Putnam Investments 401(k) Participant Experience Helping to Drive Deferral Rates up 25 Percent

Easily Digestible, Actionable Information Continues to Motivate Higher Levels of Retirement Savings Among Putnam Plan Participants in 2013

Business Wire


Four years after the launch of its award-winning Lifetime Income Analysis experience, participants in Putnam Investments-administered 401(k) plans continue to take significant steps forward in increasing their level of retirement preparedness through use of the firm’s unique lens on projected monthly income in retirement and its ability to enable near-immediate action to improve one’s savings trajectory.

During 2013, Putnam found that of the participants who used the firm’s proprietary Lifetime Income Analysis ToolSM, 35 percent made deferral changes, and of those, 76 percent chose to increase their savings rate by an average of 25 percent.

Results were noticeably more pronounced among plan participants who also used Putnam’s Health Cost Estimator, a feature of the Lifetime Income Analysis Tool, which provides an estimate of how much future income will be needed to cover healthcare costs in retirement. Those who used the Health Cost Estimator and made a deferral rate change, increased their 401(k) plan savings contributions from 7.7 percent to 9.9 percent, a 29 percent increase – and more than three percentage points over the industry average of 6.8 percent, according to Plan Sponsor Council of America.

“We face three big challenges in helping workers achieve their retirement goals. First, helping them accurately understand their current prospects; second, offering actionable solutions; and third, enabling them to act immediately and overcome inertia,” said Edmund F. Murphy III, Head of Defined Contribution, Putnam Investments. “The Putnam Lifetime Income Analysis Tool is working effectively to meet all three of these challenges, and helps motivate 401(k) plan participants to increase their savings, putting them on a better footing for retirement.”

Murphy also noted that plan participants using the Putnam Lifetime Income experience to change their deferral rates, increased their savings by a much more significant magnitude – seven times more, in fact – than participants who used other methods to change their contribution levels, such as telephone.

The Putnam study analyzed the actions of over 40,000 participants in Putnam retirement plans who used the Lifetime Income Analysis Tool during 2013, as well as over 8,000 participants who accessed the Health Cost Estimator during the year.

Putnam’s award-winning 401(k) participant experience is comprised of several key features, including:

  • Lifetime Income Analysis Tool
    Introduced in January 2010, the Lifetime Income Analysis Tool projects plan participants’ current savings into future monthly retirement income, calculates whether they are on track to generate the income they are likely to need once they stop working and offers actionable steps to increase savings. It also offers next steps to help boost income in retirement, and provides a convenient way to immediately adjust contributions and rebalance portfolios.
  • Putnam Health Cost Estimator
    The Putnam Health Cost Estimator, launched in Spring 2013, provides an important window into what will likely be one of the largest, most burdensome expenses in retirement: Healthcare costs. It offers personalized estimates of how large a portion of expected future monthly income will be needed to cover a broad range of healthcare costs in retirement, including itemized insights on medical, dental and pharmaceutical expenses at different age points.
  • 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 participant experience, to help them evaluate resources for potential retirement savings.
  • “How Do I Compare?”
    In the coming months, Putnam will launch “How Do I Compare,” a new 401(k) feature, fully integrated into the firm’s Lifetime IncomeSM Analysis Tool, which will allow plan participants to compare their progress in saving for retirement with their peer group and top-tier savers.

About Putnam Investments
Founded in 1937, Putnam Investments is a leading global money management firm with over 75 years of investment experience. In February 2014, for the third time in five years, the firm was named one of the top two mutual fund families by Lipper/Barron’s based on the firm’s performance across asset classes in the previous year. In 2014, Putnam also was ranked #2 out of 55 fund families for its performance over the past five years. 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 Media Contacts:
Jon Goldstein, 617-760-1127 (office)
516-946-5598 (cell)
Laura McNamara, 617-760-1108 (office)
978-505-0524 (cell)


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