Ted Benna, the 84-year-old benefits consultant widely credited as the father of the 401(k), has spent his later years wrestling with a regret. The retirement plan he pieced together from an obscure corner of the tax code in the early 1980s went on to reshape how Americans save, turning a lot of spenders into savers, as he puts it, and eventually displacing the traditional pension. But it worked far better for high earners than for the lower-paid workers who needed help most, and now, considering his legacy, Benna has a new plan meant to reach the people his first one left behind.
The numbers sketch the gap. More than two-thirds of private-sector workers have access to a 401(k)-type plan, yet only about half of those eligible actually participate, and by one estimate 44% of the employer subsidies flow to the top 20% of earners. That is not a story of a good system with uneven uptake. It is a story of a system whose very design rewards exactly the things lower-income workers do not have, and Benna's new project, both in what it fixes and in what it cannot, shows just how deep that design problem runs.
The flaw was built in from the beginning
The 401(k) rewards two things, and both of them are markers of already being well-off. The first is the ability to defer income. The entire mechanism asks a worker to take money out of their paycheck and lock it away, which requires having a paycheck with something to spare. For someone stretching every dollar to cover groceries, rent, and gas, there is nothing to defer, and no tax incentive changes that arithmetic. So the plan is available in practice only to people who already have surplus income, which is to say, disproportionately, to people who need the help least.
The second is a high tax bracket. The benefit of a 401(k) is that contributions are made pre-tax, and a deduction is worth more the higher your marginal rate. A dollar deferred saves a top-bracket earner roughly 37 cents in taxes; it saves a worker in the 10% or 12% bracket only a dime or so, if that worker can afford to defer at all. Stack the two features together and you have a savings incentive whose value scales with both your capacity to save and your tax rate, two things that rise together with affluence. The upward tilt of the subsidies is not a distortion that crept in over the decades. It is the predictable output of the design.
Benna's regret is really a diagnosis
What makes Benna's second act interesting is that his regret is not merely sentimental; it is an accurate diagnosis of that structural problem. A voluntary, tax-advantaged, paycheck-deferral system simply cannot serve people who have no spare paycheck and no high tax rate to shield, because those are precisely the two levers it operates on. The plan does its job for the comfortable and misses the precarious, and it does so by construction.
He is candid, too, about a related harm. The 401(k) was never meant to replace the traditional pension, but it did, and in doing so it shifted the risk and responsibility of funding retirement from employers onto individual workers, a change that research suggests reduced financial security for many lower earners. Add a national personal savings rate that fell to about 2.6% in early 2026, near its lowest in years, and you have a large population, in Benna's words, that has never had an account invested for their benefit. The people with the greatest need to build wealth are the ones the dominant wealth-building vehicle is worst at reaching.
The new plan inverts the two problem features
Benna's answer, developed with the entrepreneur Kyle Bagley and called Radish, an evolution of an earlier concept he dubbed the Wheat Grain Incentive Plan, is clever precisely because it targets both design flaws directly. Instead of asking employees to defer pay they cannot spare, Radish is employer-funded: the money comes from the employer, not the worker's paycheck, which removes the barrier that keeps low-income workers out of a conventional 401(k). And rather than framing saving as a sacrifice, it ties the contributions to work itself, rewarding employees for consistently showing up or meeting performance goals, with the accumulated units converted periodically into tax-deferred savings.
That inversion is genuinely well-aimed. It reaches the workers a 401(k) structurally excludes, it reframes retirement saving as a reward for showing up rather than a deduction from an already-tight budget, and it aims to give people their first invested account, which for someone who has never had one can matter both financially and psychologically. Taken on its own terms, as a way to pull non-savers into the system, it addresses the exact failure Benna spent years regretting.
