| 1 EO /15 A look at health-care reform and its impact on investors Not FDIC Insured May Lose Value No Bank Guarantee

| 2 EO /15 The health-care system has serious challenges Costs have skyrocketed over the past decade Significant financial pressures on government entitlement programs Aging baby boomers will further strain the system

| 3 EO /15 Health-care costs have skyrocketed Source: Kaiser Family Foundation, September Health insurance premiums 191% Workers’ earnings 54% Overall inflation 43%

| 4 EO /15 The aging of America will further strain the system Total U.S. population age 65+ Source: U.S. Census Bureau, 2014 projections. Today 45 million million

| 5 EO /15 Fiscal pressures on the Medicare system Source: 2014 Trustees Report. Workers per beneficiary are steadily declining 3.2 workers 2.3 workers 2.0 workers

| 6 EO /15 Workers are paying more for their health care Average annual health insurance premiums and worker contributions for family coverage, 2004–2014 $9,950 $16,834 69% total premium increase 81% worker contribution increase Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,

| 7 EO /15 Signed into law in March 2010, the ACA is fully up and running 2010 No pre-existing conditions No lifetime limits on policies Dependent coverage up to age Supreme Court upholds individual mandate 2013 New taxes introduced 2014 Individual mandate begins Premium tax credits available Health insurance marketplace launched Essential health benefits required in policies 2015 Employer mandate begins

| 8 EO /15 Key elements of the legislation Expanded coverage Mandates to maintain insurance coverage Insurance reforms New taxes to offset costs

| 9 EO /15 Provisions expand coverage for individuals and families Medicaid expanded to cover lowest-income individuals Tax credits available for lower to moderate income individuals and families* Dependents covered to age 26 New requirements ensure a base level of coverage – 60% of out-of-pocket costs and 10 essential health benefits *Note that as of March 2014, according to the Kaiser Family Foundation, 19 states have decided not to expand their Medicaid programs while six states are still undecided. 26 states (including DC) have taken steps to expand their Medicaid programs.

| 10 EO /15 Financial incentives to obtain coverage Individuals Family of 4 $16,242 $33,455 $47,080 $97,000 FULL SUBSIDY TAX CREDITSNO SUBSIDY Based on 2015 Federal Poverty Levels of $11,770 for individuals and $24,250 for a family of four. Not all states have decided to expand their Medicaid programs to subsidize health insurance for all residents. For example, prior to the Affordable Care Act (ACA), adults without dependent children were generally excluded from Medicaid coverage. As of March 2014, 26 states have decided to expand Medicaid according to the Kaiser Family Foundation. $0 Full subsidyTax creditsNo subsidy

| 11 EO /15 New health-care exchanges Plan Actuarial value Typical deductible Typical coinsurance Bronze60%$5,00030% Silver702,00020 Gold80020 Platinum90010 Source: Kaiser Family Foundation, August 2013; figures for individual coverage. Actuarial value is the percentage of total average costs the health plan will cover. For example, a health plan with an actuarial value of 80% will generally cover 80% of costs with the plan member responsible for the remaining 20% of the costs.

| 12 EO /15 Individuals face a penalty if they don’t have insurance The penalty is calculated based on a specified dollar amount or percentage of income, whichever is greater. The percentage of income begins at 1% in 2014 and then increases to 2% of income in 2015 and finally to 2.5% of income in 2016 and beyond.

| 13 EO /15 Changes affecting business owners May be eligible for tax credits to offset premium costs Must offer coverage or face penalty in 2016 Must offer coverage or face penalty in 2015 Number of full-time employees

| 14 EO /15 There are two types of penalties facing employers ScenarioPenalty Employer offers no health-care coverage $2,000 per full-time employee over a threshold of 30 employees Employer coverage doesn’t cover at least 60% of expenses or employees pay more than 9.5% of their income on coverage $3,000 per full-time employee receiving a federal tax credit for purchasing coverage via an insurance exchange* *Total employer fine cannot exceed $2,000 per full-time employee based on the total amount of full-time employees minus 30.

| 15 EO /15 Fundamental changes to insurance Guaranteed issue: Applicant cannot be denied coverage because of a pre-existing condition Community rating: Cost determination for premiums is significantly limited in scope (age, tobacco use, geographic location) No lifetime or annual limits on coverage

| 16 EO /15 New taxes to offset costs Increase in the individual portion of the Medicare payroll tax on wages from 1.45% to 2.35% New Medicare investment income tax of 3.8% – Will affect interest, dividends, capital gains, rental income – Distributions from retirement accounts are excluded – Interest from municipal bonds not affected Targeted at individuals with more than $200K income (couples with $250K income)

| 17 EO /15 $50K Muni income Married couple with income over $250K: How does the new 3.8% surtax work? $150K Salary $50K IRA income $100K Cap gain Not subject to 3.8% surtax $250K income threshold (MAGI) $50K cap gain subject to surtax $50K cap gain not subject to surtax Simplified, hypothetical example designed to illustrate how the new Medicare net investment income surtax is applied. Beginning in 2013, the surtax applies to individuals with MAGI over $200,000 and married couples filing joint tax returns with MAGI over $250,000. MAGI defined as Adjusted Gross Income (AGI) plus net foreign income exclusion amount. Not subject to the surtax but is included in determining the $200K/$250K income threshold

| 18 EO /15 How may you be impacted by health-care reform? Higher income taxpayers May be subject to new health-care-related taxes Pre-retireesThose with health issues may benefit from obtaining individual insurance prior to Medicare eligibility without being denied or charged higher premiums RetireesDeductibles and co-payments for certain preventative services eliminated; less out-of-pocket expenses for prescription drugs; possibility of supplemental coverage premiums increasing with cuts to Medicare Advantage Business ownersReview existing employee coverage and make decision about offering health-care benefits in the future

| 19 EO /15 Considerations for investors facing higher taxes Look for ways to reduce taxable income – Retirement plan contributions, use of flexible spending accounts (FSAs), deferring compensation if possible Consider municipal bonds for a greater portion of your fixed-income assets Utilize Roth accounts for tax diversification and to create a tax-free source of income in retirement

| 20 EO /15 At higher tax rates, municipal bonds are more attractive Maximum tax bracket %5.30% 4%7.07 5%8.83 Equivalent yield of a taxable bond For 2015, assumed tax rate is 43.4%, reflecting the new Medicare investment income surtax of 3.8%. Bond investments are subject to interest-rate risk, which means the prices of the fund’s bond investments are likely to fall if interest rates rise. Bond investments also are subject to credit risk, which is the risk that the issuer of the bond may default on payment of interest or principal. Interest-rate risk is generally greater for longer-term bonds, and credit risk is generally greater for below-investment-grade bonds, which may be considered speculative. Unlike bonds, funds that invest in bonds have ongoing fees and expenses. While all bonds have risks, municipal bonds may have a higher level of credit risk as compared to government bonds and CDs. Municipal bond yield

| 21 EO /15 Closing thoughts Health-care reform represents the most sweeping changes to our nation’s health-care system in decades Consult with your financial advisor and tax professional to discuss strategies for your specific situation

| 22 EO /15 A BALANCED APPROACH A WORLD OF INVESTING A COMMITMENT TO EXCELLENCE | 22 EO /13

| 23 EO /15 This information is not meant as tax or legal advice. Please consult your legal or tax advisor before making any decisions. Putnam Retail Management putnam.com