The Associated Press reports that t he legislation was pushed by Senator Ron Wyden (D-Oregon) and Senator Gordon Smith (R-Oregon) on behalf of the workers of Enron subsidiary Portland General Electric, who lost their 401(k) savings when Enron’s stock price plummeted. “Congress has a responsibility to help workers who were the victims of Enron’s criminal activity,” Wyden said in a statement on his Web site.
The “catch-up allowance” provides that, as long as an executive or another employee was indicted or convicted for dealings related to the bankruptcy, employees would be able to contribute up to $7,000 a year to a tax-advantaged IRA, according to the AP. The current limit is $4,000. Employees would be able to put away an extra $1,500 in 2005 and an extra $3,000 per year from 2006 to 2009, beyond the current $4,000 limit.
Reactions received from the AP by former Enron employees were mixed. While some said it was a good idea, they said it only helped those who had the means to put away the extra money and not the average ex-Enron employee.
Kevin Brady (R-Texas) who sits on the House Ways and Means Committee, which has oversight of the pension bill in the House, said he was unaware of the provision but that he would push to have it included in the House version.
Another Wyden provision approved as part of the pension reform legislation would prohibit companies from giving executives deferred compensation if the company’s pension plan is less than 80% funded, according to the news release on his Web site. “Hardworking Oregonians should be able to sleep soundly at night without having to worry that their pensions are languishing in an ailing program while their employers have their retirement savings safely locked away,” Wyden said.
Wyden’s news release is here .