• HISTORY
• THE BASICS OF 401 (K) PLANS
• THE EVOLVING 401 (K)
• OVERALL IMPACT OF 401 (K) PLANS
• FURTHER READING:

A 401(k) plan is a tax-deferred, defined-contribution retirement plan. The name comes from a section of the Internal Revenue Code that permits an employer to create a retirement plan to which employees may contribute a portion of their wages on a pretax basis. This section allows the employer to match employee contributions with tax-deductible company contributions. Earnings on all contributions are allowed to accumulate in a tax-deferred trust. By the late 1990s, 78 percent of employees to whom 401(k) plans were offered elected to participate in them.

HISTORY

The 401(k) provision was created...