Pension Legislation Heads to Floor
The New York Times
April 11, 2002
By THE ASSOCIATED PRESS
Filed at 3:30 p.m. ET
WASHINGTON (AP) -- House
Democrats repeatedly invoked
the word `` Enron'' Thursday,
saying a bill modeled after
President Bush's pension
overhaul plan would not prevent
workers from losing their
retirement savings in another
corporate collapse.
``It's corporate contributions, stupid,'' said Rep. Charles
Rangel, D-N.Y., citing that as the reason Republicans
were pushing the bill. Democrats acknowledged they
wouldn't be able to defeat the measure but with an eye
toward November elections were attempting to tie the
debate to corporate greed and Enron.
The bill would let retirement fund managers give advice to
workers, allow workers to sell employer-matched stock in
their 401(k) plans and require that notice be given to
workers before changes are made to their plan.
``What you see is a party desperate for a message,''
Speaker Dennis Hastert, R-Ill., said of Democrats. ``They'll
try to take Enron and politicize this whole process.''
The Democratic-controlled Senate hasn't acted on its
pension proposals, which still are being considered by
committees.
The House bill is the first Enron-inspired legislation to be
considered on the floor of either congressional chamber
following a flurry of hearings and proposals after the
December collapse of the energy company. Thousands of
Enron workers whose 401(k) plans were heavily invested
in company stock lost their retirement savings.
``It's not the silver bullet that's going to solve every
problem,'' said Rep. Rob Portman, R-Ohio, a sponsor of
one of the bills merged in the final legislation. ``But it's a
substantial change in current law and it does address the
Enron issue.''
Portman lost his Democratic co-sponsor, Rep. Benjamin
Cardin, D-Md., when Republican leaders included in the
final plan a provision allowing workers to receive
investment advice from the same companies that manage
their 401(k) retirement accounts. Democrats say the
advice would be tainted by financial conflicts of interest.
The bill by Portman and Cardin would let workers pay for
their own investment advice with pretax dollars
automatically deducted from their paychecks. That also
was included in the final bill.
Democrats cited Merrill Lynch & Co. Inc. as an example of
problems that could occur if investment firms were
allowed to advise workers. The firm was ordered Monday
to reform its business practices after being accused of
giving advice that hurt clients but enriched the company.
``This is the lesson of Enron,'' said Rep. George Miller,
D-Calif., ranking Democrat on the House Workforce
Committee.
But Republicans defended the measure, saying that it
provides much-needed investment advice to workers and
requires disclosure of any potential conflicts.
``The bill includes rigorous protections to safeguard the
interests of workers who receive investment advice,'' said
Kevin Smith, a Workforce Committee spokesman. ``Those
who say otherwise are simply playing politics.''
Other provisions include:
--Banning company executives from selling their company
stock during blackout periods when workers can't make
changes to their 401(k) accounts. Enron executives sold
their stock while workers were prohibited from selling that
in their 401(k) plans as the price plummeted.
--Requiring 30 days notice to workers before they are
locked out of their accounts for administrative changes.
--Letting employers decide if workers can sell their
employer-matched company stock after holding it for
three years or after three years of service with the
company. Enron barred workers from selling
employer-matched company stock in their 401(k) plans
until age 50.
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