This is a partial transcript from Your World with Neil Cavuto, January 10, 2002. Click here for complete access to Neil Cavuto's CEO interviews.
NEIL CAVUTO, FOX NEWS: Well, Treasury Secretary O'Neill says he wants to make sure 401(k) workers don't get burned like they did at Enron. In his first of a two-part exclusive chat on Fox, the secretary says his aim is making sure the little guy is protected.
PAUL O'NEILL, UNITED STATES SECRETARY OF THE TREASURY: We're looking to see if there's some lessons that we should learn out of recent bankruptcies, most significantly the Enron case. You know, there have been complaints lodged by individual and employees that their 401(k) funds were blocked.
And we will look at the regulations that have been out there for some time and see if there's some change in regulatory scheme or in the law that we ought to make sure of the consequence of learning from lessons from this that we're up to date and that there's fairness and equity in the way these things work and that individual human beings, employers and shareholders are not disadvantaged because we don't have an adequate regulatory process for the way our system works.
CAVUTO: Does that mean that you would allow people in the future if, for example, they want to sell their company stock, which is apparently at issue in the case of Enron pension planners, to do just that?
O'NEILL: Well, we need to take a look and see, you know, if that's the right thing to do. I don't know. I think we need to do study, we need to do analysis. I think the rules that are in place now were thoughtfully considered when they were put in place. We need to see if these recent experiences with companies like Enron suggest that we need to modify the rules, you know. And this comes from the president's instinct of just hurting a lot for people who apparently accumulated all of their savings in a 401(k) plan and lost it all in a period of a couple of months.
CAVUTO: But that happens a lot. I mean, market, obviously, the Enron situation was very unique, as you pointed out, sir. But I'm just wondering. There are a lot of companies. I don't know what your old haunt, you know, Aluminum Company of America, did but who make their matching contributions in company stock by edict.
O'NEILL: Exactly. Exactly.
CAVUTO: Now, is part of your effort to save companies? You can't do that anymore? You will go out and provide matching funds in any other vehicle?
O'NEILL: Again, Neil, I think we need to do analysis before we do prescription. It's a pretty good idea to figure out what, if any, disease exists before you start cutting off arms and legs and the rest of that. So I don't know what the answers ought to be.
But the president really feels this hurt for the people who lost their money in this affair. And actually, he's ordered the establishment of two groups -- the one is myself and the Secretary of Commerce and Secretary of Labor -- to look at these issues related to a pension impact from company bankruptcies and 401(k) impact.
The other group is something called the President's Working Group and it's myself and Alan Greenspan, the Chairman of the CFTC, Commodity Future Trading Corporation and the Chairman of the SEC. And in that group, we're going to look at disclosure rules and see if we need some changes in disclosure rules, in order to assure that investors and markets have all the information they're entitled to have in order for our free market economy to work properly.
CAVUTO: But if you were in a 401(k), Mr. Secretary, at the very least, people seem to think that they should have the right to move that money in and out of funds or stocks at their will. Many were surprised to find that in many companies like Enron and a host of others, they don't have that right. Would you push for something like that, that if you were at a company, you could put your money in wherever you want?
O'NEILL: I think this. First of all, again, we need to do analysis before we start prescribing. My sense is that in the Enron case, there is a fact pattern, where they basically changed the organization or the outside firm that was managing the 401(k) account. And the existing rules and regulations permit a company, in effect, to have a freeze condition or a holiday on withdrawals, when they're changing administrators. Now, we need to take a look at that and see if that's a sensible thing to do.
In my own case, since you referenced where I was before, at ALCOA, you know, I believed that employees should have an opportunity to invest their money not only in company stock but in an array of other investment instruments. Frankly, I hope that they would see that they were part of the best company in the world and they'd put all their money in ALCOA stock. In fact, those who did that over the 13 years I was there did about as well as any investment they could have made anywhere. But that's not always the case.
But I think ultimately, the decision should be left to the individual. But the individual needs to have full information and an understanding of what the risks are.
CAVUTO: All right. We'll have more with the Treasury Secretary in part two of our interview tomorrow and how he feels about all those job rumors out there, whether he could lose it.
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