6178591232 

Putnam 

INVESTMENTS 

August 11, 201.5 

Secretary '"fl1omas E. Perez 

U.S. Department of Labor 

200 Constilution Avenue 

\oVashington, DC 20210 

Dear Secretmy J'erez, 

Robert L. Reynolds 

President and 

Chief Executive Officer 

17: 10: 00 09-03-2015 

6l7-750·8BOO 

6i7·760·7154 fax 

robert_reynolds1!j:putm11n.com 

One Post Office Square 

6oston, MA 02109 

It ·w·.is a pleasure to meet you on July 30 at the vVhite House along with members uf Um U.S. 

Chamber of Cormnercc. As the head of the second-fargest retirement plan provider in America, I 

was especially gratified to hear of your interest in making sure that the proposed Department of 

L'lbor rule on fiduciary standards and practices will not only be workable - but help us achieve the 

shared goal of increased retirement security for ·working Americans. 

I will not go into detail on the multiple concerns we addressed in our formal comment letters to 

the DOL. But I would like to highlight one major concern that stems directly from my recent 

conversation with you at the White House. 'I1mt is the risk that t11c rule as drafted could stymie the 

expansion of workplace savings plans in America. 

As you know, tens of millions of working Americans lack access to any form of payroll deduction 

savings plan. W c view this "access gap" as one of ilie most serious shortfalls in American retirement 

'policy and we have actively supported legislation that could help dose it - notably the auto-IRA 

legislation the Administration has repeatedly advocated. So we are very concerned that the DOL's 

proposal could actunlly worsen this access gap. Herc's why. 

'111c "seller's l:cu-ve-out11 in lhe rule L'i limited to plans with either fewer thu1 100 empkiyecs or 

$100 rnillion in assets. This, in cffecl, will block providers from making customary sales 

presentations to the ovcnvhelming nw,Jority of small and emerging businesses - U1c prime growth 

sct:,rmcnt of workplace savings. 

'I11c rationale for 11protccting" these small business owners is fallacious. All of them, in fact, are -

by definition - fiduciaries under ERISA. TI1ey arc also savvy business people well able to 

understand a sales pitch when they receive one. 

'l11c rule's platform and selection/monitoring "carve-outs" - which might seem to mitigate my 

concerns - actually limit providers' role severely. 111cy require, for example, than any suggested 

narrowing of the vast array of potential investments be done on objective criteria provided by the 

business owner. 111cy also seem lo make platf01ms the only permissible offering for small plans, 

thereby cutting out advisors and other intermediaries. 

2 13 
6178591232 

Sccrcla!y Thomas E. Perez 

P<lb"e Two 

August 11, 2015 

17: 10: 17 09-03-2015 

Strangely, then, the proposed rule seems to assume on one hand that businessmen ;ind women are 

too naive to recognize a sales pitch; on the other hand, they are sophisticated enough to select the 

right screens and filters to <let.ermine an investment line-up. Both assumptions, I would suggcsti a:re 

vvrong. 

Here are a few basic changes that could amend this rule to reflect current real"world best practices 

- while ilso helping tho small business market for savings plans to grow in the future. 

• Extend the seller's carve out to plans of all sizes. Sales presentations per se are not fiduciary 

acts. 

111 Explicitly allow retirement service providers, advisors and otlier intermediaries to assist 

plan sponsors in narrowing the r.mge of investment choices in their plan. 

• Require full, plain~English disclosure of any financial interest a provider might have in any 

specific invesllnent option in a plan's Jine-up - but do not prohibit such options. 

Mr. Secretary, I believe these changes to the rule are the minimum needed to avoid stalling the 

growth of workplace savings coverage among new and emerging businesses. 

We ask you to consider them in order to advance common goals we sh.arc with you: extending 

workplace savings options to all working Americans and seeing that they receive guidance a11d 

advice that is in their best interests. 

If members of the DO L's policy teams arc .interested in discussing these ideas or other issues 

relat.ed to tl1e proposed rule, I would be pleased to have experts from Empower Retirement be in 

touch with them. 

Robert L. Reynolds 

President and Chief Exe cu live Officer 

Great.-West Lifeco U.S. Inc. and Pu1nam Investments 

RLR:mc 

cc: Mark Iwzy, U.S. Treasw-y 

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