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

• 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.

• 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.

• 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.

• 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:

• 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.

• 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.

• 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.

• Failure or refusal to provide the required notice will result in a civil penalty.

• 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:

• Allowing workers to diversify their investments in employer stock after three years.

• Providing workers quarterly benefit statements that explain the value of diversified investments.

• 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

###