;

     o    an  agreement is entered into that,  if  consummated,  would result in
          change of control; or

     o    any other event,  transaction or occurrence that our Board declares to
          be a pre-change of control event

The  purpose of these  agreements  is to assure  each  covered  executive  that,
following a change of control,  he or she will be  permitted  to continue in our
employment on  substantially  comparable  terms and conditions of employment and
with  substantially  comparable  compensation and benefits as were applicable to
the executive  prior to the occurrence of such event.  To that end, in the event
of a change of control, these agreements:

     o    mandate that the executive receive specified levels of salary,  annual
          incentive  compensation and benefits for a period of not less than two
          years following the occurrence of a change of control; and

     o    provided that,  subject in such  circumstances  where the Company does
          not survive as a public  company to the  successor  to our business or
          its  parent  (the  "Successor")   agreeing  to  issue  its  equity  in
          substitution  of  awards  of  our  equity,  (i)  all  of  the  covered
          executive's outstanding stock options or stock appreciation rights and
          any  time-vesting  outstanding  equity or  equity-based  awards  shall
          continue  in  effect  in  accordance  with  their  terms  (but,  where
          appropriate  ,  converted  into  equity  or  equity-based  awards of a
          similar type and nature  related to the common stock of the Successor)
          and (ii) any other outstanding  performance-based equity awards (other
          than stock  options or stock  appreciation  rights)  will be converted
          into time vesting  restricted  stock or restricted stock units for our
          stock (or the  stock of the  Successor),  based on actual  performance
          through  the change of control  date  projected  out to the end of the
          corresponding  performance  period.  If  and  to  the  extent  that  a
          conversion  into the  Successor's  equity is necessary or appropriate,
          and the Successor does not agree to such  substitution,  then any such
          awards that are not so converted will become fully vested, exercisable
          and /or distributable upon the date of the change of control,  and the
          covered  executive  will  receive  the  value of such  awards in cash,
          unless the Committee  determines,  in accordance with the terms of the
          plan pursuant to which the award was granted, that no equity or equity
          based awards will be settled in cash; and

     o    will vest the covered  executive  in all benefits  previously  accrued
          under  any  deferred  compensation  plan that is not  qualified  under
          Section 401(a) of the Internal Revenue Code; and

     o    assure each executive of receiving a specified  level of severance and
          other  termination  benefits  in the  event  that  his  employment  is
          terminated  without "cause" or by the executive  voluntarily for "good
          reason." A termination by his or her employer  without cause or by the
          executive   for  good  reason  is  hereafter   called  a   "qualifying
          termination."

For  this  purpose,  "good  reason"  means  adverse  changes  in the  terms  and
conditions of the executive's employment, including:

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<PAGE>

     o    any  failure  to pay  the  executive's  base  salary  or any  required
          increase in salary;

     o    any failure to pay the  executive's  annual bonus or any  reduction in
          the executive's annual bonus opportunity;

     o    any material  adverse change in the  executive's  position  (including
          offices,   titles  or  reporting   requirements,   but  not  reporting
          responsibilities), authority or duties under the agreement; or

     o    any material reduction in the executive's  aggregate  compensation and
          benefits; or

     o    relocation of the  executive to any office or location  other than the
          location at which the executive worked prior to the change of control.

     The benefits to be paid or provided under the agreements  upon a qualifying
     termination include:

     o    a lump sum  severance  benefit  equal to  three  times  the sum of the
          executive's annual base salary and target annual bonus;

     o    the immediate vesting of all stock options,  stock appreciation rights
          and all shares of restricted  stock,  performance  shares,  restricted
          stock units,  deferred stock units and similar awards then held by the
          covered  executive,  and  regardless  of  whether  such  awards  would
          otherwise  vest  based  upon the  passage  of time  and the  continued
          performance  of  services,   or  upon  the  achievement  of  specified
          performance criteria;

