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
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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.
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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.
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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.
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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:
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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.
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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.
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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.
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Failure or refusal to provide the required notice will result
in a civil penalty.
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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:
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Allowing workers to diversify their investments in employer
stock after three years.
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Providing workers quarterly benefit statements that explain the
value of diversified investments.
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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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