Date: 2003-05-14
Speaker: SAM JOHNSON (republican)
Chamber: H
State: Texas

Mr. Speaker. I thank the chairman for yielding me time. Mr. Speaker. I am glad you all asked us to look at this. because I want to help Americans who are working hard and saving for their retirement. They deserve more information about what is happening to their retirement plans. They deserve help in making financial decisions that can often be overwhelming. They deserve the right to diversify their money in their retirement accounts. The Pension Security Act that we are debating today lets all Americans do all this. Unfortunately. we have been here and done this before. We passed this bill in the last Congress. but it went to the other side of the Capitol. where nothing happened. Hopefully it will be enacted this year. The Pension Security Act gives employees the freedom to diversify their retirement savings. but does not force them to do so. Free enterprise works best when individuals have the freedom to put their money where their mouths are. It gives employees information on the importance of diversification. but. ultimately. the individual knows their own situation better than some arbitrary rule that Congress might have imposed. I have heard from many constituents about the fact that they do not want the government imposing caps on how much company stock they can hold. The Pension Security Act not only gives employees the freedom to diversify. but it also gives them a new tool to help them. and. more importantly. to help them understand their investments. Employees will be able to receive professional advice so they can turn to a fiduciary adviser who can help them decide what the right investments are for their individual situation. During the drafting of this bill about 1 year ago. we worked very hard to be sure that the employeeowned companies would not be required to set aside reserves to buy back company stock that might have been subject to the diversification requirements. The diversification requirements for privately held ESOP companies would have been a direct call on capital. requiring these companies to set aside cash or obligate lines of credit for the possible repurchase of shares. rather than for building the business. I am glad we dealt with this issue fairly and quickly. As chairman of the Subcommittee on EmployerEmployee Relations. I want to add that the bill is simply reiterating current law regarding fiduciary liability during a blackout. The concept of a blackout was written into ERISA last year as part of the Corporate Accountability Act. The provision in this bill is meant as a tagalong with those changes. Employers are still not liable for market swings during a blackout period. as long as they provide advance notice of a blackout. they have a legitimate reason for doing it. and generally acting as a good fiduciary during these periods. This bill also contains several ERISA provisions that have been blocked by arcane Senate rules from moving forward in a tax bill. This bill will expand the missing participants program at the Pension Benefits Guaranty Corporation so that 401(k) plan participants can be reunited with their money if their company ceases to exist. The bill also simplifies the annual reports that pension plans are required to file with the Department of Labor. The new form should be only one page long. and is a step in the right direction to cutting red tape that has caused so many small businesses to simply terminate their retirement plans. Small business owners have told me that this change could go a long way to reducing the cost of maintaining a retirement plan. There are several other good changes in this bill. but I just want to mention two more small business provisions that are long overdue. One of them would reduce the PBGC insurance premium for the new defined benefit plan and for small plans in order to reduce costs associated with setting up pension plans. Also. current law prohibits small business owners who pay insurance premiums to PBGC from receiving retirement benefits if the business fails. We reversed that. So this bill. in effect. is going to help Americans prepare for their financial security in retirement. It must pass. It needs to be signed into law.