     o    a pro-rated  annual bonus for the year of termination  and a pro-rated
          long-term  incentive  plan  payment  for each cycle then in  progress,
          minus,  in each  case,  the  amount,  if any,  paid in respect of such
          annual  or  long-term  incentive  plan at the  time of the  change  of
          control;

     o    an  increase  in the  retirement  benefits  the  executive  would have
          accrued   had  he  or   she   become   fully   vested   in  all   such
          previously-unvested   benefits,  accrued  three  additional  years  of
          service and received the lump-sum  severance benefits described above,
          excluding  the   long-term   incentive   plan   bonuses,   as  covered
          compensation during such assumed additional years of service;

     o    an  additional  payment to offset any excise tax imposed under section
          4999 of the Internal Revenue Code, but only if the after-tax amount of
          the additional  payment would exceed 10% of the after-tax benefits the
          executive would receive if the executive's benefits were limited to an
          amount such that the payments  would not be subject to the excise tax;
          and

     o    the  reimbursement  for legal fees and other related expenses required
          to secure, preserve or obtain benefits under the agreements.

In  addition,  until  the  third  anniversary  of the  date  of the  executive's
termination  or such later date as any plan may specify (or such shorter  period
necessary  for such  benefits not to be treated as deferred  compensation  under
Section 409A of the Internal  Revenue Code),  each covered  executive and his or
her  family  will  receive  welfare  benefits  (including  accidental  death and
dismemberment,  dental, medical, vision and group-term life insurance) which are
at  least  as  favorable  as the  most  favorable  programs  at the  same  costs
applicable to peer executives and their families who are actively employed after
such termination date.

Pursuant  to the  terms of these  change of  control  agreements,  Mr.  Griswell
agreement specifies that for three years, and the other Named Executive Officers
agreements specify that for one year, following a termination of employment that
results in the executive  receiving the severance  benefits described above, the
executive will not engage or participate in, or become employed by or serve as a
director of or  consultant  to, a  competing  business;  nor will the  executive
solicit  employees or customers,  or interfere  with the Company's  relationship
with its employees or customers.

     For purposes of these agreements,  a change of control will mean any one or
     more of the following events:

     o    any person becoming the beneficial  owner of 40% or more of the Common
          Stock;

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<PAGE>

     o    the individuals  then serving as members of the Board who were members
          of the Board as of the date of the agreements  cease for any reason to
          constitute at least a majority of the Board,  provided  that, for this
          purpose,  any  subsequently-appointed  or elected  member of the Board
          whose  election or  nomination  for election  (unless  such  election,
          nomination  or  appointment  was  in  connection  with  an  actual  or
          threatened proxy contest) was approved by a vote or written consent of
          at least a majority of the incumbent  directors then in office and the
          directors  elected  or  nominated  in a  manner  consistent  with  the
          conditions  of  this  provision  shall  be  treated  as  an  incumbent
          director; or

     o    the consummation of a merger, reorganization, consolidation or similar
          transaction other than a transaction  immediately  following which the
          shareholders  of the  Company  continue  to own  more  than 60% of the
          voting securities of the surviving  corporation or its ultimate parent
          corporation; or

     o    approval by the shareholders of the Company of a plan or agreement for
          the  sale or  other  disposition  of all or  substantially  all of its
          consolidated assets or a plan of liquidation.

ADDITIONAL EXECUTIVE COMPENSATION DISCLOSURE

     The  Company  intends  to  provide  additional  information  regarding  the
     compensation  awarded to the Named  Executive  Officers with respect to and
     during the year ended  December 31, 2005,  in the proxy  statement  for the
     Company's  2006  annual  meeting of  shareholders,  which is expected to be
     filed with the Securities  and Exchange  Commission not later than 120 days
     after the year ended December 31, 2005.

ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL  OFFICERS;  ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS

At a meeting of the Board of Directors of the Company held on February 27, 2006,
Federico F. Pena,  a director of the  Company and its  wholly-owned  subsidiary,
Principal Life Insurance Company,  whose terms of office will expire at the time
of the Company's 2007 annual meeting of shareholders,  indicated his decision to
resign from these positions effective May 16, 2006. Mr. Pena's decision is based
in part upon demands on his time from other professional commitments, and is not
due to a disagreement  with the Company on any matter  relating to the Company's
operations,  policies or practices.  Mr. Pena was not asked to resign or removed
for cause from the Board of Directors.

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  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:    March 3, 2006


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<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: FEBRUARY 27, 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))

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

                                       1
ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

HUMAN RESOURCES COMMITTEE ACTIONS

2006 SALARIES

On February 27, 2006, the Human  Resources  Committee (the  "Committee")  of the
Board of Directors of Principal  Financial Group, Inc. (the "Company")  approved
the  annual  base  salaries  (effective  as of March 4,  2006) of the  Company's
executive  officers  after a review  of  comparative  compensation  information,
individual  performance,  internal  equity and other  factors  as the  Committee
determined  important.  The  following  table sets forth the annual  base salary
levels of the Company's Named Executive Officers (which officers were determined
by reference to the Company's proxy statement dated March 31, 2005) for 2006:

      NAME AND POSITION                                      BASE SALARY

J. Barry Griswell , Chairman, President and
         Chief Executive Officer....................        $  1,000,000

John E. Aschenbrenner, President,
         Insurance and Financial Services...........             550,000

Michael H. Gersie, Executive Vice President and
         Chief Financial Officer ...................             470,000

James P. McCaughan, President,
         Global Asset Management....................             525,000

Larry D. Zimpleman, President,
         Retirement and Investor Services...........             585,000

ANNUAL INCENTIVE COMPENSATION

Also on  February  27,  2006,  the  Committee  authorized  the payment of annual
incentive awards to each of the Company's Named Executive Officers in respect of
the year ended December 31, 2005. The annual incentive awards were made pursuant
to the  Principal  Financial  Group,  Inc.  Annual  Incentive  Plan (the "Annual
Incentive  Plan").  The Annual Incentive Plan contains a performance  measure of
two percent of the  Company's  Operating  Income that makes  available an annual
incentive award pool. That pool  establishes the maximum amount that may be paid
under the plan for that year. The Committee establishes corporate, business unit
and individual  goals  relating to financial,  operational  and other  strategic
areas of performance under the Company's  broad-based  employee annual incentive
plan  ("PrinPay").  The Committee uses these performance goals and other factors
determined by the Committee to guide its decision regarding whether (and, if so,
how) to use its negative  discretion to reduce the actual awards earned by Named
Executive  officers  under the Annual  Incentive  Plan.  In February  2005,  the
Committee approved the following components upon which to base awards for senior
officers under the PrinPay Plan for 2005: (1) Company performance and individual
performance in the case of the Chief Executive  Officer and senior officers with
service  unit  responsibilities,  and (2)  Company  performance,  business  unit
performance  and  individual  performance  in the case of senior  officers  with
business unit responsibilities.

In February 2005, the Committee  decided a single metric relating to achievement
of a  stated  level of  operating  earnings  for the  total  organization  would
determine  Company  performance  for purposes of the PrinPay Plan for 2005.  The
Committee  established  a level of  operating  earnings  achievement  as  target
performance for the Company component under the plan.  "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.

In approving  the PrinPay  awards for 2005,  the Committee  determined  that the
result  obtained for Company  performance  yielded a 152% payout.  The extent to
which  the  Company  performance  result  affected  any  particular  participant
depended  on  the  relative  weight  of the  Company  performance  component  to
individual and any business unit components applicable to the participant. After
the Committee  assessed the Company's,  applicable  business unit and individual
performance  for the year, a final award was  approved for each senior  officer.
For 2005, the Committee had approved for eligible senior officers, including the

                                       2
Named Executive Officers,  target awards at ranges of 50% to 250% of base salary
for achieving  performance  at target and maximum awards of 100% to 500% of base
salary  for  achieving  performance  above  target.   Attainment  of  individual
performance targets varied among Named Executive Officers.

