Good morning, and welcome to the Principal Financial Group First Quarter 2021 Financial Results Conference Call. There will be a question- and- answer period after the speakers have completed their prepared remarks. If you would like to ask a question at that time, simply press star and then the number one on your telephone keypad. We would ask that you please be respectful of others and limit your questions to 1 and a follow-up so we can get everyone in the queue. I would now like to turn the conference over to John Egan, Vice President of Investor Relations. Thank you and good morning. Welcome to Principal Financial Group's first quarter 2021 conference call. As always, materials related to today's call are available on our website at principal.com/investor. Following a reading of the safe harbor provision, CEO Dan Houston and CFO Deanna Strable will deliver some prepared remarks. We'll open up the call for questions. Others available for the Q&A session include Renee Schaaf, Retirement and Income Solutions, Pat Halter, Global Asset Management, and Amy Friedrich, U.S. Insurance Solutions. Some of the comments made during this conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. The company does not revise or update them to reflect new information, subsequent events, or changes in strategy. Risk and uncertainties that could cause actual results to differ materially from those expressed or implied are discussed in the company's most recent annual report on Form 10-K filed by the company with the U.S. Securities and Exchange Commission. Additionally, some of the comments made during this conference call may refer to non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures may be found at our earnings release, financial supplement, and slide presentation. We're looking forward to connecting with many of you at our 2021 Investor Day, which will now be held on June 29th. The event will be virtual, and we'll share more details in the near future. Additionally, our 2020 corporate social responsibility report was recently released, and we launched a new sustainability subsection on principal.com. Our 2020 CSR report highlights several achievements from the year and new commitments we've made. View the report and learn more about our ESG strategy at principal.com/sustainability. Dan? Thanks, John. Welcome to everyone on the call. This morning, I will discuss key performance highlights for the first quarter and the growing momentum we're seeing across our diversified business. Deanna will follow with additional details of our first quarter results and our current financial position. 2021 is off to a strong start. Beginning on slide four, we reported non-GAAP operating earnings of $424 million. Excluding significant variances, non-GAAP operating earnings increased 18% over the first quarter of 2020, driven by solid execution and improved macroeconomic conditions. We're very optimistic about the opportunities that lie ahead as momentum has returned in many of our businesses, and we continue to see resiliency in small to medium-sized businesses. In the first quarter, we had strong in-group growth from positive employment trends in group benefits, and we had record sales in our retirement business while participant deferrals and company matches increased and returned to pre-pandemic levels. We continue to be in a very strong financial position, with $2.8 billion of excess and available capital. We deployed over $250 million of capital in the first quarter through share repurchases and common stock dividends. Last night, we announced a $0.61 common stock dividend payable in the second quarter, a $0.05 increase over the first quarter dividend. This increase helps us stay on track with our targeted 40% dividend payout ratio. We're confident that our businesses will continue to generate strong earnings and create long-term value for shareholders. We closed the first quarter with record total company AUM of $820 billion, an increase of nearly $190 billion, or 30% over a pressured first quarter of 2020. This includes $19 billion of positive net cash flow. We achieved record PGI managed and PGI sourced AUM of $508 billion and $250 billion respectively. Our diversified suite of products and solutions are in demand in the current market and continue to be relevant to institutional retail investors as well as our affiliated businesses. Investment performance remains strong as 57% of Principal Mutual Funds, ETFs, separate accounts, and collective investment trust were above median for the one-year time period, 77% for the three-year, 76% for five-year, and 89% for the 10-year. For our Morningstar rated funds, 71% of fund level AUM had a four or five-star rating. Longer term performance, which drives our net cash flow, remains strong and positions us well to attract and retain assets going forward. Principal International reported $160 billion of AUM in the first quarter, a 15% increase on a constant currency basis compared to a year ago. China AUM, which is not included in our reported AUM, increased to $155 billion in the first quarter. Total company net cash flow was a positive $8 billion in the first quarter, $5 billion higher than the first quarter of 2020. Our RIS-Fee generated $5.7 billion of net cash flow, driven by a record $8 billion of retirement sales, growth in recurring deposits, as well as low contract lapses and participant withdrawals. The pipeline is robust, especially in the large plan market. It is expected to drive strong growth in full-year sales. Participant withdrawals as a percent of average account values returned to pre-pandemic levels in the first quarter, a recovery that is expected to persist throughout the year. While PGI-sourced first quarter net cash flow was a positive $400 million, driven by strong institutional flows, PGI-managed net cash flow was a negative $500 million. To better meet customers' needs, we chose to move approximately $7.5 billion from mutual funds to collective investment trust in April. This will not impact second quarter net cash flow, nor will there be a material impact on revenues or earnings. Principal International reported $1.4 billion of first quarter net cash flow, the 50th consecutive positive quarter, driven by Southeast Asia and Hong Kong. Although not included in our reported net cash flow, China had $34 