Submitted Electronically 

August 16, 2010 

To: The Office of Regulations and Interpretations 

 Employee Benefits Security Administration 

Attn: Lifetime Income Joint Hearing 

Room N-5655 

U.S. Department of Labor 

200 Constitution Avenue, NW.,Washington, D.C. 20210 

E-mail address – e-ORI@dol.gov

From: Leonard M. Glynn, Managing Director, Policy, 

Putnam Investments 

1 Post Office Square, Boston, Ma. 

Leonard_glynn@putnam.com 

617-760-1074 

Putnam Investments requests permission to send a representative of our company to 

speak, answer questions and offer written testimony at the September 14 Joint 

Hearing on Certain Issues Relating to Lifetime Income Options for Participants and 

Beneficiaries in Retirement Plans (Federal Register/Vol. 75, No. 153 -- pages 48367-8 

-- Tuesday August 10, 2010). 

We would choose to focus on the third of the five key issues that the Joint Hearing will 

address: the disclosure of account balances as monthly income streams. Our intention would 

be to speak for five minutes or less and address several issues related to question 3 – as 

summarized below. 

First, Putnam believes that providing for future income is the prime rationale for the tax 

advantages granted to defined contribution savings plans like 401(k)s, 403(b)’s 457s and 

others. Yet this central goal – lifetime income – has too often been obscured by an industry 

– and individual -- focus on asset accumulation, account balances, investment choices, asset 

allocation and other issues. 

 

We believe that the focus of workplace savings policy needs to shift. From the beginning of 

an individual’s retirement savings journey, the lens through which workers view their jobbased retirement savings plan should be changed from a focus on the accumulated savings 

balance to the assets’ potential for generating reliable income for life. 

To that end, our own new 401k Participant web site offers immediate access – as the first 

information displayed – to Putnam’s Lifetime Income Analysis Tool.® This enables plan 

participants to measure how much income their savings can be reasonably estimated to 

generate at their projected retirement date. They can readily “see” estimates that show 

whether they are on track to have sufficient income to maintain their current lifestyle once 

they stop working. And they can take immediate action to get on track or close any income 

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gap the tool discloses by changing their current deferral rate, asset allocation or projected 

retirement age. 

Through this site, then, the “lens” has been changed – and while traditional balance data is 

readily available – it is not primary. A lifelong income planning view is the first angle from 

which participants in Putnam’s defined contribution plans see their own progress and they 

are “educated” – dynamically – to measure their progress in terms of future income 

replacement, rather than only by raw asset accumulation. 

Participants can use this tool to act – immediately – and change some of the key variables 

that impact future income potential – specifically, their rate of savings (deferral), their asset 

allocation, and the future date at which they plan to retire. They are also able to take full 

account of future income from both Social Security and other (non-plan) retirement assets 

when they calculate their income potential. Putnam’s initial experience with this process 

strongly suggests that this new “view” does, in fact, influence participants’ savings behavior. 

To make such an income “view” an effective motivator, it is vital that financial service 

providers be permitted to calculate estimated future income potential based not just on 

current account balances, but on contribution rates and potential asset appreciation to some 

future retirement age. Expressing participants’ account balances in terms of current incomegenerating potential could actually undermine confidence and de-motivate savers by vastly 

understating the future income potential they are on track to achieve. 

We believe that participants who learn to interpret their workplace savings through the 

“lens” of their future potential to generate lifelong income will be much more willing as they 

approach retirement age to consider products and services designed to convert their balances 

into lifetime income streams. This kind of experience-based “education” can – and should – 

be supplemented over time by traditional communications and information to participants 

about the benefits and trade-offs inherent in either annuity or non-annuity lifetime income 

products and strategies. 

Regulatory and policy action that encourages financial service providers and plan sponsors to 

emphasize an “income” view of workplace savings could help speed the adoption of such an 

approach – and begin changing workplace savers’ mindset about their goals. We would also 

support efforts to offer plan sponsors and advisors strong legal safe harbor for advocating or 

adopting plan design elements that emphasize a lifetime income “view” or offer participants 

education and guidance to appropriate lifetime income products and strategies. 

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