The following table sets forth cash payments to the Named Executive  Officers in
respect of their annual  incentive  awards under the Annual  Incentive  Plan for
2005:

         NAME                                          ANNUAL INCENTIVE AWARD

    Mr. Griswell......................                    $    2,100,000
    Mr. Aschenbrenner.................                           794,492
    Mr. Gersie........................                           503,573
    Mr. McCaughan.....................                         2,108,519
    Mr. Zimpleman.....................                           796,831

LONG-TERM INCENTIVE COMPENSATION; OPTION AND PERFORMANCE SHARE GRANTS

Beginning in 2004, the Committee  determined  that the long-term  incentive plan
for senior officers would consist of stock-based  compensation  awards under the
Company's  Stock  Incentive  Plan.  Prior to 2004,  the Company also made awards
under a long-term plan that existed before the Company became  publicly-held  in
2001,  the "Long-Term  Performance  Plan." The last  three-year  cycle under the
Long-Term  Performance  Plan ended on December 31, 2005.  Payouts for the 2003 -
2005  performance  period were reported in the Company's  Current Report on Form
8-K dated February 3, 2006.

     On February 27, 2006, the Committee approved grants of non-qualified  stock
options and performance  shares to each of the Named Executive Officers pursuant
to the Company's 2005 Stock  Incentive  Plan.  For 2006, the Committee  replaced
restricted  stock units,  which vest based  solely on the passage of time,  with
performance  shares.  Performance  shares are similar to restricted  stock units
except the number of shares that are earned  depends on Company  performance  as
measured  against  three-year  goals  set at the  beginning  of the  performance
period. The performance shares will be earned and paid in shares of Common Stock
if  performance  requirements  are met or exceeded.  A return on equity  ("ROE")
objective  (a simple  average of the ROE for each of the  calendar  years  ended
during the  three-year  performance  period) and an earnings  per share  ("EPS")
objective (the  cumulative EPS for the  three-year  performance  period) must be
achieved  for any of the  performance  shares to be earned.  If the  performance
requirements are not met, the performance shares will be forfeited.

The Committee  determines the level of options and  performance  shares it could
grant Named  Executive  Officers under the plan by considering the percentage of
total compensation that competitors award in the form of options and other forms
of equity compensation for comparable positions, and other factors the Committee
deems  important.  Utilizing this  information,  the Committee sets target award
opportunities for long-term incentive compensation, expressed as a percentage of
base salary.  Actual  grants may vary from these  targets  based on a variety of
factors such as  individual  performance  and the  importance  of retaining  the
senior officer ("Adjusted Target Award  Opportunity").  The Committee calculates
the actual  number of options it will award to a senior  officer by dividing the
present value of one option,  utilizing the  Black-Scholes  model (but adjusting
for the possibility of forfeitures of options), into the portion of the Adjusted
Target Award Opportunity to be granted in options.  The Committee calculates the
actual number of  performance  shares it will award a senior officer by dividing
the 20-day  average  stock price  immediately  preceding the grant date into the
portion of the Adjusted  Target Award  Opportunity  to be granted in performance
shares.  The following table sets forth  information  regarding  grants of stock
options and performance  shares to the Named Executive Officers made on February
27, 2006.

                                       3
NUMBER OF STOCK      NUMBER OF PERFORMANCE
               NAME               OPTIONS (1),(2)(3)           SHARES (4)

    Mr. Griswell............             242,890               62,854
    Mr. Aschenbrenner.......              67,400               17,442
    Mr. Gersie..............              47,565               12,309
    Mr. McCaughan...........              63,760               16,499
    Mr. Zimpleman...........              82,885               21,449

(1)  Options  vest in three equal  annual  installments  beginning  February 27,
     2007, subject to continuous employment.