billion of net cash flow in the first quarter. While China clearly benefited from money market funds being in favor in the first quarter, we're making progress to diversify our offering through our joint venture with China Construction Bank, including $360 million of positive net cash flow and equity strategies in the first quarter. In addition, our digital distribution continues to grow in China. We added three million new digital retail mutual fund customers and doubled our digital AUM in the first quarter alone. The pandemic continues to impact many countries we operate in, Brazil in particular. Industry-wide net deposits were down 19% from a year ago. While we continue to lead the industry in pension deposits, first quarter net cash flow of $100 million declined from the fourth quarter. In Chile, first quarter AUM was negatively impacted by $600 million from COVID hardship withdrawals, improved from $1.3 billion in the fourth quarter. I'll now share some additional execution and business highlights, starting with the integration of the institutional retirement and trust business. The integration is going very well and remains on track with a third successful migration occurring just last week. The migration of the retirement business will be completed in the second quarter, and trust and custody in the third quarter. In total, we're adding more than 2.2 million retirement participants and approximately $140 billion in retirement account value through the IRT acquisition. Expense synergies will begin to emerge in the second half of the year, and the transition services agreement will wind down by the end of the year. To offset some of the pressure on earnings, we're working on solutions to mitigate the impacts that the low IOER rate has had on the acquired trust and custody business. We're beginning to realize some tangible benefits of the IRT acquisition. Having scale and additional distribution channels help drive record retirement sales in the first quarter. Our pipeline has doubled compared to a year ago. As we're servicing more customers, revenue synergies are starting to build and exceeded our expectations in the first quarter, including IRA rollovers, automatic IRAs, and asset management opportunities. This business is a powerful growth driver for Principal. We are increasing our scale to better serve small, medium, and large-sized clients. We're enhancing our capabilities. We have a more robust platform that is needed to compete in the retirement business moving forward. A few other business highlights to note. In RIS – Spread, we had approximately $900 million of opportunistic MTN and GIC issuances in the first quarter. The PRT pipeline continues to build. We expect a robust second half of the year. Individual life sales rebounded with a 30% increase over the prior year quarter, driven by non-qualified deferred compensation, an important component of our total retirement solutions and our small to medium-sized business strategies. A few weeks ago, Principal unveiled new corporate responsibility commitments that bring additional accountability to our ESG strategy. Through these commitments, we're pledging enhanced support for women and minority-owned businesses, continuing to nurture a diverse and inclusive work environment, and by 2050, we are targeting net zero carbon emissions. As many of you are aware, we entered into an agreement with Elliott Investment Management earlier this year to conduct a strategic review of our business mix, capital management, and capital deployment, as well as add two independent directors to our board. The review, which is being led by the finance committee of our board, is well underway, and we'll share the outcome in late June. We are considering the entire spectrum of options to enhance shareholder value, meet the needs of our customers, and strengthen our position as an industry leader. We've had very insightful conversations with many of our investors and sell-side analysts since reaching our agreement with Elliott Management in mid-February. I want to thank all of you for your candor and your perspectives. Our conversations with Elliott remain constructive. Last night, we announced Claudio Muruzábal is joining our board of directors. Claudio's immense global experience and leadership in the technology industry will bring valuable insights to our digital initiatives around the world. Combined with the addition of Maliz Beams in February, we've now added two new independent directors in 2021 per our agreement with Elliott. With that, let me turn it over to Deanna. Thanks, Dan. Good morning to everyone on the call. This morning, I'll share the key contributors to our financial performance for the quarter, the impacts from COVID, as well as our current financial position. The first quarter was a strong start to the year with net income attributable to Principal of $517 million, including $94 million of net realized capital gains with minimal credit losses. We reported $424 million of non-GAAP operating earnings in the first quarter, or $1.53 per diluted share. Excluding significant variances, non-GAAP operating earnings of $442 million, or $1.60 per diluted share, increased 18% and 19% respectively compared to the first quarter of 2020. As shown on slide four, we had three significant variances during the first quarter. These had a net negative impact to reported non-GAAP operating earnings of $25 million pre-tax, $18 million after tax, and $0.07 per diluted share. Pre-tax impacts included a net negative $21 million impact from COVID related claims, a negative $19 million impact from IRT integration costs, and a $15 million benefit from higher than expected variable investment income. Specific to variable investment income, alternatives and prepayment fees benefited RIS – Spread and Individual Life by a combined $25 million. This was partially offset by a negative $10 million impact in Corporate as the increase in interest rates negatively impacted some mark-to-market fixed income investments. The first quarter financial impacts from COVID were limited to mortality and morbidity in RIS – Spread and U.S. Insurance Solutions. With approximately 200,000 U.S. COVID related deaths in the first quarter, the net $21 million pre-tax impact was slightly better than our sensitivity would've suggested, primarily due to