Edwin T. Johnson, 82; his company designed the 401(k) plan

Edwin T. Johnson
Edwin T. Johnson
Posted: September 04, 2012

Edwin T. Johnson, 82, of Newtown, Bucks County, founder of Johnson Cos., the benefits consulting firm that designed the 401(k) savings plan, died Thursday, Aug. 23, at home after a 22-year battle with prostate cancer.

After earning a bachelor's degree from Gettysburg College in 1951, Mr. Johnson joined Provident Mutual Insurance Co. as a sales agent.

To better serve his life-insurance clients who were requesting information about pensions, retirement plans, and health insurance, Mr. Johnson established a consulting firm in 1963 that evolved to become Johnson Cos. He was also a founder of Johnson, Kendall & Johnson, an insurance brokerage and risk-management firm.

In 1980, Johnson Cos. vice president Ted Benna discovered a way to take advantage of section 401(k) of a new IRS code. He proposed an innovative retirement plan that permitted matching funds from employers and gave employees both a tax break and a voice in deciding where their money could be invested.

Initially, Johnson Cos. failed to interest clients, including a bank and an insurance company, in the 401(k) plan because the clients didn't want to experiment with the new tax law.

Instead, Johnson Cos. allowed its own 80 employees to sign up for the plan. Information about the new plan was published in a trade newsletter, and eventually stories about 401(k) plans and the Johnson Cos. were published in The Inquirer, the New York Times, and the Wall Street Journal. "They put us on the map," said E. Thomas Johnson Jr., who worked with his father.

In 2004, The Inquirer reported that 45 million Americans had 401(k) accounts.

Besides being an innovator in the retirement field, the Johnson Cos. was an early developer of managed-care and self-insurance group health programs, Tom Johnson said. The firm had more than 400 employees when it was sold in 1990 to Noble Lowndes.

Mr. Johnson, who retired in the mid-1990s, was past president of the Association of Advanced Life Underwriters.

He grew up on family farms in Bucks County and attended Fallsington High School.

In 1952, he married his college sweetheart, Cynthia Shearer. The couple raised two children on a farm in Newtown.

Mr. Johnson was a founding member of the Newtown Improvement Association, formed in 1964 to improve housing and race relations in the area. He served as chairman of St. Mary Medical Center in Middletown, Bucks County, and was a member of the St. Mary Medical Center Foundation council.

He was former chair of the Gettysburg College board of trustees and was a member of the Gettysburg College board, which awards the annual Lincoln Prizes to authors of new books about the Civil War era.

Mr. Johnson - who read a book a week and encouraged others to do the same, his son said - read all 80 to 90 entries for the prize.

An elder at Newtown Presbyterian Church, he was active with the Stephen Ministry, caring for people in need of comfort. He recently led a career networking group helping the unemployed.

Mr. Johnson, who had a summer home in Maine, was a trustee of the Jackson Laboratory in Bar Harbor from 1996 to 2006. The laboratory researches the genetic basis for preventing, treating, and curing human disease. In 2010, he and his wife were honored with the Jackson Laboratory's Philanthropy Award.

His actions were motivated by faith, his son said, and he believed in the concept of servant leadership.

In addition to his wife and son, Mr. Johnson is survived by a daughter, Rebecca Kerchner; a brother; and six grandchildren.

The funeral will be at 1 p.m. Friday, Sept. 7, at Newtown Presbyterian Church, 25 N. Chancellor St., Newtown, Pa. 18940.

Donations may be made to the Jackson Laboratory, attn. Penny Fox, Box 254, Bar Harbor, Maine 04609.

Contact Sally A. Downey at 215-854-2913 or sdowney@phillynews.com.

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