WASHINGTON – Traveling to West Virginia to attend a GOP retreat, President Bush unveiled his proposals for revamping pension account rules, his response to Enron's collapse in which thousands of employees lost the entire value of their retirement accounts.
Bush, whose own mother-in-law lost more than $8,000 in the firm's stock when it collapsed, said he was outraged to learn that employees of the former energy giant were prohibited from cashing out their stock when they learned that the company had hit dire straits.
Now he is offering a plan, based on recommendations by a Task Force on Retirement Security formed last month, that would allow workers to diversify their 401(k) accounts and sell their company stock, including matching company contributions, after three years of participation.
"The 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 the investment," he told GOP officials and operatives at a lunch in the swank Greenbrier resort.
Bush's proposal will not limit the portion of workers' 401(k) plan that can be invested in their employer's stock, something that was under consideration immediately following Enron's collapse.
It does require employers to give quarterly reports to employees on the value of their accounts and information on the importance of diversity. It increases employer accountability when workers are barred from trading on their retirement accounts and requires firms to give 30 days notice when employees will face "blackout periods," or periods of time when selling is not allowed because of changes in the administration or features of a pension plan.
Senior corporate executives will also be barred from selling company stock when employees are in blackout periods, a direct response to the discovery that Enron executives cashed in millions of dollars in stock while telling workers the company was doing fine.
"If it's OK for the sailor, it ought to be OK for the captain," he said.
One such executive, former CEO Kenneth Lay, will be up on Capitol Hill Monday, testifying before two committees on the extent of the company's financial woes and the restrictions on 401(k) programs.
Lay, who tried unsuccessfully to convince the Bush administration to intervene with Enron's creditors, has not asked for immunity for his testimony.
Congress is conducting 11 investigations simultaneously on Enron, including one on whether its executives tried to profit off stock sales after they knew the company was about to collapse.
Friday's annual GOP retreat, this year at the Greenbrier resort in White Sulphur Springs, W.Va., gives Republican lawmakers a chance to strategize on the new legislative session.
Besides urging lawmakers to reform pension plans, Bush said he was pleased with Congress' efforts to beef up homeland security, working with the legislative body on bioterrorism and airport security initiatives, among other issues.
"I am so proud of working with you. I'm proud to be able to call you a colleague here in Washington, D.C. It's been a remarkable experience for me. It's a joy to exchange ideas. It's been sometimes a joy to watch the legislative process," he said.
Bush also repeated his objective of rooting out terror globally, reiterating his threat to nations that harbor terrorists or develop weapons of mass destruction.
The Associated Press contributed to this report.
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