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Bush Calls for Pension Reform - 2002-02-01


President Bush wants to reform America's pension system to give workers more control over investments and retirement savings.

The proposals come as Congress prepares to investigate a politically-powerful energy firm that went bankrupt, leaving 15,000 workers with a total loss of more than $1 billion.

In his first major response to the collapse of the Enron energy firm, President Bush Friday proposed a series of changes to the way employers and employees handle retirement accounts.

"My plan will strengthen the workers' ability to manage their own retirement funds by giving them more freedom to diversify, better access to professional investment advice, and quarterly information about their investments," the president said.

The president said workers should be allowed to sell company-contributed stock in their retirement plans after just three years. Most companies make employees wait longer. In the case of Enron, workers could not sell company stock before they reached the age of 50.

Mr. Bush wants corporate executives bound by the same restrictions they impose on their workers regarding "blackout" periods during which people may not change their retirement accounts. The president wants a 30 day notice before the start of any blackout period to give workers greater freedom to tailor their investments to changing market conditions.

Blackout periods were also part of the Enron collapse with thousands of employees unable to unload company stock as its value fell from more than $80 a share to less than $1 a share. Senior managers, however, were able to sell large amounts of stock before the company went broke over debts hidden in offshore partnerships.

Enron could become a political liability for Mr. Bush as it was the biggest contributor to his political career from governor of Texas to the presidential inauguration. The General Accounting Office says it is suing the Bush administration to get obtain records from meetings that Vice President Dick Cheney had with Enron officials and other oil executives about U.S. energy policy.

The White House is refusing to turn over those records, saying it is protecting the administration's right to collect opinions from private citizens without divulging that counsel to the public.

President Bush did not mention Enron by name. Instead, he called for Americans to embrace a new era of corporate and individual responsibility. "Our hope is that the country's culture changes to one of responsibility. That each of us is responsible for the decisions we make in life. If you are a mom and dad, you are responsible for loving your child with all your heart and all your soul," he said. "If you are a compassionate neighbor, you are responsible for helping a neighbor in need. If you are Corporate America, you are responsible for making sure you reveal all your assets and liabilities to your shareholders and your employees."

Some 42 million Americans have corporate retirement accounts with a total of more than $2 trillion in assets. The president said better protection of workers' pensions is a matter of fairness and openess. In his State of the Union address, Mr. Bush said employees who have worked hard and saved all their lives should not have to risk losing everything if their company fails.