WASHINGTON, DC — President George W. Bush has proposed changes to corporate 401(k) plans to enable employees to diversify their investments more and prevent future disasters such as the situation when workers lost virtually all of their retirement savings due to the failure of Enron.

The president’s proposal would allow employees to sell the corporate stock that their company contributes to their 401(k) after just three years, preventing firms from requiring that employees hold the stock for extended periods of time.

Republican leaders praised the plan. Democratic leaders maintained that it did not go far enough to protect employees. Some Democrats would like to ban workers from having any more than 20% of their 401(k) in the stock of their own company.

Publication date: 02/04/2002