Bush’s guidelines aim to safeguard pensions

? President Bush today will propose giving workers greater freedom to diversify their company retirement accounts, part of a package of pension safeguards that represent the administration’s first concrete response to issues raised by Enron Corp.’s collapse.

Under the administration’s plan, officials said, workers would be permitted to sell company stock after three years even those shares contributed by companies as matching grants and pursue other investment options, while companies would be encouraged to make independent financial advice available to employees.

Administration officials said Bush will also propose “pension parity,” in which top executives would be forbidden from selling company stock during “black out” periods when lower-ranking workers may not trade such stock in their 401 (k) plans. The proposal is aimed at protecting workers from the dilemma of Enron employees who watched the company’s stock plummet last fall but were unable to switch to other investments, even as top executives cashed out.

“All of these proposals would not necessarily have applied to Enron, but we believe this plan addresses the major pension-related problems the Enron situation highlighted,” a senior official said.

Bush’s plan, to be unveiled at a retreat for House Republicans, constitutes a presidential effort to take the offensive on an issue that is the subject of a dozen investigations on Capitol Hill and that Democrats believe could prove a liability for GOP candidates this fall.

Bush, who has come under attack from Democrats for his ties to the bankrupt energy trading company, has tried to deflect questions about those connections by promising changes in pension rules to protect workers. “Employees who have worked hard and saved all their lives should not have to risk losing everything if their company fails,” he said in his State of the Union Address Tuesday, a speech that did not mention Enron by name.

Bush’s proposals must be approved by Congress. Some of the ideas are largely symbolic: Employers would be required to give workers quarterly benefit statements that include information on individual accounts. Such statements are now required annually.

Pension experts said Bush’s plan does little to address the larger issues of retirement security. A 401(k) account is a tax-deferred retirement savings program that leaves employees on their own to participate and make the proper investments. About 42 million Americans have such accounts.

Enron’s 401(k) plan had nearly 21,000 participants, and at the end of 2000 held $1.3 billion worth of Enron stock. That stock is now virtually worthless. In Enron’s plan, the company matched a portion of each worker’s contributions to the 401(k) in company stock, but it forbade workers from selling those shares until they reached age 50.