more favorable impacts in RIS – Spread. For the full year, we're now estimating a total of 275,000 U.S. COVID deaths, or about 75,000 in the remainder of the year. This is slightly lower than what was anticipated in our outlook due to the vaccine rollout. We continue to see further recovery across our U.S. businesses in the first quarter. Group benefits in- group growth was a strong positive at just under 1% during the quarter, and dental claims returned to expected levels for the quarter. In the retirement business, recurring deposits increased 10% compared to the first quarter of 2020, driven by an increase in both the number of people deferring and the number of people receiving a match, as well as impact from the IRT migrations. Additionally, a record $8 million of sales and low lapses contributed to the strong first quarter net cash flow. Looking at macroeconomic factors in the first quarter, the S&P 500 index increased 6%, and the daily average increased 9% compared to the fourth quarter, and 26% from the year ago quarter, benefiting revenue, AUM, and account value growth in RISV and PGI. Foreign exchange rate tailwinds emerged in the first quarter, but remain a headwind compared to a year ago. Impacts to reported pre-tax operating earnings included a positive $3 million compared to fourth quarter 2020, a negative $4 million compared to first quarter 2020, and a negative $45 million on a trailing 12-month basis. Excluding significant variances, first quarter results were in line with or better than our expectations for all of the business units. A few comments. PGI's trailing 12-month revenue growth of 2% was muted due to lower performance fees and transaction and borrower fees due to the pandemic. We expect to be at the high end of the 9%-13% guided range for revenue growth for the full year. In Principal International, while Encaje performance was $5 million lower than expected in the first quarter, it was offset by favorable variable investment income in Chile. Excluding the impact of foreign currency translation, Principal International's trailing 12-month revenue was flat compared to the year ago with a 33% margin. Revenue growth is expected to improve throughout the year and to be within the 8%-12% guided range for the full year. Turning to capital and liquidity on slide six, we remain in a strong financial position with $2.8 billion of excess and available capital, including $1.8 billion at the holding company, more than double our target of $800 million to cover the next 12 months of obligations. $575 million in excess of our targeted 400% risk-based capital ratio, estimated to be 437%, and $400 million of available cash in our subsidiaries. We expect the estimated 437% RBC ratio to move down toward our targeted 400% throughout 2021 as capital is deployed. Our non-GAAP debt-to-capital leverage ratio, excluding AOCI, is low at 23%. Our next debt maturity of $300 million isn't until late 2022, and we have a well-spaced laddered debt maturity schedule into the future. As shown on slide seven, we deployed $252 million of capital during the first quarter, including $100 million of share repurchases. We remain committed to $600 million-$800 million of share repurchases in 2021. Far in the second quarter, we've completed approximately $75 million of repurchases through April 26th. Last night, we announced a $0.61 common stock dividend payable in the second quarter, a $0.05 or 9% increase from the first quarter. Our dividend yield is approximately 4%. During the first quarter, the impact from credit drift and credit losses was immaterial. We're now estimating $100 million impact for the full year, improved from the $300 million estimate at the end of 2020. 2021 is off to a great start with record assets under management and strong earnings in the first quarter. The macroeconomic outlook has improved from year-end. Will help fuel continued growth across our businesses. We're looking forward to welcoming the remainder of the IRT retirement customers to Principal in the second quarter and are excited for the opportunities that lie ahead. As John mentioned at the beginning of the call, I look forward to connecting with many of you at our virtual investor day on June 29th, where we'll share our strategies for long-term growth. This concludes our prepared remarks. Operator, please open the call for questions. At this time, I would like to remind everyone that to ask a question, press star and then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Our first question comes from Jimmy Bhullar of J.P. Morgan. Hi. Good morning. I had a question on the retirement and the asset management business. You had very strong flows in your FSA business. I think there were a couple of large wins. Typically, when FSA flows are strong, your asset management flows tend to be good as well. I think in this case, the plans had more of an open architecture platform. Just wondering if that's a trend we should see going forward as well. Also, what are the implications of this for your overall earnings for the enterprise? Because in the past, obviously a majority of the FSA assets have been managed by PGI. Good morning, Jimmy. This is Dan. It's a great question. Clearly, when you make an acquisition the size of the Wells Fargo IRT business, we knew that it was going to come with larger plan capabilities. We also know that we had tapped into a new set of consultants, advisors that might bring us this size opportunity. It's worthy of spending a few minutes and digesting that. To do that in a constructive way, I'll have Renee talk about our continued commitment to the SMB market, but also this larger case market. Renee? Yeah, absolutely. Jimmy, thank you for that question. Let me first start by talking about the sales that we saw in the first quarter. They're very strong, and we're very pleased with the development so far. I think the thing that's the most pleasing is that when we look at first quarter sales, they were strong across all plan sizes, small, medium, and large. In particular, in the large plan market, we've seen very robust pipeline growth, and the corresponding sales. Of course, we did have two very nice large plan wins in the first quarter. I think the thing to know there is the sales cycle is a little bit longer in the large plan market. That will result in a little