PLANADVISER - November/December 2018 - 16

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Celebrating 40 Years of the 401(k)
... And discussing how it could be further strengthened
THE 401(k) turned 40 on November
6. Over
the last
four decades,
this
retirement plan has evolved in a
number of ways-including by developing
communication and education
programs, call centers, advisory
services, online account management
and by integrating mobile and digital
capabilities-to become
the
centerpiece
of employer-sponsored retirement
benefit programs.
It is its own brand, in a way. What
other section of the Internal Revenue
Code (IRC) do Americans know? said
Charlie Nelson, CEO of retirement and
employee benefits at Voya Financial, at
a birthday celebration for the 401(k),
hosted by his company at the New York
Stock Exchange (NYSE).
The plan was created by
the
Revenue Act of 1978, four years after the
Employee Retirement Income Security
Act (ERISA) became law. Passed by the
95th Congress and signed by President
Jimmy Carter on this date in 1978, the
bill led to the addition of IRC Section
401(k), which allowed employees to
defer taxation on the portion of income
they elected to contribute.
For the celebration, the hosts
invited the small group of guests-
industry
leaders,
advisers,
consultants
and plan sponsors-to share
their unique insights and perspectives
about this milestone. The event
included roundtable discussions about
the health of the 401(k) industry, the
impact of legislation and regulation
on retirement policy, and reflections
on the plan's 40 years.
Bill Harmon, president of corporate
markets at Voya Financial, and
Alison Cooke Mintzer, editor-in-chief
of PLANADVISER and PLANSPONSOR,
led attendees in a roundtable analysis
of the 401(k), examining its historical
strengths and weaknesses and potential
opportunities and threats (SWOT).
Attendees were optimistic about
the opportunities for the plan, as well
as for the surrounding industry, noting
TOP: Industry leaders applaud after Voya's Charlie Nelson (center) rings the New York Stock
Exchange opening bell. BOTTOM: Celebration guests, including PLANADVISER's Alison Cooke
Mintzer, talk to a Citadel floor trader for Voya.
that an awareness of the plan's weaknesses
could generally be addressed.
" At Voya, we have been proudly
supporting customers with their retirement
goals for decades, " said Nelson.
" Since they were created 40 years ago,
401(k) plans have evolved from a supplemental
program to become a primary
way that individuals and families save
for their future. As we take a moment
to celebrate the strong foundation and
accomplishments of the system, let's
also recognize the opportunities we
have to help even more employers and
workers take advantage of important
401(k) benefits. "
According to the latest statistics
from the Department of Labor (DOL),
401(k)s cover over 65 million workers,
represent $4.4 trillion in savings and
pay for over $385 billion in retiree
expenses annually. -Judy Faust Hartnett
16 | planadviser.com November-December 2018 Photos courtesy of NYSE

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PLANADVISER - November/December 2018

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