comparing your retirement plan options
TRANSCRIPT
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 Individual 401(k) 401(k)
Key benefit Easy to set up and maintain. Salary reduction contribution plan with little administrative paperwork.
Permits high level of salary deferrals. Flexible design; high level of salary deferrals.
Eligibility Any employer. Any employer with 100 or fewer employees that does not currently maintain another retirement plan.
Individual business owners and partners of partnerships plus spouses (if also working for the business).
Any public or private company.
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. 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.
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.
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.
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).
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).
Employee salary deferral contributions: $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.
Employee: $16,500 in 2011; additional contributions can be made by participants age 50 and over ($5,500 in 2011).
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).
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.
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.
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.
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, 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.
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.
Vesting Contributions are immediately 100% vested. Employer and employee contributions are immediately 100% vested.
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.
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.
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).
SEP IRA SIMPLE IRA Individual 401(k) 401(k)
Key benefit Easy to set up and maintain. Salary reduction contribution plan with little administrative paperwork.
Permits high level of salary deferrals. Flexible design; high level of salary deferrals.
Eligibility Any employer. Any employer with 100 or fewer employees that does not currently maintain another retirement plan.
Individual business owners and partners of partnerships plus spouses (if also working for the business).
Any public or private company.
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. 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.
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.
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.
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).
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).
Employee salary deferral contributions: $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.
Employee: $16,500 in 2011; additional contributions can be made by participants age 50 and over ($5,500 in 2011).
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).
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.
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.
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.
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, 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.
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.
Vesting Contributions are immediately 100% vested. Employer and employee contributions are immediately 100% vested.
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.
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.
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
Companyname
Currentretirementplan(if any)
Areyouself-employedoranemployer-and-spousebusiness?
nYes nNo
Ifno,howmanypeopledoesyourcompanyemploy?
Fulltime Parttime
Howwouldyoucharacterizeyourcompany’semployeebase?
nHighlycompensatedownerandpartners/management
nOthersalariedemployees (e.g., group of doctors, attorneys, architects)
n Mostemployeeshavesimilarage,salaryrange,andyearsofexperience
Whichbestdescribesyourcompany’sincome?
nPredictableandsteady
n Businessresultsarenotknownuntiltheendofthecalendaryear
Whatisyourpreferenceforcontributions?
n Iwantemployeestocontributetotheirownretirementaccounts
n Iwantthecompanytocontributeonbehalfoftheemployees
n Iwouldlikebothoptions(matching or other company contribution)
Whichofthefollowingplanfeatureswouldyourequire?
nLoans nMulti-managerfundflexibility
nMatchingcontributions nAfter-taxoption(Roth401(k))
nVestingschedule nOther
Your current retirement plan (if applicable)
Whattypeofplandoyoucurrentlyoffer?
nProfitsharing nSEP
n401(k) nSAR-SEP
nMoneypurchase/Keogh nOther
Whatisthecurrentassetlevelofyourplan?
Whatisyourparticipationrate?
Totalnumberofemployees
Numberofemployeesparticipatinginplan
Totalnumberofcurrentaccounts(including terminated employee accounts)
Whoisyourplanprovider?
Whywouldyouconsideranotherplanprovider?(check all that apply)
nBetterservice n Moreinvestmentchoices
nTesting/5500filingissues nBetterfeestructure
nBetteradvisorsupport nOther
Whatinvestmentoptionsdoesyourplanoffer?
Whatareyourplanfees?
Annualbasefee
Perparticipantfee
Expenseratio(include wrap or M&E fee, if it is insurance-based)
Other
Total
Complete this questionnaire with your financial advisor to determine the plan that is best for your company.
Putnam Retirement Services
One Post Office Square Boston, MA 02109
1-800-719-9914
putnam.com
Putnam Retail Management
IR759 264991 11/10
Mutual funds provided by Putnam Investments.
Retirement solutions for every needWhether you are saving for your own retirement or
responsible for the retirement plan of a large business,
Putnam offers a complete range of options.
Full-service 401(k)
Total retirement outsourcing (TRO)
Small Business 401(k)
Individual 401(k)
Traditional IRA
Roth IRA
Rollover IRA
403(b)(7) Custodial accounts
SEP 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 honored with service awards for 20th consecutive year
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 share-
holders, 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.
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