[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Extensions of Remarks]
[Page E174]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                INTRODUCTION OF THE PENSION SECURITY ACT

                                 ______
                                 

                          HON. JOHN A. BOEHNER

                                of ohio

                    in the house of representatives

                      Thursday, February 14, 2002

  Mr. BOEHNER. Mr. Speaker, I am joined today my many of my colleagues 
in the introduction of the Pension Security Act. President Bush has 
sent a clear message to Congress that he is committed to addressing the 
Enron collapse by calling for new safeguards to help workers preserve 
and enhance their retirement savings. I am pleased to introduce his 
proposal today.
  One of the tragic realities of the Enron collapse is that it has 
rattled the confidence of American workers in the country's pension 
system--a system that by and large has served employees and their 
families well. Even more tragic is the possibility that much of it 
could have been avoided. At least some of Enron's workers might have 
been able to preserve their nest eggs if Washington had taken some 
basic steps to update our nation's pension laws. For example, many 
Enron workers might have had access to a professional investment 
advisor who could have warned them they had too many eggs in one 
basket. Current law, enacted more than a quarter-century ago before the 
advent of 401(k) accounts, denies workers this opportunity.
  That is why today, my colleague Sam Johnson, chairman of the 
Employer-Employee Relations Subcommittee, and I are introducing the 
President's proposal as the first step toward a consensus product that 
can be signed into law on behalf of America's workers. Workers must be 
fully protected and fully prepared with the tools they need to protect 
and enhance their retirement savings.
  Specifically, the Pension Security Act includes new measures that 
give employees the freedom to diversify their portfolio and better 
information about their pensions. Under the bill, employees may sell 
company stocks and diversity into other investment options after they 
have participated in a 401(k) plan for three years. In addition, it 
requires companies to give workers quarterly benefit statements that 
include information about accounts, including the value of their 
assets, their right to diversify, and the importance of maintaining a 
diverse portfolio.
  In addition, as part of his proposal, President Bush has called upon 
the Senate to pass the Retirement Security Advice Act (H.R. 2269), 
which passed the House last November with a large bipartisan vote. The 
bill encourages employers to make investment advice available to their 
employees and allows qualified financial advisors to offer investment 
advice only if they agree to act solely in the interests of the workers 
they advise. The Senate has yet to act on this legislation, though it 
passed the House with the support of 64 Democrats.
  Current law continues to needlessly deny rank-and-file workers access 
to quality investment advisers to help them make sound investment 
decisions. Some of Enron's employees could have preserved their 
retirement savings if they had access to a qualified adviser who would 
have warned them in advance that they needed to diversify their 
investment portfolio.
  When senior executives face no restrictions on selling stock held 
outside the 401(k), it is likewise unfair for workers to be denied the 
same authority to sell company stock in their 401(k) accounts during 
blackout periods. The Pension Security Act ensures parity between 
senior corporate executives and rank-and-file workers by prohibiting 
executives from selling company stock during ``blackout'' periods when 
workers are unable to change investments in their plans. The bill also 
requires companies to give 30-days' notice before a blackout period 
begins.
  Lastly, the bill clarifies that companies have a fiduciary 
responsibility for workers' investments during a blackout period. Under 
current law, employers are not responsible for the results of workers' 
investment decisions. This ``safe harbor'' from liability will no 
longer apply during a blackout period. Under the Pension Security Act, 
employers will be responsible for the consequences of the workers' 
inability to control their investments if they violate their fiduciary 
duty to act in the interests of the workers during blackout periods.
  Congress has taken some positive steps in the recent past to update 
our nation's pension laws, and this committee has been central to those 
efforts. We passed the landmark reforms authored by my friend and 
colleague, Representative Rob Portman, that gave workers more pension 
portability, faster vesting, and a host of other needed changes. We 
passed the Retirement Security Advice Act to give rank-and-file workers 
the same access to professional investment advice that wealthy 
executives have. But in spite of these efforts, a lot of work still 
lies ahead. And in the aftermath of Enron, Congress must now confront 
this modernization effort with a new urgency.
  I am optimistic that common ground can be reached with Democrats 
because there is bipartisan support in Congress for the reforms I have 
just outlined. All are key elements of President Bush's proposal. The 
nation's private pension system is essential to the security of 
American workers, retirees, and their families. Congress should more 
decisively to restore worker confidence in the nation's retirement 
security and pension system, and President Bush's reform proposal will 
do just that. I urge my colleagues to respond to the needs of America's 
workers by supporting the Pension Security Act.

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