The House of Representatives passed a bill yesterday that would place some limits on how employers handle 401(k) plans for workers. The bill passed by a 255-163 margin, after Democrats gave up attempts to improve the bill with amendments. The bill was promoted as a "pension reform" bill in the wake of the unraveling Enron fiasco. In reality - something in short supply in our big business-dominated Congress - it was merely a mis-named bill to provide some minimal protections and rights to holders of 401(k) accounts. The bill provides for a 30 day notice to workers of any "blackout" period where 401(k) account activity would be frozen; a prohibition on bosses selling company stock while employee 401(k) company stock cannot be sold; allow workers to sell company-contributed stock in their accounts after 3 years; and other provisions.
While any improvement in the regulation of our loose and scandal-ridden 401(k) system is welcomed, the Republican bill is merely a scratch on the surface of the problem. But, even a thimble of water is welcomed by a desperate soul on the parched Sahara! Corporate America lobbied hard against the Democrats who attempted to strengthen the bill, using the bogus claim that these limited restrictions would cause employers to stop offering 401(k) plans to employees. The bill now moves to the U.S. Senate for action, where a significantly different version of the bill has already been passed. Observers predict action possibly as early as May.