bit of volatility in terms of when that business will close. A lot of that business may not become effective until 2022, just because of the long sales cycle. Nonetheless, we're very pleased with our sales across all plan size segments. The second part to your question was, what happens with asset capture and how are we driving assets to PGI? A couple of comments there. First off, Principal is unique from the perspective of having a very strong track record in driving proprietary asset management capabilities in our new sales. While the industry average is somewhere around 30%, we routinely beat that, particularly in the small and the mid-size plan market. Larger plans can be expected to drive assets as well to PGI, and an important source of that comes from the rollover opportunities and also the small amount force outs. Also, we are introducing our proprietary asset management capabilities on a client-by-client basis, where it makes sense and where we compete very well. We do anticipate seeing some nice lift there, too, as we begin to migrate the IRT business into our block and we begin to work with the plan sponsors as they consider their investment lineups. Again, very pleased with first quarter results, strong momentum across all plan sizes, and we continue to capture a good share of proprietary asset management, particularly in the small and the mid-size market. Jimmy, a lot to think about there. Any follow-ups? Yeah, just on the same topic. Should we assume that your fee rate would decline as you become more competitive in the larger case market? Obviously, you can generate good margins if you've got scale, but in terms of the fee rate itself, should that be going down over the next few years, as you're putting on more large case business? The average fee, if you look at the fees overall, you'll see that the highest fees are associated with the small plan market, of course, they scale down with the larger plan market simply because of economies of scale within a particular plan. In terms of overall competitiveness and what we're seeing in the marketplace, we see fee competitiveness across all segments. It would be unfair to say that we see the fee pressures in the large plan market at a greater rate than what we see in the other size markets. Again, we continue to see fee pressures. The whole industry sees fee pressures. You typically see higher amounts of fees in the small plan market compared to the large, we're not seeing a disproportionate competitive pressure in the large plan market. Thanks for the question, Jimmy. Appreciate it. Thank you. Thanks. Our next question comes from Humphrey Lee of Dowling & Partners. Good morning, and thanks for taking my questions. I guess just to follow up on our RIS-Fee, I think in your prepared remark, you talked about the revenue synergies from the IRT block exceeded your expectation in the first quarter. Can you quantify that for us? How should we think about it as you continue to migrate the business into your platform? Yeah. It's a good question, and one I'll have Renee speak to. Again, we made initial assumptions having underwritten this opportunity. Frankly, as I've said before on these calls, it's about a three-quarter delay from where we wanted to be in terms of transitioning those clients over. We've now transitioned over very successfully three of the five blocks of business, with two remaining that'll be completed by the end of the second quarter. The reason that's so important is although it did generate higher expenses, it allowed us to retain a lot of business and also to be in a position to capture more revenue. As well as more revenue opportunities, it also allowed us to capture some expense synergies. Again, hats off to Renee and her team for really good execution here. I'll have Renee speak specifically to your revenue questions, Humphrey. Yeah, absolutely. Thank you for the question, Humphrey. First off, our ability to work directly with the plan sponsors on revenue synergies, it increases as those clients begin to roll over to our platform. Generally speaking, there are several opportunities for us to add to the revenue and to capture synergies. The first area that I would point to is our very broad Total Retirement Solutions offering. You've heard us talk about this before, we are strong not only in defined contribution, but number one in defined benefit, number one in ESOP, and number one in non-qualified in terms of number of plans. One of the areas that we look at right away is what additional solutions can we bring to the table for those plan sponsors and deliver in a very integrated and coordinated way. We've seen some good early success in bringing particularly defined benefit capabilities to the table as well as non-qualified. The second area that I would point to is in the IRA rollover spectrum. There again, we have a very strong IRA rollover capture capability. As those participants come onto our platform and we have the ability to work with them at benefit event, we'll begin to see the results of that, and it creates a nice lift to proprietary asset management flows. The next area, of course, is the small amount force outs, which is a benefit to the bank. Last of all, we work with the fiduciary committees at each of our plan sponsors to identify opportunities to introduce our proprietary asset management capabilities as they make sense. That will be something that continues to unfold as this block of business migrates over. We're off to a strong start with a lot of runway left as that block of business migrates over. A follow-up, Humphrey? Yeah, sure. Just staying on kind of RIS-Fee in terms of the flows. Clearly, you start off first quarter very strong. I think on the outlook call, you talked about how the expectation for flows for 2021 would be flat for the year. Given the strong performance in the first quarter, did that change your outlook for the balance of the year, or were those two kind of large case wins kind of expected in the outlook call, so it didn't change it? Yeah, Humphrey, that's a great question, and let me tackle that by walking through each component of the net cash flow formula. First off, in terms of transfer deposits, we've already talked about the fact that we're seeing really good momentum in both pipeline and in sales across all plan segments. We