Advantages of 401K Plan Presentation - PowerPoint

					Putnam
Small Business
401(k)

 Not FDIC Insured
 May Lose Value
No Bank Guarantee

                    FOR PLAN SPONSOR USE ONLY




                             225121_putnam_small_k 5/5/2005 1
Small businesses:
An untapped market
          PERCENT OF BUSINESSES OFFERING RETIREMENT PLAN

                                          89%


                                                                           46%




                                  Large                                   Small
                                companies                               businesses
                              (More than 100                          (Fewer than 100
                                employees)                              employees)
Source: U.S. Department of Labor, Bureau of Labor Statistics, 2004.                FOR PLAN SPONSOR USE ONLY




                                                                                            225121_putnam_small_k 5/5/2005 2
  Why should you offer a
  retirement plan?
 Attract and retain valuable employees
 Stay competitive
 You can determine plan requirements to encourage
  employee retention
 It’s more affordable than you may think
 Tax credits may ease your tax burden
 You need a plan for your own retirement!

                                             FOR PLAN SPONSOR USE ONLY




                                                      225121_putnam_small_k 5/5/2005 3
        Benefits of a 401(k) plan
 High contribution limit — up to $42,000* per participant
 Flexible contributions
 Catch-up contributions for participants age 50 and older
 Loan availability
 Greater protection against creditors than
       non-ERISA-qualified plans
 Account consolidation/Rollovers


      Taxes due upon withdrawal. Withdrawals prior to age 59½ may be subject to an additional 10% tax.         FOR PLAN SPONSOR USE ONLY
  *   As of 2005, $42,000 maximum would be higher if the participant is eligible for catch-up contributions.




                                                                                                                        225121_putnam_small_k 5/5/2005 4
  401(k) plan myth #1
 “Starting a 401(k) plan is too expensive”
 Fact: A typical Putnam Small Business 401(k) can
  be established for less than $2,000
 Fact: You may deduct contributions
 Fact: Your business may be eligible for a tax credit



  Tax credit subject to an overall $500 limit for start-up costs in each of the first three calendar years the
  plan is maintained. Other limits may apply.                                                                    FOR PLAN SPONSOR USE ONLY




                                                                                                                          225121_putnam_small_k 5/5/2005 5
  401(k) plan myth #2
 “Running a 401(k) plan is too difficult
  and time consuming”
 Fact: The Putnam Small Business 401(k) is a
  convenient Web-based retirement plan
 Fact: ExpertPlan performs standard compliance
  testing and provides a signature-ready Form 5500



  ExpertPlan is not an affiliate of Putnam Investments.   FOR PLAN SPONSOR USE ONLY




                                                                   225121_putnam_small_k 5/5/2005 6
  401(k) plan myth #3
 “401(k) plans are not suitable for small companies”
 Fact: Recent legislation favors retirement plans for
  small businesses
 Tax advantages and employee-retention aspects
  may be even more important for small or new
  companies



                                            FOR PLAN SPONSOR USE ONLY




                                                     225121_putnam_small_k 5/5/2005 7
  Putnam and ExpertPlan:
  A winning combination
 Putnam Investments
    – Over 67 years of investment experience
    – A retirement plan leader for more than 30 years
    – DALBAR award-winning customer service
 ExpertPlan
    – Innovator in cutting-edge recordkeeping technology
    – Leader in Internet-based DC plan administration
    – Dedicated support teams with a wealth of industry experience

                                                        FOR PLAN SPONSOR USE ONLY




                                                                 225121_putnam_small_k 5/5/2005 8
  Who is eligible?
 Start-up plans
 Typically, existing plans with under $3 million in assets
 Putnam 401(k) plans are also available for
  larger companies




                                             FOR PLAN SPONSOR USE ONLY




                                                      225121_putnam_small_k 5/5/2005 9
    Key features
 Best of both worlds: Putnam’s DALBAR award-
    winning service and ExpertPlan’s cutting-edge
    technology
   Online setup, enrollment, and maintenance
   Online and VRU account transactions, including
    automatic rebalancing
   Toll-free telephone support
   Contributions made via ACH or check

