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REP. JOHN LINDER (R-Ga.): We’ll hear a lot of demagoguery about Enron today. Some of it maybe even true.
KWAME HOLMAN: The huge corporation that suddenly collapsed last year, was invoked frequently on the floor of the House today. That’s because when giant energy trader Enron’s stock fell to nearly nothing, it wiped out the savings of thousands of its workers. They had invested heavily in Enron through company-run 401(k) retirement accounts.
HOUSE STAFF MEMBER: House calendar number 136.
KWAME HOLMAN: Today, Congress took its first major step toward protecting other workers from the same fate. But opinion on how best to do that split along party lines, as debate began on a bill offered by the Republican majority.
REP. ROB PORTMAN (R-Ohio): It’s good, solid legislation that does address what happened at Enron. It’s not the silver bullet that’s going to solve every problem in our pension area, but it makes substantial progress. It does not turn the clock back. It moves the clock forward. It gives people information, education, security they need.
REP. MARTIN FROST (D-Texas): You could argue over the particulars of what the Republican bill would do but there’s no doubt about what it won’t do. It won’t protect Americans from corporate wrongdoers, like the ones at Enron. It won’t stop unscrupulous executives at another corporation from defrauding their employees and investors the way Enron executives did.
KWAME HOLMAN: The Republican bill closely adheres to principles for safeguarding private pensions laid out by President Bush after the Enron collapse.
REP. MARK FOLEY(R-Fla.): What this bill says loudly and clearly: If it’s good for the brass, it ought to be the same for the middle class. We’re taking care of employees, we’re defining benefits, we’re giving investment advice, we’re providing advanced notice of blackouts, we’re giving diversification.
KWAME HOLMAN: The bill would allow employees to sell company stock in their company-sponsored pension plans, after holding it for three years. Enron barred its workers from selling Enron stock before they reached the age of 50. Thirty days notice to employees would be required if a company wished to freeze– or black out– transactions in retirement accounts.
Blackout periods often occur while a company changes plan administrators. And during such periods, company officials also would be barred from selling their stock in the company. Some executives at Enron sold millions in Enron stock before prices plummeted, while workers were prohibited from doing so. But Democrats complained about a Republican provision that allows employers to select those who give workers advice on how to invest their retirement savings.
REP. ROBERT ANDREWS, (D-N.J.): This proposal would enshrine into the law, would legalize and legitimize the opportunity of unscrupulous advisers to offer advice, which benefits them, but not the pensioners to whom the advice is offered. Employees do need advice. They should be given a full array of choices. They should be made aware, and as the Democratic substitute does, made available as to how to pay for the offering and receipt of independent advice.
KWAME HOLMAN: The Democrats’ alternative also would put employees on company committees that oversee 401(k) retirement plans.
REP. HILDA SOLIS, (D-Calif.): Unlike the Republican version of pension reform, our bill would give employees a voice about their pension plans. It requires employee representatives to serve on pension boards. Gee, what a great idea. I’m certain that the Enron employees who recently lost their life savings would have loved to have had an opportunity to be at the table to discuss how their pension plan funds would be spent.
KWAME HOLMAN: Republicans objected strenuously to a Democratic provision that could allow workers to sue their employers if pension investments go bad. Republicans said that could discourage employers from even providing retirement accounts.
REP. JERRY WELLER, (R-Ill.): It’s an attempt to offer a so-called solution which is way over broad and in the end would actually reduce retirement savings opportunities for workers particularly because while maybe not well intended, this legislation would actually discourage small business from providing retirement savings. The increased liability the increased liabilities and the damages that would result would push employers out of providing retirement benefits. Again, that’s anti-small business.
KWAME HOLMAN: This afternoon, as expected, the Republican pension reform bill won out picking up a few Democratic votes in the process. The measure now goes to the Senate where floor action is not expected for at least several weeks.