anticipate that that will continue throughout 2021, and that we'll see good quarter-over-quarter increases in sales. Good momentum in the transfer deposits. The same thing is true with recurring deposits. We saw a 10% increase in recurring deposits in first quarter, driven by increases in the number of people who are participating, as well as a nice uptick in actually the match and the deferral contributions themselves. As a reminder, as the IRT block migrates over to our platform, the recurring deposits will begin to increase as a result of that IRT business now being on our platform. Which brings us then to withdrawals, and we're seeing a really interesting phenomena this year, and it's related to the strong market appreciation. Let me cover that just real quickly. We expect to see account values appreciate over 30% in 2021, and it's driven as a result of equity market performance. We'll also see participant withdrawals from the IRT block of business show up in our block, and it will go through the participant withdrawals as well. As a result, when you look at the dollar amount of withdrawals, you'll see that increase over 2020. If you compare those dollar amounts of withdrawals to the average account values, what you'll see is that we expect our results will be at the pre-pandemic levels, which is very favorable. As a result of this is what led us to guide towards a flat net cash flow in 2021 in our outlook call. We're certainly very pleased with what we've seen in first quarter. That gives us nice optimism for the rest of the year. It largely depends too, on the pattern of the large plan sales that we might see for the rest of the year. That was a long explanation, but hopefully that helps. Hopefully that helps, Humphrey. Yeah, it is. Every time we've seen the markets go up and to the right this aggressively, it's the same pattern that emerges. It's just the opposite when the equity markets go the other way. Thank you. Next question, please. Our next question comes from Andrew Kligerman of Credit Suisse. Hey, thanks and good morning. Andrew. Hey, thank you and good morning. Can you hear me? We can. Great. Thanks. I'm thinking a little strategically. Dan, at the beginning of the call, you were alluding to the individual life business being important to your SMB businesses and I think income solutions. Sales were great. I'm wondering if you could elaborate a bit more on strategically how that business fits in with your RIS businesses, et cetera. How important is it? Yeah. Let me give that a high level and then kick it over to Amy. I would start with where we've always been, which is our overall arching strategy, as you very well know, is the SMB market and larger employers. We bolstered that in the acquisition of the Wells Fargo IRT business. We also know that some of those products that lie within USIS serve as really strong vehicles for the funding mechanism, for example, non-qualified deferred compensation. Those tax benefits are very compelling. Back to the core SMB strategy, life insurance is used, as we all know, for buy-sell and key person protection. You don't have to look much further than the last 12 months to have an appreciation for what a single mortality life can mean to a small to medium-sized business. That's where we have always anchored our thesis for being in those businesses. The same lies true if you were to look at Renee's spread business when we provide guaranteed income for our customers. Of course, you have to recognize that PGI manages a disproportionate percentage of those assets because they lie into the general account. It really is a comprehensive business model that we have built, and I'll have Amy speak to first quarter sales and her outlook and her ideas as well. Amy? Yeah, thanks for the question. Dan, you did a great job teeing this up, and you've hit exactly the right points, which is we're happiest with our life sales and growth numbers when they have a tie to the business market. One of the statistics we've provided over the last several years is how much of our life sales is tied to that business market. That's going to be tied to a solution that we use the life insurance product to solve either an executive benefit or to solve some sort of an employer benefit issue, usually with business owner and executive solutions as sort of the basis of that. This first quarter, what was probably most notable is that we were at nearly 60% business market sales. I would tell you above 50% is what we want to see. We want to tie in to provide great solutions. Dan talked about it, tax efficient solutions for things that we're doing for executives and plans. We intentionally tie into our retirement business as one of the pillars of TRS to provide great non-qualified solutions and to drive both volume and good quality solutions in that. We're also looking to do even more business. You've seen that reflected in our results in the business owner and executive solution. We know that the marketplace and some of the returns on what I consider just the pure retail plays are difficult, particularly difficult for a public insurer. The business market focus, the tie into the other pieces of the strategy, has been a focus for us for years. That's the piece that we continue to see as really critically important to the strategy. Hopefully that helps, Andrew. Very much. Yeah. I kind of get that sense of the integration. It sounds like the IRT integration is going really well. You said three of five blocks, so by the end of the year it should be humming. Are you at the scale and position where you want to be? Could you find other businesses in RIS that you'd like to acquire? It's like a lot of things. It's opportunistic in some sense. At the same time, we definitely have a to-do list. It surrounds itself around capabilities, whether it's asset management or asset gathering around the world. We've thought through that. We need to digest what we've acquired in the IRT business. As I said, we feel very good about what we have acquired and onboarding it with the successful completion by the end of the second quarter of the last migration. We still have some work for the balance of the year on the trust and custody component. We're clearly consciously aware of the fact that this doesn't stay stagnant. There's going to be winners and losers in this