Press release

PUTNAM INVESTMENTS CEO ROBERT L. REYNOLDS SAYS RETIREMENT SECURITY IS A 'VITAL NATIONAL CHALLENGE'

Calls on President Obama and Governor Romney to Endorse Existing Savings Incentives and Debate How the Nation Can Move Swiftly to Make Social Security Solvent

BOSTON, May 9, 2012Putnam Investments Chief Executive Officer Robert L. Reynolds today called on President Obama, Governor Romney and both political parties to recognize retirement security as "not only a vital national challenge, but a key element in solving our nation's debt and deficit crisis over the long term."

Speaking at a retirement security forum in Washington, D.C., sponsored by the Financial Services Roundtable, Reynolds said that, “Both political parties should come together to create a truly reliable retirement system with strong public and private elements. We have the ability to make Social Security solvent and extend access to retirement savings on the job to all working Americans. We have a great foundation to build on and it would be tragic if we fail to get this done.”

Noting recent data showing an uptick in elderly poverty and growing strains on Social Security‘s finances, Reynolds called for retirement security to be a front–and–center issue in this year's presidential campaign. "This year is the time for debate. Next year is the time for action. A secure retirement system can provide higher savings, fuel more investment and sustain more rapid economic growth. But we need to strengthen the system, not undermine it — as some short–sighted budget hawks in Washington are proposing to do.”

Reynolds explained that retirement savings tax incentives are merely a deferral plan designed to encourage broad–based savings and ultimately the lessoning of longer–term financial burden on the government; not tax “expenditures,” as some in the budget discussions have portrayed them.

Underpinnings of Retirement Savings at Risk
Despite the great benefits that a secure retirement system could bring, Reynolds warned that “We now face a very real risk that policymakers could severely undercut incentives for 401(k)’s, IRA's and other savings vehicles in the course of trying to reduce federal deficits. That would be a huge step in the wrong direction at a time when we should be doing all we can to shore up savings and retirement security.”

Citing recent deficit commissions and Congressional policy papers that repeatedly identify savings incentives as a major cost to the Treasury, Reynolds warned that cutting back such incentives could send millions more working Americans toward retirement with little or no retirement savings. “It is hard to imagine a more perverse and destructive policy error than undercutting private savings to try to cope with out–of–control federal deficits,” Reynolds continued. “National solvency and personal solvency go together. We should never pit one against the other as proposals to cut retirement savings incentives would do.”

Presidential Candidates Put on Notice
Reynolds called on President Obama, Governor Romney and Congressional candidates of both parties to support a bipartisan Sense of Congress Resolution in defense of retirement savings and to forthrightly discuss retirement security in this year's campaign. “Our political leaders should be asked specifically what they plan to do to sustain and expand personal savings incentives. They should also tell us what specifically they will do to restore Social Security solvency for the long term. This is a debate that America needs, and given the increasingly loud ticking of the clock, this is the year for it.”

Indicating that 10,000 Baby Boomers will be reaching retirement age every day for a generation to come and the number of Americans over age 65 is due to rise from 32 million today to over 70 million by 2030, Reynolds said, “Retirement security is too critical an issue to be dealt with in closed committee rooms or in think–tank debates in Washington. Americans need a full, open national discussion about policy risks to savings incentives — including how close we are to actually solving the retirement challenge, as well as the real dangers that await if we are not up to the task.”

More positively, Reynolds contended, “We also need to convince people that retirement savings policy can play a key role in lifting Americans' savings rates and financing economic growth. The American people need to know that we can solve this challenge. There are serious, bipartisan compromises that could make Social Security solvent now. Delay would only make reform more painful. At the same time, we can extend private retirement savings options to all working Americans. Together, this public–private system can deliver reliable lifetime incomes. We know how to do that –– and we should. ”

Restoring Faith in America’s Ability
By working together on comprehensive retirement reform, Reynolds concluded, "Our two great political parties could help restore faith that our government can get the most vital jobs done. Strong retirement policy can, in turn, lay the foundation for a new economic model for America — one driven by higher savings, greater returns to investment, new business formation and private sector job creation. And growth, not austerity, offers the best long–term solution for our country's debt and deficit crises."

About Robert L. Reynolds
Since Robert L. Reynolds, a 30–year retirement savings industry veteran, became Putnam’s President and CEO in 2008, the company has deepened its commitment to helping America meet the retirement savings challenge and launched a series of innovations and initiatives to meet emerging customer needs.

Reynolds has been a leading advocate of addressing the nation’s long–term financial problems through a comprehensive and integrated approach that includes retirement savings, entitlement reform and addressing the structural deficit in the federal budget. Prior to joining Putnam, Reynolds spent 23 years at Fidelity Investments, where his accomplishments included building the firm’s retirement business.

About Putnam Investments
Founded in 1937, Putnam Investments is a leading global money management firm with 75 years of investment experience. At the end of March 2012, Putnam had $124 billion in assets under management. Putnam has offices in Boston, London, Frankfurt, Amsterdam, Tokyo, Singapore and Sydney. For more information, visit putnam.com.

Putnam mutual funds are distributed by Putnam Retail Management.

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