For Immediate Release
Office of the Press
Secretary
October 19, 2002
President
Takes Action to Protect Pensions and Retirement Security for All Americans
Presidential Action
- President Bush believes that economic freedom is essential to individual
success and prosperity. The President's economic agenda invests in individuals
by creating jobs, expanding opportunities to save and invest, providing a good
education, and helping each American own part of the American dream.
- An important component of the President's economic security agenda is
providing American workers and retirees new tools to protect their pensions,
investments, and retirement security.
- In his radio address, the President will announce the implementation of
rules that require workers to receive a 30-day notification before any
"blackout" restrictions are placed on their 401(k) plans.
- On October 21, 2002, the Department of Labor will issue regulations
implementing the new notice provisions, providing important protections to
workers and retirees with investments in 401(k) plans. The regulations provide
both interim-final rules and a model notice to assist plans in carrying out
their responsibilities. Under the new rules:
- Workers will receive notice 30 days before any restrictions are placed on
their ability to direct investments, take loans, or obtain distributions from
their 401(k) plans.
- Companies with employer stock in their 401(k) plan will receive the same
notice so corporate insiders will know they cannot sell stock in the company
or exercise stock options when the workers in the 401(k) plan are restricted
from doing so.
- The notice to employees must include the reasons for the blackout period;
its beginning and ending date; and, if the ability to direct investments is
suspended, a statement that participants should evaluate their current
investments in light of their inability to direct or diversify assets during
the blackout period.
- Failure or refusal to provide the required notice will result in a civil
penalty.
- The rule will be effective on the earliest possible date under the
statute, January 26, 2003 (180 days after enactment of the Sarbanes-Oxley
legislation).
The Securities and Exchange Commission is also working on a new rule
scheduled to take effect early next year that will bar corporate executives from
trading their stock when their rank and file workers are prevented from selling
theirs.
Unfinished Business
The President has proposed other important, commonsense proposals to help
protect the retirement savings of American workers:
- Allowing workers to diversify their investments in employer stock after
three years.
- Providing workers quarterly benefit statements that explain the value of
diversified investments.
- Giving workers better access to much-needed investment advice from
professional advisers acting in the workers' best interest.
These remaining provisions passed the House of Representatives on April 11,
2002. Unfortunately, the Senate has failed to act on these important
initiatives.
To learn more about the President's comprehensive economic security and
corporate accountability agenda please visit www.whitehouse.gov
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