FYI: Congress passed the Revenue of Act of 1978 to lower tax brackets on individuals. Within that act, there was a short 900-word section 401(k) which was added with the intent of limiting executive compensation (Narrator: It did not have that effect).
Ted Benna, an insurance company consultant at the time, realized this part of the tax code could be used for both employee and employer retirement contributions. It was initially used by banks as a way to transfer bonuses to employees in a tax efficient manner.
Thus, the defined contribution 401(k) plan was born.
Regards,
Ted
https://awealthofcommonsense.com/2018/11/the-biggest-myth-in-retirement-savings/
