401(k) Creator Launches Employer-Funded Savings Plan for Low-Wage Workers

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Ted Benna, the 84-year-old widely credited with creating the modern 401(k), has launched a new savings program called Radish aimed at lower-income workers who cannot afford to contribute from their paychecks. Radish is structured as a 401(a) plan — a profit-sharing vehicle that has existed since the 1950s — in which employers, not employees, deposit money into workers' accounts when those workers hit performance goals such as safety records, on-time attendance, or tenure. The plan is specifically limited to workers earning less than $160,000 in 2025 by IRS standards, and employer contributions are not processed through payroll, saving companies from payroll tax on the rewards.

Workers' funds grow tax-free inside the account, but in most cases owe income taxes plus a 10% penalty if withdrawn before age 59½. One notable tradeoff flagged by Alicia Munnell of Boston College's Center for Retirement Research: because Radish rewards are not counted as cash compensation, they do not raise a worker's Social Security earnings record, which is calculated from the 35 highest-earning years — potentially reducing future Social Security benefits. Benna's counterargument is that improved short-term financial security matters more for this population than a marginally higher benefit decades away. The plan is still early-stage, with pilots underway at a North Carolina private school, an Oklahoma retailer, and a trucking firm of roughly 200 workers; no large employer has yet signed on.