« Back | Press release: March 6, 2014

Putnam Investments 401(K) participant experience helping to drive deferral rates up 25 percent

Easily Digestible, Actionable Information Continues to Motivate Higher Levels of Retirement Savings Among Putnam Plan Participants in 2013

BOSTON, March 6, 2014 — Four years after the launch of its award-winning Lifetime Income Analysis experience, participants in Putnam Investments-administered 401(k) plans continue to take significant steps forward in increasing their level of retirement preparedness through use of the firm's unique lens on projected monthly income in retirement and its ability to enable nearimmediate action to improve one's savings trajectory.

During 2013, Putnam found that of the participants who used the firm's proprietary Lifetime Income Analysis ToolSM, 35 percent made deferral changes, and of those, 76 percent chose to increase their savings rate by an average of 25 percent.

Results were noticeably more pronounced among plan participants who also used Putnam's Health Cost Estimator, a feature of the Lifetime Income Analysis Tool, which provides an estimate of how much future income will be needed to cover healthcare costs in retirement. Those who used the Health Cost Estimator and made a deferral rate change, increased their 401(k) plan savings contributions from 7.7 percent to 9.9 percent, a 29 percent increase — and more than three percentage points over the industry average of 6.8 percent, according to Plan Sponsor Council of America.

"We face three big challenges in helping workers achieve their retirement goals. First, helping them accurately understand their current prospects; second, offering actionable solutions; and third, enabling them to act immediately and overcome inertia," said Edmund F. Murphy III, Head of Defined Contribution, Putnam Investments. ‘The Putnam Lifetime Income Analysis Tool is working effectively to meet all three of these challenges, and helps motivate 401(k) plan participants to increase their savings, putting them on a better footing for retirement." Murphy also noted that plan participants using the Putnam Lifetime Income experience to change their deferral rates, increased their savings by a much more significant magnitude — seven times more, in fact — than participants who used other methods to change their contribution levels, such as telephone.

The Putnam study analyzed the actions of over 40,000 participants in Putnam retirement plans who used the Lifetime Income Analysis Tool during 2013, as well as over 8,000 participants who accessed the Health Cost Estimator during the year.

Putnam's award-winning 401(k) participant experience is comprised of several key features, including:

  • Lifetime Income Analysis Tool*
    Introduced in January 2010, the Lifetime Income Analysis Tool projects plan participants' current savings into future estimated monthly retirement income, calculates whether they are likely to generate the income they are likely to need once they stop working and offers actionable steps to increase savings. It also offers next steps to help boost income in retirement, and provides a convenient way to immediately adjust contributions and rebalance portfolios.
  • Putnam Health Cost Estimator
    The Putnam Health Cost Estimator, launched in Spring 2013, provides an important window into what will likely be one of the largest, most burdensome expenses in retirement: Healthcare costs. It offers personalized estimates of how large a portion of expected future monthly income will be needed to cover a broad range of healthcare costs in retirement, including itemized insights on medical, dental and pharmaceutical expenses at different age points.
  • Financial Wellness
    In late 2013, Putnam introduced a new Financial Wellness program that provides plan participants with a suite of education tips, financial management tools and access to budgeting experts, all integrated into the participant experience, to help them evaluate resources for potential retirement savings.
  • "How Do I Compare?"
    In the coming months, Putnam will launch "How Do I Compare," a new 401(k) feature, fully integrated into the firm's Lifetime IncomeSM Analysis Tool, which will allow plan participants to compare their progress in saving for retirement with their peer group and top-tier savers.
About Putnam Investments

Founded in 1937, Putnam Investments is a leading global money management firm with over 75 years of investment experience. In February 2014, for the third time in five years, the firm was named one of the top two mutual fund families by Lipper/Barron's based on the firm's performance across asset classes in the previous year. In 2014, Putnam also was ranked #2 out of 55 fund families for its performance over the past five years. At the end of December 2013, Putnam had $150 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Beijing, Amsterdam, Tokyo, Singapore and Sydney. For more information, visit http://www.putnam.com.

Putnam Investments Media Contacts:

Jon Goldstein — 617-760-1127 (office), 516-946-5598 (cell), [email protected]
Laura McNamara — 617-760-1108 (office), 978-505-0524 (cell), [email protected]

IMPORTANT: The projections, or other information generated by the Lifetime Income Analysis Tool regarding the likelihood of various investment outcomes, are hypothetical in nature. They do not reflect actual investment results and are not guarantees of future results. The results may vary with each use and over time. The analyses present the likelihood of various investment outcomes if certain investment strategies or styles are undertaken, thereby serving as an additional resource to investors in the evaluation of the potential risks and returns of investment choices.

Each simulation takes into account the participant's current plan balance and investment mix, as well as his or her age, income, retirement date, contribution rate, likely future savings, and estimated Social Security benefit. The tool runs over 50 billion market simulations to provide an estimate of a monthly income likely to be generated at retirement. The Lifetime Income Analysis Tool is an interactive investment tool designed for Putnam 401(k) participants to illustrate the estimated impact of a participant's plan balances and projected savings on income in retirement. The tool takes into account both before-tax and after-tax accumulated balances and future regularly scheduled contributions for estimated projections. It cannot account for dramatic changes in a participant's personal situation, including unexpected expenses and other financial situations that may negatively affect one's estimated monthly income in retirement. You are advised to consider your other assets, income, investment options, investment time horizon, income tax bracket, and risk tolerance when planning for specific investment goals. It is recommended that you consult a financial advisor for more information. It is important to note that the results from this tool are estimates based on what you input today. The results are not a guarantee of actual outcomes and will change as your inputs change. Health-care costs and projections are provided by HealthView Services, Inc., a third-party vendor. They provide broad, general estimates and information that may help you consider your retirement income needs by better understanding potential health-care costs. This estimate is provided for educational purposes only, and you should not rely on it as the primary basis for your medical, insurance, investment, financial, retirement, or tax planning decisions. Costs are estimated, hypothetical in nature, and not guaranteed. Your actual medical costs will likely vary (sometimes significantly) from the estimates. Putnam does not believe that HIPAA applies to the data obtained from plan participants using this new tool.

How Barron's ranked the fund families: The Barron's/Lipper Fund Family Ranking published February 8, 2014, ranked Putnam 1 out of 61 for 2009, 14 out of 57 for 2010, 57 out of 58 for 2011, 1 out of 62 for 2012, and 2 out of 64 for 2013 for the 1-year period with funds in five categories: U.S. equity, world equity, mixed asset, taxable bond, and tax-exempt bond. Putnam ranked 43 out of 54 and 46 out of 48 for the 5- and 10-year periods ending 2009, 41 out of 53 and 38 out of 46 for the 5- and 10-year periods ending 2010, 49 out of 53 and 41 out of 45 for the 5- and 10-year periods ending 2011, 27 out of 53 and 36 out of 46 for the 5- and 10-year periods ending 2012, and 2 out of 55 and 32 out of 48 for the 5- and 10-year periods ending 2013, respectively. Only funds with at least one year of performance were included. Returns were calculated minus the effects of sales charges and 12b-1 fees. Rankings were asset weighted, so larger funds had a greater impact on a fund family's overall ranking, and then weighted by category, with each category assigned a percentage. Past performance is not indicative of future results. Barron's is a registered trademark of Dow Jones & Company.

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.