PLANSPONSOR - December 2018/January 2019 - 18

Upfront
The 401(k) Turns the Big 4-0
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 call
centers, advisory services, online account
management, and communication and
education programs, not to mention integrating
mobile and digital capabilities-
to become the centerpiece of employersponsored
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
a small group of guests-industry leaders,
advisers, consultants and plan sponsors-
to share their insights and perspectives
about the 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
PLANSPONSOR and PLANADVISER,
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
TOP: Industry leaders applaud after Voya's Charlie Nelson (center) rings the New York Stock
Exchange opening bell. BOTTOM: Celebration guests, including PLANSPONSOR's Alison
Cooke Mintzer, talk to a Citadel floor trader for Voya.
the surrounding industry, noting 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
16 PLANSPONSOR.com December 2018-January 2019 Photos courtesy of NYSE
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

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PLANSPONSOR - December 2018/January 2019

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