WASHINGTON (CNN/Money) - Republican House members passed a pensions reform act sparked by the problems highlighted by the collapse of Enron Corp. and the loss of retirement funds by many employees there, although Congressional Democrats charged the measure did not go far enough to protect retirement savings.
The measure, which has the backing of the White House, passed 255 to 163. Republican representatives voted 208 to 2 for the measure, while Democrats opposed it 160 to 46, Rep. Benjamin Cardin, D-Maryland, one of the original co-sponsors of the measure, joined other Democrats in voting no, charging the final version, "failed to give employees the control they should have over their retirement savings."
The measure that passed would let workers get investment advice from the companies managing their retirement plans, allow workers to sell employer-matched stock in their 401(k) plans after three years and require that notice be given to workers before changes are made to their accounts.
It would also require 30 days' notice to workers before they are locked out of making changes to their account holdings during administrative changes, and would ban company executives from selling their own employer stock during blackout periods when workers cannot make changes to their 401(k) accounts.
Several top Enron executives sold their stock while workers were prohibited from selling the stock in their 401(k) plans as the price plummeted. Many Enron employees had a large percentage of their 401(k) accounts in now-worthless Enron stock because the Enron stock the company used to pay employer matches could not be sold until they were 50 years old.
About 42 million Americans hold 401(k) accounts, with $2 trillion in assets.
Republicans said that the reforms encompassed in the bill are long overdue.
"It's not the silver bullet that's going to solve every problem," said Rep. Rob Portman, R-Ohio, a sponsor of one of the bills combined in the final legislation. "But it's a substantial change in current law and it does address the Enron issue."
Democrats failed to get included measures to allow workers to serve on employer pension boards and to require corporate executives to notify workers when they sell company stock. They also strongly opposed a provision allowing workers to receive investment advice from the same companies that manage their 401(k) retirement accounts, saying that advice would be tainted by financial conflicts of interest.
"Investment advice is a very important component of good retirement policy," said Cardin. "But it is vitally important that employees have a wide range of investment options, as well as full disclosure about the choices they have so they can make good investment decisions. This bill fails to provide workers enough choice or enough information."
Democrats charged that Republicans caved into corporate interests in the crafting of the final bill. Republicans charged the Democrats were simply trying to politicize the problems at Enron.
from staff and wire reports