Franklin Templeton Investments Launches Franklin Retirement Payout Fund Series

From Franklin Templeton Investments
contact Cheryl Sanclemente
Telephone (650) 312-3270

Five-Fund Lineup Seeks to Fill Gap for Plan Sponsors in Next Generation Retirement Solutions

San Mateo, CA, June 1, 2015 — Franklin Templeton Investments today announced the launch of the Franklin Retirement Payout Fund series1 designed to help defined contribution (DC) participants transition from savings to spending in retirement.

The process of converting retirement savings into cash flow is complex for many plan participants, who may know and understand the expenses they face in retirement, but feel less confident about sources of income. In fact, it was found in Franklin Templeton’s 2015 Retirement Income Strategies and Expectations (RISE) survey, which polled 2,002 American adults, that 52% of people are concerned about managing retirement income to meet retirement expenses.2

The retirement industry has made great strides with respect to the accumulation phase; however, plan sponsors have previously been reluctant to actively address participant cash flow needs in retirement. The Franklin Retirement Payout Fund series is an in-plan solution designed to help address some of these critical needs.

The Franklin Retirement Payout Fund series — with current annual fund maturity dates from 2017 through 2021 — is designed for participants who are nearing or in retirement, and are seeking a straightforward payout schedule to help provide a more predictable cash flow distribution from their investment account while in retirement. These funds and their payout schedule can potentially be matched against a participant’s specific expenses as they make that transition

“We pride ourselves in bringing innovative solutions to the retirement marketplace. These funds can help plan participants structure a more predicable cash flow from their account balance for future spending needs in retirement,” said Drew Carrington, head of Institutional DCIO for Franklin Templeton Investments. “The proceeds can be used to pay for current expenses or reinvested into a subsequent fund in the series. The flexibility of this innovative approach not only seeks to make spending in retirement simpler and more straightforward, it is also adjustable, allowing participants to change their strategy as they see fit through a simple exchange or redemption.”

This product innovation continues Franklin Templeton’s efforts to provide simple, practical solutions to a changing retirement landscape — one that is increasingly oriented to helping plan participants not only save for, but successfully move on to, what’s next.

“In addition to simplifying withdrawal strategies for plan participants, the open-end mutual fund structure mitigates some of the challenges with existing in-plan retirement income solutions—namely fiduciary, recordkeeping and portability issues,” Carrington continued.

Roger Bayston, CFA2, the funds’ portfolio manager with Franklin Templeton Fixed Income Group, said, “With the Franklin Retirement Payout Fund series, we can integrate the more predictable principal repayment features of individual bonds with the diversification potential of traditional fixed income funds.”

The Franklin Retirement Payout Fund series seeks capital preservation and income by investing predominantly in U.S. dollar-denominated investment grade fixed income securities, including government and corporate debt securities, asset-backed securities and municipal securities. Such securities may be fixed or variable rate. Each fund may invest a portion of its assets in U.S. dollar-denominated foreign securities.

Important Information About the Funds

All investments involve risks, including possible loss of principal. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Interest rate movements will affect the fund’s share price and yield. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline. Because the funds can only distribute what they earn, the funds’ distribution to shareholders may decline when prevailing interest rates fall or when the funds experience defaults on debt securities they hold. Interest earned on floating loans varies with changes in prevailing interest rates. Therefore, while floating rate loans offer higher interest income when interest rates rise, they will also generate less income when interest rates decline. These and other risks are described in the fund’s prospectus.

Investors should carefully consider a fund’s investment goals, risks, sales charges and expenses before investing. To obtain a prospectus, which contains and other information, please call Franklin Templeton Investments at 1 (800) 321-8563. Please read the prospectus carefully before investing or sending money.

About Franklin Templeton Investments

Franklin Templeton Investments is a leader in retirement investing, managing over $200 billion3 in retirement assets on behalf of individuals, small businesses and institutions. Since 1947, Franklin Templeton has helped people build retirement success.

The fund’s principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 150 countries. Through specialized teams, the Company has expertise across all asset classes — including equity, fixed income, alternative and custom solutions. The Company’s more than 600 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in 35 countries, the California-based company has more than 65 years of investment experience and over $894 billion in assets under management as of April 30, 2015. For more information, please visit

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  1. Franklin Retirement Payout Funds include Franklin Payout 2017 Fund, Franklin Payout 2018 Fund, Franklin Payout 2019 Fund, Franklin Payout 2020 Fund and Franklin Payout 2021 Fund.
  2. The Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey was conducted online among a sample of 2,002 adults comprising 1,001 men and 1,001 women 18 years of age or older. The survey was administered between January 8 and 22, 2015, by ORC International’s Online CARAVAN®, which is not affiliated with Franklin Templeton Investments. Data is weighted to gender, age, geographic region, education and race. The custom-designed weighting program assigns a weighting factor to the data based on current population statistics from the U.S. Census Bureau.
  3. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
  4. As of 3/31/15