Last year around this time, I wrote an article patterned after Frank Capra’s Christmas Classic It’s a Wonderful Life (see “Plan Sponsors Smile: Hooray for the 401k!” on FiduciaryNews.com). In it, I wrote of what life would have been like for several real-life people had the 401(k) never existed. Readers gave the article such great response that I repurposed it and used it as the opening chapter in my book 401(k) Fiduciary Solutions.

I’m not the only person to sing hosannas for the 401(k). The nation is filled with many grateful employees whose employers began offering 401(k) plans as soon as they became popular in the 1980s. These folks, if not there already, are on their way to a comfortable retirement, despite the economic calamity of the late Bush/Obama era. On this journey to financial independence, these folks have learned and practiced the art of self-discipline, self-confidence and ultimately, self-endowment. No longer would their retirement benefits remain chained to a company—all the more important in an evolving economy where yesterday’s highflyer is today’s Chapter 11 filer.

The aura of the 401(k) has found itself well matched to that archetypal American persona of the rugged individual. Successful 401(k) investors forged into the heretofore unexplored frontier of personal investing. They came packed and ready, not afraid to admit what they didn’t know and not afraid to teach themselves what they needed to tackle any obstacle market cycles would throw at them.

Think about what the 401(k) has created. It has led to a generation of Americans more knowledgeable about their personal finances than their immediate predecessors. Unlike their parents and grandparents, so dependent on the company pension, this new generation has emerged from the primordial ooze of retirement benefits just at the right time. While the older generations tended to pass away soon after leaving work, this new generation’s life expectancy takes it decades beyond the normal retirement age.

Today, we think of retirement not as the final scene, but as a new and third act of life. Thanks to the 401(k), many more retirees are prepared for these last 30 years than the pensions of old could have afforded to pay.

This is not to say the 401(k) world is perfect. There’s more we can and should do. Too many employees aren’t saving enough. Automatic deduction addressed some of this, but plan sponsors still need to implement policies to encourage increased savings. As previous columns have pointed out, academic research provides some guidance here.

But the work is not for the plan sponsor alone. Legislators and regulators can help ease the burden, especially for smaller companies. Right now there’s bipartisan legislation in Congress seeking to address this. The politicians and the bureaucrats need to get together on these issues. Some of these ideas involve compromise, some of these ideas involve greater oversight. As it begins a new session, Washington should keep in mind reducing fiduciary liability for plan sponsors is OK as long as it’s offset by increasing the fiduciary responsibilities of the service providers.

This way, the 401(k) can help make even more wonderful lives.

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It&rsquo;s a wonderful 401(k)

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It’s a wonderful 401(k)