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
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