(2)  Options  granted  to the Named  Executive  Officers  under  the 2005  Stock
     Incentive  Plan are  exercisable  for ten  years  after  the date of grant,
     generally subject to the optionee's  continued service with the Company and
     its  subsidiaries.  Unvested options terminate upon termination of service,
     except in the event of such  participant's  death,  disability  or approved
     retirement.  In the event of a participant's  death or disability,  options
     granted  to  the  participant   become   immediately   exercisable  by  the
     participant,  or  participant's  beneficiary,  if  applicable,  and  may be
     exercised  at any  time  prior  to the  earlier  of the  expiration  of the
     remaining  term of the  option  or  three  years  from the date of death or
     termination of employment due to disability, as applicable. In the event of
     a  participant's  approved  retirement,  options granted to the participant
     become  immediately  exercisable by the participant and may be exercised at
     any  time  during  the  remaining  term  of the  option.  The  vesting  and
     exercisability  of the options may also accelerate upon the occurrence of a
     change of  control,  unless  the  options  are  honored or assumed on terms
     intended to preserve  the value of the option for the  optionee  (including
     acceleration of vesting upon an involuntary  termination following a change
     of control).

(3)  The per-share  option  exercise price of $49.25 equals the closing price of
     the Common Stock on the date of grant.

(4)  Performance  shares are similar to  restricted  stock units.  The number of
     shares that are earned depends on the  participant's  continued  employment
     through the performance period and Company  performance as measured against
     three-year goals set at the beginning of the performance period.

CHANGE IN CONTROL AGREEMENTS

In 2005 and early 2006,  the Committee  reviewed the provisions and costs of the
change of control  employment  agreements with  executives.  As a result of this
review,  the  Committee on February 28, 2006  directed the Company to enter into
new change of control agreements to give the Company the ability to amend change
of control agreements upon 12 months' notice rather than upon 24 months' notice,
as is currently provided in most of the agreements.

The Company has offered "change of control" employment agreements to each of the
Named  Executive  Officers,  effective as of February 28, 2006,  to simplify and
clarify the terms and  operation of such  agreements  and  otherwise  conform to
changes  in  best  practices  for  such  arrangements.  The  revised  agreements
generally have a term of two years and will  automatically  renew for successive
one-year  periods  unless and until the  Company  provides a notice to a covered
executive electing not to so extend the term. However, if at any time during the
term of these arrangements, there shall occur a "pre-change of control event" or
a "change  of  control"  (in  either  case as  defined  in such  agreements  and
described  below),  the term of the agreements  will generally  extend until the

                                       4
second anniversary of a change of control (and regardless of whether a notice of
non-renewal  shall have been  delivered  prior to the  occurrence of either such
event).

While  these  agreements  will not have any effect  unless and until a change of
control occurs (and, at that time, the covered  executive has been  continuously
employed by the Company or one of its  affiliates  from the date as of which the
agreement  was entered  into),  the  severance  and other  termination  benefits
provided under such agreements  will be available to a covered  executive if his
or her employment is terminated  following or in connection with a pre-change of
control event,  if any third party requests or otherwise  causes the termination
of  executive's  employment or an adverse  change in the terms and conditions of
the  executive's  employment  with the Company or its affiliate.  This result is
effected  under  the  agreements  by  deeming  such  termination  or  change  in
employment  conditions or terms to have occurred immediately  following the date
on  which a change  in  control  occurs  (rather  than at the  time it  actually
occurs).  For this  purpose,  a pre-change of control event will mean any one or
more of the following events:

     o    the commencement of a tender offer that would, if completed, result in
          a third party owning 40% of our voting securities;

     o    the  commencement  by a  person  other  than  the  Company  of a proxy
          solicitation or contest for the election of one or more members of the
          Company's Board;

     o    an  agreement is entered into that,  if  consummated,  would result in
          change of control; or

     o    any other event,  transaction or occurrence that our Board declares to
          be a pre-change of control event

