Democratic Senators Barbara Boxer (CA) and Jon Corzine (NJ) have introduced a bill that would protect workers from complete financial devastation in situations like the Enron collapse, where a company goes under without warning.
The bill, S.1838, known as the Pension Protection and Diversification Act of 2001, would amend the Employment Retirement Income Security Act of 1974 and the Internal Revenue Code to ensure that individual retirement account plans protect workers by limiting the amount of employer stock each worker may hold and encouraging diversification of investment of plan assets.
Provisions of the act include the following:
- Limiting to 20% the amount of any one stock in an employee's retirement plan;
- Limiting to 90 days the amount of time an employer can require an employee to hold company stock in a 401(k) plan;
- Allowing workers with company stock in company retirement plans to move money out of the company stock when they have reached 35 years of age and have worked five years for the company;
- Limiting to 50% the amount a company can deduct for retirement plan contributions in company stock
In light of the Enron bankruptcy, which wiped out many retirement plans of the company's employees, President Bush has indicated that he supports a measure that would protect workers. Prior to the Enron collapse, Congress had been lukewarm about this type of pension reform.