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Putnam Investments Calls for an Expanded Focus on Retirement Income to Encourage Workers to Save More

Saying that providing for future income is the prime rationale for 401(k) plans and other tax-deferred retirement savings vehicles, Putnam Investments called on policymakers, employers and the financial services industry to shift the focus of retirement savings from asset accumulation to the assets’ potential for generating reliable income for life. Promoting a more realistic view of retirement income needs and likely potential income will motivate workers to increase their savings to close any gap.

“Individuals saving for retirement too often miss the forest for the trees. While account balances, asset allocation and investment options are important elements to monitor in every retirement plan, ultimately working Americans should be focusing on the big picture: Generating reliable income for life,” said Edmund F. Murphy III, Managing Director, Defined Contribution Services at Putnam Investments, who testified today before a joint U.S. Department of Labor-Department of the Treasury hearing on lifetime income issues. “Changing the lens through which workers view retirement and helping them translate savings into projected income will give them a more realistic view of their retirement income needs and encourage them to increase their savings rates.”

Putnam Investments has attempted to shift how workers view their retirement savings by creating the Lifetime IncomeSM Analysis Tool which enables them to see their workplace-based retirement savings plan through a “lens” that offers them a clear understanding of their account’s potential for generating reliable income for life. Putnam also seeks to enable workers to intuitively understand the actions they can take to increase their retirement income potential as well as the cost-benefit trade-offs of taking such actions.

Murphy indicated that initial evaluation of behavioral data associated with plan participant use of the Putnam Lifetime Income Analysis Tool is showing a positive impact on savings rates. “By translating the retirement savings process into the language of ‘income,’ we are starting to see a very favorable response by 401(k) participants,” noted Murphy.

The Putnam Lifetime Income Analysis Tool is designed to help participants in 401(k) plans and other retirement savings vehicles model how much income their savings might generate in retirement, and determine if they are on track to have sufficient income to maintain their current lifestyle once they stop working. The Lifetime Income Analysis Tool also offers actionable next steps, such as increasing payroll deferrals to 401(k) accounts. While income planning is the first screen plan participants see when they access their accounts, they also have ready access to more traditional information about their retirement accounts, such as investment balances and asset allocation. Additional information on the Lifetime Income Analysis Tool is available at

Putnam Investments and Retirement

Since Robert L. Reynolds became Putnam’s president and chief executive officer in July 2008, the company has deepened its commitment to the retirement market. This year, Putnam has launched a series of retirement initiatives, including an enhanced Web site for sponsors of 401(k) plans and other defined-contribution retirement plans, a Lifetime Income Analysis Tool for plan participants, and fee transparency disclosures in its effort to provide the clearest, most complete overview of fees and expenses in the workplace savings industry. (For more details on Putnam’s approach to fee transparency, please visit

About Putnam Investments

Founded in 1937, Putnam Investments is a leading global money management firm with over 70 years of investment experience. The firm was recently ranked #1 out of 61 fund families based on its funds’ performance during 2009 in a Lipper/Barron’s Fund Families Survey and named “Mutual Fund Manager of the Year” by Institutional Investor. At the end of July 2010, Putnam had over $115 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Amsterdam, Tokyo, Singapore, and Sydney. For more information, visit

Putnam mutual funds are distributed by Putnam Retail Management.


Putnam Media Contacts:
Jon Goldstein, 617-760-1127 (office)
516-946-5598 (cell)
Laura McNamara, 617-760-1108 (office)
617-850-2727 (cell)
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