« Back | Press release: January 21, 2014

Putnam Investments to bring peer comparison to the 401(K) savings realm

"How Do I Compare" Feature — Integrated Into Firm's Award-Winning Participant Experience — Will Seek to Have Positive Effect on Participants' Contribution Rates

BOSTON, January 21, 2014 — Putnam Investments, Putnam Investments today announced it will be launching "How Do I Compare," a new 401(k) feature which will allow plan participants for the first time to compare their progress in saving for retirement with their peer group and top-tier savers. Putnam's "How Do I Compare" will be fully integrated into the firm's award-winning Lifetime IncomeSM Analysis Tool, which projects participants' current savings into future monthly retirement income and offers actionable steps to increase savings. The new comparison lens is expected to be available within all Putnam 401(k) plans in the coming months.

The Putnam initiative draws on social comparison behavioral theory which holds that individuals are motivated by comparisons with peers who are top performers. Using data from the entire universe of participants in Putnam 401(k) plans, "How Do I Compare" will let employees in Putnam-administered defined contribution plans both measure their savings rate and potential income replacement in retirement with peers, based on several criteria including age, salary and gender. Importantly, the employees can see how they compare to the top savers in their peer group. Ultimately, the feature allows the participant to gauge the impact of changes to savings rates and make immediate adjustments, if desired.

"We are constantly searching for new and better ways to shed additional light on the retirement savings challenge at the plan sponsor and participant levels," said Edmund F. Murphy III, Head of Defined Contribution, Putnam Investments. "Research shows that social comparisons can have a powerful effect on changing behavior. We believe this concept has tremendous application in the retirement savings space to potentially help raise contribution rates."

Murphy explained that the "How Do I Compare" social comparison feature is designed to work in combination with a number of key elements already incorporated in the Putnam Lifetime Income Analysis Tool, including the firm's Health Cost Estimator and Financial Wellness components. "In the end, we are seeking to provide the information, support and incentive that people need to plan, prepare and proactively raise their retirement savings rates," Murphy underscored.

Putnam Lifetime Income Analysis Tool

Putnam's Lifetime IncomeSM Analysis Tool was introduced in January 2010 as a new approach that changes the lens through which 401(k) plan participants view their current retirement savings activities, by placing much greater focus on future monthly income needs and shortfall planning. The online experience is designed to help participants project how much monthly income their current retirement savings may generate in retirement compared to what they may need, and then offer actionable next steps.

Putnam Health Cost Estimator

The Putnam Health Cost Estimator, launched in Spring 2013, provides 401(k) plan participants with a personalized estimate of how much of their expected future monthly income is likely to be needed to cover their healthcare costs in retirement, including itemized insight on medical, dental and pharmaceutical expenses, at different ages. The projections are generated from individual participant data and cost models using proprietary actuarial-based guidelines and expressed as monthly costs, providing participants with a digestible format that lays the groundwork for action steps to address potential savings shortfalls.

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 Lifetime Income Analysis experience, to help them evaluate resources for potential retirement savings.

About Putnam Investments

Founded in 1937, Putnam Investments is a leading global money management firm with over 75 years of investment experience. 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 putnam.com.

Putnam Investments Media Contacts:

Jon Goldstein — 617-760-1127 (office), 516-946-5598 (cell), [email protected]
Laura McNamara — 617-760-1108 (office), 617-850-2727 (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.

Putnam has partnered with LearnVest to provide access to a full range of budgeting and planning tools — including access to a LearnVest financial wellness expert. Fees may apply to certain LearnVest services. Use LearnVest to get a better handle on your day-to-day finances, and to get the help you need to make progress toward all your financial goals.

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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