Putnam filed May 3 with the Securities and Exchange Commission to add two share classes—R5 and R6—to allow qualified retirement plan sponsors to separate investment management fees from recordkeeping and administrative fees for their plan participants. The R5 share class will have 10 basis points of revenue, and the R6 class has no revenue, Edmund Murphy, Head of Defined Contribution, Putnam Investments told PLANSPONSOR.
“In our conversations with leading consultants and advisers, there is a growing interest in solutions that allow direct payment for all or a portion of administrative expenses,” said Murphy. “We expect the unbundling of fees through these new share classes to be well-received by the marketplace.”
At this time, Murphy said, Putnam has no revenue goals for these funds. They will be available to qualified retirement plans with at least $50 million in plan assets. He said expects the funds to be in the market around August.
The additional share classes will initially be offered on the Putnam funds that are most widely used among defined contribution plans, Murphy said. The filing with the SEC requires the company to specify one fund and provide disclosure language and once that is approved there will be a phased approach to adding the shares to individual funds, he commented.
These new share classes will be available both through Putnam’s investment-only defined contribution and full-service recordkeeping businesses.
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