The Man Behind the 401[k]
B E L L E F O N T E, Pa., Jan. 18 -- Ted Benna was thinking about giving upretirement planning to become a full-time Quaker minister when hestumbled across something new buried deep within the federal taxcode.
The change — a paragraph (k) added in 1978 to Section 401 of theInternal Revenue Code — was intended to clear up a tax issue over acorporate profit-sharing plan. But Benna saw a broader application:an avenue for converting after-tax savings plans into tax-deferredretirement accounts.
Thus was the humble beginnings of the 401(k), which over theyears has become a wildly popular savings program and a hugestorehouse of national wealth. Some 48 million American workers nowhave 401(k) plans worth more than $1.3 trillion.
"I knew it would be big," said Benna, who now does retirementconsulting from this central Pennsylvania town. "Of course, Istopped projecting in the billions — I never got to thetrillions."
Mover and Shaker in Retirement Account World
Benna remains a mover and shaker in the retirement-accountworld. He contributes regularly to publications, and heads the401(k) Association, which promotes the retirement plans and lobbiesCongress to oppose laws that would add more regulations.
He's also an open advocate of unrestricted employee choice indirecting their 401(k)s, which he sees as a win-win situation — workers make their own investment decisions, and employers arerelieved of legal exposure.
"It's your money," he said. "You should have the choice, thecontrol, and the employer shouldn't be liable."
The 401(k) idea, as popular as it is now, didn't catch on rightaway.
Benna's first proposals were a Philadelphia bank and a couple ofinsurance companies, but they fell flat. So he made a guinea pigout of The Johnson Cos., a suburban Philadelphia employee benefitscompany where he was a partner. He persuaded some of the company'sworkers to try his idea, and their first contributions were made inJanuary 1981.
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