Katherine Sullivan

James Chappell from Duke says these changes that began with ERISA marked a shift in responsibility.

Little by little, the government was encouraging individuals to take on their own retirement planning.

And that belief took off.

With the failure of several high-profile pension funds like Studebaker, the option to take full control over your retirement savings looked pretty appealing.

It also looked appealing to companies.

Justin Baer is the deputy markets editor at The Wall Street Journal.

He wrote about this period in a forthcoming book about the financial services company Fidelity.

Fidelity and other firms like Vanguard had been behind the scenes managing pension funds for companies.

But they soon pounced on the new individualized plans that the government had opened the door to.

Investment firms realized they could go directly to individuals to sell them retirement plans.

And the IRS continued to pass more regulations allowing for personal retirement accounts.

Consultancy firms would scan new tax laws looking for ways to manage savings.

Here's Ted Benna.

The provision allowed for companies to provide cash or deferred arrangements to employees.

Here's Bennett again explaining his innovation on a financial podcast.

Benna realized companies could use these matching funds as perks to offer employees.

Companies liked them a lot more than traditional pensions.

But employees were skeptical.

companies eventually rebranded the plans.

And by the mid-1980s, major Fortune 500 companies began to embrace the 401k.