Exhibit 10.8

Deferred Compensation Plan
for Non-Employee Directors of
Principal Financial Group, Inc.
(Amended and Restated as of May 19, 2003)

1.Effective Date; Eligibility; Administration

        (a)    Effective Date.    The Deferred Compensation Plan for
Non-Employee Directors of Principal Financial Group, Inc., a Delaware
corporation (the "Plan"), shall become effective upon adoption of the Plan by
the Principal Financial Group, Inc. Board of Directors (the "Effective Date")
with respect to compensation that is payable to eligible members of the Board of
Directors of Principal Financial Group, Inc. (the "Company") on and after the
date that is six (6) months following the effective date of the Plan of
Conversion of Principal Mutual Holding Company ("Plan of Conversion).

        (b)    Eligibility.    Each member of the Board of Directors (the
"Board") of the Company who is not an employee of the Company or a subsidiary or
affiliate of the Company (each, a "Director") is eligible to participate in the
Plan (including a Director who takes office after the adoption of the Plan).

        (c)    Administration.    The Plan shall be administered by the Human
Resources Committee of the Board ("Committee") or such other committee of the
Board as the Board shall designate from time to time. The Committee shall have
full authority to interpret and administer the Plan, to establish, amend, and
rescind rules and regulations relating to the Plan, to provide for conditions
deemed necessary or advisable to protect the interests of the Company and to
make all other determinations necessary or advisable for the administration and
interpretation of the Plan in order to carry out its provisions and purposes,
provided that, no Committee member may participate in any decision with respect
to such member's benefits or entitlements under the Plan, unless such decision
applies generally to all non-employee Directors. Determinations,
interpretations, or other actions made or taken by the Committee shall be final,
binding, and conclusive for all purposes and upon all persons.

2.Participation

        (a)    Deferral Election.    The approximate one-year period that
commences with the start of an annual meeting of stockholders and concludes just
prior to the start of the annual meeting of stockholders held in the following
calendar year is referred to herein as a "Board Year." A Director may elect to
defer receipt of all or any part of the annual retainer(s) to which the Director
would otherwise be entitled for serving on the Board and/or a Board committee
for the Board Year following the Board Year in which such election is made and
for succeeding Board Years. Any person who shall become a Director who was not a
Director of the Company prior to the beginning of a Board Year may elect, before
the Director becomes entitled to receive such amounts, to defer payment of all
or any part of the Director's proportionate annual retainer(s) for Board and/or
Board committee service to which such Director would otherwise be entitled for
the remainder of such Board Year and for succeeding Board Years.

        In addition, prior to the start of any Board or Board committee meeting,
a Director may elect to defer receipt of all or any part of the Board and/or
Board committee meeting fees to which such Director would otherwise be entitled
for that Board and/or Board committee meeting, and for succeeding Board and/or
Board committee meetings.

        All amounts deferred by a Director hereunder shall be credited to an
account (the "Account") (the aggregate amount to be deferred hereunder by a
Director is hereinafter referred to as "Fees").

        (b)    Form and Duration of Deferral Election.    An election to
participate in the Plan shall be made by written notice executed by the Director
and filed with the Secretary of the Company. Such election shall continue in
effect until the Director terminates such election by written notice filed with
the Secretary of the Company. Any such termination shall become effective as of
the end of the Board

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Year in which such notice is given (for annual retainers) and/or the next Board
or Board committee meeting (for Board and/or Board committee meeting fees), as
applicable, and only with respect to compensation payable for services as a
Director thereafter. Amounts credited to the Director's Account prior to the
effective date of the termination of such election to participate in the Plan
shall not be affected by such termination and shall be distributed only in
accordance with the terms of the Plan.

        (c)    Renewal.    A Director who has terminated an election to
participate in the Plan may thereafter file another election to participate for
any Board Year subsequent to the Board Year in which such election is filed
and/or Board or Board committee meeting, as applicable.

        (d)    Adjustment of Amount Deferred.    Prior to the beginning of any
Board Year or Board or Board committee meeting, as applicable, a Director
participating in the Plan may file another written notice with the Secretary of
the Company electing to change the amount of compensation to be deferred for
services as a Director commencing with such Board Year or Board or Board
committee meeting, as applicable. Amounts credited to the Director's Account
prior to the Secretary's receipt of the written notice of the change shall not
be affected by such change and shall be distributed only in accordance with the
terms of the Plan.