But it stays inside the paradigm that caused the problem
The harder question is whether inverting those two features is enough, and here fairness requires some skepticism, because Radish remains a voluntary, employer-mediated program, which is the same category that produced the regressivity in the first place. Its funding depends on employers choosing to offer and pay for it, and the employers whose workers most need it, low-wage businesses with thin margins, are precisely the ones least likely to fund generous benefits, just as they already tend to offer weaker or no 401(k) matches. The access gap the 401(k) opened between good employers and marginal ones could simply reappear one layer over, with the same workers on the wrong side of it.
The contributions are also at the employer's discretion and conditioned on attendance or performance, which means they are neither guaranteed nor universal, and they can be modest. And Benna himself is clear that Radish is a gateway, a way to kickstart saving, not a plan that will fund a retirement. That candor is admirable, but it also marks the limit. Radish is designed to solve financial inclusion, getting people their first account and their first invested dollars, which is a real and worthy goal. It is not designed to solve retirement adequacy, the deeper problem that low-income workers cannot save enough to retire on, because a discretionary employer incentive tied to showing up will not, at plausible amounts, add up to a secure old age. Those are two different problems, and the new plan squarely addresses the smaller one.
The question a better product cannot answer
Step back and the most striking thing is what Benna's second act represents. The architect of America's voluntary, employer-based retirement system is, late in life, acknowledging its central limitation, that a system built on deferring your own pay and sheltering it from your own tax rate cannot reach people who have neither spare pay nor a high tax rate. And his remedy, thoughtful as it is, works around that limitation rather than escaping it, because it is still a private product that depends on employer generosity.
The population Benna worries about needs something that does not hinge on either a worker's surplus income or an employer's willingness to pay, which is to say a floor rather than an incentive. That points toward the structural policy debates a private plan can gesture at but never resolve on its own: automatic-IRA mandates that enroll workers by default, an expanded or supplemented Social Security, a refundable saver's match that puts government money directly into low earners' accounts regardless of their tax bracket, or the kind of mandatory contribution systems some other countries run. Reasonable people disagree sharply about which of these, if any, is the right answer, and this is not the place to adjudicate that. The narrower observation is simply that the flaw Benna is trying to patch was never really a flaw in the 401(k) itself. It was in the decision to make retirement security voluntary and employer-mediated at all, and a better voluntary, employer-mediated product, however well-designed, runs into the edge of that same decision.
There is something quietly moving in an 84-year-old spending his final chapter trying to fix the thing he is most famous for building, and something clarifying in watching even his best effort bump against the paradigm's limits. Radish may well help people who have never saved a dollar begin to, which is not nothing and may be a great deal to the person it reaches. But the workers with nothing to defer and no employer inclined to fund them are left, at the end, needing what the private market has always struggled to give them: not a cleverer incentive to save money they do not have, but a stake that arrives whether or not they can.
Primary sources
- Bloomberg Markets, via Bloomberg Law, Yahoo Finance, and WealthManagement.com, for Ted Benna's regret that the 401(k) served high earners better than lower-paid workers, his view that the plans have grown too complex and costly, the history of his creating the first plan in 1981 with two investment options and razor-thin fees, defined-contribution plans eclipsing pensions and the research suggesting this lessened security for lower earners, the statistic that over two-thirds of private-sector workers have access but only about half participate, and the launch of the employer-funded Radish incentive program.
- Moneywise for the figure that 44% of employer 401(k) subsidies go to the top 20% of earners, Radish's co-founding with entrepreneur Kyle Bagley, and Benna's point that many middle- and lower-income employees cannot afford payroll deferrals.
- PLANADVISER for the design mechanics of the predecessor Wheat Grain Incentive Plan, including employer contributions based on attendance or performance and accumulating units converted to tax-deferred contributions, and Benna's critiques of 401(k) matching structures and early withdrawals.
- Realtor.com, via Yahoo, for the April 2026 personal savings rate near 2.6% and Benna's observation that a large population has no assets and has never had an invested account.
- Fortune for Benna's stated concerns about fees and corporate practices in workplace retirement plans.