The  purpose of these  agreements  is to assure  each  covered  executive  that,
following a change of control,  he or she will be  permitted  to continue in our
employment on  substantially  comparable  terms and conditions of employment and
with  substantially  comparable  compensation and benefits as were applicable to
the executive  prior to the occurrence of such event.  To that end, in the event
of a change of control, these agreements:

     o    mandate that the executive receive specified levels of salary,  annual
          incentive  compensation and benefits for a period of not less than two
          years following the occurrence of a change of control; and

     o    provided that,  subject in such  circumstances  where the Company does
          not survive as a public  company to the  successor  to our business or
          its  parent  (the  "Successor")   agreeing  to  issue  its  equity  in
          substitution  of  awards  of  our  equity,  (i)  all  of  the  covered
          executive's outstanding stock options or stock appreciation rights and
          any  time-vesting  outstanding  equity or  equity-based  awards  shall
          continue  in  effect  in  accordance  with  their  terms  (but,  where
          appropriate  ,  converted  into  equity  or  equity-based  awards of a
          similar type and nature  related to the common stock of the Successor)
          and (ii) any other outstanding  performance-based equity awards (other
          than stock  options or stock  appreciation  rights)  will be converted
          into time vesting  restricted  stock or restricted stock units for our
          stock (or the  stock of the  Successor),  based on actual  performance
          through  the change of control  date  projected  out to the end of the
          corresponding  performance  period.  If  and  to  the  extent  that  a
          conversion  into the  Successor's  equity is necessary or appropriate,
          and the Successor does not agree to such  substitution,  then any such
          awards that are not so converted will become fully vested, exercisable
          and /or distributable upon the date of the change of control,  and the
          covered  executive  will  receive  the  value of such  awards in cash,
          unless the Committee  determines,  in accordance with the terms of the
          plan pursuant to which the award was granted, that no equity or equity
          based awards will be settled in cash; and

     o    will vest the covered  executive  in all benefits  previously  accrued
          under  any  deferred  compensation  plan that is not  qualified  under
          Section 401(a) of the Internal Revenue Code; and

     o    assure each executive of receiving a specified  level of severance and
          other  termination  benefits  in the  event  that  his  employment  is
          terminated  without "cause" or by the executive  voluntarily for "good
          reason." A termination by his or her employer  without cause or by the
          executive   for  good  reason  is  hereafter   called  a   "qualifying
          termination."

For  this  purpose,  "good  reason"  means  adverse  changes  in the  terms  and
conditions of the executive's employment, including:

                                       5
o    any  failure  to pay  the  executive's  base  salary  or any  required
          increase in salary;

     o    any failure to pay the  executive's  annual bonus or any  reduction in
          the executive's annual bonus opportunity;

     o    any material  adverse change in the  executive's  position  (including
          offices,   titles  or  reporting   requirements,   but  not  reporting
          responsibilities), authority or duties under the agreement; or

     o    any material reduction in the executive's  aggregate  compensation and
          benefits; or

     o    relocation of the  executive to any office or location  other than the
          location at which the executive worked prior to the change of control.

     The benefits to be paid or provided under the agreements  upon a qualifying
     termination include:

     o    a lump sum  severance  benefit  equal to  three  times  the sum of the
          executive's annual base salary and target annual bonus;

     o    the immediate vesting of all stock options,  stock appreciation rights
          and all shares of restricted  stock,  performance  shares,  restricted
          stock units,  deferred stock units and similar awards then held by the
          covered  executive,  and  regardless  of  whether  such  awards  would
          otherwise  vest  based  upon the  passage  of time  and the  continued
          performance  of  services,   or  upon  the  achievement  of  specified
          performance criteria;

     o    a pro-rated  annual bonus for the year of termination  and a pro-rated
          long-term  incentive  plan  payment  for each cycle then in  progress,
          minus,  in each  case,  the  amount,  if any,  paid in respect of such
          annual  or  long-term  incentive  plan at the  time of the  change  of
          control;

     o    an  increase  in the  retirement  benefits  the  executive  would have
          accrued   had  he  or   she   become   fully   vested   in  all   such
          previously-unvested   benefits,  accrued  three  additional  years  of
          service and received the lump-sum  severance benefits described above,
          excluding  the   long-term   incentive   plan   bonuses,   as  covered
          compensation during such assumed additional years of service;

     o    an  additional  payment to offset any excise tax imposed under section
          4999 of the Internal Revenue Code, but only if the after-tax amount of
          the additional  payment would exceed 10% of the after-tax benefits the
          executive would receive if the executive's benefits were limited to an
          amount such that the payments  would not be subject to the excise tax;
          and

     o    the  reimbursement  for legal fees and other related expenses required
          to secure, preserve or obtain benefits under the agreements.

