Building a better retirement plan for small businesses. Putnam Retirement Services

Building a better
retirement plan for
small businesses.
Putnam Retirement Services
Putnam brings big ideas to
the small business 401(k).
The workplace savings system reaches more than 80 million Americans today,
in businesses of all sizes and types. In fact, it has become the primary source for
many employees’ incomes in retirement, and it’s a system that has shown great
ability to adapt and innovate.
91.4% of employees participate in a
401(k) plan if offered by their employer,
while only 9.4% contribute to an IRA if
no employer-sponsored plan is offered.
2009 Profit Sharing Council of America study
of plans with up to 50 employees.
The Putnam Small Business 401(k)
Provides significant tax advantages —
for both employers and employees
A simple way to bring retirement savings
to your small business
Company contributions, including profit sharing,
non-elective, or matching contributions, are tax
deductible. Set-up fees for small businesses may
also qualify for an annual credit of 50% up to
$1,000 for qualified expenses.
The Putnam Small Business 401(k) is a Web-based
plan.* With 24-hour Internet access to your plan
and the support of Putnam’s Small Business 401(k)
toll-free phone line, you’ll spend less time managing
the plan and more time focusing on your business.
Participants may invest up to $16,500 (in 2010)
in pretax dollars for their retirement plan. So,
in addition to the benefit of saving for retirement,
participants may also lower the amount of taxes
they pay on income earned. Additional “catch-up”
contributions may be made by individuals who
are 50 or older by December 31 of the current
calendar year.
A small business 401(k) can help you attract and
retain employees, and we believe it’s an excellent
way to save for one of life’s most important goals —
retirement.
* Administration and recordkeeping for the Putnam Small
Business 401(k) is provided by ExpertPlan, Inc. ExpertPlan
is not affiliated with Putnam Investments.
Take advantage of the 2010 high contribution limits of a large-company plan.
Base employee
contribution
Profit-sharing
contribution
Catch-up contribution
(age 50+)
Total
contributions
$16,500
Up to $49,000
$5,500
Up to $54,500
Putnam offers three plan
design options.
Safe
Harbor
plan
Standard
plan
New
comparability
plan*
Key feature
Mandatory employer
contribution based on
various formulas,
including automatic
enrollment
Maximum flexibility
with a range of options,
including “Safe Harbor”
Employees are
grouped into categories
to determine contribution
levels
Employer
benefit
No need for
discrimination testing;
good for companies
with low participation
or high turnover
Can be tailored to
company’s specific
needs
Beneficial if there are
significant age and salary
differences between
highly compensated
employees and general
workforce
Contributions
Employer and highly
compensated employees
can max out; deferrals not
contingent on employee
participation
Match and discretionary
contributions determined
by employer
Contributions determined
by formula that favors
older employees and those
with higher salaries
Discrimination
testing
Discrimination testing
is not necessary
Discrimination testing is
necessary, unless Safe
Harbor is chosen
Plan is subject to
cross-testing rules, which
may require third-party
administrator
* A third-party administrator may be required if you choose this plan type. To satisfy nondiscrimination requirements, age-based
and new comparability plans are subject to cross-testing rules, which are complex and will likely result in a higher administrative
fee. Employers are strongly urged to consult competent legal and other counsel in establishing and administering these plan types.
Putnam has been honored for the 20th consecutive year with
DALBAR service awards, which are presented annually to firms that
deliver industry-leading service to their customers, based on testing
by DALBAR, an independent market research firm. In 2009, for the
11th time, Putnam won awards in each of the three categories —
to investors, to financial advisors, and to annuity contract holders.
Putnam’s small business 401(k) plan options are rich in features
Affordable and easy to set up
Comprehensive service
•Low set-up cost, and low fees
•Rollovers into the plan are allowed
•Plan can be established online in minutes
•Loans are available at no additional cost
to the plan
Helpful plan features
•In-service distributions are allowed at
age 591/2, disability, or death
•Auto-enrollment offers a default contribution
percentage and investment options
• utomatic deferral increase allows participants
A
to systematically increase contributions on
preselected dates
•Automatic deferral-increase program available
•Communications to help motivate plan
participants
•Roth 401(k) helps employees establish a
source of tax-free income in retirement
•Terminated status e-mail alerts available
for sponsors and advisors to help facilitate
employee transition
Simple to maintain
A complete array of retirement products
•24-hour online account for plan sponsors
and participants
•Traditional and Roth IRA plans that may allow
for additional retirement savings
•Signature-ready 5500 and compliance
testing included
•IRA rollover plans for employees who retire or
change jobs
•Award-winning service
•Individual 401(k) plans designed for soleproprietors and their spouse
Flexible investments
•Investment choices from multiple managers
•Several options for QDIAs
•Free automatic account rebalancing
•Additional 401(k) and retirement products
available as your business grows
A range of investment products
that can help plan participants make
the right choices.
