Episode 2 - It Sings, But Will it Sail? The Birth of the 401(k)
Release Date: 03/09/2021
Bonus: Episodes Recap with Michael Kreps
The Accidental Plan Sponsor®
In the second half of season two, Josh and co-host Michael Kreps explored different ideas to reshape our country’s retirement system. Listen to their recap and reflections on the various approaches and proposals.
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Season 2 Episode 8: Non-Accidental Plan Sponsors
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Season 2 Episode 7: The Implementers
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Josh Cohen and guest co-host Michael Kreps have been telling the story of how some policy makers, think tanks, industry groups and politicians worked to address some of the gaps in our retirement system. One of those gaps is the millions of Americans that don’t have access to workplace savings plans. In this episode, they focus on the work being done at the state level and the process of moving from policy design and legislation, to implementation. They speak with two individuals who have been instrumental in getting these plans implemented: Katie Selenski, executive director...
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Season 2 Episode 6: Laboratories of Democracy
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In the 1932 Supreme Court ruling, Justice Louis Brandeis popularized the phrase “laboratories of democracy“ to describe how “a single courageous state may, if its citizen choose, serve as a laboratory and try novel social and economic experience without risk to the rest of the country.” Many states have looked to become laboratories to address some of the gaps in the US current retirement system that federal policy hasn’t yet been able to successfully solve. Josh Cohen and guest co-host Michael Kreps talk to two early experimenters, Hank Kim and Daniel Biss, to learn from...
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Season 2 Mid-season Trailer
The Accidental Plan Sponsor®
For the second half of season 2, Josh Cohen will be joined by guest co-host Michael Kreps, Principal at Groom Law Group, to dissect the biggest questions and potential solutions that are being worked on in the retirement space.
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Bonus: Perspectives from Josh’s Global Colleagues
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Josh gets on the ground insights from three colleagues in PGIM’s Institutional Relationship Group: Ben Price, Howard Nowell, and Philip Hsin.
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Bonus: Meet Josh’s New Boss
The Accidental Plan Sponsor®
Michael Miller, a long-time industry veteran and Head of PGIM DC Solutions, joins Josh to share how he got into the retirement space and some insightful perspectives on DC trends and pressing issues.
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Bonus: Josh’s Key Takeaways: Non-US Retirement Systems
The Accidental Plan Sponsor®
In the first half of season 2, Josh traveled the globe to hear from local experts about how their countries tackled the challenge of building a retirement system. Listen to Josh’s reflections on lessons learned and common themes.
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Bonus: Global Episodes Recap with John Mitchem
The Accidental Plan Sponsor®
John Mitchem, global financial consultant and retirement expert, joins Josh to discuss episodes from the first half of season 2 while weaving in his experiences and expertise.
info_outlineAt 40 years old, the 401(k) has become part of the bedrock of the employer-based retirement system. Tens of millions of Americans have socked away trillions of dollars in a retirement investment vehicle that has fundamentally changed the dynamic of how employers provide a secure retirement for their workers. Today, the 401(k) makes up more than $6.5 of the $9.5 trillion in workplace defined contribution assets. But in 1981, this nascent idea was trying to find its place amongst pension and various savings plans, and it was finding an audience that would propel it to prominence. Host Josh Cohen talks with Ted Benna, father of the 401(k), and Richard Stanger, the author of the 869-word insert to the US tax code that changed retirement.
Key Takeaways:
[1:15] Josh Cohen picks up where we left off following the birth of ERISA and welcomes two key players in the creation of the 401k: Richard Stanger and Ted Benna.
[3:46] To better understand 401k’s Josh rounds up the history of profit-sharing plans — which is almost as long as the history of the United-States.
[6:27] Richard Stenger shares the story of how he came to write the Revenue Act add-on, from President Carter’s election to the entrance of Barber Conable on stage.
[11:46] “The beauty of it was that there wasn’t a lot of lobbying. Take a blank sheet of paper, forget the history of pension law: how do we create something that creates a fair distribution of contributions and benefits between rank-and-file employees and highly compensated employees?” — Richard Stanger
[13:24] Ted Banner is often referred to as the father of 401k’s, he shares how he came into this title starting with what was called “thrift plans”, Coda Plans and getting a green light on 401k plans in 1981.
[19:33] “They took us into a big auditorium and plopped me up in front of 25 of their top tax writers with their crossed arms like” what’s this country hick going to tell us? Less than an hour into the interview it switched over to how can we get that for us?” — Ted Benna
[22:10] Ted shares his take — both the good and the bad — on what the employer role is in pension plans, as well as the benefits of the 401k.
[24:56] Richard looks back with pride on the legacy of those 869 words he wrote.
[26:20] Josh thanks both of his guests and closes out episode 2 of the Accidental Plans Sponsor and shares a teaser on episode 3: looking ahead.
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Mentioned in this episode:
Richard Stanger wrote the 869 word add-on to the Revenue Act of 1978. Find him on LinkedIn
Ted Benna took Richard Stanger’s idea and ran with it! Find him on LinkedIn