Comparing Your Retirement Plan Options
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Comparing your retirement plan options
Putnam Retirement Services
Solutions for businesses of all sizes
Since the inception of 401(k) plans, Putnam Investments has been a leader in the business of retirement. We manage retirement assets for some of America’s most successful companies, helping thousands of plan sponsors and financial advisors design plans that make saving as effortless as possible. We recognize that there is no one-size-fits-all retirement plan option. Putnam offers a comprehensive selection of plans and investment management options for businesses of all sizes. To determine which are best for your business, use the following questionnaire and plan comparison grid, and work with your plan’s financial advisor. We look forward to helping you design a plan to meet your needs.
SEP IRA
SIMPLE IRA
Key benefit
Easy to set up and maintain.
Salary reduction contribution plan with little administrative paperwork.
Eligibility
Any employer.
Any employer with 100 or fewer employees that does not currently maintain another retirement plan.
Plan documents needed
Set up plan using either IRS Form 5305-SEP or the Putnam prototype SEP agreement.
Set up plan by completing IRS Form 5304-SIMPLE.
Contributions to the plan
Employer contributions only. Prior year contributions through tax filing deadline, plus extensions. Roth 401(k) after-tax contributions not available.
Employee salary reduction and contributions and employer contributions. Roth 401(k) after-tax contributions not available.
Maximum annual contribution
25% of compensation or a maximum of $49,000 (for 2011). Maximum compensation on which 2011 contribution can be based is $245,000. Self-employed individuals making “employer” contributions on their own behalf are generally limited to a deductible amount that is the lesser of 20% of net earnings after allowable deductions, or $49,000.
Employee: $11,500 in 2011 and thereafter. Additional contributions can be made by participants age 50 and over ($2,500 in 2011).
Contribution options
Employer decides whether to make contributions for each year.
Employee can elect how much to contribute from pay. Employer must make matching or nonelective contributions.
Maximum employee coverage requirements
Must be offered to all employees who meet minimum age, service, and pay requirements. More liberal standards may be adopted by the employer.
Must be offered to all employees who meet minimum compensation requirements. More liberal standards may be adopted by the employer.
Withdrawals, loans, and distributions
Withdrawals permitted at any time subject to federal income taxes; early withdrawals subject to tax and potential penalty. No loans permitted.
Withdrawals permitted at any time subject to federal income taxes; early withdrawals are subject to tax and potential penalty. No loans permitted.
Vesting
Contributions are immediately 100% vested.
Employer and employee contributions are immediately 100% vested.
Investments
Full range of Putnam funds, including Asset Allocation funds, RetirementReady® target-date funds, and Absolute Return funds.
Full range of Putnam funds, including Asset Allocation funds, RetirementReady® target-date funds, and Absolute Return funds.
Employer: Employer must contribute matching contributions equal to 100% of first 3% of elective deferrals or nonelective contribution equal to 2% of compensation not in excess of $245,000 (for 2011).
Individual 401(k)
401(k)
Permits high level of salary deferrals.
Flexible design; high level of salary deferrals.
Individual business owners and partners of partnerships plus spouses (if also working for the business).
Any public or private company.
IRS-approved prototype plan maintained by vendor (e.g., Putnam Individual 401(k) prototype available through ExpertPlan). Individually designed plans may also be available at greater cost.
IRS-approved prototype plan maintained by provider (e.g., Putnam Defined Contribution Plan) or custom-designed document.
Employee salary deferral contributions and/or employer contributions. Roth 401(k) after-tax contributions available.
Employee salary deferral contributions and/or employer contributions. Roth 401(k) after-tax contributions available.
Employee salary deferral contributions: $16,500 in 2011. Additional contributions can be made by participants age 50 and over ($5,500 in 2011).
Employee: $16,500 in 2011; additional contributions can be made by participants age 50 and over ($5,500 in 2011).
Employer: Employer contributions, together with any employee contributions, cannot exceed the lesser of $49,000 or 25% of compensation. Self-employed individuals making “employer” contributions on their own behalf are generally limited to a deductible amount that is the lesser of 20% of net earnings after allowable deductions, or $49,000.
