4 years after Enron most pension reforms still not law! Why?
from 
JoeUser Forums
JoeUser Forums
More great and educational information from Jeffrey H. Birnbaum of The Washington Post.
Remember all of that hype and commotion from Congress about pension reform after the collapse of Enron? Many congress critters -- especially many liberal congress critters -- were ready to form a lynch mob to go after the perpetrators of the crimes against the poor people that were so badly ripped off when Enron, Worldcom, and many other .com's failed and left their stockholders and future retirees with literally nothing.
But, for all of that commotion and noise, what has really happened to make sure that problems like Enron don't happen again? And who is really looking to try to help protect us all? Think carefully before you read the answer, as the answer may surprise many.
Where many would believe that Democrats are the better custodians of the public's best interests, it seems instead that many of the Democrats have been bought just as quickly, if not more quickly, than their friends on the other side of the aisle.
Read on. Headline is linked.
Speaking of Staying Quiet . . .
This will seem hard to believe but some of the most basic pension reforms that were devised after the Enron Corp. bankruptcy four years ago still haven't become law. Now, one of the Senate's most powerful Republicans -- who is usually solidly pro-business -- is speaking out in protest and laying the delay at the doorstep of big-money lobbyists.
In 2001, thousands of Enron employees lost their nest eggs because they couldn't sell the Enron stock they owned (often to the exclusion of other stocks) in their company pension plans. Virtually everyone agreed at the time that the law needed to be revised to allow more ownership of other stocks in the plans.
Sen. Charles E. Grassley (R-Iowa), chairman of the Senate Finance Committee, has championed a popular list of measures that would do just that. He would permit pension participants to diversify their retirement assets beyond company stock after three years, toughen advance-notice requirements about so-called blackout periods when company stock can't be traded by employees, and increase the portability of retirement assets from one job to the next.
But Grassley says his proposals have languished because of the prowess -- and daunting campaign contributions -- of the financial services industry. Wall Street's allies in Congress, he says, have blocked the proposals until the Senate also adopts a plan that would allow financial firms to give investment advice to people who invest in the funds that they manage. In other words, a financial company would be allowed to recommend which mutual funds, including its own, a person should invest in his 401(k) or IRA.
Grassley and many other senators have balked, asserting that the legislation would promote exactly the kind of conflict of interest that the Enron scandal made clear should be snuffed out.
"This small group of firms and their army of well-paid lobbyists seem more concerned with making money than preserving workers' nest eggs," Grassley said. "I agree we need to do more to get investment advice to [pension] plan participants, but changing the conflict-of-interest rules isn't the place to start."
I guess the dispute isn't quiet anymore.
Note: Jeffrey Birnbaum writes about the intersection of government and business every other Monday for the Washington Post, his columns are worth the trip to the Post's web site. You can also e-mail him at [email protected].
Kudos to Senator Grassley for his efforts, and kudos to Jeffrey H. Birnbaum of the Washington Post for making noise on this issue. Hopefully people will read this and start putting some pressure on their Senators and Congress people to do the right thing and look out for the interests of the people they respresent.
Remember all of that hype and commotion from Congress about pension reform after the collapse of Enron? Many congress critters -- especially many liberal congress critters -- were ready to form a lynch mob to go after the perpetrators of the crimes against the poor people that were so badly ripped off when Enron, Worldcom, and many other .com's failed and left their stockholders and future retirees with literally nothing.
But, for all of that commotion and noise, what has really happened to make sure that problems like Enron don't happen again? And who is really looking to try to help protect us all? Think carefully before you read the answer, as the answer may surprise many.
Where many would believe that Democrats are the better custodians of the public's best interests, it seems instead that many of the Democrats have been bought just as quickly, if not more quickly, than their friends on the other side of the aisle.
Read on. Headline is linked.
Speaking of Staying Quiet . . .
This will seem hard to believe but some of the most basic pension reforms that were devised after the Enron Corp. bankruptcy four years ago still haven't become law. Now, one of the Senate's most powerful Republicans -- who is usually solidly pro-business -- is speaking out in protest and laying the delay at the doorstep of big-money lobbyists.
In 2001, thousands of Enron employees lost their nest eggs because they couldn't sell the Enron stock they owned (often to the exclusion of other stocks) in their company pension plans. Virtually everyone agreed at the time that the law needed to be revised to allow more ownership of other stocks in the plans.
Sen. Charles E. Grassley (R-Iowa), chairman of the Senate Finance Committee, has championed a popular list of measures that would do just that. He would permit pension participants to diversify their retirement assets beyond company stock after three years, toughen advance-notice requirements about so-called blackout periods when company stock can't be traded by employees, and increase the portability of retirement assets from one job to the next.
But Grassley says his proposals have languished because of the prowess -- and daunting campaign contributions -- of the financial services industry. Wall Street's allies in Congress, he says, have blocked the proposals until the Senate also adopts a plan that would allow financial firms to give investment advice to people who invest in the funds that they manage. In other words, a financial company would be allowed to recommend which mutual funds, including its own, a person should invest in his 401(k) or IRA.
Grassley and many other senators have balked, asserting that the legislation would promote exactly the kind of conflict of interest that the Enron scandal made clear should be snuffed out.
"This small group of firms and their army of well-paid lobbyists seem more concerned with making money than preserving workers' nest eggs," Grassley said. "I agree we need to do more to get investment advice to [pension] plan participants, but changing the conflict-of-interest rules isn't the place to start."
I guess the dispute isn't quiet anymore.
Note: Jeffrey Birnbaum writes about the intersection of government and business every other Monday for the Washington Post, his columns are worth the trip to the Post's web site. You can also e-mail him at [email protected].
Kudos to Senator Grassley for his efforts, and kudos to Jeffrey H. Birnbaum of the Washington Post for making noise on this issue. Hopefully people will read this and start putting some pressure on their Senators and Congress people to do the right thing and look out for the interests of the people they respresent.