Putnam Defined Contribution Services
Our goal is to help participants achieve a comfortable monthly income in retirement
Years of study have helped us understand what elements of a plan lead to more successful outcomes for plan participants. We address their most important questions by showing them where they are today, where they need to be in order to retire successfully, and how to use their retirement plan to get there.
- Plan design and auto-features should encourage saving
- Default options should include stronger protection against volatility
- Advice and guidance should be available to all participants
What’s new: Putnam introduces Lifetime Income ScoreSM
The Lifetime Income Score was designed to address concerns among plan sponsors about their workers’ readiness for retirement. The tool will add a new dimension to the success of your plan, and will help target specific areas for improvement.
The tool:
- Estimates the level of income replacement your participants are currently on track to receive in retirement
- Provides a benchmark that is focused on outcomes, rather than inputs, to measure success
- Offers plan management reporting to pinpoint those employees most at risk, and allows you to take action to positively influence retirement preparedness
This plan management, reporting, and campaign tool is the first of its kind. Learn more. All qualified plan sponsors and their consultants are eligible to receive a complimentary overview assessment. Contact us today.
Download our white paper titled “Opportunity of a lifetime: Using Lifetime Income Score to assess and improve retirement readiness.”
See Putnam's rank among service leaders in PLANSPONSOR magazine's 2011 survey.
The Putnam Lifetime Income ScoreSM represents an estimate of the percentage of current income that an individual might need to replace from savings in order to fund retirement expenses. For example, consider an individual, 45 years old, with an income of $100,000 per year. A Lifetime Income Score of 64% indicates that the individual is on track to be able to generate $64,000 in retirement income (in today’s dollars), i.e., 64% of current income. This income estimate is based on the individual’s amount of current savings as well as future contributions to savings (as provided by participants in the survey) and includes investments in 401(k) plans, IRAs, taxable accounts, variable annuities, cash value of life insurance, and income from defined benefit pension plans. It also includes future wage growth from present age (e.g., 45) to the retirement age of 65 (1% greater than the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)) as well an estimate for future Social Security benefits.
The Lifetime Income Score estimate is derived from the present value discounting of the future cash flows associated with an individual’s retirement savings and expenses. It incorporates the uncertainty around investment returns (consistent with historical return volatility) as well as the mortality uncertainty that creates a retirement horizon of indeterminate length. Specifically, the Lifetime Income Score procedure begins with the selection of a present value discount rate based on the individual’s current retirement asset allocation (stocks, bonds, and cash). A rate is determined from historical returns such that 90% of the empirical observations of the returns associated with the asset allocation are greater than the selected discount rate. This rate is then used for all discounting of the survival probability-weighted cash flows to derive a present value of a retirement plan. Alternative spending levels in retirement are examined in conjunction with this discounting process until the present value of cash flows is exactly zero. The spending level that generates a zero retirement plan present value is the income estimate selected as the basis for the Lifetime Income Score. In other words, it is an income level that is consistent with a 90% confidence in funding retirement. It is viewed as a "sustainable" spending level and one that is an appropriate benchmark for retirement planning.
The survey is not a prediction, and results may be higher or lower based on actual market returns.
Need help?
- For plan sponsors, advisors, and consultants
Looking for more information on Putnam services? E-mail our 401(k) team or call 1-800-719-9914 - For participants
Questions about your retirement plan account?
E-mail our participant help desk or log into your account.
News and resources
- Putnam named Retirement Leader of the Year
- New iPhone app allows plan participants to PriceCheck&Save
- Download our brochure on Building a Better Retirement Plan
- Learn more about guidance, advice, and managed accounts solutions for plan participants
- Putnam in the news
Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus, or a summary prospectus if available, containing this and other information for any Putnam fund or product, call your financial representative or call Putnam at 1-800-225-1581. Please read the prospectus carefully before investing.
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