Putnam Investments today announced the immediate nationwide availability of Putnam 529 for AmericaSM, its new advisor-sold 529 college savings plan. Putnam 529 for AmericaSM provides tax-advantaged, innovative strategies, including the only absolute return funds available in a 529 college savings plan, to help families pursue their college savings goals in a period of skyrocketing college costs, competing personal financial needs and volatile markets.
As program manager for one of the state of Nevada’s advisor-sold 529 college savings plans, Putnam will seek to bring a new level of solutions-based innovation to families across the nation who are saving for higher education goals. Effective today, the Putnam plan will include the first use of absolute return investment strategies – designed to target positive 3-year returns above inflation, as measured by T-bills and with lower relative volatility – by the industry.
“Putnam 529 for AmericaSM offers a whole new generation of college savings strategies that every family with college-bound children should consider,” said Putnam’s Chief Executive Officer, Robert L. Reynolds. “With the cost of a college education having risen several times faster than the rate of inflation in recent decades, saving for college is already one of the biggest financial challenges families face. We are pleased to be able to offer families and their financial advisors, in Nevada and across America, what we believe is an enhanced, investor-friendly way to address the demands of paying for college.”
"We are very excited about the opportunities our partnership with such a long-standing and accomplished company such as Putnam provides for families looking to secure a better future for their children by saving for college," said Kate Marshall, Treasurer, State of Nevada. "Putnam's proven track record of success and the company's commitment to assisting families across America meet the financial challenges of a college education make Putnam a perfect partner for Nevada."
Putnam has been helping families throughout the nation invest for their children’s future since offering among the first advisor-sold 529 college savings plans a decade ago. Reynolds indicated that Putnam has a strong legacy in the college savings market through its varied investment offering, accomplished service record, and unyielding commitment to education of advisors and investors, at a reasonable cost.
To encourage participation in the new plan, Putnam will waive sales charges for participants who transfer funds over from existing 529 plans, as well as waive the annual maintenance fees until 2012.
The Putnam 529 for America plan includes a mix of diversified and competitively priced investment choices from Putnam and other leading firms. The plan offers several different portfolio options, each geared to the goals and risk tolerance of individual families:
- Age-based, asset allocation portfolios: Actively-managed portfolios that automatically adjust annually over time, becoming more conservative as a child approaches college age, shifting from a mix of investments composed primarily of stock funds to one with more fixed-income funds and money-market funds. Within this, Conservative, Moderate or Aggressive investment options are available.
- Goal-based, asset allocation portfolios: Actively-managed portfolios that keep the same allocation mix, regardless of a child’s age. Balanced, Growth and Aggressive Growth investment options are available.
- Individual fund investment options: Investors may build their own portfolios from a selection of 11 stock, bond and cash funds overall from Putnam and other leading fund companies. Among the Putnam selections available to investors is the well-recognized flagship Putnam Voyager Fund.
- Putnam Absolute Return Funds: The investment choices include Putnam’s four target Absolute Return Funds,* which comprise the industry’s only comprehensive suite of absolute return strategies. The funds are designed to help pursue college savings goals with potentially lower volatility than more traditional mutual fund investments.
The Putnam 529 for AmericaSM plan is also the only 529 college savings program to offer absolute return strategies as an investment option. These strategies, which seek a positive return that exceeds the rate of inflation over a period of three years, regardless of market conditions, are designed to help investors pursue their college savings goals with potentially lower volatility than more traditional mutual funds.
A number of innovative features will be offered in the Putnam 529 for AmericaSM plan, including a comprehensive tuition payment analysis tool to more accurately estimate how much in tuition payments plan participants’ current savings may generate based on historical analyses. The Putnam plan also will provide advisors with a dedicated portal to manage all of their clients’ Putnam 529 plans with a single login as well as other data, analytical and educational tools to help them better serve their clients.
“America has a savings gap: We’re saving far too little for everything from college to retirement,” said Reynolds. “As a firm, we are seeking to help Americans meet this challenge. We are focused on providing the marketplace with superior investment products, world-class service, innovative tools and leading-edge technologies to raise the bar for college savings plans. We expect the Putnam 529 for AmericaSM plan to become a role model for other college savings plans around the country adopting many of its innovative features.”
Contributions to a Putnam 529 account may be made not only by parents but also by other family members and friends, up to a total of $370,000 for a particular beneficiary. The proceeds from a Putnam 529 account may be used to pay for tuition, fees, room and board, books and other qualified expenses at any accredited college or other institution of higher learning. Investment earnings are not subject to federal income tax while the account is invested, enabling faster growth, and are also exempt from federal income tax upon withdrawal if used for qualified expenses.
If the child decides not to attend college, the assets may be left invested in the plan for later use; used for another family member’s college expenses; or withdrawn for non-college use, subject to additional federal tax. Unlike other college savings vehicles, assets in a 529 plan remain under the parent’s or other account owners control even after a child reaches legal age.
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 named “Mutual Fund Manager of the Year” by Institutional Investor. At the end of August 2010, Putnam had $113 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Amsterdam, Tokyo, Singapore, and Sydney. For more information, visit putnam.com.
Putnam mutual funds are distributed by Putnam Retail Management.
*Putnam’s target Absolute Return Funds are not intended to outperform stocks and bonds during strong market rallies.
The State of Nevada
The State of Nevada, through the Treasurer’s Office, currently offers several direct-sold 529 college savings plans, including the Upromise College Fund 529 Plan, Vanguard 529 College Savings Plan and the USAA College Savings Plan. Putnam previously spent more than a decade serving the 529 college savings market through advisors in a partnership with the State of Ohio. For more information about how you can begin to “Save for College, One Step at a Time,” go to nevadatreasurer.gov or call (702) 486-2025 or 1-888-477-2667 (toll free).