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Bush calls for limits on 401 (k) 'blackouts'

WASHINGTON (CNN) -- Alluding to Enron without mentioning it by name, President Bush said Thursday that companies that contribute stock to employee 401(k) retirement plans "should not be permitted to lock their employees into owning that stock for years and years."

Bush, speaking at what was billed as a retirement summit in Washington, defended a proposal that would "allow workers to sell company stock and diversify into other investment options after three years in their own company's plan."

There should be action, Bush said, that gives workers the right to put their savings' "eggs in more than one basket."

Bush addressed the issue of "blackouts "-- times when employees are not free to change or access their retirement accounts -- and called for companies to give workers 30 days notice before such periods begin.

"When companies black out a pension plan, they temporarily take away workers' freedom to choose for themselves," the president said.

Enron put its 401(k) plan in "lockdown" on October 17, 2001, the day after the company first revealed its financial difficulties. The move prevented employees from selling Enron stock in their retirement funds: As a result, many employees saw their retirement savings wiped out as the stock price plunged.

He also said that company officers should not be allowed to sell company stock when workers cannot -- an apparent reference to top Enron brass who made millions by selling the company's stock at a time when the rank-and-file could not.

"What's fair on the top floor should be fair on the shop floor," Bush said.

Workers deserve sound advice and timely information on their investments every three months, he said.



 
 
 
 






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