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Innovate in ‘08 – Looking Back Ten Years Later

By Jack Towarnicky

"Great things are done by a series of small things brought together." - Vincent Van Gogh

Ten years ago, an individual at the Corporation for Enterprise Development (today, Prosperity Now) suggested I share my experiences as a plan sponsor innovator. In 2008/2009, I recounted actions we took to morph our 401(k) plan from a retirement savings plan to a holistic, lifetime financial instrument.1

Of all we experienced during that 23-year journey, 1985-2008, the most consequential were changes in the workforce, in the retirement savings marketplace, and in myself:

  • We encountered approximately 175,000 workers, retirees, and beneficiaries – a steady stream, coming and going; an ever-changing group of participants with ever-changing goals and needs; 
  • The marketplace experienced dramatic changes in law and regulations, enabling new products, services, etc. which created new opportunities and challenges; and 
  • I was changed by learning about and responding to these marketplace changes and our participants’ diverse and ever-changing needs. 

Our individual account retirement savings plan had been adopted in 1968. Today, that plan is 50 years old with 50,000 participants and more than $5 billion in assets. 401(k) features were added in 1984.

Participant “lifecycles” vary dramatically. Some workers I encountered were participants for only a month or two. Others will be plan participants for more than 75 years! Plan provisions were adjusted so that participants could use plan assets throughout their “lifecycle” as each worker’s circumstances, needs, and financial capabilities changed. Plan changes included eligibility at hire; adopting automatic enrollment, escalation and perennial automatic re-enrollment; adding 21st century loan processing; eliminating hardship withdrawals; embracing rollovers; changing the default payout provision upon separation; adding various post-separation payout options; updating administrative fees to a per capita, per transaction basis; deploying target date models and directed brokerage while simplifying and white labeling the core investment options; changing from mutual funds to collective investment trusts; etc.

For me, serving in a plan sponsor role was no longer “work.”2 It was no longer a trade, a craft, or even a career, profession, or a vocation. It became a calling. It was my opportunity to make a difference, to favorably impact participants in my plan. Like the old Navy recruiting slogan, it’s wasn’t just a job, it was an adventure.3

All of those changes – and more – were necessary to ensure the plan addressed the needs of a diverse, ever-changing population. We made a difference in people’s lives. For example, in 1985, only a handful of term-vested participants kept their account after separation. Today, about one third of all plan assets belong to people like me who no longer work there! My spouse and I expect to continue as participants for the rest of our lives.

Can you say that about the plan where you serve in a plan sponsor role? The Plan Sponsor Council of America’s 61st Annual Survey results show that some can make that claim! Others, not so much. If your individual account retirement savings plan isn’t an asset magnet or if your workers are ambivalent about the opportunity your plan offers, remember that current statutes and regulations provide a great opportunity for you and your service providers to “innovate.”

Just look in that rear view mirror.4

1CFED/Prosperity Now no longer maintains the 2008/2009 Innovator awards material. All that remains from that 2008/2009 innovation activity appears to be a promotional video. Accessed 12/26/18 at:
2Maynard G. Krebs, world’s most famous beatnik, in the 1950’s - 1960’s TV Comedy, The Many Loves of Dobie Gillis, Accessed 12/26/18 at:
3Navy Recruiting Advertisement, 1981, Accessed 12/26/18 at:
4J. Towarnicky, My Financial Wellness Solution: The 401(k) As A Lifetime Financial Instrument, SOA, 2017, Accessed 12/26/18 at:

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