space. We're going to continue to distinguish ourselves as a net winner. We'll be very strategic in how we go about doing that. Appreciate the question. Thank you. Our next question comes from the line of Erik Bass of Autonomous Research. Hi. Thank you. Hey, Erik. Good morning. I was hoping to get some more color on the international organic growth drivers in a couple of regions. In Southeast Asia, it looks like you had record net flows this quarter. I was hoping you could talk about the drivers there. For Latin America, clearly, there've been some headwinds from COVID and pension legislation changes. Can you discuss some of the current dynamics there in the key markets? Yeah. I'll tag team this one with Deanna. I'll take Latin America, maybe kick off Asia to her. As you know, in all three of the Latin American countries, Mexico, Brazil, and Chile, they are all going through some form of pension reform. You may have even seen, last night, Erik, that President Piñera actually allowed for the third now distribution out of the Afore system, or AFP, which will reduce by another 10% the account values. Of course, that doesn't necessarily impact our revenues. It's calculated differently. There's also some pension reform that's being debated about moving the required funding contribution from 10 to 16%. There's a debate currently going on, of which we're part of, along with the industry, on how that next 6% gets managed and the structures that go around that. Mexico's already achieved their reform. We know that starting in 2023 through 2030, it'll go up 1% per year, going from 6% to 15%. They've also modified in the current environment the fee structures that we're allowed to charge. We've got some near-term pressure, and we're making adjustments on expenses reflecting that downward pressure on the fees that we can charge. Of course, we got to be thinking about Brazil. As you know, they're in a lot of hurt right now with COVID. That's a serious issue. In spite of that, our joint venture with Banco do Brasil holds up incredibly well. We still enjoy roughly a 30% market share, and we captured 37% of all the new deposits through February 21st of this year. In spite of having a tremendous amount of macro pressure in Brazil, you have to give that team a lot of credit for their ability to fight through it. The last comment I'll make about Brazil is there has been a very conscious effort to migrate away from the significant emphasis and focus that we have on fixed income to include other products. Multimercado is what it's referred to, and it's a balanced fund, and we're working very closely with the bank and helping shift some of that fixed income into more of a balanced approach. Lastly, as you know, we have Claritas, and Claritas is an asset manager of which we own 100%, is actually doing quite well in spite of some of these other challenges. With that, let me flip it over to Deanna to talk about Southeast Asia. Yeah, thanks. Thanks for the question, Erik. First of all, just to give you a little bit of backdrop. The economic outlook in Southeast Asia is very similar to what we see here in the U.S. There's a lot of liquidity in the market. Economic recovery is well underway. A better outlook regarding the pandemic, given the vaccination progress, and we've continued to have very strong investment performance from our joint venture. As you know, we increased our ownership of that joint venture a few years ago. That's coming into play as well. The net cash flow for the quarter was very strong at $900 million. That was half driven by institutional, half driven by retail, very focused in our equity funds. There can be some lumpiness of that institutional money from quarter to quarter. We do continue to remain optimistic about the net cash flow outlook for the remainder of the year. Thanks, Deanna. Any follow-up there, Erik? Great. No, appreciate all the color there. That's helpful. Then one, Deanna, you had mentioned, I think the prepared remarks, exploring some ways to offset the low IOER rate and the impact on our RIS-Fee. I was just hoping you could provide some more color on what options you may have there and the potential benefit. Yeah, very good. Why don't I have Renee do that? She's certainly close to that. Again, they've done a nice job navigating this. Renee, please. Yeah, absolutely. Erik, thank you for that question. We've talked a lot about the IOER rates and the decline and the impact that's had on revenue. We've been eager to identify opportunities to present solutions to our customers that are attractive and that can help create a better economic scenario for us. We've been working very closely with Wells Fargo. We've identified solutions that are leveraging the strengths and the capabilities of our bank, and that can deliver what we think are some very attractive alternatives to this customer base. Again, this is for the trust and custody customers, and that block of business will migrate over at the tail end of the migration. The very last part is summer. As we introduce these alternatives to our customers, we would anticipate to see some revenue replacement begin to come through at the tail end of 2021 and then on into 2022. Thanks, Renee. Appreciate the question. Thank you. Next question comes from the line of Ryan Krueger of KBW. Hey, good morning, everyone. My first question was, as the business starts to migrate over to the new platform in Retirement, can you just help us think a little bit more about how to think about the trajectory of expense saves and the TSAs rolling off as we go through the rest of 2021? Yeah, Ryan Krueger, happy to do that. I'm going to call an audible here because I know we're probably giving a little bit longer answers, so I'm going to maybe go to one question per analyst so we can get through the whole queue in the interest of time. Again, that's on us. Even in spite of having short prepared comments, our answers here have been a little bit long this morning. With that, I'm going to have Renee Schaaf speak specifically to the issue of the migration and the expense relief. Yeah, absolutely. As we've said, the migration is going very well. We're very pleased with the way that customers are being migrated in a very smooth fashion, good communications with advisors and consultants. Specific to your question, we will see the TSA