Date: 2002-04-11
Speaker: SAM JOHNSON (republican)
Chamber: H
State: Texas

Mr. Speaker. I thank the gentleman for yielding me time. Mr. Speaker. conflicted advice. we keep hearing about. but there is not any conflicted advice when you have somebody who is recognized as a professional stock or option advisor being concerned. Ihave been concerned about many of the pension proposals that have been introduced aimed at protecting Americans from themselves. If history is any guide. Congress should very well protect Americans by simply destroying another successful pension plan. Just look at what happened with the governments overregulation of the defined benefit pension system. Congress killed those plans with kindness. Let us not repeat those mistakes here. The bill we are debating here is moving pension reforms cautiously in the right direction. and it is balanced and fair. And I want to commend the gentleman from Ohio and the gentleman from California for their hard work in putting together this bill. As a subcommittee chairman for the Committee on Education and the Workforce. I will focus on those sections of the bill. First. I believe that the rolling 3year diversification rights for employees who are given company stock as a match in their 401(k) is as important an improvements as any in this proposed legislation. Rolling diversification will preserve employees ownership ethics as stockholders. but will also permit individuals to diversify into other investments as they see fit. Next. I am glad that we have clarified the issue of employer liability for stock market fluctuations in a 401(k) plan during a blackout period. We heard a lot of testimony in my subcommittee on this subject. Under the bill reported by the full committee. employers are not responsible for market swings and 401(k) accounts during a blackout period. as long as they provide 30 days notice in advance and make sure they have a legitimate reason for doing the black out. The bill today also exempts privately held businesses from being subjected to the diversification mandates and permits them to use their most recent annual valuation for reporting stock value on 401(k) stock benefit statements. I probably sat through more hours of hearings on pension benefit issues in this session of Congress than any other Member. One thing that has been confirmed for me during these hearings is that employees want. need and deserve to receive professional investment advice for their 401(k) plans. This bill does this. Last month. Mr. Dary Ebright was a witness before the Committee on Ways and Means. and he told his personal story about the horrors of putting all your eggs in one basket. His personal tragedy could have been prevented if he had received professional investment advice. He had invested 60 percent of his 401(k) into Enron stock. and then he cashed out his traditional pension plan and bought Enron stock. His defined benefit pension would have paid him roughly $2.000 per month for the rest of his life. But instead. at the age of 54. the only retirement savings that he has left is the portion of his 401(k) that was diversified. I asked if he received any professional advice on these decisions. He said he did not. Too many workers lack access to quality investment advice on how to invest their hardearned savings. Without a doubt. investment advice must become law soon. and I urge Members to vote for this sensible bill which does that. It educates. It provides investments advice. It provides diversification. and it stops big executives from selling their stock during a blackout period.