Employer: Employer contributions for each employee, together with employee contributions, cannot exceed the lesser of 100% of the employee’s compensation, or $49,000 in 2011 (additional limits may apply).
Employee salary deferral contributions as desired up to limit. Employer contribution may also be made as set by plan terms.
Employee can elect how much to contribute from pay. Employer contribution may also be made as set by plan terms.
Plan is intended for self-employed business owners with spousal employees only. Coverage for additional employees is available through the Putnam Small Business 401(k).
Plan sponsors can adopt eligibility requirements that are within the range allowed by law. Nondiscrimination and minimum coverage testing may apply.
Withdrawals permitted after specified events occur (e.g., retirement, plan termination). Plan may permit loans and hardship withdrawals; early withdrawals subject to tax and potential penalty.
Withdrawals permitted after specified events occur (e.g., retirement, plan termination). Plan may permit loans and hardship withdrawals; early withdrawals subject to tax and potential penalty.
Employee salary deferrals are immediately 100% vested. Employer contributions may be 100% vested according to plan terms.
Employee salary deferrals are immediately 100% vested. Employer contributions may vest over time according to plan terms, subject to applicable limits.
Full range of Putnam funds, including Asset Allocation funds RetirementReady target-date funds, and Absolute Return funds; extensive non-Putnam fund menu.
Full range of Putnam funds, including a choice of prediversified options; extensive non-Putnam fund menu available for Putnam Small Business 401(k), and complete open architecture available for Putnam full-service 401(k).
Assess your retirement plan needs
Complete this questionnaire with your financial advisor to determine the plan that is best for your company. Company name
Your current retirement plan (if applicable)
Current retirement plan (if any)
What type of plan do you currently offer?
Are you self-employed or an employer-and-spouse business? Yes n
No n
If no, how many people does your company employ?
n Profit sharing n SEP n 401(k) n SAR-SEP n Money purchase/Keogh n Other What is the current asset level of your plan?
Full time Part time
What is your participation rate? How would you characterize your company’s employee base? Highly compensated owner and partners/management n n Other salaried employees
(e.g., group of doctors, attorneys, architects)
n Most employees have similar age, salary range,
Total number of employees Number of employees participating in plan
Total number of current accounts (including terminated employee accounts)
and years of experience
Who is your plan provider? Which best describes your company’s income?
n Predictable and steady n Business results are not known until the end of the calendar year
What is your preference for contributions?
n I want employees to contribute to their own retirement accounts
Why would you consider another plan provider? (check all that apply)
n Better service n More investment choices n Testing/5500 filing issues n Better fee structure n Better advisor support n Other What investment options does your plan offer?
n I want the company to contribute on behalf of the employees n I would like both options (matching or other company contribution)
Which of the following plan features would you require?
n Loans n Matching contributions n Vesting schedule
n Multi-manager fund flexibility n After-tax option (Roth 401(k)) n Other
What are your plan fees? Annual base fee Per participant fee Expense ratio (include wrap or M&E fee, if it is insurance-based) Other Total
Putnam honored with service awards
Retirement solutions for every need
for 20th consecutive year
Whether you are saving for your own retirement or responsible for the retirement plan of a large business, Putnam offers a complete range of options.
Putnam has been honored for the 20th consecutive year with DALBAR Service Awards, winning five awards in total for 2009. DALBAR, an independent market research firm, recognizes service excellence to shareholders, advisors, and annuity contract holders. For the 11th time, Putnam won the “triple crown” for service in each of the three categories — an accomplishment unrivaled in the mutual fund industry.
2008 2 0 09
2 0 09
2 0 09
Full-service 401(k)
Roth IRA
Total retirement outsourcing (TRO)
Rollover IRA
Small Business 401(k)
403(b)(7) Custodial accounts
Individual 401(k)
SEP IRA
Traditional IRA
SIMPLE IRA
This material is for informational purposes only. It should not be considered tax advice. You should consult your financial advisor to determine what may be best for your individual needs. 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 advisor or call Putnam at 1‑800‑225‑1581. Please read the prospectus carefully before investing.
Putnam Retirement Services Mutual funds provided by Putnam Investments.