expenses begin to roll off the last half of 2021, which led us to guidance at the outlook call to say that we'll see the margins begin to increase in the 23%-27% margin range towards the latter half of the year, reflecting the fact that those expenses are coming off. Thank you, Renee. Appreciate the question, Ryan, and sorry to limit it to one. If the operator could take us to the next call, please. Our next question comes from John Barnidge of Piper Sandler. Industry participant on the life side, albeit targeting a lower income stratification, recently noted increased experience in deaths of despair in their mortality book, and then also an increased impact from lack of medical treatment for heart and Alzheimer's disease. Can you talk about what you're experiencing with this dynamic in general mortality trends beyond COVID? Thank you. Yeah. Happy to do that, John. Amy, please. Yeah, sure. Thanks for the question, John. We saw the same reports that you've seen in terms of some of the things going on beyond a direct COVID experience. What I can tell you is we've taken a really hard look at our individual life block as well as our group life block. Keep in mind, we probably feel like we have the best point of claim data for our individual life block. That tends to give us the deepest insight into what the causes were. As we look through our portfolio of products and customers, what we're seeing on those claims is that we don't see anything beyond normal volatility. I appreciate that there's a larger discussion going on out there. Some believe should see fewer deaths non-COVID. There's other people coming in and saying there's more deaths non-COVID. What I would say is for individual disability as well as group life right now, those are both relatively unremarkable for us. We're not seeing claims patterns that would be on a diagnosis code basis, anything that's remarkable. Again, we like the fact that that's not remarkable, but we understand that's a little bit different than what you might be hearing in the rest of the industry. That has been our performance. Thanks, John, for the call. Appreciate it, for the question. Our next question comes from Suneet Kamath of Citi. Thanks. Just a question on the acquired AUA. If we look kind of sequentially, there was about a $31 billion drop in that balance despite the fact that markets were pretty strong, and I didn't think that there was any transfers into RASV. Is that just increased lapsation activity or is there something else that's kind of driving a bigger delta than we've seen in recent quarters? Yeah. Thanks for the question, Suneet. Please, Renee. Thank you, Suneet. To your point, fourth quarter AUA ended at $685 billion, now we're at $654 billion. There are a couple of things that led to that. First off, market appreciation would help to drive that up. That market appreciation is being offset by the normal shock lapses that we had projected. Those shock lapses are predominantly in the trust and custody side of the house. That is the impact there. Hopefully that helps. Yeah. Thanks. Okay, Suneet. Thank you. Our next question comes from Tom Gallagher of Evercore. Hey, good morning. Just I had a few questions on RASV. I'll just ask them all at once. Do you expect to still break even on flows after the very strong start to the year? I just wasn't entirely clear on that. It sounded to me like that was partly related to the IRT assets, which I don't think the bulk of those are currently included in RASV. Would you expect to begin to include those either next quarter or Q3, where we would see more of a complete picture of net flows? Finally, are there pretty big outflows in the IRT that you're not currently including that we're then going to see included when we have a more complete picture? Thanks. Yeah, appreciate that. Please, Renee. Let's first look at the IRT business and how that migrates over. When the IRT business comes over, it will be recorded in acquired operations underneath the account value roll forward. It does not come in through the net cash flow in terms of transfer deposits. Where it does impact net cash flow is the IRT block of business will show up in recurring deposits, and it will show up in withdrawals. Back to that comment earlier about just the 30% plus increase in account values that we expect to see from last year to this current year will impact the dollar amount of withdrawals. To your question about do we expect to see flat net cash flows or what are we expecting to see for the remainder of the year? Certainly, we're very pleased with the results that we see in net cash flow for the first quarter. Our remaining quarters, the net cash flow that we see there will be dependent on if we're successful in winning additional large plans, and there's some volatility to that. We're certainly very positive about first quarter, and we believe that we'll see some lift in net cash flow as a result. Tom, did I get it done? It did. Just to be clear, will the bulk of those assets be showed in the roll forward in Q2 or Q3? The retirement will show up in Q2. Go ahead, please. Yeah. The retirement business shows up in Q2, and then the trust and custody migration is slated for September. It'll show up later. Okay. That's great. Thank you. Thanks, Tom. Our next question comes from Josh Shanker of Bank of America. Yeah, thank you very much. Please my question. If we go back a year ago, when people were embracing a COVID-19 mentality, were there shifts in the strategies that people were wanting PGI to use? Did certain funds see inflows, others saw outflows? Are we seeing that again right now in the reopening and the change in outlook? Does Principal have enough variety of strategies to embrace the needs of all of its customers, or do they have to go elsewhere? Sounds like the perfect question for Pat and one that we've been discussing internally with a great deal of passion. Pat? Josh, thanks for the question. First, maybe to sort of set the stage a little bit. If you look at our Principal Mutual Funds, our ETF offerings, we have 80 offerings, and around 36 of those are in four and five-star Morningstar rated funds. I think when it comes to our confidence in providing a strong, diversified offering to any macro environment that a client faces, I think we're very well-positioned, whether it was in March