In  addition,  until  the  third  anniversary  of the  date  of the  executive's
termination  or such later date as any plan may specify (or such shorter  period
necessary  for such  benefits not to be treated as deferred  compensation  under
Section 409A of the Internal  Revenue Code),  each covered  executive and his or
her  family  will  receive  welfare  benefits  (including  accidental  death and
dismemberment,  dental, medical, vision and group-term life insurance) which are
at  least  as  favorable  as the  most  favorable  programs  at the  same  costs
applicable to peer executives and their families who are actively employed after
such termination date.

Pursuant  to the  terms of these  change of  control  agreements,  Mr.  Griswell
agreement specifies that for three years, and the other Named Executive Officers
agreements specify that for one year, following a termination of employment that
results in the executive  receiving the severance  benefits described above, the
executive will not engage or participate in, or become employed by or serve as a
director of or  consultant  to, a  competing  business;  nor will the  executive
solicit  employees or customers,  or interfere  with the Company's  relationship
with its employees or customers.

     For purposes of these agreements,  a change of control will mean any one or
     more of the following events:

     o    any person becoming the beneficial  owner of 40% or more of the Common
          Stock;

                                       6
o    the individuals  then serving as members of the Board who were members
          of the Board as of the date of the agreements  cease for any reason to
          constitute at least a majority of the Board,  provided  that, for this
          purpose,  any  subsequently-appointed  or elected  member of the Board
          whose  election or  nomination  for election  (unless  such  election,
          nomination  or  appointment  was  in  connection  with  an  actual  or
          threatened proxy contest) was approved by a vote or written consent of
          at least a majority of the incumbent  directors then in office and the
          directors  elected  or  nominated  in a  manner  consistent  with  the
          conditions  of  this  provision  shall  be  treated  as  an  incumbent
          director; or

     o    the consummation of a merger, reorganization, consolidation or similar
          transaction other than a transaction  immediately  following which the
          shareholders  of the  Company  continue  to own  more  than 60% of the
          voting securities of the surviving  corporation or its ultimate parent
          corporation; or

     o    approval by the shareholders of the Company of a plan or agreement for
          the  sale or  other  disposition  of all or  substantially  all of its
          consolidated assets or a plan of liquidation.

ADDITIONAL EXECUTIVE COMPENSATION DISCLOSURE

     The  Company  intends  to  provide  additional  information  regarding  the
     compensation  awarded to the Named  Executive  Officers with respect to and
     during the year ended  December 31, 2005,  in the proxy  statement  for the
     Company's  2006  annual  meeting of  shareholders,  which is expected to be
     filed with the Securities  and Exchange  Commission not later than 120 days
     after the year ended December 31, 2005.

ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL  OFFICERS;  ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS

At a meeting of the Board of Directors of the Company held on February 27, 2006,
Federico F. Pena,  a director of the  Company and its  wholly-owned  subsidiary,
Principal Life Insurance Company,  whose terms of office will expire at the time
of the Company's 2007 annual meeting of shareholders,  indicated his decision to
resign from these positions effective May 16, 2006. Mr. Pena's decision is based
in part upon demands on his time from other professional commitments, and is not
due to a disagreement  with the Company on any matter  relating to the Company's
operations,  policies or practices.  Mr. Pena was not asked to resign or removed
for cause from the Board of Directors.

                                    SIGNATURE

Pursuant  to the  requirements  of the  Securities  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:    March 3, 2006

                                       7