Happy new year! What are your resolutions for 2022? Here at Manifest, we want to get folks engaged and excited about retirement benefits. That's why, in the coming weeks, you'll see some changes to our content – instead of reviewing benefits products, we'll be diving deep into the world of retirement. Stay tuned for profiles on retirement experts, retirement plan teardowns, and more!

📚 Weekly Benefits Digest

​What Biden’s student loan extension means for employers​
The student debt moratorium is being renewed again — and that gives employers yet another opportunity to support their workers through student loan repayment assistance, financial wellness programs, and more. (5 minute read)

​Office Holiday Parties Really Might Never Be the Same​
COVID-19 is still making it difficult for teams to get together for end-of-year festivities. Is the office holiday party obsolete? How can colleagues socialize beyond the break room? (7 minute read)

​401(k) and IRA leakages may be more severe than previously believed​
New data is redefining and reframing retirement account leakages, which might be more widespread than previously believed. (3 minute read)

💡 Spotlight on Retirement

If you subscribe to Better Benefits, you probably have at least one retirement account. And if that retirement account was supplied by an employer, chances are it's a 401(k) — the nation's most popular defined contribution plan. Less than fifty years ago, pension plans DOMINATED the retirement landscape. Today, 401(k) plans hold an estimated $6.9 trillion. What happened?

Let's take a trip ✨back in time✨ to find out.

For most of the 20th century, defined benefits plans (also know as pension plans) dwarfed all other types of retirement offerings. During this time, many working folks would find a stable job and stick with it for decades. When they retired, they would receive a retirement payout from their employer based on their tenure and previous salary, without ever having to put away a dime of their own money. Pension plans helped to ensure worker loyalty — why look for another job and risk losing the retirement savings your company was stashing away for you?

Retirement savings accounts changed all this. While the 401(k) was a major innovation (and the most popular retirement savings account today), it wasn't the first of its kind. Profit-sharing plans grew in popularity as a vehicle for retirement savings as early as 1952. An article from The New York Times in February of that year explains why:

By tying employees' retirement savings to their company's current earnings, employers could take on less financial risk while still providing retirees with a fair payout. By 1961, there were 35,000 profit-sharing plans, covering 2 million workers nationwide.

Jump to 1978: pension plans were still the most common form of employer-sponsored retirement savings, but not for much longer. A new federal bill, the Revenue Act of 1978, laid the groundwork for the modern 401(k). By incentivizing retirement savings and adding tax-deferred options to profit-sharing plans, this act created the fertile soil in which the 401(k) would soon grow.

Ted Benna (pictured above) is often credited as "the father of the 401(k)," but he wasn't alone in its inception. In an attempt to shelter the money of Kodak and Xerox executives from taxes, New York state rep Barber Conable was instrumental in the creation of tax law Section 401(k), written by Richard Stanger. Without the work of these two men (and their wealthy muses at Kodak and Xerox), the 401(k) might never have existed.

Benna did contribute one vital element to the modern 401(k), however: he added the matched savings incentive. In 1980, he used Section 401(k) to design a more tax-friendly retirement program that encouraged employers to match a percentage of employees' pre-tax retirement plan contributions.

Just one year later, his proposed plan skyrocketed in popularity when the IRS allowed employees to fund their 401(k)s through payroll deductions. Within 2 years, nearly HALF of all big US companies were offering or looking to offer a 401(k) plan. And the American retirement landscape was forever changed.

In the years since, the 401(k) has grown and evolved. Auto-enrollment has increased contribution numbers, almost doubling plan participation. And new ways of saving, from online portals to cryptocurrency allocations, are being developed every day.

“For all its issues," Ted Benna told MarketWatch in 2016, "the 401(k)’s biggest value is that it turns spenders into savers.”

For further reading on the history of the 401(k), check out this stellar Forbes article.​

Thoughts on our new direction? Have anything you'd like to see us explore? Feel free to reach out at hello@usemanifest.com. For now, happy saving!