Senate Bill Would Restrict Investments in Company Stock

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.

You may like these other stories...

A new Wall Street Journal/NBC poll found that there is broad support among registered voters for Congress to enact legislation that would curb the practice of US companies shifting their headquarters overseas to cut their US...
All that was needed on Tuesday was a voice vote for the House of Representatives to pass a bill that would prevent state and local governments from taxing access to the Internet.Now the ball is in the Senate’s court....
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.