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Putnam Investments’ Lifetime Income Analysis Spurs Workers to Increase Retirement Savings Rates by an Average 23 Percent

Putnam Investments today released the initial results — and impact — of the 401(k) plan participant use of its proprietary Lifetime IncomeSM Analysis Tool, which helps workers model how much monthly income their savings might generate in retirement and determine whether they are on track to maintain their current lifestyle once they stop working. Early usage by participants in Putnam-managed 401(k) plans, shows that a significant number of employees changed their savings deferral, and of those who did, an overwhelming number opted to increase their savings rate.

At the end of December 2010, nearly 34 percent of 401(k) participants who interacted with the firm’s Lifetime IncomeSM Analysis Tool made changes to the amount of income they deferred to retirement savings; 80 percent of the changes were deferral increases; and the average savings rate increase was approximately 23 percent, from 7 percent of income to 8.6 percent. The figures are based on initial results*, which confirms the research that was instrumental in creating the tool, according to Putnam.

“The challenge that working Americans face to save for successful retirements has never been greater,” said Putnam Investments Chief Executive Officer, Robert L. Reynolds. “And there’s a huge gap between the way people hope or expect to live in retirement and how they’re actually saving to reach their goals. One of the most powerful ways to close that gap is to first show defined contribution savers how far along they are towards reaching the monthly income they will need once they stop working – and then let them take immediate action to improve their prospects. Putnam’s Lifetime Income Analysis Tool, which does exactly that, is already showing strong, positive results in changing participants’ behavior and raising their savings rates. We believe it sets a new, higher standard for workplace savings. ”

“Americans want to do the right thing as they prepare for retirement, but too often get distracted by market values and asset allocation pie charts instead of focusing on the bottom line: How much monthly income their savings are likely to produce once they are retired,” said Edmund F. Murphy III, Director, Defined Contribution Services at Putnam Investments. “By including estimated monthly income in retirement front and center on our participant Web site, and sharing the information through our call center and communications programs, we have begun to redefine the retirement savings experience in a way that is driving positive changes in behavior that this industry hasn’t seen to date.”

“We are motivating workers to take action by shifting the ‘lens’ through which they view their retirement savings and focusing on what really matters. By showing them where they stand, explaining what they can do to help improve their position and helping them to make midcourse corrections in a simple interactive manner that helps to alleviate anxiety and inertia, the Lifetime Income Analysis Tool solves the complexity of saving for retirement,” Murphy explained.

A recent study by Employee Benefit Research Institute showed that 90% of workers want statements that show their estimated retirement income. “Illustrating 401(k) as a stream of monthly income with prescriptive next steps toward successful outcomes is proving to be a refreshing and motivating experience for plan participants and sponsors,” Murphy added.

Putnam launched their Defined Contribution Participant Web site with the Lifetime Income Analysis Tool in January 2010 to help participants in Putnam-administered workplace-sponsored retirement plans view their savings in a way that provides a clear view of their account’s potential for generating reliable income for life. Putnam also seeks to help workers understand the actions they can take to increase their retirement income potential as well as the trade-offs of such actions by including a number of key financial elements, such as expected social security income, 401(k) employer match, and outside retirement assets.

In addition to planning projections, the Web site also gives plan participants full access to more traditional information about their retirement accounts, such as investment balances and asset allocation. Additional information on Putnam’s income in retirement experience is available at

Putnam’s approach to innovation in retirement saving and focus on successful outcomes has received independent recognition from industry experts. The redesigned 401(k) defined-contribution plan Putnam offers to its own employees, which fully integrates the Lifetime Income experience and enables participates to change their deferrals in real time, has significantly increased employee participation and savings rates, according to analyses. As a result of its plan redesign, Putnam was named a recipient of the New England Employee Benefits Council’s “Best Benefits Practices of 2010” award. Putnam was also honored by the Profit Sharing/401k Council of America (PSCA) with two gold awards for its leadership in developing tools that support retirement plan fiduciaries.

Putnam Investments and Retirement

Since Robert L. Reynolds, a 30-year veteran of the retirement savings industry, became Putnam’s president and chief executive officer in 2008, the company has deepened its commitment to the retirement market and launched a series of innovations and initiatives to meet emerging customer needs. In addition to changing the retirement savings experience for plan participants, these initiatives include new levels of fee transparency, in an effort to provide the clearest, most complete overview of fees and expenses in the workplace savings industry.

Putnam has expanded the services it offers to 401(k) retirement plans and developed products to meet the needs of those planning for or already in retirement. The firm has created a platform that provides flexible and scalable services and solutions for advisors, consultants and their plan sponsor clients in every segment of the retirement market.

Putnam RetirementReady® Funds, the firm’s suite of 10 target-date/lifecycle retirement funds, added Absolute Return Funds** to its mix of underlying investments. RetirementReady Funds became the only suite of lifecycle funds to integrate absolute return strategies, which seek positive returns over a period of three years with less volatility than more traditional mutual funds. Employed in retirement portfolios, Putnam Absolute Return Funds are intended to pursue positive returns in up and down markets, to help protect against the harmful effects of adverse investment returns, and to seek to reduce volatility.

Recently, Putnam announced plans to launch a suite of income-oriented mutual funds and a retirement income planning tool that aim to help advisors work with retirees in developing strategies for monthly income flows, at varying levels of risk tolerance, to flexibly address their changing lifestyle financial needs throughout retirement. The product suite, comprised of Putnam Retirement Income Fund Lifestyle 1, Putnam Retirement Income Fund Lifestyle 2, and Putnam Retirement Income Fund Lifestyle 3, is expected to have broad applicability for defined-contribution, IRA and other retirement assets. ***

About Putnam Investments

Founded in 1937, Putnam Investments is a leading global money management firm with over 70 years of investment experience. At the end of February 2011, Putnam had $125 billion in assets under management, including mutual fund assets of $69 billion and institutional assets of $56 billion. 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.

* Research is based on initial data gathered from the activity of 10,000 participants in Putnam defined contribution retirement plans, including nearly 3,000 participants that interacted with the Putnam Lifetime Income Analysis Tool at the end of December 2010.

** Putnam’s Absolute Return Funds are not intended to outperform stocks and bonds during strong market rallies.

*** A registration statement relating to this security has been filed with the Securities and Exchange Commission but has not yet become effective. This security may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective.

The information in the prospectus (or Statement of Additional Information) is not complete and may be changed. This security may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This is not an offer to sell this security and is not a solicitation to buy this security in any state where the offer or sale is not permitted. No offer to buy the security can be accepted and no part of the purchase price can be received until the registration statement has become effective, and any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time prior to notice of its acceptance given after the effective date.

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.


Putnam Investments
Jon Goldstein
617-760-1127 (office)
516-946-5598 (cell)
Laura McNamara
617-760-1108 (office)
617-850-2727 (cell)
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