Date: 2002-01-29
Speaker: GEORGE MILLER (democrat)
Chamber: H
State: 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 highranking 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 companyimposed lockdowns on the Enron shares and by the outright prohibition of selling companycontributed 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 fajrness 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 companys 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 familys 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 decisionmaking power to guide their investment. and it guarantees their represen. tation 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. 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.