One Post Office Square Boston, MA 02109
Putnam Retail Management
1-800-719-9914
IR759 264991 11/10
putnam.com
Putnam Retirement Services
Solutions for businesses of all sizes
Since the inception of 401(k) plans, Putnam Investments has been a leader in the business of retirement. We manage retirement assets for some of America’s most successful companies, helping thousands of plan sponsors and financial advisors design plans that make saving as effortless as possible. We recognize that there is no one-size-fits-all retirement plan option. Putnam offers a comprehensive selection of plans and investment management options for businesses of all sizes. To determine which are best for your business, use the following questionnaire and plan comparison grid, and work with your plan’s financial advisor. We look forward to helping you design a plan to meet your needs.
SEP IRA
SIMPLE IRA
Key benefit
Easy to set up and maintain.
Salary reduction contribution plan with little administrative paperwork.
Eligibility
Any employer.
Any employer with 100 or fewer employees that does not currently maintain another retirement plan.
Plan documents needed
Set up plan using either IRS Form 5305-SEP or the Putnam prototype SEP agreement.
Set up plan by completing IRS Form 5304-SIMPLE.
Contributions to the plan
Employer contributions only. Prior year contributions through tax filing deadline, plus extensions. Roth 401(k) after-tax contributions not available.
Employee salary reduction and contributions and employer contributions. Roth 401(k) after-tax contributions not available.
Maximum annual contribution
25% of compensation or a maximum of $49,000 (for 2011). Maximum compensation on which 2011 contribution can be based is $245,000. Self-employed individuals making “employer” contributions on their own behalf are generally limited to a deductible amount that is the lesser of 20% of net earnings after allowable deductions, or $49,000.
Employee: $11,500 in 2011 and thereafter. Additional contributions can be made by participants age 50 and over ($2,500 in 2011).
Contribution options
Employer decides whether to make contributions for each year.
Employee can elect how much to contribute from pay. Employer must make matching or nonelective contributions.
Maximum employee coverage requirements
Must be offered to all employees who meet minimum age, service, and pay requirements. More liberal standards may be adopted by the employer.
Must be offered to all employees who meet minimum compensation requirements. More liberal standards may be adopted by the employer.
Withdrawals, loans, and distributions
Withdrawals permitted at any time subject to federal income taxes; early withdrawals subject to tax and potential penalty. No loans permitted.
Withdrawals permitted at any time subject to federal income taxes; early withdrawals are subject to tax and potential penalty. No loans permitted.
Vesting
Contributions are immediately 100% vested.
Employer and employee contributions are immediately 100% vested.
Investments
Full range of Putnam funds, including Asset Allocation funds, RetirementReady® target-date funds, and Absolute Return funds.
Full range of Putnam funds, including Asset Allocation funds, RetirementReady® target-date funds, and Absolute Return funds.
Employer: Employer must contribute matching contributions equal to 100% of first 3% of elective deferrals or nonelective contribution equal to 2% of compensation not in excess of $245,000 (for 2011).
Individual 401(k)
401(k)
Permits high level of salary deferrals.
Flexible design; high level of salary deferrals.
Individual business owners and partners of partnerships plus spouses (if also working for the business).
Any public or private company.
IRS-approved prototype plan maintained by vendor (e.g., Putnam Individual 401(k) prototype available through ExpertPlan). Individually designed plans may also be available at greater cost.
IRS-approved prototype plan maintained by provider (e.g., Putnam Defined Contribution Plan) or custom-designed document.
Employee salary deferral contributions and/or employer contributions. Roth 401(k) after-tax contributions available.
Employee salary deferral contributions and/or employer contributions. Roth 401(k) after-tax contributions available.
Employee salary deferral contributions: $16,500 in 2011. Additional contributions can be made by participants age 50 and over ($5,500 in 2011).
Employee: $16,500 in 2011; additional contributions can be made by participants age 50 and over ($5,500 in 2011).
Employer: Employer contributions, together with any employee contributions, cannot exceed the lesser of $49,000 or 25% of compensation. Self-employed individuals making “employer” contributions on their own behalf are generally limited to a deductible amount that is the lesser of 20% of net earnings after allowable deductions, or $49,000.
Employer: Employer contributions for each employee, together with employee contributions, cannot exceed the lesser of 100% of the employee’s compensation, or $49,000 in 2011 (additional limits may apply).
