U.S. President Proposes Pension Reform

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Last updated at: (Beijing Time) Saturday, February 02, 2002

U.S. President Proposes Pension Reform

U.S. President George W. Bush outlined his pension reform plan Friday and urged Congress torevamp pension laws and give workers greater flexibility to diversify their company savings accounts.

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U.S. President George W. Bush outlined his pension reform plan Friday and urged Congress torevamp pension laws and give workers greater flexibility to diversify their company savings accounts.

Bush's proposals addressed some of the abuses faced by Enron employees who saw their retirement savings plummet, while the energy giant refused to let them sell the stock in their 401-K retirement plans.

Enron's collapse cost workers their life's savings and created a political problem for the White House.

"This is a matter of fairness. It's a matter of openness," Bushtold Republican lawmakers. "Workers should have freedom to choose (how to manage) their retirement savings."

Under Bush's proposals, workers would be able to sell company stock and diversify into other investment options once they have participated in a 401-K plan for three years.

Corporate executives and workers would be on an equal footing when restrictions are imposed on selling corporate stock.

Companies are required to give 30-days' notice before the startof a blackout period when stock could not be sold.

Bush's proposal would also require companies to provide workerswith more frequent reports about their 401-K plans and increase employer accountability when workers are barred from trading on the savings accounts.

About 42 million Americans have 401-K accounts with total assets of two trillion dollars.

Bush's proposals came from the recommendations of a Cabinet-level task force formed on January 10 to study the safeguards in place for Americans' retirement plans.

The proposals also came as the White House has been under scrutiny by Congress over its dealings with Enron, whose executives and former executives have been among Bush's strongest political contributors.

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