WASHINGTON -- In sharp contrast to a flawed and risky Republican pension bill, Education and Workforce Committee Democrats Wednesday will offer an alternative bill to provide employees in 401(k) plans greater protection and control of their investments and also to halt a devastating change proposed in December by President Bush regarding the rules for converting traditional defined benefit pension plan to cash balance plans.

gOver a year after the collapse of Enron, Global Crossing and other giant corporations, millions of Americans remain deeply concerned about their retirement security,h said Congressman George Miller (D-CA), the senior Democrat on the committee.

gBut the Republican bill before us today pretends that Enron never happened; it not only fails to correct abuses in the pension system, but through its conflicted investment advice provision, it makes things even worse. This bill is a huge missed opportunity to respond to the severe pension abuses that have cost millions of rank and file employees billions of retirement dollars.

gIn the wake of the Enron scandal, where thousands of employees lost their nest eggs because of conflicts of interest by company executives, it strikes me as incredible that Congress would consider legislation that would allow conflicted investment advice,h Miller added. gAnd it also surprises former SEC Chairman, Arthur Levitt, who warns us that the conflicts inherent in the investment advice bill eviolate bedrock principles of investing.fh

Committee Democrats will offer a substitute to H.R. 100, the Pension Security Act of 2003 introduced this year by Committee Chairman John Boehner (R-OH), and they will offer several individual amendments. The Democratic alternatives attempt to respond to the growing and widespread anxiety over retirement security. Democratic amendments to H.R. 1000 include:

Protect Older Employeesf Pensions. Requires companies that are converting to cash balance plans to ensure older workers receive the same amount of benefits they would have received under the existing defined benefit plan. This amendment would overrule the proposed Department of Treasury rules announced in December that would give the green light for companies to make deep cuts in pension benefits for older workers.

Honest, Accurate and Timely Information for Employees. Pension plans would be prohibited from giving misleading information; requires regular benefit statements to workers, including notice about the importance of diversification; Require notice of the importance of diversification when more than 10% of an employee's account is invested employer stock.

Executive Accountability: Notice To Employees When Executives Are Dumping Company Stock. Requires plan participants to be notified of any significant sales of employer stock by executives or plan fiduciaries. Significant stock sales are sales of $100,000 or more either per transaction or in the aggregate.

Gives Employees a Voice on Pension Boards. Requires pension plans to include rank-and-file employees on pension boards, where critical decisions about workersf retirement security are made.

Un-biased, Independent Investment Advice. Provides for independent financial advice for employees when company stock is offered as an investment option under the plan.

Parity of Benefits for Executives and Rank and File workers. Closes current law loophole that provides special treatment for executive pension plans. Enron showered its executives with special executive deferred compensation benefits (that were paid outside the reach of bankruptcy and the claims of creditors), while rank-and file employees are still standing in line with all other creditors with little hope of recovery any of the billions of pension benefits that were lost.

Gives Employees Control Over Their Retirement Savings. Gives employees the right to diversify company-matched stock after one year of plan participation. Enron employees, for example, were locked out of over $100 million in company-matched stock due to company restrictions, while company executives were dumping hundreds of millions in company stock. This enables employees to safeguard against such losses in the future.

Additional Protections for Workers' Pension Benefits. Requires plan fiduciaries to secure insurance in an amount sufficient to cover benefits under the plan; gives employees the right to be made whole in court for 401(k) plan abuses; prohibits companies from forcing workers to waive their right to bring a claim under ERISA; enhances Department of Labor assistance; protects whistleblowers, and provides for a study of defined contribution plans insurance system.

Tougher Criminal Enforcement. The Democratic substitute toughens current law criminal penalties for fiduciaries who violate workersf pension rights.

Miller said that the Bush/Boehner bill was deeply flawed and risky to employeesf retirement health. Specifically, he pointed out that the Bush/Boehner bill:

Will leave millions of employees and their families waiting for justice from lost 401(k) accounts and will also open new, dangerous loopholes that will jeopardize all employeefs retirement investments by allowing for the first time self-interested investment firms to serve as the principal financial advisor to employees.

Fails to address the need for an employee voice on pension boards, even though testimony before this committee last year established that Enron pension trustees failed to take decisive action to protect the savings of Enron employees.

Leaves employees locked into company stock investments for years against their will while corporate executives can cash out millions in stock options, executive type 401(k)s, and bonuses, just like they did in Enron.

Fails to halt a devastating plan by the Bush Administration regarding cash balance plan conversions that could wipe out half the value of an older employeefs traditional defined benefit pension.