Insiders: State of the Union Address May Be Vague On Pension Issues

January 29, 2002 ( - In his first State Of The Union Address tonight, President Bush isn't expected to name Enron by name but might touch on retirement security as one of his administration's goals, Washington insiders say.

Overall, Bush is expected to address the war on terrorism, homeland security and the economy. He might seek to broaden those themes to touch on the company stock issues that Enron’s collapse has created.

“I think the theme is going to be security,” said James Klein, council president at the American Benefits Council. “And while everyone thinks of that in terms of national and homeland security, I think it’s going to spill over into pension and health care security to include prescription drugs, health care coverage for those who’ve lost their jobs as well as the Enron case and pension reform.”

Handle with Care

He added that he hopes Bush will handle health care and company stock with care. “We want to make sure that the issues arising out of Enron are examined carefully before any decisions are made that will have a negative effect on the industry,” Klein said. “On the health care front, we’re hoping that Congress will not make any concessions to expand costs that in the process expand employer liability which will in turn force employers to drop insurance.”

Danny Devine of the Employee Benefit Research Institute says whether the president discusses pension reform at all is highly speculative. 

“Reform can sometimes mean an overhaul of a system and I think some people will say that this (pension reform) isn’t worth it, when you have 43 million 401(k) plans out there working,” says Devine.

“Besides, is President Bush convinced that reform is really needed in the pension area?  I would be reluctant to see too many restrictions on 401(k) plans. But more importantly, the issue is: why do some people have 100% asset allocation in company stock?”