Tags: Bush | Proposes | Pension | Changes

Bush Proposes Pension Changes

Friday, 01 February 2002 12:00 AM

Bush detailed his proposals before a group of Republicans meeting at the Greenbriar Resort in White Sulphur Springs, W.Va.

He was responding to the collapse of Enron Corp., the nation's seventh-largest company. Enron's former top officials, including CEO Kenneth Lay, made millions by selling company stock while employees were locked into ownership of their plummeting shares, according to the lawsuit filed by more than 400 current and former Enron employees.

"If you're corporate America, you're responsible for making sure you reveal all your assets and liabilities to your shareholders and employees," Bush said.

Enron's problems came after executives reportedly hid massive debt in a cadre of subsidiary and shell companies.

Under Bush's proposal, workers would have more flexibility in managing their retirement funds. It would allow them increased freedom to diversify their stock portfolios and give them better access to investment advice and quarterly information about their investments.

Bush said he would ask Congress to pass legislation that would give workers the option of diversifying their stock holdings after three years. His proposal gives employees a 30-day notice before the start of a "black period" on the sale of stock, and company executives would be bound by the same blackout restrictions imposed on workers.

"It's OK for the sailor; it ought to be OK for the captain." Bush said it was a "matter of fairness" and "openness."

Bush's proposal is much less restrictive than others put forth by Capitol Hill lawmakers. One alternative plan favored by Democrats would limit employees from holding more than 20 percent of company stock in their pension plan. A second bill would restrict employees from holding more than 10 percent of company stock in their 401(k) plan.

Senate plurality leader Tom Daschle, D-S.D., criticized Bush's proposal as inadequate.

"Americans are rightfully anxious about the security of their pensions in the wake of the Enron Corp.'s collapse,” he said. "Regrettably, the administration's plan would do little, if anything, to restore public confidence in the private pension system."

Daschle said Bush's proposal would introduce conflicts of interest by allowing investment advisers to steer workers into investments in which the advisers may have a financial stake. That, Daschle said, could compound rather than reduce the risks faced by workers and investors.

"While it is encouraging that the administration now seems to recognize a need for government action in this area, the administration's proposal actually addresses only a small part of the problem and does that inadequately," Daschle said.

Copyright 2002 by United Press International.

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Bush detailed his proposals before a group of Republicans meeting at the Greenbriar Resort in White Sulphur Springs, W.Va. He was responding to the collapse of Enron Corp., the nation's seventh-largest company. Enron's former top officials, including CEO Kenneth Lay,...
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Friday, 01 February 2002 12:00 AM
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