Investment flexibility and an open platform
A choice in QDIAs
We blend open architecture with Putnam products
from which to choose funds. An open platform provides the flexibility you need to create a plan lineup
that meets your needs. We offer:
Putnam offers a number of products that can
serve as QDIAs for participant-directed defined
contribution plans:
•A universe of over 100 funds to choose from
•Qualified default options that meet Department
of Labor guidelines
•Putnam equity and fixed-income funds
We offer funds from every category.
Your financial advisor can help you choose
from over 100 funds, across all asset classes
and styles.
•Putnam Absolute Return 500 Fund seeks to
earn a positive total return over a period of three
years with less volatility than traditional funds
and largely independent of market conditions.
•Putnam RetirementReady® Funds offer an
easy, one-step approach to diversification
based on a “target year” when a participant
plans to retire or needs to withdraw money.
These funds utilize a more conservative glide
path complemented by a blend of absolute
and relative return strategies.
• utnam Asset Allocation Funds provide
P
diversification through three portfolios —
Conservative, Balanced, and Growth — each
geared toward a specific investment objective.
Each RetirementReady Fund has a different target date indicating when the fund’s investors expect to retire and begin withdrawing assets from their account. The dates range from 2010 to 2050 in five-year intervals, with the exception of the Maturity
Fund, which is designed for investors at or near retirement.
The funds are generally weighted more heavily toward more aggressive, higher-risk investments when the target date of the
fund is far off, and more conservative, lower-risk investments when the target date of the fund is near. This means that both the
risk of your investment and your potential return are reduced as the target date of the particular fund approaches, although
there can be no assurance that any one fund will have less risk or more reward than any other fund.
The principal value of the funds is not guaranteed at any time, including the target date.
The right combination of people, process,
and a drive to outperform.
People
Our investment professionals are smart, experienced, and driven to
outperform. And our analysts offer impressive credentials, including years
of experience, deep sector knowledge, and hands-on experience in the
industries they follow.
Putnam topped Barron’s
list of best-performing
fund families in 2009.
Process
Our goal is to generate returns that exceed those of benchmarks but
with an eye on risk management. And while we’re big enough to have a
global footprint in every asset class, we’re nimble enough to capitalize
on a range of opportunities.
Performance
In February 2010, Barron’s named Putnam the top mutual-fund family
for performance in 2009 across a broad range of asset classes and
funds. In April 2010, Institutional Investor named Putnam the “Mutual
Fund Manager of the Year”.
The Lipper/Barron’s survey, published February 1, 2010, included 61 fund families with funds in five categories: general U.S.
stock, global or international, mixed-asset, taxable bond, and tax-exempt bond. 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. Putnam ranked 43 of 54 and 46 of 48 for the 5- and 10-year periods, respectively.
Past performance is not indicative of future results. For more information on the Lipper/Barron’s survey methodology, visit
putnam.com. Barron’s is a registered trademark of Dow Jones & Company.
Institutional Investor Research Group administered surveys by e-mail, phone calls, and conferences to more than a thousand of the top U.S. foundations and endowments, corporate pension plans, and public pension plans over a two-month
period. Investors were asked to rank their top managers in the 20 awarded asset classes on a scale of 1 to 10 for the following attributes: client service, innovation, performance, reputation, and risk management. Winners were identified based
on the analysis of the survey data.
Convenient online account
management for sponsors
and participants.
We have the tools and resources necessary for you to manage your
plan, and for plan participants to manage their account. Online access
makes plan management simple, while an intuitive Web experience
for participants helps them pursue successful outcomes.
Easy to set up — and easy to manage
The Putnam Small Business 401(k) is entirely
Web-based and is powered by ExpertPlan,
an online retirement plan recordkeeper.*
You’ll have 24-hour access to your plan, as
well as the support of our toll-free phone line.
