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 Thank you Madam Secretary.
I want to commend you for your leadership in convening this impressive group of
delegates to address the timely topic of retirement savings. And it’s a
pleasure to join my good friend John Boehner today. Our challenge today is to
learn lessons from the Enron scandal so we can strengthen America’s pension
system and protect the retirement security of America’s workers. Enron
executives cashed out more than a billion dollars of stock while Enron
workers’ retirement disappeared.
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Corporate executives get
golden parachutes when they lose their jobs, but workers get only a tin cup when
they lose their retirement savings. As we have seen with Enron, all too
often the top brass is set for life, while the average worker pays the price.
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The emerging details of
the Enron scandal reveal a shocking abuse of corporate power that left workers
powerless to protect themselves. Enron workers lost more than $1 billion
of their retirement savings because they were pressured to invest 401(k) savings
in company stock. This is a widespread problem at many major companies,
where workers have as much as 90 percent of their 401(k) assets in company
stock.
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The
real test of pension
reform is whether it will prevent future Enrons. Sadly, the President’s
proposal falls far short of this goal. We need tough action to prevent
corporate greed from eating away at workers’ savings. We need more than
a slap on the wrist to corporate America.
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Instead of fixing our
pension system to ensure workers can count on a secure retirement, the
Administration’s proposal offers symbol without substance. It does
little to address the key issue of diversification. Across the nation,
workers are being pressured to buy company stock, resulting in risky,
undiversified retirement savings. The result is that workers’ assets are
being eaten away by corporate mismanagement and corporate greed.
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Instead of giving workers
independent, unbiased investment advice to improve their retirement security,
the Administration’s proposal allows for conflicts of interest to taint the
choices available to workers. Under the Administration’s proposal,
workers could receive investment advice from parties with a financial interest
in the workers’ investment decisions. If we’ve learned anything from
Arthur Andersen, it is that we need fewer -- not more -- conflicts of interest.
That is why I support the Bingaman-Collins bill to ensure that workers would
have access to unbiased investment advice.
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 When it comes to
protecting the hard-earned retirement dollars of America’s workers,
we should not settle for half measures. I intend to move forward next week
with legislation that will give workers real investment choices plus protection
for their retirement savings. We owe it to America’s workers to make
them savers -- not losers -- when it comes to their retirement. We must insure that
workers have real choice and genuine retirement security when it comes to their
401(k)s. Workers must be free of employer intimidation and pressure to buy
company stock. Real choice means the ability to choose investment options
without undue employer pressure. Real choice means that workers, not just
employers, have a role in choosing the investment options. Our pension
reforms must be straightforward and easy to understand, not bureaucratic and
full of loopholes that future Enrons can exploit. Above all, our pension
system must provide retirement security for the long haul.
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Toward this end, my
legislation will take concrete steps to end employer intimidation and promote
diversification. My bill will stop employers from having it both ways when
it comes to pushing their stock in 401(k) plans -- they can’t both match in
stock and push workers to buy company stock as an investment option.
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The legislation will
require that workers are given complete and accurate information to make their
investment decisions. My bill will insure that workers receive independent
not conflicted investment advice. The bill will also require that workers
be informed of executive stock sales so that workers can make informed decisions
about their own investments. Employers who mislead workers when it comes
to their investments will face real penalties. My bill will make clear
that ERISA fiduciary rules prohibit an employer from providing false or
misleading information.
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If the Enron scandal
teaches us anything it’s that we must stop rewarding corporate misbehavior.
It’s time to stop letting big business get away with it at the expense of the
little guy. But that’s exactly what’s happening in Washington today.
Each day, a door is opened for corporate America while another is slammed shut
on workers.
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We need to change course
in Washington, to ensure that all Americans can ride the tides of prosperity,
not just those at the top.
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That means that instead of
papering America with gimmicks and false promises, we should focus on concrete,
responsible steps to protect Social Security for our children and our
children’s children.
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That means no $250 million tax breaks for Enron while its workers lose their
retirement savings.
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That means protecting workers from ergonomic injuries instead of protecting
corporate tax shelters in the Caribbean.
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That means providing all workers with a living minimum wage, instead of
softening rules for top corporate executives to get more and more tax relief for
their pensions at the expense of workers’ savings.
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And it means providing real retirement security -- with guaranteed Social
Security benefits, strong 401(k) protections, and a meaningful voice for workers
in corporate retirement decisions.
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While we must protect the retirement savings of workers in the wake of Enron, we
must also protect Social Security. Most Americans are counting on Social
Security as a major source of income in their golden years.
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Social Security is the most successful program ever designed to lift people out
of poverty and to insure their financial security. For two-thirds of
America’s senior citizens, Social Security retirement benefits provide more
than half their annual income. Without Social Security, half the
nation’s elderly would be living in poverty. Protecting Social Security
for future generations is one of our foremost responsibilities.
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Because Social Security provides the financial foundation for so many retirees,
it must remain the guaranteed benefit it is today. It would be an enormous
mistake to substitute private accounts subject to the uncertainty of the market
for that guaranteed benefit. The substantial decline in stock values which
we have seen in the last two years underscores the inherent risk in private
accounts. Devastating losses, like those faced by Enron workers, should
not be risked with Social Security funds. We must keep the security in
Social Security.
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We cannot let another day go by without taking action to protect the future of
America’s workers. I am hopeful in the end that we can agree on a
pension plan that provides the kind of retirement security that our worker’s
need and deserve. But we owe it to all Americans to keep the bar high when
it comes to their future and their retirement. We have demonstrated in the
past that we can come to meet pressing national priorities. And on this
important issue, American workers deserve no less.
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