                                           FOR PLAN SPONSOR USE ONLY




                                                   225121_putnam_small_k 5/5/2005 10
    Key features
   Broad selection of investment options
   Standardized prototype documents and SPD
   Signature-ready draft 5500 form
   Compliance testing provided by ExpertPlan
   Online participant statements
   24/7 voice response system
   Loan availability
   Online participant education materials

                                                FOR PLAN SPONSOR USE ONLY




                                                        225121_putnam_small_k 5/5/2005 11
  Flexible contribution options
 Salary deferral
 Employer profit sharing
 Employer matching contributions
 Catch-up contributions for participants age 50
  and older




  Lower limits may apply if compensation constitutes self-employment income.   FOR PLAN SPONSOR USE ONLY




                                                                                       225121_putnam_small_k 5/5/2005 12
   Wide range of
   investment options
 A range of investment options to help satisfy 404(c)
   fiduciary guidelines
 Plan built around a core offering of Putnam funds
 Also a choice of 40 Putnam funds
 Can be supplemented by funds from more than 15 other
   mutual fund families
 No restriction on the number of funds you select; no additional
   per-fund charge
 Retirement Choice Portfolios™ with auto-rebalancing
 RetirementReady® Funds
   Outside funds available for plans using A shares with over $1 million in existing
   assets or R shares (no asset qualification).                                        FOR PLAN SPONSOR USE ONLY




                                                                                               225121_putnam_small_k 5/5/2005 13
     Choose the option for your needs
     Choose the plan type that fits the needs
     of your business
    EZ Setup Plan
    Standard Plan
    Safe Harbor Plan
    Age-based Profit Sharing Plan*
    New Comparability Plan*
    * Age-based and New Comparability Plans cannot rely on a prototype document and may require the
      services of a TPA to perform the additional cross-testing required for these plan types. Employers
      should seek competent professional counsel before adopting these plan types.                         FOR PLAN SPONSOR USE ONLY




                                                                                                                   225121_putnam_small_k 5/5/2005 14
  EZ Setup Plan
 Most features set automatically
 Helps comply with non-discrimination requirements
 Reduces need for outside plan counsel




                                          FOR PLAN SPONSOR USE ONLY




                                                  225121_putnam_small_k 5/5/2005 15
  Standard Plan
 Flexibility in designing plan options
 Can be tailored to specific needs of your business
 Choose vesting schedules, eligibility requirements,
  withdrawal features




                                           FOR PLAN SPONSOR USE ONLY




                                                   225121_putnam_small_k 5/5/2005 16
  Safe Harbor Plan
 Available as a feature for EZ Setup and
  Standard Plans
 Eliminates most ADP/ACP and top-heavy requirements
 Good for companies with low participation
  or high turnover
 Employer and highly compensated employee deferrals
  not contingent on participation

                                            FOR PLAN SPONSOR USE ONLY




                                                    225121_putnam_small_k 5/5/2005 17
  Age-based Profit Sharing Plan
  and New Comparability Plan
 Favors older and more highly compensated
  employees
 Requires the services of a TPA or other professional




                                          FOR PLAN SPONSOR USE ONLY




                                                  225121_putnam_small_k 5/5/2005 18
  Cost effective
   PUTNAM SMALL BUSINESS 401(k) FEES

   Asset              Setup/conversion fee   Annual admin. fee    Participant fee

   $0 – $2M                 $750                   $750                     $30

   $2M – $5M                $500                   $500                     $20
   >$5M                     $500                     $0                       $0



 Loan: $50 setup, $25 annual maintenance
 Distribution: $50 per occurrence

                                                                 FOR PLAN SPONSOR USE ONLY




                                                                         225121_putnam_small_k 5/5/2005 19
  How to get started
 Meet with your financial advisor
    – Review the proposal and plan features
    – Select investment options

 Use Putnam’s easy online setup process
    – Create a plan that meets your needs

 Upload your employees’ census information
    – Encourage employees to save for retirement

                                               FOR PLAN SPONSOR USE ONLY




                                                       225121_putnam_small_k 5/5/2005 20
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
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 Retail Management
www.putnaminvestments.com

				
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Description: Advantages of 401K Plan Presentation document sample