[Congressional Record (Bound Edition), Volume 148 (2002), Part 1]
[House]
[Pages 317-318]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          PENSION LAW CHANGES

  The SPEAKER pro tempore (Mrs. Capito). Pursuant to the order of the 
House of January 23, 2002, the gentleman from California (Mr. George 
Miller) is recognized during morning hour debates for 5 minutes.
  Mr. GEORGE MILLER of California. Madam Speaker, I rise today to 
announce that later today I will be introducing the Employee Pension 
Freedom Act, a measure that is urgently needed in light of the recent 
Enron scandal and other threats to pension security affecting millions 
of American families. I will be doing that with over 50 original 
cosponsors.
  Over the past month, this Nation has been shocked at the revelations 
of how the Enron Corporation employees lost their entire savings 
through the actions of high-ranking company officials and how they lost 
their future retirement. As the value of the Enron stock plummeted last 
fall, Enron employees were prohibited from rescuing their own savings, 
estimated at over $1 billion, by company-imposed lockdowns on the Enron 
shares and by the outright prohibition of selling company-contributed 
shares until the employee had reached age 55.
  The spectacle of company executives hiding billions of dollars of 
debt from investors and from employees through the secret offshore 
partnerships of Enron while simultaneously cashing out company stock 
for themselves is an audacious assault on our pension security laws and 
offends the sense of fairness and justice in every American.
  These executives ignored their responsibilities to investors and to 
their own employees by cooking the books, making misleading statements 
about the company's health, and locking down the ability of employees 
to save themselves from the Enron collapse.
  Employees at other corporations, like Kmart, face other penalties and 
restrictions on the sale of company stock in their 401(k) plans. For 
example, in some companies if you sell company stock in your 401(k) 
plan before a certain age, the company withholds an employer 
contribution to your plan for 6 months. The question is why should the 
employer be able to penalize you for exercising dominion over the 
assets that belong to you. It simply is not fair.
  Now the questions of whether Congress will respond or will the 
employees get rhetoric and a few tweaks that leave the antiquated 
pension laws pretty much in place to the employees' disadvantage.
  Clearly, there are two sets of rules when it comes to company stock. 
Ken Lay and other executives would get one set of rules, where they can 
get rid of their stock almost at any time, and the average employees 
get another more restrictive set of rules when it comes to the company 
stock and their 401(k)s. The executives are free to rescue their value 
and their family assets tied up in stock should they smell the company 
is in for a bad time in the stock market. The employees are 
artificially locked down. It is money that was given to them for 
compensation in working for the corporation, yet when they seek to 
rescue their family's retirement, when they seek to make a decision 
that maybe this stock should not be held any longer, that maybe they 
should buy something else or buy a mutual fund, they are prohibited 
from doing that.
  What we really need is freedom for employees to be able to exercise 
complete and total control over the contributions, the assets, the 
money in their 401(k) plans so that they can do as we have told them to 
do, to diversify for the security of their retirement, to make 
retirement plans and investments based upon their age. The older one 
gets, the less risk they may want to take. The younger they are, the 
more risk they may want to take. That is the way it is supposed to be, 
but that is not the way it is. These companies have come along and 
placed restrictions and penalties on the ability of the employees to 
get rid of some of the assets within that plan.
  The Employee Pension Freedom Act that I am introducing today with 
over 50 cosponsors makes several important changes to our pension laws. 
The most important change my bill makes is to provide employees 100 
percent control over their investments and their 401(k) plans. 
Employees would have total control over the investment of the money 
they earned and contributed to the retirement plans and that their 
employer contributed to their plans as part of their compensation.
  This change is critical to help avoid the problems we have just 
witnessed with Enron. It will help provide employees the ability to 
rescue their nest eggs, to diversify and manage their investments 
consistent with the advice of financial professional people throughout 
the country and consistent with the aims of their families.
  My bill ensures that employees are informed about the real health of 
their pensions, it gives them the decision-making power to guide their 
investment, and it guarantees their representation on boards that guide 
their future economic security. My bill guarantees the right of 
employees to make decisions about their pension contribution by 
repealing current rules that prohibit employees from deciding where to 
invest the money that belongs to them.

[[Page 318]]

  Pension money and assets, whether invested by the employee or 
contributed by the employer, represent compensation to the employee and 
the employee is not to be denied the control of that. It is not 
compensation to the pension plan or manager; it is compensation to the 
employee for services rendered to the corporation.
  I urge my colleagues to join in the cosponsorship of this legislation 
that is designed to provide employees the pension freedom that they 
need to secure retirement for their families.

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