[Weekly Compilation of Presidential Documents Volume 38, Number 6 (Monday, February 11, 2002)]
[Pages 175-176]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
The President's Radio Address

February 2, 2002

    Good morning. In my State of the Union Address, I committed our 
Nation to three great goals: To win the war; to secure our homeland; and 
to defeat the recession.
    In recent days, we have heard some encouraging reports on our 
progress and our work to defeat the recession. But many workers have 
lost their jobs and their retirement savings when their companies went 
bankrupt. Employees who have worked hard and saved all their lives 
should not have to risk losing everything if their company fails, so my 
administration is proposing important safeguards to our pension laws to 
protect the retirement savings of workers.
    First, we want to give workers greater freedom to diversify their 
retirement portfolios. Many companies require their workers to hold 
company shares long after their workers wish to sell, even when the 
company's shares are dramatically dropping in value. I propose that 
workers be permitted to sell company-contributed shares in their 
retirement account and diversify after they have participated in a 
401(k) for 3 years.
    Next, we need to make sure that companies have a single standard for 
their executives and their employees. It is unfair for workers to be 
denied the ability to sell stock when executives are free to sell their 
stock. Right now, though, companies can create what are called 
blackouts, when they switch the management of their retirement accounts 
from one investment firm to another. During the switch, employees don't 
have access to their 401(k)s and can't buy or sell. These blackouts 
usually happen because the company is looking for better service for its 
employees. But when employees can't sell, executives shouldn't be able 
to sell, either, so I am proposing that company executives be prohibited 
from selling any and all of their stock during these blackout periods.
    Third, workers should be informed in advance that a blackout period 
is coming. Under my administration's reforms, workers must be given 30 
days' notice before employers make any changes that would stop them from 
selling their stock.
    Fourth, companies will be put on notice when employees are blacked 
out; company executives with power over 401(k)s will be held accountable 
for treating their workers' assets as carefully as they treat their own.
    Fifth, workers should have the benefit of solid, independent 
investment advice. Right now, the law deters companies from providing 
employees with sound advice such as information about the benefits of 
diversification, and that doesn't make sense. We need to encourage 
companies to provide workers good advice, not punish them for doing so.
    And finally, employers should be required to provide regular 
information to their workers about the current value of their accounts 
and their right to sell and diversify. Right now, employers need to give 
an accounting to workers only once a year. We're going to tell them they 
must do so every 3 months. These measures will be a major benefit for 
American workers and for America's employers.
    Our country's employers welcome the highest standards of conduct, 
because high standards are good for business and good for America. I 
thank you for listening.

Note: The address was recorded at 2:40 p.m. on February 1 at Camp David, 
MD, for broadcast at 10:06 a.m. on February 2. The transcript was made 
available by the Office of the Press Secretary on February 1 but was 
embargoed for release until the broadcast. The Office of the Press 
Secretary also released a Spanish language transcript of this address.

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