Saying “more steps are needed,” President Bush announced the forthcoming (see Blackout Rules Published at ) rules from the Labor Department regarding blackout notifications. Bush signed the law approving the new changes and calling on the DOL to prepare regulations supporting them in July (see Blackout Rules Ride With Accounting Reforms ).
Echoing comments made at the height of the Enron scandal (see Bush Unveils Pension Proposal ), Bush said, “Today’s workers own more than $1.5 trillion in assets through their 401(k)’s. Younger workers have an average of about $10,000 in their accounts, while workers near retirement hold closer to $100,000 in their 401(k)’s. This is real money for real workers, and we must do all we can to help make sure it’s there for them when they retire.”
While crediting the forthcoming rules with offering some protection, Bush also called on the “Senate to pass the rest of my proposals into law.” Those proposals, which Bush termed “common sense,” and already encompassed in a bill passed by the House in April, include:
- Giving workers the ability to diversify company stock investments after three years
- Giving more information about the investment performance of their accounts
- Allowing firms that manage money to provide investment advice to participants for a fee
The most controversial aspect of the proposals is the approach on investment advice. Unlike the current proposals languishing in the Senate, the House version, championed by Representative John Boehner (R-Ohio) and supported by the Bush administration, would allow investment management firms to offer participants investment advice for a fee, subject to some restrictions and participant disclosure (see Pension Protection Passes House ). The Senate versions would essentially retain current prohibitions against the practice (see Advice Approaches Separate Senate, House ).
Bush said the remaining changes would allow workers to “make more informed decisions about their savings.”
Congress informally recessed on Thursday; however, lawmakers will return after the November elections to try to wrap up their unfinished business.
The president also alluded to forthcoming rules from the Securities and Exchange Commission that would bar corporate insiders from selling their own holdings of company stock while workers could not during a 401(k) blackout. The rules, which will take effect next year, were also part of the Sarbanes-Oxley accounting reform bill signed by the President in July.