        (e)    Prior Deferrals.    All compensation deferred (together with any
interest earned thereon) under any individual deferred compensation agreement
between the Director and the Company (an "Individual Deferred Compensation
Agreement") will remain subject to the terms and conditions of such Individual
Deferred Compensation Agreement (unless an election is made to transfer the
balance under such Individual Deferred Compensation Agreement to the Account
created hereunder, as described in the following sentence). A Director may
elect, upon written notice to the Secretary of the Company, to have all or any
part of the balance under any Individual Deferred Compensation Agreement
transferred to the Director's Account under this Plan on or after the date that
is six (6) months following the effective date of the Plan of Conversion.

3.Directors' Accounts

        The Company shall maintain a separate Account for each Director who has
elected to defer compensation under this Plan. Fees that are deferred and
credited to a Director's Account pursuant to Section 2 hereof shall be deemed to
be invested in a theoretical number of units in respect of Common Stock, par
value $0.01 per share, of the Company ("Company Stock"), calculated to the
nearest ten thousandth of a unit, produced by dividing the dollar amount of such
Fees by the Market Value Per Share (as defined below) on the date such Fees
would otherwise have been paid (or the date such amounts are transferred to the
Account pursuant to Section 2(e) as applicable).

        Whenever a dividend is declared in respect to the Common Stock, the
number of units in the Director's Account shall be increased by the result of
the following calculations: (i)  the number of units in the Director's Account
multiplied by any cash dividend declared by the Company on a share of Common
Stock, divided y the Market Value Per Share on the related dividend payment
date; and/or (ii) the number of units in the Director's Account multiplied by
any stock dividend declared by the Company on a share of Common Stock.

        In the event of any Common Stock or Common Stock split, recapitalization
(including but not limited to the payment of an extraordinary dividend to the
stockholders of the Company), merger, consolation, combination, spin-off,
distribution of assets to stockholders (other than ordinary cash dividends)
exchange of shares, or other similar corporate change, the number of units
credited to a Director's Account shall be appropriately adjusted by the
Committee to reflect such corporate change.

4.Distribution from Accounts

        (a)    Form of Distribution Election.    At the time a Director makes a
deferral election pursuant to Section 2(a), the Director shall also file with
the Secretary of the Company a written election with respect to the distribution
of the value of the units credited to the Account. A Director may elect to
receive the distribution of the value of such units in one lump-sum payment, or
a Director may elect to receive a distribution of the value in such number of
equal annual installments (not to exceed ten

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annual installments) as the Director may designate. The lump-sum payment or the
first installment shall be paid on the first business day of the calendar year
immediately following the year in which the Director ceases to be a Director of
the Company or on the first business day of such earlier calendar year as the
Director may elect, except that a Director shall not be permitted to elect to
receive a distribution or partial distribution on a date that is earlier than
eighteen (18) months following the effective date of the Plan of Conversion. Any
subsequent installments shall be paid on the first business day of each
succeeding installment period until the entire amount credited to the Account
and subject to that distribution election shall have been paid.

        (b)    Amendment of Distribution Election.    In accordance with
Section 4(a), at any time, and from time to time, a Director participating in
the Plan may file a written notice to further delay the timing of the
distribution from the Director's Account. To be effective, an election to
further delay the timing of distribution with respect to the Account must be
received by the Secretary of the Company at least twelve (12) months prior to
the date of distribution under the previously-filed election for such
distribution.

        (c)    Distribution Election on Transfers.    In the event that a
Director elects to transfer all or any part of the balance under any Individual
Deferred Compensation Agreement to the Director's Account pursuant to
Section 2(e), the value of the units credited to the Account pursuant to such
election shall be distributed according to the distribution election for the
Account in effect on the date of such transfer unless such Director directs an
alternate timing of distribution at the time of the transfer election. In no
event, however, may such distribution occur earlier than eighteen (18) months
following the effective date of the Plan of Conversion.

