Compliance January 2, 2004

Combs Calls for Pension Reform Passage

February 13, 2003 (PLANSPONSOR.com) - A prominent US Department of Labor (DoL) official has called on lawmakers in Washington to pass the Pension Security Act (PSA) in order to protect American workers from Enron and WorldCom-like abuses.

Reported by

Fred Schneyer

Ann Combs, assistant DoL secretary for Employee Benefits Security and a key enforcer of the nation’s ERISA benefits law, told members of the House Employer-Employee Relations Subcommittee that financial ruin and personal heartache could have been avoided for the WorldCom and Enron workers who lost their savings when their companies collapsed. Parts of the PSA were passed and signed into law as part of the Sarbanes-Oxley bill.

“The Administration believes the first order of business should be to pass the remainder of the [Pension Security Act],” Combs told the committee, according to a committee news media release. Combs further testified that the PSA would “strengthen workers’ ability to manage their retirement funds by giving them more freedom to diversify their investments, provide better information to workers through improved 401(k) and pension plan statements, and encourage employers to provide their employees with access to professional investment advice.”

Support For Advice Expansion

Combs in particular highlighted the Administration’s support for increasing worker access to professional investment advice. “By relying on expert advisers who assume full fiduciary responsibility for their counsel and disclose relationships and fees associated with investment alternatives,” Combs testified. “American workers will have the information to make better retirement decisions.”

House Education & the Workforce Committee Chairman John Boehner (R-Ohio) and Employer-Employee Relations Subcommittee Chairman Sam Johnson (R-Texas) will reintroduce the Pension Security Act in the coming weeks, the House statement said.

“We should not have to wait for another corporate scandal before we empower workers with new protections that can help them enhance and protect their retirement security,” Johnson said, according to the House statement. “The Pension Security Act will give millions of Americans new tools to help them better manage and expand their retirement savings.”

The Pension Security Act would give workers the ability to diversify their retirement savings within three years; expand worker access to investment advice; empower workers to hold company insiders accountable for abuses; and give workers better information about their pensions.