For Immediate Release
Office of the Press Secretary
October 19, 2002
President Acts to Protect Pensions and Retirement Security
Radio Address by the President to the Nation
Fact Sheet
THE PRESIDENT: Good morning. I want to discuss with you steps we
are taking to help strengthen the retirement security of America's
workers. More than 40 million Americans save for retirement through
401(k) accounts, making regular contributions and building economic
security over a lifetime. A 401(k) provides a chance to invest in the
long-term growth of the American economy and an opportunity to build
wealth and independence.
Today's workers own more then $1.5 trillion in assets through their
401(k)s. Younger workers have an average of about $10,000 in their
accounts, while workers near retirement hold closer to $100,000 in
their 401(k)s. This is real money for real workers and we must do all
we can to help make sure it's there for them when they retire.
Turbulence in the financial markets reminds us that every
investment carries some risk. Yet American workers also have rights
which must be respected and enforced. I've made five common-sense
proposals to help protect the retirement savings of American workers.
First, every worker should get 30 days advance notice before any
blackout period -- the time when they cannot sell, buy or borrow from
their 401(k)s.
Second, corporate executives should have to follow the same rules
that every other employee must follow during blackout periods. If you
can't sell on the shop floor, you should not be able to sell on the top
floor.
Third, workers should be able to sell their company stock after
holding it for three years so that no one's nest egg is tied up in the
stock of a single company.
Fourth, investors should receive better information, including
quarterly -- not just yearly -- reports on how their 401(k)s are
performing.
And, fifth, workers should have access to professional investment
advice so they can make more informed decisions about their savings.
The United States Congress has passed only two of these proposals
-- giving workers advance notice of blackout periods and holding
executives to the same rules as their employees. I signed these
reforms into law.
On Monday my administration is implementing that law with tough new
rules to require that companies give their workers 30 days notice
before any blackout period. Under the new rule, employees will have
time to buy or sell stock or borrow from their accounts before the
accounts are temporarily frozen. This important protection will help
ensure that workers don't get stuck in a bad investment simply because
their employers block them from accessing their own accounts.
The Securities and Exchange Commission is also working on a new
rule to prevent corporate executives from selling off their own
holdings of company stock when employees are kept from doing so.
Corporate executives will no longer be able to sell off their company's
declining stock while employees are left holding the bag. Both of
these rules will take effect early next year and give workers greater
protections against corporate fraud or abuse.
These rules are a step forward in protecting the rights of
investors. More steps are needed. My three additional proposals --
allowing more diversity in 401(k) accounts, and more frequent account
updates, and advice for workers -- have already passed in the House.
But after six months, the Senate has not acted. For the sake of
American workers who are concerned about their retirement security I
urge the Senate to pass the rest of my proposals into law. People who
work hard and save for the future deserve every protection we can give
them.
Thank you for listening.
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