Employee salary deferral contributions as desired up to limit. Employer contribution may also be made as set by plan terms.
Employee can elect how much to contribute from pay. Employer contribution may also be made as set by plan terms.
Plan is intended for self-employed business owners with spousal employees only. Coverage for additional employees is available through the Putnam Small Business 401(k).
Plan sponsors can adopt eligibility requirements that are within the range allowed by law. Nondiscrimination and minimum coverage testing may apply.
Withdrawals permitted after specified events occur (e.g., retirement, plan termination). Plan may permit loans and hardship withdrawals; early withdrawals subject to tax and potential penalty.
Withdrawals permitted after specified events occur (e.g., retirement, plan termination). Plan may permit loans and hardship withdrawals; early withdrawals subject to tax and potential penalty.
Employee salary deferrals are immediately 100% vested. Employer contributions may be 100% vested according to plan terms.
Employee salary deferrals are immediately 100% vested. Employer contributions may vest over time according to plan terms, subject to applicable limits.
Full range of Putnam funds, including Asset Allocation funds RetirementReady target-date funds, and Absolute Return funds; extensive non-Putnam fund menu.
Full range of Putnam funds, including a choice of prediversified options; extensive non-Putnam fund menu available for Putnam Small Business 401(k), and complete open architecture available for Putnam full-service 401(k).
Assess your retirement plan needs
Complete this questionnaire with your financial advisor to determine the plan that is best for your company. Company name
Your current retirement plan (if applicable)
Current retirement plan (if any)
What type of plan do you currently offer?
Are you self-employed or an employer-and-spouse business? Yes n
No n
If no, how many people does your company employ?
n Profit sharing n SEP n 401(k) n SAR-SEP n Money purchase/Keogh n Other What is the current asset level of your plan?
Full time Part time
What is your participation rate? How would you characterize your company’s employee base? Highly compensated owner and partners/management n n Other salaried employees
(e.g., group of doctors, attorneys, architects)
n Most employees have similar age, salary range,
Total number of employees Number of employees participating in plan
Total number of current accounts (including terminated employee accounts)
and years of experience
Who is your plan provider? Which best describes your company’s income?
n Predictable and steady n Business results are not known until the end of the calendar year
What is your preference for contributions?
n I want employees to contribute to their own retirement accounts
Why would you consider another plan provider? (check all that apply)
n Better service n More investment choices n Testing/5500 filing issues n Better fee structure n Better advisor support n Other What investment options does your plan offer?
n I want the company to contribute on behalf of the employees n I would like both options (matching or other company contribution)
Which of the following plan features would you require?
n Loans n Matching contributions n Vesting schedule
n Multi-manager fund flexibility n After-tax option (Roth 401(k)) n Other
What are your plan fees? Annual base fee Per participant fee Expense ratio (include wrap or M&E fee, if it is insurance-based) Other Total
Putnam honored with service awards
Retirement solutions for every need
for 20th consecutive year
Whether you are saving for your own retirement or responsible for the retirement plan of a large business, Putnam offers a complete range of options.
Putnam has been honored for the 20th consecutive year with DALBAR Service Awards, winning five awards in total for 2009. DALBAR, an independent market research firm, recognizes service excellence to shareholders, advisors, and annuity contract holders. For the 11th time, Putnam won the “triple crown” for service in each of the three categories — an accomplishment unrivaled in the mutual fund industry.
2008 2 0 09
2 0 09
2 0 09
Full-service 401(k)
Roth IRA
Total retirement outsourcing (TRO)
Rollover IRA
Small Business 401(k)
403(b)(7) Custodial accounts
Individual 401(k)
SEP IRA
Traditional IRA
SIMPLE IRA
This material is for informational purposes only. It should not be considered tax advice. You should consult your financial advisor to determine what may be best for your individual needs. 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 advisor or call Putnam at 1‑800‑225‑1581. Please read the prospectus carefully before investing.
Putnam Retirement Services Mutual funds provided by Putnam Investments.
One Post Office Square Boston, MA 02109
Putnam Retail Management
1-800-719-9914
IR759 264991 11/10
putnam.com
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