The site gives you a comprehensive look at all
the relevant — and important — information
about your plan, and helps you manage your
fiduciary responsibilities.
* ExpertPlan is not affiliated with Putnam Investments.
The plan sponsor site allows you to:
See a plan summary
Download customized reports
Perform ACH contribution processing
Manage participant requests
See plan highlights
Get instant access to plan documents
See a Summary Plan Description
and Administrative Guide
Intuitive Web tools for participants
Our robust Web site provides the resources necessary
for participants to manage their retirement portfolio.
The site provides the tools they need to get on track,
and stay on track.
The plan participant site allows
your employees to:
Conduct account transactions
Rebalance their portfolio
Download annual, quarterly,
or customized statements
Get information about your plan’s
financial advisor
Putnam’s Small Business
401(k) Web site gives both
sponsors and participants
robust and intuitive tools.
Get started with an
industry leader today.
Once you decide to offer a 401(k) retirement savings plan to your employees,
the process is straightforward. All you have to do is take the following steps.
Meet with your financial advisor
Complete the proposal, review plan features, and select
investment options.
Set up your plan online
Use our easy online setup process to create the plan
that meets your needs.
Get started
Upload your employee census information and encourage
your employees to start saving for retirement.
Putnam’s Small Business 401(k)
is a cost-effective way to provide
a valuable retirement savings
benefit for your employees.
Asset
size
Set-up/
conversion
fee
Annual
administrative
fee
Participant
fee
<$2M
$750
$850
$30
$2M–$5M
$500
$600
$20
>$5M
$500
$0
$0
Fees for Safe Harbor
start-up plans*
$350
$600
$30
* Pricing available only for plans using Safe Harbor plan features. Call Putnam for details.
Questions? Call your financial advisor or call the
Putnam Small Business 401(k) Hotline at
1-866-207-7261.
To take a tour of the Putnam Small Business
401(k) Web sites, visit
putnam.com/retirementplans
Log in for sponsor site demo:
Log in for participant site demo:
User ID:
putnamdemo1
User ID:
putnamdemo2
Password:
password
Password:
password
INVESTING
FOR OVER
Consider these risks before investing: Asset allocation decisions may not always be correct and may adversely affect
fund performance. The use of leverage through derivatives
may magnify this risk. Leverage and derivatives carry other
risks that may result in losses, including the effects of unexpected market shifts and/or the potential illiquidity of certain
derivatives. International investments carry risks of volatile
currencies, economies, and governments, and emergingmarket securities can be illiquid. Bonds are affected by
changes in interest rates, credit conditions, and inflation. As
interest rates rise, prices of bonds fall. Long-term bonds are
more sensitive to interest-rate risk than short-term bonds,
while lower-rated bonds may offer higher yields in return for
more risk. Unlike bonds, bond funds have ongoing fees and
expenses. Stocks of small and/or midsize companies increase
the risk of greater price fluctuations. REITs involve the risks of
real estate investing, including declining property values.
Commodities involve the risks of changes in market, political,
regulatory, and natural conditions. Additional risks are listed
in the funds’ prospectus.
Money market funds are not insured or guaranteed by the
Federal Deposit Insurance Corporation (FDIC) or any other
governmental agency. Although the fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to
lose money by investing in this fund.
Request a prospectus, or a summary prospectus if available,
from your financial representative or by calling Putnam at
1-800-225-1581. The prospectus includes investment objectives, risks, fees, expenses, and other information that you
should read and consider carefully before investing.
70
YEARS
A BALANCED APPRoACH
Since 1937, when George Putnam created a diverse
mix of stocks and bonds in a single, professionally
managed portfolio, Putnam has championed the
balanced approach.
A WoRLD oF INvESTING
Today, we offer investors a world of equity, fixedincome, multi-asset, and absolute-return portfolios
to suit a range of financial goals.
A CoMMITMENT To ExCELLENCE
Our portfolio managers seek superior results over time,
backed by original, fundamental research on a global
scale. We believe in the value of experienced financial
advice, in providing exemplary service, and in putting
clients first in all we do.
One Post Office Square
Boston, MA 02109
FOR PLAN SPONSOR USE ONLY
Putnam Retail Management
1-800-719-9914
IR719 261051 6/10
putnam.com