Father of 401(k) Looks Ahead
Philadelphia Inquirer (01/28/01) Vol. 29, No. 2 p.H1; Lewerenz, Dan

In 1980, Ted Benna developed a tax-deferred retirement savings account known as the 401(k). Benna's coworkers at Pennsylvania-based employee-benefits company Johnson Cos. eagerly made their first contributions to the account in 1981. Today, the 401(k) plan--with assets reaching $1.3 trillion--is one of the top retirement plans for nearly 50 million American workers. Benna's innovation, while revolutionizing personal finance, has transformed participants into active managers of their retirement plans. However, employers still decide who administers the 401(k) plan for their company. When employers choose a fund group that employees can pick from, then decide to change plan administrators, it can leave them open for lawsuits. In addition, it also prevents employees from deciding on their best investment needs. In the next decade, Benna expects employers to get out of 401(k) administration. In what Benna describes as a change where everyone wins, employees will be given autonomy over their investments. Employers are relieved of liability, and employees are left to make their own investment decisions.


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