of 2020, whether it's April of 2021. As you know, Josh, there's been significant rotation going on in the last two quarters. If you think about sort of the rotation in the fourth quarter, starting from high-quality growth to low-quality growth, low-quality companies coming into vogue, cyclicals. We've been able to continue to, I think, provide very strong, I think, investment capabilities to that sort of change in the equity markets. In terms of our fixed income suite, we continue to have very strong capabilities in terms of people wanting yield yet, but not wanting to be in Treasuries and sovereign credit and take that interest rate exposure and have that hit. I think we feel very good about our public listed capabilities. More pronounced, I think, as we go forward, we feel very good about our private real estate capabilities. We are seeing a continued sort of increasing focus today, Josh, as we come out of this pandemic in terms of what investors are seeking in terms of alternatives and private asset classes. Our private debt capabilities, our real estate capabilities seem to be gaining a lot of traction. That's probably the most noteworthy thing today in terms of post-COVID that we are seeing different versus maybe in the thrust of the COVID in March of 2020. I hope that helps. I think that's useful. I'll come back to John later and then get a little more detail, but I know you guys want to get more questions in. Thank you. Thanks, Josh. We'll dive into that as deep as you want to go. Our next question comes from the line of Tracy Benguigui of Barclays. Thank you. I know we're going to learn more in June about strategic priorities, but I couldn't help but notice that your guidance for full year capital deployment of $1.4 billion-$1.8 billion, including $600 million-$800 million in buybacks has not changed. You did mention that credit drift expectations are now $100 million, down from $300 million. I'm wondering if your capital deployment targets perhaps maybe stale, and can you see the potential raise of that in light of a healthier credit trajectory? Yeah, very good. It's a good question and one that obviously that we're talking about in conjunction with our strategic review. Let me ask Deanna to provide her thoughts here. Yeah. Tracy, obviously, the impact of the ongoing strategic review has some impact on whether we would increase our capital deployment outlook or change that as we go forward. I'd say we'll continue to update that as we go forward. Obviously, we were a little bit shy of a run rate that would get us to the $1.4 to the $1.8 in the first quarter. Again, I'd say we're still on pace to be within that. As we go throughout the next few months, we'll continue to work with our board and the finance committee to determine how we think about our capital deployment plans for the remainder of the year. As those change, we'll communicate it at that time. Thanks for the question, Tracy. Our final question will come from the line of Brian Meredith of UBS. Thanks, guys. Good morning. This is Mike Ward. On the proposed tax rate changes in the U.S., I was wondering if you had maybe any estimate on what could be your operating tax rate, if the rate was taken up to 28%. On the same theme, do you think changes in capital gains tax rates could impact demand for certain products across your platform? Thanks. We're certainly evaluating all of the various tax proposals, as you very well know, there's no decisions been made, and we're looking at all of those as it impacts our businesses both here in the U.S. as well as international. Other than planning for and looking closely at what the proposals are, of course, we have our own efforts on Capitol Hill to lobby on behalf of Principal and our shareholders and our customers and as part of the trades to get responsible tax policy that does not hamper our ability to help our customers reach financial security. Any thoughts that we have would be pure speculation at this point. Deanna, anything you want to add to that? The only thing I would say is, the devil's in the details. There's different impacts across us. If you went back to when the effective tax rate went down, you saw obviously some underneath elements of that that didn't all translate into the effective tax rate. Again, it's the headline rate, but the devil's in the details of how some of the other components happen. I'd also say that obviously it can cause a remeasurement of our deferred tax liabilities as it did back with the last tax change and could have some potential change in required capital as the tax rate changes as well. Again, there's statutory and balance sheet implications as well as just the income effective tax rate that you discussed. More to come as we find out more. At this point, it's tough to know when it will happen and to what flavor it will actually look like. Thanks for the question, Mike. We have reached the end of our Q&A. Mr. Houston, your closing comments, please. Yeah, just real quickly, I would just simply say we feel really good about the quarter. There was clearly some recovery in the U.S. and Southeast Asia with regards to COVID, but businesses are opening back up again, and there is, and historically been low unemployment, which leads to, in some cases, wage inflation. What we see is hiring happening among small to medium-sized employers and large employers. All of those macro events help drive, propel our businesses. We feel good about the position that we're in and frankly, feel very confident about the balance of the year. A couple important dates, our shareholders meeting on May the 18th at 9:00 A.M., Central. Although the time has not been set, we'll have our investor day on June 29th, where we'll talk in more details with regards to our strategic review, and we look forward to showcasing those for you. In the meantime, we're going to continue to execute on our strategy and deploy capital in a responsible manner. With that, have a wonderful day, and thank you for your time. Thank you for participating in today's conference call. This call will be available for replay beginning at approximately one PM Eastern Time today until end of day May 4th, 2021. 7196888 is the access code for the replay. The number to dial for the replay is 855-859-2056 for U.S. and Canadian callers or 404-537-3406 for international callers.