- The Washington Times - Sunday, October 20, 2002

President Bush said yesterday the Labor Department will issue "tough new rules" this week to help protect workers' retirement savings from corporate fraud and abuse.
Mr. Bush outlined in his weekly radio address the new rules that will require employers to give workers 30 days' notice before imposing a 401(k) pension plan blackout period, which, as the president said, is a "time when [the rank-and-file workers] cannot sell, buy or borrow from their 401(k)s."
The president pointed out that "more than 40 million Americans save for retirement through 401(k) accounts." Collectively, he said, American workers "own more than $1.5 trillion in assets through their 401(k)s."
Mr. Bush's announcement comes as most people with 401(k)s saw their holdings plunge in value in recent months in the wake of the falling stock market. The president yesterday discussed legislation already passed and other bills awaiting final passage designed to prevent recurrences of situations in which employees of the bankrupt energy giant Enron and other corporations had their 401(k) savings wiped out when they couldn't sell during a trading blackout. Meanwhile, corporate officials were free to unload their in-house company stocks and made millions of dollars.
"This is real money for real workers, and we must do all we can to help make sure it's there for them when they retire," Mr. Bush said of 401(K) investments.
He added: "Turbulence in the financial markets reminds us that every investment carries some risk. Yet American workers also have rights which must be respected and enforced."
In his radio address, the president also said the Security and Exchange Commission is working on a new rule that will prevent corporate executives from cashing in their own in-house stock holdings during such blackout trading periods.
"Corporate executives should have to follow the same rules that every other employee must follow during blackout periods. If you cannot sell on the shop floor, you should not be able to sell on the top floor," Mr Bush said.
"Corporate executives will no longer be able to sell off their company's declining stock while employees are left holding the bag," Mr. Bush said.
The president said that "both of these rules will take effect early next year." The Labor Department will begin implementing retirement protection plans tomorrow . The two measures had already been approved by Congress this year as part of a bill to overhaul corporate accounting practices.
Mr. Bush provided the update on new pension plan protections 2 weeks before the midterm congressional elections as a way to help blunt Democrats' accusations that he's not doing enough to improve the troubled economy and has been soft on corporate corruption.
Mr. Bush noted that Congress has passed only two of the five proposals he discussed yesterday to help protect workers' retirement savings.
A third plan, he said, would enable workers "to sell their company stock after holding it for three years, so that no one's nest egg is tied up in the stock of a single company."
A fourth proposal, Mr. Bush said, would require that investors receive "better information on how their 401(k)s are performing," through quarterly, not just yearly, reports.
"And, fifth, workers should have access to professional investment advice, so that they can make more informed decisions about their savings," the president said.
On Friday, Mr. Bush blamed the Democrat-controlled Senate for blocking what he called "common-sense" proposals to help protect Americans' retirement savings.
"My three additional proposals have already passed in the [Republican-controlled] House. But after six months, the Senate has not acted. For the sake of American workers, who are concerned about their retirement security, I urge the Senate to pass the rest of my proposals into law," the president said yesterday.
But in the Democratic response to Mr. Bush's radio address, Shannon O'Brien, Massachusetts state treasurer and gubernatorial candidate, placed the blame on Republicans for the "souring economy."
"It wasn't Democrats who squandered nearly $5 trillion of the federal budget surplus. It's not Democrats who have given us the grizzliest bear market since the Great Depression. It's not Democrats who chose to grant tax breaks to the wealthiest Americans, while cutting small business, job training and education programs," she said.
"It's not Democrats who want to gamble Social Security on the same stock market that has swallowed trillions in American wealth over the last two years," she added.


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