401(k) pension plans and theories of policy change

This research is a case study of a policy change in U.S. retirement/tax system which resulted in the creation of the 401(k) pension plan, using these two perspectives on policy making—Kingdon's model of policy windows and Baumgartner and Jones' model of a punctuated partial equilibrium. Accordingly, the research hypothesis is: Baumgartner and Jones' model of policy more effectively explains the development of the 401(k) pension plan.; While the evidence failed to support the research hypothesis, I found evidence linking a number of key distinguishing elements of both theories, including: (1) The recognition of problems in the private pension system; (2) The linkage of those problems in the private pension system to the development of a new DC plan; (3) The existence of a technically feasible and available alternative for dealing with the problems in the private pension system that was supported by a cohesive policy community and that was compatible with values of policy specialists in the field; (4) Changes in the Administration and the expiration of a Congressionally mandated moratorium on the development of new CODAs; (5) A significant number of changes to the institutional structure governing private pensions; and (6) The expansion of the scope of the conflict from one that included only employers and employees with salary reduction plans to one that included employers and employees of CODAs, 403(b) plans, and cafeteria plans.; Moreover, I found that the ability of individual groups and institutions to mobilize, provide information, and remain cohesive and influential over time was an important similarity in both Kingdon's and Baumgartner and Jones' theories, and was significant in this case to the development of the 401(k) pension plan. The deliberate action of this group to lobby Congress, despite the Treasury's attempts both administratively and legislatively to eliminate the tax-exempt status of these plans, played an important role in changing policy.; The implication from this conclusion suggests that those groups that are capable of mobilizing resources and acting deliberately possess a structural advantage in influencing policy changes. This implication coincides with long-established theory on collective action that small groups have a greater propensity for organizing and engaging in collective action (Olson, 1982). In this case the deliberate actions of a relatively small, but cohesive group of employers and employee representatives over a period of several years proved to be significant to this policy change.