Lesson 10 The 401(k) Plan
As previously mentioned, when 401(k) plans were first conceived, they were intended to be a supplement to traditional plans, not a replacement. Ted Benna, a benefits consultant, designed a plan to allow some employees of a small bank to tax shelter a bonus if they so desired, while allowing other employees to take the bonus in cash. (The bank president wanted to defer his bonus, but felt that most of the rank-and-file would prefer cash.) The rest is history. The idea took off, grabbing an increasing share of the total retirement plan landscape.
As a supplemental plan, the 401(k) plan is a truly great idea. As such, it is often offered in combination with other pension plans. A 401(k) plan gives employees an opportunity ...
Get The Retirement Challenge: Will You Sink or Swim? now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
