Last week Hutchinson introduced S. 1969, the ‘Pension Security Act of 2002,’ a bill that contains the proposals outlined by President Bush on February 1. The bill is co-sponsored by Senators Trent Lott (R-Mississippi) and Judd Gregg (R-New Hampshire).
The bill is the only bill currently pending in the Senate that incorporates all of the President’s pension protection proposals, including:
- allowing workers to sell company stock and diversify into other investment options once they have participated in a 401(k) or ESOP for three years
- requiring 30-day notice of any ‘blackout’ period, and clarifying that during any blackout period the fiduciary duty is on the employer;
- prohibiting corporate executives from selling company stock or exercising stock options during necessary ‘black out’ periods
- requiring quarterly statements to workers on the value of their retirement savings accounts, which also advises workers of the wisdom of diversification.
Separately, Hutchinson has introduced a new advice bill in the Senate which would amend ERISA to allow employers to provide their workers with access to professional investment advice as long as the advisers fully disclose any fees or potential conflicts, along the lines of the Retirement Security Advice Act which passed the House last fall. Hutchinson’s version of the advice bill is S. 1978, the Retirement Security Advice Act of 2002.
As with Boehner’s version, the bill would exempt plan sponsors from the duty to monitor the specific investment advice given by the fiduciary adviser to participants but would require that the plan sponsor or other fiduciary retains the duty of prudent selection and periodic review of the fiduciary adviser. The bill would also allow plan assets to be used to pay for the expenses of providing investment advice to participants and beneficiaries.
Hutchinson’s legislation will be referred to the Senate Health, Education, Labor, and Pensions Committee, upon which he serves. There it will be considered alongside another version introduced earlier by Sens. Bingaman (D-New Mexico) and Collins (R-Maine), the Independent Investment Advice Act (see Conflicting Opinions: Advice Bill Introduced in Senate ).