        (d)    Valuation of Units on Distribution.    The value of the units
payable hereunder shall be determined by multiplying the number of units then
subject to distribution by the average Market Value Per Share for the 20 trading
days prior to the date for payment.

        (e)    Installment Payments.    Where a Director receives the balance of
the Director's Account in annual installments, the amount of each installment
shall be equal to the value (as calculated pursuant to Section 4(d) above) of a
fraction of the total number of units in the Account on the date of such
payment, the numerator of which is one (1) and the denominator of which is the
total number of installments remaining to be paid at that time.

5.Designation of a Beneficiary

        A Director may designate a beneficiary or beneficiaries (which may be an
entity other than a natural person) to receive any payments to be made pursuant
to Section 6 hereof upon the Director's death. At any time, and from time to
time, any such designation may be changed or canceled by the Director without
the consent of any beneficiary. Any such designation, change or cancellation
must be by written notice filed with the Secretary of the Company. If a Director
designates more than one beneficiary, any payments made pursuant to Section 6 to
such beneficiaries shall be made in equal shares unless the Director has
designated otherwise, in which case the payments shall be made in the
proportions designated by the Director. If no beneficiary has been named by a
Director, payment shall be made to the Director's estate.

6.Distribution on Death

        If the Director shall die before payment has commenced or all
installment payments have been completed, the total unpaid balance then credited
to such Director's Account shall be paid to the designated beneficiaries or such
Director's estate in a lump sum on the first business day of the month
immediately following the month in which the Board receives notice of such
Director's death, or as soon as reasonably practical following such date.

7.Amendment and Termination

        The Board of Directors may at any time amend or terminate the Plan;
provided no such amendment or termination shall impair the rights of a Director
with respect to amounts then credited to such Director's Account under the Plan.

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8.Miscellaneous

        (a)   The Company shall not fund its liability for deferred Fees or
amounts equal to interest thereon or for any appreciation in unit value in any
way, the separate memorandum accounts for each Director electing deferment shall
not constitute trusts, and a Director shall have no claim against the Company or
its assets other than as an unsecured general creditor.

        (b)   The crediting of units to the Account pursuant to Section 3 hereof
shall not be deemed to create for a Director any interest in any class of equity
securities of the Company.

        (c)   The Secretary of the Company shall provide a copy of the Plan to
each Director together with a form of letter which may be used, if the Director
so elects, to notify the Company of the Director's election to defer Fees in
accordance with the Plan.

        (d)   Nothing contained herein and no action taken pursuant hereto will
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and any Director, the Director's beneficiary or
estate or any other person. Title to and beneficial ownership of any funds
represented by the Account will at all times remain in the Company; such funds
will continue for all purposes to be a part of the general funds of the Company
and may be used for any corporate purpose. No person shall, by virtue of the
provisions of this Plan, have any interest whatsoever in any specific assets of
the Company. TO THE EXTENT THAT ANY PERSON ACQUIRES A RIGHT TO RECEIVE PAYMENTS
FROM THE COMPANY UNDER THIS PLAN, SUCH RIGHT WILL BE NO GREATER THAN THE RIGHT
OF ANY UNSECURED GENERAL CREDITOR OF THE COMPANY.

        (e)   A Director's right or the right of any other person to the balance
in the Account cannot be assigned, alienated, sold, garnished, transferred,
pledged or encumbered except by a written designation of beneficiary under this
Plan, by written will, or by the laws of descent and distribution.

        (f)    Payments hereunder shall be made in U. S. dollars and may be made
to a bank or other financial institution in the U. S. if payment to a Director
is in some manner restricted by federal, state or foreign law. The Company shall
have the right to deduct from all distributions hereunder any federal, state,
foreign or local taxes or other obligations required by law to be withheld with
respect thereto.

        (g)   Notwithstanding anything else contained in the Plan to the
contrary, no action shall be taken, and no distribution shall be made, under the
Plan which contains any term or condition that would violate any provision of
the Plan of Conversion.

        On behalf of the Nominating Committee of the Board of Directors of the
Company, this Deferred Compensation Plan for Non-Employee Directors of Principal
Financial Group, Inc. has been executed this 19th day of May, 2003.

By:
 
/s/  BETSY J. BERNARD      

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Betsy J. Bernard, Chair
 
 

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