Employer Stock in Retirement Plans: Bills in the 107th Congress

Publication Date: March 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Labor

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Abstract:

In the wake of the bankruptcy of Enron Corporation, numerous bills have been introduced in the 107th Congress with the intent of protecting workers from the financial losses that employees risk when they invest a large proportion of their retirement savings in securities issued by their employers. Legislative proposals include some that would directly regulate the proportion of employees' retirement savings that can be comprised of employer securities, and others that would encourage education of employees on financial matters without imposing a cap on employee investment in employer securities. Some of the bills would expand employee rights to direct the investment of the assets they hold in their retirement plans and would impose new civil and/or criminal penalties on plan fiduciaries who violate the right of participants to control these assets.

By the end of March, three of these bills had been reported (with amendments) by Congressional committees. H.R. 3669, the "Employee Retirement Savings Bill of Rights," was ordered reported, as amended, by the House Committee on Ways and Means on March 14, 2002. H.R. 3762, the "Pension Security Act," was ordered reported (as amended) by the House Committee on Education and the Workforce on March 20, 2002. S. 1992, the "Protecting America's Pensions Act," was ordered reported (as amended) by the Senate Committee on Health, Education, Labor, and Pensions on March 21, 2002. The Senate Finance Committee expects to mark up a bill in April.