From Here to Security: How Workplace Savings Can Keep America's Promise

CHAPTER 3

HOW DID WE GET HERE? THE RISE OF DEFINED CONTRIBUTION SAVINGS

From tiny seeds a mighty tree may grow.

—AESCHYLUS

To understand how we evolved the workplace savings systems that Americans rely on today, we need to look back more than 40 years. It also helps to recall how “the law of unintended consequences” plays out.

All legislation and regulations have consequences. The intended ones are typically immediate and foreseen; the unintended ones are often totally unforeseen, but may have powerful, even revolutionary, long-term effects. This is very much the case with two 1970s laws that helped set off an unplanned, almost accidental transformation in American retirement finance.

The first was The Employee Retirement Income Security ...